Tech Chat – February 2020
Sharing the pain
This week, we examine the impacts of epidemic on international and UK tech companies.
Two hunters are out in the woods when one of them collapses. He’s not breathing so his friend calls the emergency service number. “My friend is dead! What should I do?” The operator replies, “Calm down sir, first make sure that he’s really dead.” There’s a silence, then a loud bang. Back on the phone, the guy says, “Ok, now what..?“
Sorry but we need a bit of cheering up in the current environment and that’s our current black humour favourite.
Well we can run through the obvious tech implications of the current epidemic (we’re not going to mention the c-word as epidemics are not black swan moments but regular occurrences and this will apply each time they happen). On the downside, sharing services will temporarily take a bath (don’t forget to wash your hands), while remote tech providers (home working, ordering, entertainment) might well see a growing bonanza. We can’t imagine people will be that keen on mixing in crowds or sharing space/equipment over the next few weeks/months (maybe years?). That will impact the sharing tech suppliers; in the US that is Uber, Lyft, AirBnB etc. Over here Big Dish (DISH) might see its restaurants suffering while JustEat (JE) will enjoy the moment. Hardware suppliers (both tech and industrials) will be carefully managing their supply chains out of the Far East and particularly China. One of the issues aside from the factories getting workers back is the lack of facemasks – obligatory for tech workers aside from the usual medical purposes. Most factory managers are required to have two per shift and a stock for a couple of weeks. Those stocks will likely have been appropriated or sold on the black market which might cause further delay. Luckily many will have stocked up for both Brexit and the expected slowdown over the Chinese NY. After the celebrations Chinese manufacturing normally picks up in mid-February but is set to run on into March and will test stocks. That might impact the likes of Computacenter (CCC) shifting hardware. Amino (AMO) under the guiding hand of logistics wiz Donald McGarva, has confirmed that it is closely discussing orders and timeliness with customers and expects little if any negative full year effect. Similarly Quixant (QXT) boasts an exceptional sourcing team run by one of the founders, JJ Lin.
There are always winners though – remote working solutions and robotic worker (RPA) providers for example. In London that might be LoopUp (LOOP), Netcall (NET) and Blue Prism (PRSM). Solo pursuits such as home entertainment will benefit Sumo (SUMO) and Frontier Developments (FDEV). Netflix in the US of course. We’d highlight Bango (BGO). They will have been disappointed with the cancellation of MWC, usually a great stage for them, however they make money facilitating app store spending and in Japan even goods bought by Direct Carrier Billing. With the world (and Japan in particular) steadily going into a lockdown and home isolation, the devil makes work for idle hands, or idle thumbs in the smartphone age – so we foresee an awful lot more app spending going on; from games and services to goods in Japan. Boku (BOKU) similarly facilitates spending on iPhones.
Just to leave you with a smile after a tough week, I told my wife she was drawing her eyebrows too high. She looked surprised.
(Sorry again)
Happy Friday