Mid-Year Update on Our 2019 Predictions
Apple will be the best performing FAANG stock in 2019
As of the close on July 2nd, Apple is up 29%, Google 6%, Facebook 43%, Amazon 26%, and Netflix 41%. Apple sits in the middle of the pack, but we still believe they will finish the year as the top performer. Apple’s privacy-first approach shelters them from most headline risk around consumer data practices, we expect the growing Services narrative to lead to multiple expansion, and a good quarter in China would restore confidence in their second largest market (which has damaged the stock year-to-date).
Reducing Technology Use Will Be a Top 10 New Year’s Resolution
The collective concern about device usage and social media addiction seems to have cooled off in the first half of 2019. However, the current attitude toward big tech and potential government regulation may re-escalate interest in reducing tech use and addiction to social and content services. We still think it’s a real problem, and have experimented with ways to change behavior. We also started our own movement to reduce tech addiction, the Good Phone, which outlines a minimalist iPhone setup. In reality, the Good Phone movement is about helping people feel superhuman, which should be the point of all good movements — to empower those who embrace it.
At Least Four $10B+ Tech Unicorns IPO
This prediction may not have been ambitious enough. So far, six $10B+ tech unicorns, Slack, Zoom, Pinterest, Chewy, Lyft, and Uber, have gone public in 2019. While the companies have been a mixed bag with regards to performance, it is clear that the appetite for tech IPOs is high. We expect several more this year, including Airbnb, Palantir, Robinhood, and WeWork.
Legislation to Regulate Tech Company Data Usage Will Be Introduced and Passed
Formal regulation has yet to be introduced at the federal level, specifically with regard to regulating data usage. The California Consumer Privacy Act (passed in 2018, implementation in 2020) remains the best example of data regulation in the US. However, the federal government is taking steps to regulate Big Tech outside of data concerns. Last month the DOJ and FTC announced antitrust investigations into Apple, Google, Amazon, and Facebook. Additionally, Sen. Josh Hawely introduced a bill that would open companies like Facebook and Youtube to lawsuits about the content on their sites.
Apple’s New Streaming Service
In March, Apple announced a slew of new services, headlined by Apple TV+, the home for the company’s original content, which now has over 40 shows in the works. Here is a list of the planned shows. Alongside Apple TV+, Apple TV Channels will house third-party subscriptions in a friendly UI. While Apple’s video content has successfully been transitioned out of the Music app, the organization of Apple’s content (music, original video, third-party streaming, podcasts, audiobooks, etc.) is still messy under the new umbrella of expanded services.
Despite Increased Competition, Tesla Will Maintain Its 50+% Market Share in the US
Tesla recently reported a record quarter for both production and deliveries, delivering 95,200 total vehicles. According to the InsideEVs sales scorecard, Tesla has sold 57% of the EVs in the US so far in 2019. Tesla’s market share lead may last longer than we anticipated, as competition seems to be taking off slower than expected. As a point of reference, the highest volume EV, Tesla’s Model 3, has sold 128,478 this year. The highest non-Tesla vehicle, the Chevy Bolt, has sold 8,281. The Audi e-tron has sold 1,835 and the Jaguar I-Pace has sold 1,073, both of which were high-profile entrants made by established automakers.
Oculus Quest Will Be the First VR Headset Ready for the Mainstream
Since its May 21st launch, the Oculus Quest has been selling well and earning raving reviews from users. In its first week, the Quest sold out on Amazon, Best Buy, and Walmart. While unit sales have been encouraging, ownership of VR headsets is far from “mainstream.” That said, the Quest is undoubtedly suited for a mainstream audience, as it is by far the most accessible and affordable way to have a compelling VR experience. Read our thoughts on how the Quest changes the industry here, and our review of the device here.
Disclaimer: We actively write about the themes in which we invest or may invest: virtual reality, augmented reality, artificial intelligence, and robotics. From time to time, we may write about companies that are in our portfolio. As managers of the portfolio, we may earn carried interest, management fees or other compensation from such portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making any investment decisions and provided solely for informational purposes. We hold no obligation to update any of our projections and the content on this site should not be relied upon. We express no warranties about any estimates or opinions we make.