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The changing world of tech

March 30: The tech world is getting a shake up, from the end of Future Shop to a rise in gender discrimination trials


 

MORNING-PLAYBOOK-STORY
Amidst blockbuster stories on the massive valuations that tech companies from Snapchat to Pinterest are getting, today we step back and look at who’s winning, but more often losing, in the industry: from brick-and-mortar stores to women at venture capital firms.

Last week ended on a sour note for markets, as oil and gold prices fell, bringing the TSX/S&P Composite down once again (by almost 60 points), as the loonie fell under 80 cents once again. One of the big surprises on Friday was a profit from BlackBerry, which sent shares up by 2.5 per cent, despite a grinding loss on the revenue front. South of the border, the news was another speech from Fed chair Janet Yellen, who cautioned that rate changes – once they actually begin – will be cautious but steady. This morning, Chinese markets are rallying on hints the Chinese central bank may loosen monetary policy once again, with the notoriously volatile Shanghai Composite hitting a seven-year high. Prospects are shaky for Greece, with an update expected on how eurozone talks on the country’s bailout fared over the weekend. We’re also waiting on the results of Nigeria’s presidential election, and oil is falling again this morning – WTI is currently under $48.

Today, we have the industrial product-price index, and the raw materials price index, both for February, as well as numbers on personal income and savings from the U.S. Tomorrow will be the day to watch for, with real GDP numbers for January – a chance to look at the damage wrought by the oil crisis – New Brunswick’s budget, and January’s survey of payrolls, employment and hours. We’ll also get eurozone inflation numbers tomorrow. This week is a short one, with markets in the West and Australia closed on Friday for Easter.

The great BlackBerry debate. On Friday I said the latest BlackBerry earnings would be roundly disappointing (although there’s always room for surprises). Despite pledging a turnaround plan, a renewed emphasis on software, and plans to launch device after device, the company has not seen a lot of good news. Still, the results were mixed: the company surprised by actually announcing a profit in the last quarter, of $28 million and adjusted earnings per share of four cents, and shares rose as a result. But revenue didn’t offer a happy ending – it was 32 per cent down from the previous year, far short of investor expectations, at about $800 million. While there were gains in software revenue, profits from hardware, and the number of devices, were both lower than expected. CEO John Chen said the two-year turnaround plan is working, and pledged significant gains in revenue from software by the end of the year, as the company starts charging for specialized BlackBerry features like Messenger.

Goodbye Future Shop. The electronics store is closing its doors – and, in many cases, putting up a new sign. Best Buy, which owns the Canadian chain, announced over the weekend it will consolidate the two brands – which in some cases sat across parking lots from each other – closing 66 Future Shops and converting 65 to Best Buys, and in the process laying off about 1,500 people. The chain has been owned by the American Best Buy since 2001, with only limited differences separating the two, after the founder sold the chain for $580 million. Both brands have been under pressure from the same broad trends, as consumers continue to snap up consumer electronics (less DVD players, more wearables), but increasingly order them either via Amazon or directly from the manufacturer or brand, including the Apple Store. The restructuring is expected to cost $350 million.

The tech industry and gender on trial. On Friday, Ellen Pao lost her high-profile, closely watched gender-discrimination suit against the venture capital firm Kleiner Perkins Caufield & Byers. The case was seen as a bellwether for gender-discrimination cases in the tech industry, which has regularly seen accusations at some of the industry’s most high-profile companies. The suit revolved around Pao’s claim that she was passed over for promotion, and eventually dismissed, from one of the industry’s most prestigious firms due to her gender, and a complaint she made after a colleague sexually harassed her after she broke off an affair. The jury judged that Pao didn’t progress due to her own performance. But regardless of Kleiner Perkins’s win, the case has opened up a floodgate of debate over women and diversity in the tech industry, and the New York Times reported many cases are now re-examining their harassment policies and gender imbalance, which in the world of venture capital, is large: says the Times, “six per cent of partners are women, and 77 per cent have never had a female investor.” Two gender discrimination suits have since been filed against Facebook and Twitter.

How long does it take to shop for groceries in Venezuela? A long time. As the country has faced massive shortages of basic products, from cooking oil to toilet paper, Venezuelans wait in enormous lines to do their grocery shopping. Critics say this is the result of strict price controls and economic collapse, the government said it’s the result of people hoarding products, or even distant events like a strike at a Los Angeles port (in the case of french fries). So this BBC reporter went shopping to show how much time and effort picking up a few basic groceries now takes.

Need to know: 
TSX: 14,812.42 (-57.38), Friday
Loonie: 79.37 (-0.82), Friday
Oil (WTI): $47.77, Monday (6:15 a.m.)


 

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