Welcome to Next, a weekly newsletter highlighting some of our unique news and research on how technology is reshaping the future of industries across global markets. As part of our expanded cross-sector tech coverage, we will curate some of our best insights and features on topics such as artificial intelligence, internet of things, cybersecurity, 5G, smart cities, autonomous vehicles, clean energy, telehealth and financial technology.
Top News
Microsoft is expected to report continued double-digit revenue growth for the September quarter on the strength of its cloud business, which analysts predict will offset any slowdown in the company's hardware sales as a global chip shortage drags on. Supply-chain disruptions related to the critical computing component used in everything from laptops to cars are weighing on manufacturing around the globe, and Microsoft confirmed that its new 2-in-1 tablet computer, the Surface Pro 8, is no exception.
Source: Microsoft |
Meanwhile, concerns about inflation and rising fuel costs are likely to weigh on the U.S. utility sector heading into third-quarter updates. Utilities and their investors are also keeping a close eye on Washington and any developments related to U.S. President Joe Biden's infrastructure investment and clean energy agenda. Sector analysts are particularly concerned that the emerging risk of stagflation, which describes a period of high inflation and stagnant economic growth, may pressure utilities to increase customer bills and could drive down equity values.
In healthcare, Pfizer's $1 billion deal for a cancer treatment and GlaxoSmithKline's $700 million payment for two neurodegenerative disorder therapies were the largest up-front offerings of the licensing agreements signed in the third quarter. Pfizer agreed to make a $650 million up-front payment and a $350 million equity investment in Arvinas as part of a July deal to jointly develop and commercialize the company's experimental breast cancer drug ARV-471. GSK's $700 million up-front offering to Alector Inc. was the largest all-cash payment of the quarter, as part of a July deal to jointly commercialize the Californian biotech's antibodies, dubbed AL001 and AL101, for a range of neurodegenerative diseases.
Chart of the Week
Analysts question Netflix valuation as 'Squid Game' drives stock
Content is king, and Netflix is still the seat of the empire. The company reported a membership beat in the third quarter and offered fourth-quarter guidance almost twice the third-quarter result. The streaming platform has a massive content slate planned for the fourth quarter, with its current crown jewel "Squid Game," a widely popular dystopian series out of Korea, already driving viewership and platform adoption.
Tech, Media and Telecom
Microsoft's thriving cloud business set to offset chip shortage headwinds
Offsetting Microsoft's device sales headwinds are booming cloud sales, fueled by a pandemic-driven shift to remote work that accelerated companies' digital migration plans across the globe.
Internet service providers collect sensitive consumer data, FTC says
Federal Trade Commission officials found that major internet service providers collect data about users' browsing history, location, economic status, political views and race to make money.
Online wagering, engaged fans key to sports betting growth
Now legal in some form in Arizona, Washington, South Dakota, Wyoming and Connecticut, sports betting is available to nearly 60% of U.S. adults, and that number could exceed 80% in the next few years.
Consumer
Subprime M&A offers path to captive expansion for automaker, retailer
Two recent deals seek to replicate GM's success in using the acquisition of a subprime auto lender as the basis for the creation of a broader captive financing capability to support sales and enhance profitability.
Fintech
PayPal investors not pinning hopes on a $45B Pinterest deal
If successfully integrated, Pinterest has the potential to strengthen PayPal's value proposition and differentiate PayPal from other checkout options, MoffettNathanson analyst Lisa Ellis wrote. However, effective integration will not be easy.
National Bank Holdings eyes nationwide fintech platform for small businesses
After the Colorado-based company made two strategic investments in financial technology firms last August, CEO G. Timothy Laney said the bank is "very focused" on developing certain fintech partnerships.
Energy
US utility Q3 earnings calls to focus on federal climate plans, stagflation risk
Still, the majority of U.S. investor-owned electric utilities are expected to report positive earnings results, according to an S&P Global Market Intelligence analysis.
Metals and Mining
Mining sector 'wildly unprepared' for energy transition – Black Mountain CEO
The mining sector will need capital to turn on the spigot if it is to meet global metal needs, said Rhett Bennett, founder and CEO of Black Mountain, a group of natural resources companies.
Chile makes a play to add to its lithium market influence
The Chilean government is making a play to expand its influence on the global lithium market and bring more money into public coffers by inviting more companies to exploit its substantial lithium reserves.
$22.6B Mexican lithium mine bogs down in drug cartel, tech risks
Tesla sought lithium carbonate from northern Mexico, but the task has proven more complicated than it first appeared.
Healthcare
Pfizer's $1B cancer buy tops Q3 licensing deals; neurological interest undimmed
Cancer deals dominated the licensing agreements for the third quarter of 2021, with therapies for neurological disorders also attracting sustained interest from buyers.
Roche promises fair Alzheimer's drug price as US FDA accelerates review
Gantenerumab could become one of the Basel, Switzerland-based drugmaker's biggest medicines if late-stage data next year leads to the drug's approval, Roche Pharmaceuticals CEO Bill Anderson told S&P Global Market Intelligence.
CVS, Walgreens, Walmart unveil 'omnichannel' strategies for healthcare expansion
Executives told the HLTH 2021 conference about the rationale behind the retailers' recent moves into the healthcare space and what the future looks like for their customers' health.
Top Research
Tech startups in other sectors moving onto insurers' turf
Fresh competition for insurance agents and carriers is coming not only from insurtechs but from tech startups focused on other industries entirely, according to S&P Global Market Intelligence's 2021 U.S. Insurtech Market Report.
From Kagan, a media research group within S&P Global Market Intelligence:
Alexa, tell me about the smart speaker market in 2021
Consumer demand for smart speakers, which are voice-enabled products such as the Amazon Echo and Google's Nest Mini, continues to grow. Worldwide unit shipments are on track to increase by 12% in 2021.
Global telco survey: No fireworks in busy-hour bandwidth demand
Reports of surging data consumption during the pandemic underscored broad lifestyle changes, but Kagan's latest survey of telco decision-makers illustrates significantly less volatility in busy-hour demand than what was expected a year ago.
Global console software slump in 2021 portends shift to subscriptions
Console gaming content revenue is on track to fall 5.2% in 2021 to an estimated $38.24 billion as pandemic-driven demand wanes and hardware shortages persist.
From Panjiva, a business line within S&P Global Market Intelligence:
ZIM, Matson lead carriers, DP-DHL, K+N lead forwarders in slowing September
Ships continue to queue outside major ports even though U.S. imports have slowed, increasing 5.1% year over year in September. Imports have been at peak-season levels since March, while 2020 numbers build towards a holiday peak.
Using the 451 Research Datacenter KnowledgeBase dataset, now available via Xpressfeed™ and Snowflake, you can assess market and region energy current and future demand from data centers.
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Upcoming Event
Livestream: A tale of two mobile payment markets — the U.S. and India
Nov. 3, 2021 1:30 p.m. ET
Join our fintech experts for a Market Intelligence Live conversation Thursday, Oct. 28th. Watch Live on the Capital IQ Pro platform or LinkedIn — and submit your questions via the LinkedIn event.
Financial Technology & Banking: Pathways to Convergence
Nov. 3, 2021 1:30 p.m. ET
Join S&P Global Market Intelligence as we review our proprietary research on digital banking, examine recent trends in fintech valuations and deals and discuss how traditional commercial banks are adapting their business models, creating a scenario where the line between banking and fintech could erode.
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Click here to listen to the latest episode of "MediaTalk," an S&P Global Market Intelligence podcast. In this episode, Alexandra Reeve Givens, head of the Center for Democracy and Technology, and Sheryl Kingstone, head of customer experience and commerce at 451 Research, provide insights on privacy legislation in the U.S., how online companies are storing our data and growing concerns among consumers about privacy in the wake of the pandemic.
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Click here to listen to the latest episode of "Next in Tech," a weekly podcast featuring 451 Research and other areas of S&P Global Market Intelligence. It’s easy to gloss over digital transformation hype as just the latest fad, but there’s a core aspect in the drive to digitization that’s increasingly critical to staying competitive. Simon Robinson, head of research at 451, talks with host Eric Hanselman about the need for digital infrastructure and how it’s the foundation of the 451Nexus conference in October. It’s time to take stock of how far you've come and what you need to put in place to be ready for whatever the future throws at you.