Digital trade is a “significant competitive advantage for the U.S. economy,” and the Trump administration should view any U.S.-Japan free-trade agreement as an “important opportunity to expand commitments to the free flow of data,” commented IBM in docket USTR-2018-0034. The Office of the U.S. Trade Representative sought feedback to help shape the administration’s negotiating posture in future trade talks with Japan (see 1811260011).
Better protecting U.S. intellectual property rights should be a high priority in negotiating a new trade agreement with Japan, tech groups urged the Office of the U.S. Trade Representative in comments posted this month in docket USTR-2018-0034. USTR sought comment in late October to develop U.S. negotiating positions with the aim of addressing “both tariff and non-tariff barriers and to achieve fairer, more balanced trade.” A “flexible” and “balanced” IP “regime” is critical “for the continued growth of the digital economy,” said the Computer & Communications Industry Association. A U.S.-Japan free trade agreement “should reflect the two trading partners’ commitments to preserving limitations and exceptions in copyright law needed to further innovation,” said CCIA. U.S. trade policy “has long reflected domestic copyright principles by including necessary intermediary protections for online services in trade agreements dating back to 2003,” it said. The “single most important part” of the semiconductor manufacturing industry is its IP, said SEMI, the industry’s top supply-chain trade group. Continued technological development “requires significant resource commitments, and as such, strong global intellectual property protections are a top priority,” it said. “The ability to leverage this intellectual property means that companies in this industry can engage in trade and reinvest revenue into research.” SEMI strongly supports efforts to better protect IP, “and encourages greater enforcement of trade and investment rules,” it said. A Semiconductor Industry Association top negotiating priority is a U.S.-Japan trade deal that ensures access to encryption products, said SIA. “We recommend that all U.S. trade agreements contain specific commitments preventing parties from placing discriminatory restrictions on commercial foreign products with encryption,” said SIA. It also wants a trade agreement that bolsters protections of trade secrets, which remain “extremely vulnerable, especially in jurisdictions with weak laws and/or enforcement practices," it said. SIA warned about "misappropriation of trade secrets enabled or encouraged" by government industrial policy. Comments were due by midnight Monday. The U.S. Office of the Intellectual Property Enforcement Coordinator received comments last week as it looks to put together its next three-year joint strategic plan (see 1811260014).
Nuance Communications will spin off its automotive voice-control business as a separate publicly traded company in late 2019 and “wind down” its subscription revenue services and consumer device operations because they're “non-core” to Nuance’s artificial intelligence “strengths” in “conversational AI solutions,” said CEO Mark Benjamin on an earnings call. The company will manage royalty contracts in consumer devices “and seek opportunities to monetize IP and source code in one-time deals,” he said Monday. Its voice and virtual assistance technology for car infotainment and communication systems is in more than 50 million new cars yearly “and can be found in more than 200 million cars,” said Benjamin.
New York State’s $1.5 billion incentives package luring Amazon to build a new headquarters campus in Long Island City, Queens (see 1811130013), “is a lightning rod for the political rhetoric on both extremes,” wrote Gov. Andrew Cuomo (D) Monday. The New York Post, “representative of extreme conservatives,” was “factually baseless” for editorializing the deal as a billion-dollar giveaway, said Cuomo. New York “gave Amazon nothing,” except for tax incentives that have been “operational for decades” with bipartisan support, he said. Rupert Murdoch's Post “is being totally hypocritical,” because companies that Murdoch controls “have aggressively sought and received hundreds of millions in government tax incentives from New York State,” he said. Murdoch's News Corp. didn't comment. Of “socialists” who blasted the deal as a billion-dollar giveaway to Amazon CEO Jeff Bezos when the money should have gone instead to the poor and needy, it's "a politically appealing argument,” but also wrong, said Cuomo: “We give Amazon nothing and their revenues give us approximately $900 million annually.” Rep.-elect Alexandria Ocasio-Cortez, a democratic socialist whose district borders the site where Amazon will build the campus, tweeted that the deal was “extremely concerning to residents here” because New York communities "need MORE investment, not less." Cuomo countered that Amazon’s presence will bolster the region’s tech sector. ”There will be a new school in the community, new residential apartments, investments in public transit, a tech incubator, a partnership with the local housing authority to create employment opportunities and myriad other local benefits,” he said.
Cisco saw “immaterial” impact in its Q1 ended Oct. 27 from the 10 percent Trade Act Section 301 tariffs that took effect Sept. 24 on $200 billion worth of Chinese imports, because the tariffs kicked in with only a month to go in the quarter, said CEO Chuck Robbins on a Wednesday earnings call. Though Cisco hiked prices on Chinese-sourced goods in Q1 to cover the higher tariff costs, it “saw absolutely no demand change” between the week before and the week after the price increases took effect, he said.
CES, which begins Jan. 8, will showcase "companies and industries that you really wouldn't expect," said Karen Chupka, CTA executive vice president-CES, during a news conference Q&A. That includes first-time exhibitor Procter & Gamble, which scheduled a news conference Jan. 6 on the first media day. Connectivity and personalization "have changed the way consumers interact with nearly every product and service, and consumer packaged goods are no different," emailed P&G Friday. "As a first time exhibitor at CES, we will showcase new products that address changing consumer desires, using technology to transform everyday experiences. These technologies fall within our grooming, beauty, oral and home care."
Direct-to-consumer content delivery continues to be one of Disney’s “top priorities,” said CEO Bob Iger on a Thursday earnings call. More than a million subscribe to ESPN Plus, and “we continue to see impressive growth,” he said. That “bodes very well” for Disney’s overall direct-to-consumer ambitions, including the Disney Plus-branded service to launch late 2019, he said. The company will give “a first look at Disney Plus, along with some of the content we're creating for it," at an investor conference in April, he said. “You can't cry over spilled milk,” said Iger about Disney’s failed bid to land Sky, which went to Comcast. “We would have loved to have had Sky, both because we believe in the asset and we thought it could have helped us in terms of introducing a direct-to-consumer service in the European market.” Disney still plans to launch Disney Plus in Europe, he said: Without Sky, it’s possible “it takes us a little bit longer to penetrate some of these markets.”
It’s “not resolved” whether CTA members have the will to file a lawsuit to block tariffs on Chinese imports before they rise to 25 percent Jan. 1, CTA President Gary Shapiro told us at CTA Unveiled New York Thursday. The association hired Akin Gump to draft a court complaint and is shopping it to other trade groups seeking support (see 1810290025). “It will take an action” from the Trump administration to stop the hike, Shapiro told us. President Donald Trump and Chinese counterpart Xi Jinping agreed to meet later this month, and “one report said they’re even going to have dinner” together, Shapiro noted. “If it’s a very successful dinner, we can avoid a depression. We’re hoping there’s some sort of deal cut or delay.”
Cord-cutting “continues to alter the TV landscape,” said Roku CEO Anthony Wood on a Wednesday-evening earnings call after reporting Q3 results that led to a stock plunge. “We believe the trend will accelerate as more consumers understand the choice and value that streaming offers.” With 24 million “active accounts,” the “scale” of Roku’s customer base “now rivals large traditional U.S. cable and satellite companies,” he said. The chief predicted "more content will move to streaming" as pay-TV bundles shrink. Though executives said the streamer again raised its 2018 outlook, it now expects Q4 net to range between a $4 million loss and profit of $3 million. That's reportedly less profit than expected. The company "tightened our Q4 outlook slightly," Chief Financial Officer Steve Louden told analysts.
The mass market for consumer augmented- and virtual-reality devices may be developing more slowly than it appeared last year, said the CEO of a microdisplay supplier working on such products. Andrew Sculley on a Q3 earnings call Thursday said the consumer AV/VR market will remain a “substantial growth opportunity.” Last year's “urgency” to chase it no longer exists, he said. “It’s our assumption that many of the companies pursuing this market recognize that widespread consumer adoption will take more time and development work than originally contemplated.”