Jul 15, 2020

Axios Login

By Ina Fried
Ina Fried

Remember when I used to start most newsletters from the exciting location I was in that day? Well, there's no need to let a pandemic get in the way.

Greetings from my couch. Today's login is 1,351 words, a 5-minute read.

Situational awareness: Google announced Wednesday morning that it's investing $4.5 billion in India's Jio Platforms, with plans to team up on an entry-level smartphone, becoming the latest tech giant to invest in the company following Intel, Qualcomm and Facebook.

Apple won't have to pay $15 billion in back taxes, as EU judges found that no laws were broken in a deal that let Apple save on taxes by making Ireland its base for Europe, the Middle East and Africa.

1 big thing: Tech's reopening plans slowed again

Illustration: Annelise Capossela/Axios

Tech was the first industry to send its workers home when COVID-19 first hit the U.S., and it has been among the most cautious in bringing workers back. Even still, many companies are realizing that their reopening plans from as recently as a few weeks ago are now too optimistic.

Why it matters: Crafting reopening plans gave tech firms a chance to bolster their leadership and model the beginnings of a path back to normalcy for other office workers. Their decision to pause those plans is the latest sign that normalcy is likely to remain elusive in the U.S.

What's happening: Many tech companies had already announced plans to allow most workers to telecommute through the end of the year (and in some cases indefinitely). Quietly, though, companies had been drawing up playbooks for portions of their workforces to return to the office sooner.

  • In many cases, though, those plans are now on hold.

Snapchat, which had said employees could work remotely through Sept. 1, notified workers on Tuesday that was being extended through at least Jan. 4, citing the resurgence of COVID-19 in many parts of the U.S.

  • Still, Snap says it wants to be flexible, as some workers want to come back to the office when safe: "We will continue to press ahead with plans for reopening our offices for some team members, to the extent that we are allowed to, in accordance with local public health guidelines."
  • And while its U.S. offices remain largely closed, the company has partly or fully reopened some global offices in China, Europe and Israel.

Meanwhile, Apple has been forced to again close many of the U.S. retail stores that had reopened.

Most companies didn't want to talk publicly about reopening plans, but private conversations with many of them revealed a consistent theme: The industry is expecting even more of its workforce to be out of the office longer than they'd anticipated before the latest U.S. resurgence of the pandemic.

  • The key factors driving the shift are the increase in COVID-19 cases, a continued lack of widespread testing and the likelihood that many schools will remain closed this fall. That has left companies that had yet to communicate fall plans scrambling to do so.
  • It's a big change from just a few weeks ago, when many companies held out hope that some percentage of their broad workforce would be able to return in fall. Now, firms are returning their focus on those workers who absolutely have to be in the office.

The big picture: Tech has become increasingly central to American life as the key gateway for entertainment, information, commerce and education. The good news is that many tech companies have found that much of their work can be done from home, without a big hit to productivity.

Yes, but: Not all workers can stay home. Cloud-based software companies need relatively few on-site workers, while a company like Intel needs a fairly large in-person staff. (You can't manufacture chips at home.)

Between the lines: Lots of companies say their workers are their biggest asset, but in the tech industry, where the competition for engineering talent remains fierce, that's especially true.

  • There are many startups and large companies whose main assets are the engineers on their payrolls, plus some pricey office furniture and expensive real estate — along with the patents that emanate from those employees.
  • A clear sign of where things stand is companies are now spending more to help workers get set up in their home offices, paying for things like ergonomic furniture and other gear that's expensive upfront but can pay dividends over time.

Our thought bubble: Tech has the luxury of taking care of its valuable workers. In many other industries, the practical and ethical equation is far more complex, because keeping the business going often requires some workers to be put at risk.

2. U.K. moves to bar Huawei from 5G networks

U.K. Prime Minister Boris Johnson. Photo: Dan Kitwood/Getty Images

After an intense campaign from the U.S., the U.K. said Tuesday that it will bar mobile operators there from buying Huawei equipment for their 5G networks as of the end of this year and require existing Huawei gear to be removed by 2027.

Why it matters: The U.S. has deemed Huawei a security threat and applied legal and diplomatic pressure to get cellular providers in the U.S. and around the world to avoid buying the Chinese company's products.

Context: As part of its campaign, the U.S. has imposed sanctions, enacted new legislation and filed criminal charges against the company and its top executives.

  • Tuesday's move is a reversal of an earlier decision by the British government, which said Huawei's gear could be used in "non-core" parts of the network, similar to how it approached previous generations of cellular gear.
  • Britain's National Cyber Security Center determined that, given sweeping sanctions by the U.S., Huawei would have to make significant changes to its supply chain which put the future security of its networks in doubt.

What they're saying:

  • U.K. Digital Secretary Oliver Dowden: "5G will be transformative for our country, but only if we have confidence in the security and resilience of the infrastructure it is built upon."
  • FCC chairman Ajit Pai: "There is an overwhelming consensus that Huawei is in a position to exploit network vulnerabilities and compromise critical communications infrastructure for the benefit of the Chinese Communist Party.  The United Kingdom has taken a necessary step to safeguard its national security as it builds out advanced networks."
  • Huawei U.K. spokesperson Edward Brewster: "This disappointing decision is bad news for anyone in the U.K. with a mobile phone. It threatens to move Britain into the digital slow lane, push up bills and deepen the digital divide.... We remain confident that the new U.S. restrictions would not have affected the resilience or security of the products we supply to the U.K."
3. Cloud gaming is having its moment
Reproduced from ABI Research; Chart: Axios Visuals

Revenue from cloud gaming is expected to explode in the next four years, according to a new report from ABI Research, commissioned by InterDigital Lab, a mobile technology research and development company, Axios' Sara Fischer reports.

Why it matters: Higher broadband speeds and penetration from 5G connectivity will make cloud computing gaming more accessible to the masses.

Catch up quick: Cloud gaming services move processing of game play from the user's hardware device to the provider's server farms, creating a potentially simpler and cheaper experience for the player.

  • Cloud gaming has long struggled to gain wide traction, plagued by lag and other technical hiccups, but the ABI analysts believe its time has finally come.

By the numbers: Worldwide cloud video game revenue is expected to grow to nearly $4.5 billion by 2024, up from roughly $500 million in 2019, per the report.

  • The majority of that growth will be prompted by users in the Asia-Pacific region, followed by North America and Western Europe.

The big picture: New streaming services from tech giants like Facebook, Google and Apple aim to move not only the software but the processing for games into the cloud.

  • That means gamers wouldn't have to buy individual games and specialized hardware anymore — they'd just subscribe to a service.

Go deeper: The video game subscription wars are on

4. Mozilla gets into the paid VPN business

Mozilla announced Wednesday it's offering a virtual private network service for Windows and Android.

Why it matters: The move comes as the Firefox maker looks to expand its business drawing on its reputation for security and privacy.

Details:

  • The service will cost $4.99 per month, with no long-term contract required.
  • It will initially be available in the U.S., Canada, the U.K., Singapore, Malaysia and New Zealand, with plans to expand to other countries this fall.

What they're saying: Mozilla said its VPN uses a more modern engine, making it faster than rivals' offerings, and also played up that it isn't looking to collect user data.

  • "We don't partner with third-party analytics platforms who want to build a profile of what you do online," Mozilla said, adding that it doesn't keep user data logs and sticks to its Data Privacy Principles.
5. Take Note

On Tap

ICYMI

  • Massachusetts is moving toward becoming the first state to ban police use of facial recognition technology. (Bloomberg Law)
  • Massachusetts is also suing Uber and Lyft for classifying drivers as contractors not employees, following California's lead. (The Verge)
  • The Trump administration backtracked on a move to bar foreign students from the U.S. if their colleges conduct classes exclusively online. Tech companies had urged the administration to reverse course. (Axios)
6. After you Login

McSweeney's safety advice to teachers is almost as good as its previous jab at colleges' response to the pandemic. Of course, both would be far funnier if they didn't ring so true.

Ina Fried