In turns out, SpaceX was indeed not responsible for the loss of a top-secret government satellite that fell back to earth and was destroyed following a Falcon 9 rocket launch earlier this year, a report in The Wall Street Journal today states.
The Zuma satellite’s purpose was highly classified, but the fate of the project, which was rumored to cost $3.5 billion to develop, was covered in a high-profile fashion because it was intimately tied to a live-streamed SpaceX launch. Sources familiar with two separate federal and industry investigations tell the Journal that the blame for the failure rests with the failure of a payload adapter modified by top military contractor Northrop Grumman, which also built the Zuma satellite itself.
The payload adapter device struggled to operate in zero gravity conditions, the report details:
The device, purchased from a subcontractor, was significantly modified and then successfully tested three times on the ground by Northrop Grumman, according to one person familiar with the process. But upon reaching orbit, this person said, the adapter didn’t uncouple the satellite from the rocket in zero-gravity conditions.
Sensors on board failed to immediately report what happened, this person said, so officials tracking the launch weren’t aware of the major malfunction until the satellite was dragged back into the atmosphere by the returning second stage. The satellite ultimately broke free but by then had dropped to an altitude that was too low for a rescue.
In the aftermath of the successful Falcon 9 launch, word emerged that the Zuma satellite separation had been far less successful, but because of the project’s classified nature there was no official word to be found. Given the often tenuous nature of SpaceX’s history with public perception of its rocket safety, the company did later publicly note that the Falcon 9 “did everything correctly,” insinuating that the fault did not lie with its tech.
Reports soon emerged that the failure was likely not the fault of SpaceX, and it seems that after investigations, the government has concluded the same.
Shahin Farshchi is a partner at Lux Capital.
More posts by this contributor
Building a great startup requires more than genius and a great invention
Investing in frontier technology is (and isn’t) cleantech all over again
Many founders believe in the myth that the first steps of starting a business are the hardest: Attracting the first investment, the first hires, proving the technology, launching the first product and landing the first customer. Although those critical first steps are difficult, they are certainly not the most difficult on the arduous path of building an iconic company. As early and late-stage funding becomes more abundant, founders and their early VC backers need to get smarter about how to position their companies for a looming valley of death in-between. As we’ll learn below, it’s only going to get much, much harder before it gets easier.
Money will have the look, and heft, of dumbbells as the economic cycle turns. Expect an abundance of small, seed checks at one end, an abundance of massive checks for clear, breakout companies at the other, and a dearth of capital for expanding companies with early proof points and market traction. Read more on how to best prepare for this inevitable future. (Image courtesy Flickr/CircaSassy)
There will be an abundance of capital at the two ends of the startup spectrum. At one end, hundreds of seed and micro VCs, each armed with dozens of $250,000-$1 million checks to write every year, are on the prowl for visionary founders with pedigrees and resumes. At the other end, behemoths like SoftBank, sovereigns, as well “early-stage” firms raising larger funds are seeking breakout companies ready for checks that are in the mid-tens to hundreds of millions. There will be a dearth of capital to grow companies from a kernel of a business, to becoming the clear market-defining leader. In fact, we’re already seeing deal volume decreasing significantly as dollars increase, likely evidence of larger checks going into fewer companies.
Even as the overall number of deals decrease below 2012 levels, the overall dollars invested into startups continue to soar. The 200+ “seed-stage” funds formed since 2012 will continue to chase nascent companies. Meanwhile, the increasing number of mega-funds will seek breakout companies into which to make $100 million+ investments. Companies with early traction seeking ~$20 million to grow will be abundant and have difficulty accessing capital.
Founders should no longer assume that their all-star seed and Series A syndicates will guarantee a successful follow-on financing. Progress on recruiting and product development, though necessary, are no longer sufficient for B-rounds and beyond. Founders should be mindful that investors that specialize in leading $20-50 million rounds will have a plethora of well-funded, well-mentored, well-staffed startups with slick presentations, big visions and some early market traction from which to choose.
Today, there is far more capital chasing fewer quality companies. Fewer breakout companies and fear of missing out is making it easy to raise growth rounds with revenue growth, which may not be scalable or even reflective of an attractive business. This is creating false realities and prompting founders to raise big rounds at high prices — which is fine when there is an over-abundance of capital, but can cripple them when capital later becomes scarce. For example, not long ago, cleantech companies, armed with very preliminary sales, raised massive financings from VCs eager to back winners toward scaling into what they characterized as infinite demand. The reality is that the capital required to meet target economics was far greater and demand far smaller. As the private markets turned, access to cash became difficult and most faltered or were acquired for pennies on the dollar.
There is a likely future where capital grows scarce, and investors take a harder look at the underpinnings of revenue, growth and (dis)economies of scale.
What should startup leadership teams emphasize in an inevitable future where the $30 million rounds will be orders of magnitude harder than their $5 million rounds?
A business model representative of the big vision
Leadership teams put lots of emphasis on revenue. Unfortunately, revenue that’s not representative of the big vision is probably worse than no revenue at all. Companies are initially seeded with the expectation that the founding team can build and sell something. What needs to be proven is the hypothesis that the company can a) build a special product that b) is inexpensive to convince customers to pay for, and c) that those customers represent a massive market. It should be proven that it is unattractive for customers to switch to the inevitable copycats. It should be clear that over time, customers will pay more for additional features, and the cost of acquiring new customers will go down. Simply selling a product to customers that don’t represent that model is worse than not selling anything at all.
Recruiting talent that’s done it
Early founding teams are cognitively diverse individuals that can convince early investors that they can overcome the incredible odds of building a company that until now, shouldn’t have existed. They build a unique product, leveraging unique tools satisfying an unmet need. The early teams need to demonstrate the big vision, and that they can recruit the people that can make that vision a reality. Unfortunately, more founders struggle when it comes to recruiting people that have real experience reducing a technology to practice, executing on a product that customers want and charting the path to expand their market with improving unit economics. There are always exceptions of people that do the above for the first time at startups; however, most of today’s iconic startups knew what kind of talent they needed to execute and succeeded in bringing them on board. Who’s on your team?
Present metrics that matter
The attractive SaaS valuation multiples behoove all founders to apply its metrics to their businesses even if they aren’t really SaaS businesses. Sophisticated later-stage investors see right past that and dismiss numbers associated with metrics that are not representative. Semiconductors are about winning dedicated sockets in growing markets. Design tools are about winning and upselling seats in an industry that’s going to be hooked on those tools. Develop a clear understanding of how your business will be measured. Don’t inundate your investor with numbers; present a concise hypothesis for your unfair advantage in a growing market with your current traction being evidence to back it.
Find efficiencies by working in massive markets
“Pouring fuel on the fire” is a misleading metaphor that leads some into believing that capital can grow any business. That’s just as true as watering a plant with a fire hose or putting TNT in your Corolla’s gas tank: most business models and markets simply are not native to the much-sought-after venture growth profile. In fact, most later-stage startups that fail after raising large amounts of capital fail for this reason. Most markets are conducive to businesses with DIS-economies of scale, implying dwindling margins with scale, which is why many businesses are small, serving local, fragmented markets that technology alone cannot consolidate. How do your unit economics improve over time? What are the efficiencies generated by economies of scale? Is there a real network effect that drives these economies?
Image courtesy Getty Images
I expect today’s resourceful founders to seek partners, whether it’s employees, advisors or investors, to help them answer these questions. Together, these cognitively diverse teams will work together to accelerate past any metaphoric valley and build the iconic companies taking humanity to its fantastic future.
A one-year-old Chinese startup called Luckin is busy waging war against Starbucks as the new year unfolds. At an event on Thursday, Luckin announced that it aims to be the largest coffee chain in China by number of cups sold and outlets by 2019.
Caffeinated drinks are taking off in the tea-drinking nation. Average coffee consumption per Chinese consumer is expected to grow 18 percent between 2014 and 2019, well above 0.9 percent in the U.S. Starbucks is currently the largest player in China’s coffee market, with 3,300 stores as of last May and a goal of topping 6,000 outlets by 2022.
Loss-making Luckin vows to more than double its number of locations from just over 2,000 to more than 4,500 by the end of this year. It sounds like some kind of mission impossible, given it took Starbucks 20 years to reach its current scale, but not all of Luckin’s facilities are the size of Starbucks’ sit-down shops.
Rather, Luckin operates a combination of cafes, tiny booths for customer pickup and take-out kitchens that dispatch deliverymen who bring drinks to people within 30 minutes, a big selling point of the company.
It also helps that Luckin has nailed powerful partners like food delivery giant Meituan Dianping after Starbucks teamed up with Ele.me. These moves in a way represent a proxy war between China’s two largest internet companies — Tencent and Alibaba, which backs Meituan and owns Ele.me, respectively.
Luckin has also scooped up loads of investments to power its lightspeed expansion. The company secured a $200 million Series B funding round in December that valued it at $2.2 billion, only five months after it raised $200 million. It ventured into the market by shelling out large subsidies for consumers, with deep discounts like “buy five get five free.” It’s thus not surprising to see the company operating in the red. Luckin’s net loss amounted to at least 850 million yuan, or $124 million, within nine months in 2018, the company recently told local media.
“Our chief strategy is to quickly grab market share through subsidies, so losses are expected,” said Luckin, adding that it will press on with its subsidy-powered expansion.
What’s the best way to stay up to date on things happening within your industry? Seasoned finance professionals read the Wall Street Journal. Anyone who wants to work in politics reads The Washington Post. In Silicon Valley we have industry-specific news sites like TechCrunch supplemented by Hacker News and others.
But what about young business professionals who either don’t plan on staying in one industry their whole life or just want to stay up to date on the broader business/tech/startups/politics world?
Morning Brew is a daily newsletter designed for young business professionals. Each morning email has a stock market recap, a few short briefs on the most important business news of the day and a small section with lifestyle content. The result is the perfect mix of Wall Street essentials (like market analysis) and tech news (like a deep dive on Y Combinator).
The newsletter, which now has just under 200,000 total subscribers, was founded by Alex Lieberman and Austin Rief in 2015 when they were students at the University of Michigan.
“We worked with more than 75 students to help them prepare for interviews and internships and we’d always ask the question, “How do you keep up with the business world?” It was like every student had rehearsed their answers together beforehand, saying something to the effect of “I read the WSJ…and I read it because it’s a prerequisite to say you’re well-read in business and it’s what my parents do, but it’s dense, dry, and too long to read cover-to-cover,” explained the duo.
So Morning Brew was born. While initially college-focused, that segment has shrunk to 30% of their total audience with the average reader now 28-years-old working in finance, tech, or consulting. Of course there’s nothing stopping an older reader from signing up, and if anything sites like Axios have shown that even non-millennials may now prefer short bullet-point briefings over traditional long-form reporting.
But business-minded millennials are definitely the long-term focus of Morning Brew – and for good reason. The segment is extremely sought after in the advertising world, which has helped the startup monetize early. So far they’ve hosted sponsored native content from brands like Discover Card, Casper and Duke University. The diversity of sponsors shows just how many different industries are trying to reach the demographic.
Similar to other newsletter businesses like theSkimm, Morning Brew has mainly relied on word of mouth referrals and an ambassador program of 700+ students to drive new signups. Total subscribers are nearing 200,000 with a daily open rate hovering around 50%, which for reference is at least double most other popular industry newsletters.
The long term goal is to grow the newsletter into a brand that can touch all aspects of a young professional’s life, including networking. The site is launching a monthly event series this summer to bring together millennials to network and watch panel discussions, which should provide the off-line community building that has proved successful for other media brands.
The startup has raised $750,000 in seed funding from notable media execs including Brian Kelly, founder and CEO of The Points Guy, and is targeting a Series A in 2019.
It’s hilarious to think that it’s been six years since I wrote that software was starting to eat Mobile World Congress, as the action in the mobile world moved — at the time — deeper and deeper into apps. In the intervening year’s we’ve seen a huge boom in the startup world, and six years ago companies like Waze were still startups that could take the heat… Read More
While it looked like all the major news from Microsoft’s Surface event today had already leaked ahead of time, the company still managed to surprise us with the launch of its new noise-canceling headphones and its new Surface All Access plans that offer a monthly installment plan for your Surface purchases, similar to the way you probably pay for your phone.
You can read all about the headphones here.
As for the All Access plan, the company said that plans start at $24.99/month for 24 months to get a Surface Go. At $625 over two years, that’s a bit more expensive than getting the Go outright, though Microsoft didn’t yet say what configuration we’re actually talking about here.
What we do know, though, is that All Access will include a subscription to Office 365, access to in-store training and support (or what Microsoft call “top-tier support”).
As far as we can tell, there’s no discounted upgrade plan included here, something Microsoft previously offered when it launched its first financing option for its Surface devices last year. Those plans quietly disappeared a few weeks ago, though, likely in order to make room for this new plan.
To get a device on this new plan, you’ll have to go to a Microsoft retail store.
Microsoft announces the Surface Laptop 2
Some companies keep products a closely guarded secret, like they were nuclear codes or ingredients to a popular cola. Others seem less concerned about the whole thing, as long as it keeps people talking. Based on all we’ve seen from the Galaxy Note 9 to date, it seems that Samsung falls firmly into the latter camp.
Of course, it’s key to point out that we won’t really know what the new handset is all about until its big reveal at Unpacked on Thursday. But also, we really know what it’s all about because, I mean, look at all these leaks.
That said, there’s probably still plenty of reason to pay attention to the event. Given the fact that the company opted not to wait to announce the Galaxy Tab S4 could point to even more big product announcements in the coming months.
There have been various other rumors swirling around these past few weeks and months, including a lot of speculation around a new Samsung Gear watch that could make its debut at the same event.
The Note 9, on the other hand, has all but stood up and announced its presence. In addition to your standard array of rumors, there have been a few egregious leaks on Samsung’s part, including a top executive using the new device in public and Samsung posting a promo video to YouTube.
Here’s what we know so far about the upcoming phablet.
By all accounts, the design language hasn’t changed much since the last generation device — in fact, that’s likely the reason DJ Koh thought he could go unnoticed using the phone. There is, however, one major tell that tipped off viewers to the fact that the executive was using something new.
Originally rumored to be located under screen, the fingerprint sensor has, indeed, been moved. This time, out, however, it’s under the camera, rather than beside it — addressing a key complaint with the Note 8’s design, which found users fumbling with the camera lens when attempting to unlock the device.
The dimensions are reportedly roughly the same here, as well. At 161.9 x 76.3 x 8.8mm, the device is marginally shorter than its predecessors, due perhaps in part to thinner bezels on the top and bottom. The display, meanwhile, is the ever so slightly larger at 6.4-inches to the 8’s 6.3.
Samsung’s made it pretty clear from the start that battery life is a primary focus for the new device. The company appeared to confirm early rumors that the handset would be sporting a 4,000mAh battery in an early teaser that openly mocked the iPhone’s relatively small offering (as is Samsung’s M.O. these days).
That’s a 700mAh jump over the Note 8’s offering, and puts the forthcoming handset toward the top of the phone battery heap. It also bucks Samsung’s recent trend of battery modesty, in the wake of the ongoing Note 7 fiasco. The company apologized profusely, instituted strict testing guidelines, and the phone buying public appears to have mostly forgiven and forgotten the whole kerfuffle.
Subsequent teasers, meanwhile, have focused on additional storage and performance enhancements. A massive 512GB version is rumored to be on tap and will no doubt cost a pretty penny. That can be augmented by up to a terrabyte, courtesy of the microSD slot.
#Samsung – #GalaxyNote9 – Samsung Galaxy Note 9 live images leaked https://t.co/WEgJIsWtEy pic.twitter.com/kMwHm7kpBc
— /LEAKS (@Slashleaks) July 17, 2018
This is a no-brainer. Camera updates have been the focus of virtually every flagship phone release. That said, this is one of the few pieces of the phone that’s still a relative mystery.
The company’s beloved stylus was clearly a focus from the outset. In fact, the Unpacked invitation shows a closeup of the S-Pen’s button on a yellow background. The new leaked video confirms the vibrant new color scheme, which, at the very least, should make it a bit harder to lose.
S Pen? pic.twitter.com/xizmWw9J2W
— Evan Blass (@evleaks) July 17, 2018
The company has also strongly hinted that S-Pen improvements will be a focus for the new phone, but these have mostly managed to stay under wraps. Suggested functionality includes non-drawing controls for things like music playback and remote unlock.
Yep, still here. After all, it was only a few weeks ago that the company was mocking Apple for what it perversely deemed a “double-dongle” required to listen to music and charge the phone at the same time. It remains a key differentiator between Samsung’s handsets and the iPhone, and as such, is likely sticking around for a wwhile. All of the leaks thus far appear to confirm this.
Disrupt SF is just a few months away (September 5-7 at Moscone Center West) and we’re looking for delegations of international startup groups, government innovation centers, incubators and accelerators to organize a country, state or regional pavilion in Startup Alley. Are you ready to step on a world stage, show off your emerging companies and be recognized as a leader in tech innovation?
Startup Alley is prime real estate, where hundreds of founders from everywhere in the world — and investors looking to fund them — gather to meet, connect and network. And maybe even produce a unicorn or two.
If you want to exhibit in Startup Alley as part of a country, state or region, your delegation startups must meet one requirement only: they must be Pre-Series A startups. If so, shoot our Startup Alley manager, Priya, an email at firstname.lastname@example.org. Tell us about your delegation and where you’re from, and we’ll provide more information about the application process.
Regions that have participated in previous TechCrunch events include St. Louis, Argentina, Austria, Belgium, Brazil, the Caribbean, Catalonia, the Czech Republic, Germany, Hungary, Hong Kong, Korea, Japan, Lithuania, Taiwan, Ukraine and Uruguay. We believe that innovation and great ideas know no geographical boundaries, and we strive to increase the diversity within our regional pavilions at every Disrupt.
Organize a minimum of eight (8) startups in your region and you’ll receive a discount off each Startup Alley company’s exhibitor package — and you’ll get organizer passes to the event. Plus, if you book your pavilion before July 25, your startups will receive one additional Founder ticket to attend Disrupt SF. Email email@example.com for more pricing information.
Besides binge-watching TikTok videos and battling enemies in the magical land of mobile games, many Chinese people may also pass time during the upcoming Lunar New Year on Xuexi Qiangguo, a news and chat app developed by the country’s top ideology officials.
The app managed to top the Chinese App Store between January 22 and 25 before two ByteDance apps pushed it down to the third place this week, download statistics from App Annie shows. At a glance, the news section is almost exclusively about the Communist Party and president Xi Jinping.
The app is almost exclusively about the Communist Party and president Xi Jinping.
It doubles as an instant messenger, with development support provided by Alibaba’s Dingtalk enterprise communications tool. That means users can log in via their Dingtalk account and chat with their Dingtalk contacts directly over Xuexi Qiangguo.
The app doubles as a messenger with technical support provided by Alibaba’s Dingtalk
Directly translated as “studying strengthens the nation,” Xuexi Qiangguo is the product of a research center under China’s Publicity Department, an important organ in charge of how information disseminates in the country. The digital weapon underscores the Communist Party’s growing efforts in recent years to appeal to phone-savvy generations, though the app seems to have peaked.
As of February 1, the iOS version of Xuexi Qiangguo is rated 2.4 out of 5 from 6,810 reviews. Its impressive download number, as it turns out, is in part a result of a top-down order. Many early users are Party members or work in China’s giant state apparatus, who were told to install the app. Several users TechCrunch spoke to, including a public school principal, a director of a district party committee and a municipal government official, confirmed that everyone in their organizations must download the app and every now and then, users may get quizzed on relevant content.
Newspapers and social media posts also suggest local governments have mandated downloads among Party members and encouraged the general public to give it a try. Some take a step further to organize offline study sessions for the app. For some context, China had nearly 90 million Communist Party members by the end of 2017.
A city in Hunan Province has ordered all Party members to install Xuexi Qiangguo, a local newspaper reported. The photo shows a study session held for the app. Source: 衡阳晚报 via Weibo
“I believe that most of the downloads were incentivized, probably only a very small portion was initiated by a real interest,” says Kristin Shi-Kupfer, director at MERICS, a German think tank specializing in China. “This app will probably drop out of the rankings of any app store soon.”
To engage the younger crowd, the app takes cues from new media forms in China’s flourishing online world. The news section, for instance, appears to be modeled on ByteDance’s popular news app Jinri Toutiao . While Toutiao uses algorithms to understand user preferences and delivers content from a wide array of third-party publications, Xuexi Qiangguo curates from an army of 18 state-controlled outlets.
The app also has a gamified loyalty program, which rewards users virtual points when they complete a task, such as daily sign-in. Because registrations are on a real-name basis, supervisors can check who in their organizations haven’t installed the app, ushering in a new kind of digital monitoring.
“The timing of the publishing of this app might be linked to the upcoming Chinese New Year Festival, which the Chinese Communist Party sees as an opportunity and a necessity to spread their ideology,” notes Shi-Kupfer.” [It] may be hoping that people would use the holiday season to take a closer look, but probably also knowing that most people would rather choose other sources to relax, consume and travel.”
The third paragraph was updated.
Pandora Premium is coming to Google Home, Mini, and Max devices, and other smart speakers and screens with Google Assistant built-in, the company announced this morning. The integration means listeners who pay for Pandora’s on-demand music service will be able to search and play any song, album, or playlist, just by asking Google, and can even search by lyrics, play their personalized “mood” playlists, and take other actions using their voice.
For example, Google Assistant users will be able to thumbs up and thumbs down tracks on Pandora, skip tracks, create new stations, or play a song again, using voice commands.
The service can also be set as the default on Google Home, so you don’t have to specify to play the songs via Pandora when issuing commands.
Support for Pandora Premium on Google Home has been long-awaited. Pandora Plus and Pandora’s free service have been available on Google Home since November 2016.
The Premium service, however, is Pandora’s true Spotify competitor, offering a more robust feature set in addition to on-demand music.
Access to personalized soundtracks is one of Pandora Premium’s newer features, and a potential selling point for the company’s top-tier service, along with this new Google Assistant integration.
In an effort to challenge Spotify, Pandora this spring rolled out its own set of personalized playlists based on listening behavior and other factors, built using its Music Genome. This made Pandora capable of creating over 60 personalized playlists. Most users will only see a subset of those – like “party soundtracks, or those for moods like “happy” or “rainy days,” or those for various genres of music they like. Now these, too, can stream over Google Assistant-powered devices.
The ability to search by lyrics is another benefit to using Pandora Premium on Google Assistant devices – and an area where Spotify is glaringly absent. Not only does Spotify not offer lyrics search, it doesn’t even offer lyrics. And we’re hearing that it has no plans to launch this feature anytime soon, though it continues to test this. (For example.)
Meanwhile, Spotify’s rivals are offering search by lyrics, including Amazon Music – which lets you do lyrics searches using Alexa – and Apple, which is rolling out lyrics search in the latest version of Apple Music. Many Spotify users are beginning to notice this missing feature, and regularly complain. At some point, Spotify’s inability to keep up with the market on voice (it has just barely managed a voice search button) and lyrics could give competitors an edge, along with Spotify’s lack of hardware, like Apple’s HomePod or Amazon’s Echo.
Apple Music, for instance, is now ahead of Spotify in North America, according to statements made by Apple CEO Tim Cook during the last earnings call.
Pandora’s potential is more of a mixed bag. There’s a growing market of those who pay for Pandora’s service. The company reported in July. It added 351,000 paying customers across both Premium and the mid-level tier, Pandora Plus, in the last quarter, bringing the total paying customer base to 6 million. That’s up 23% year-over-year. But its total active user base was down 6% year-over-year to 71.4 million.
But Pandora is addressing the needs of cross-platform support, in an effort to meet users anywhere they want to stream. It now supports over 2,000 connected devices including TVs, smart speakers, game consoles, streaming players, and more. These days, its listeners are increasingly using Pandora through voice-activated devices – up nearly 50% since last year, the company says.
Pandora is offering a free 90-day trial of Premium to Google Home users via the Google Home app on Android or the Play Store.
Pandora Premium was one of two major additions to Google Assistant devices on Tuesday – Deezer is also now available, allowing customers access to more than 36 million HiFi tracks and voice support, Google noted.
Gartner has released its quarterly PC sales survey for the fourth quarter of 2018, and it was the same old story. PC sales plunged in the fourth quarter and were down 1.3 percent for the year. The three top players — HP, Dell and Lenovo — accounted for 63 percent of sales worldwide in the quarter.
The company found in their preliminary sales research that worldwide sales totaled 68.6 million units in the fourth quarter. That may sound like a big number, but it’s down 4.3 percent over the same period last year.
Gartner principal analyst Mikako Kitagawa said after a couple of quarters of modest growth, the market began to slow down again for a number of reasons, including political and economic uncertainty and a CPU shortage. “There was even uncertainty in the U.S. — where the overall economy has been strong — among vulnerable buyer groups, such as small and midsize businesses (SMBs). Consumer demand remained weak in the holiday season. Holiday sales are no longer a major factor driving consumer demand for PCs,” she said in a statement.
That could be because consumers are spending much more time on mobile phones. Many tasks, whether shopping, email, banking or social media, that once required a home PC can easily be done on a mobile phone now, leaving PCs to the realm of business, where it isn’t always practical to do work on a smaller footprint. In fact, Black Friday online shopping totaled $6.1 billion this year, with mobile phones accounting for $2.1 billion.
The trade war that has adversely affected Apple and other tech companies probably also had an impact on the PC market.
Lenovo was the biggest winner in the worldwide report, achieving 24.2 percent of market share with number of units sold up 5.9 percent from last year. HP had 22.4 percent market share, but its numbers were down -4.4 percent. Dell came in third with 15.9 percent with market share, up a modest 1.4 percent.
Chart: Courtesy of Gartner
In the U.S., sales were even worse, down 4.5 percent, as small business buyers stayed away in the quarter. “The fourth quarter is typically a buying season for small office/home office (SOHO) and small business buyers in the U.S. as they want to use up the untouched budget before the tax year ends,” Kitagawa explained in the report. Unfortunately, they didn’t seem to do that this year.
Chart: Courtesy of Gartner
The top three vendors in U.S. sales were HP with 33.4 percent market share, growth down -7.6 percent; Dell with 25.7 percent, growth up 0.9 percent and Lenovo with 15.2 percent, growth up a whopping 23.4 percent for the quarter, making it the big winner in the U.S. market in terms of sales growth.
In case you’re wondering, Apple, which was forced to issue new guidance for Q12019 earnings last week due to lower iPhone sales, also had softer PC sales last quarter, with numbers down 2.1 percent in the U.S. and 3.8 percent worldwide. Gartner found that Apple PCs account for 12.4 percent of market share in the U.S. and 7.2 percent worldwide.
The report is based on data from sales of desktop PCs, notebooks and devices such as the Microsoft Surface, but excludes Chromebooks and iPads. Gartner is careful to point out these are preliminary numbers and they could change once the final data is in.
E-cigarette maker Juul recently received a surprise visit from the Food and Drug Administration, CNBC first reported. Last week, the FDA seized thousands of documents from the startup’s headquarters, TechCrunch has confirmed.
The unannounced inspection of the startup’s headquarters on Friday was part of the FDA’s efforts to seek documentation related to Juul’s sales and marketing practices, according to the FDA.
“The purpose of these inspections was to determine compliance with all applicable FDA laws and regulatory requirements,” an FDA spokesperson told TechCrunch. “The new and highly disturbing data we have on youth use demonstrates plainly that e-cigarettes are creating an epidemic of regular nicotine use among teens. It is vital that we take action to understand and address the particular appeal of, and ease of access to, these products among kids.”
This comes after the FDA requested documents from the company in April as part of an inspection of Juul’s marketing practices toward minors. Juul, in a statement to TechCrunch, says it’s committed to preventing underage use and is wanting to engage with the FDA, lawmakers and public health advocates to ensure young people don’t use its products.
“The meetings last week with FDA gave us the opportunity to provide information about our business from our marketing practices to our industry-leading online age-verification protocols to our youth prevention efforts,” Juul CEO Kevin Burns said in a statement to TechCrunch. “It was a constructive and transparent dialogue. We’ve now released over 50,000 pages of documents to the FDA since April that support our public statements. We look forward to presenting our plan to address youth access in the 60-day time frame as outlined by FDA. We want to be part of the solution in preventing underage use, and we believe it will take industry and regulators working together to restrict youth access.”
Last month, the FDA ordered five companies — Juul being one of them — to outline within 60 days their plans to address underage use of their products. If those companies fail to meet the deadline, the FDA says it will pull its products from shelves.