Glance for even a moment at Fortune’s new list of the World’s Most Admired Companies, and the sector takeaway is clear: Five of the top 10 companies are in the technology industry.
What is it that people—we survey 3,800 executives, analysts, experts, and the like—so admire about a cohort led, in this order, by Apple, Amazon.com, Alphabet, Facebook, and Microsoft? Given that the combined market capitalization of this Fantastic Five exceeds $2.3 trillion, I suspect businesspeople on the outside looking in simply admire them for the wealth they’ve created, the profits they’ve generated, and the people they employ.
But it’s not only about money. Each of these companies has created something new, which is practically the Holy Grail of business. Apple has defined the evolution of consumer computing for three decades, if you consider the phone in your pocket to be a computer, which you should. Amazon conjured up a new business model for retailing. Google/Alphabet changed advertising forever—and has been using its cash in creative ways. Facebook created a whole new form of publishing, even as it refuses to call itself a media company. And Microsoft, the software monopolist of another era, has proved nimble at recreating itself at a scale, a feat almost no company can replicate.
What about the other five companies on our top ten? If all companies are technology companies today, are they? Entertainment giant Disney has paid a ton of attention to tech, whether through its aggressive digital content strategy or the wristbands in its theme parks. General Electric has embraced sensors as the central tool of its next industrial revolution. Starbucks is a first-rate technological dabbler. As for Southwest, it certainly uses technology as all modern logistics companies must. But it’s really just a really good—and admirable—airline. Then there is Berkshire Hathaway, its recent stake in Apple notwithstanding, which just isn’t a tech company in any way. Call Berkshire the exception to the rule. That’s kind of admirable too.
Have a great weekend.
BITS AND BYTES
Samsung scrambles to fill leadership void after arrest of vice chairman. Jay Y. Lee, the conglomerate’s de facto leader since his father’s 2014 heart attack, was taken into custody after prosecutors presented more evidence they say links him to the corruption scandal that led parliament to impeach President Park Geun-hye. The situation isn’t likely to cause day-to-day operational issues, but strategy is likely to fall on the shoulders of the company’s two other vice chairmen. (Reuters, Reuters)
Mark Zuckerberg warns against isolationism. The Facebook founder and CEO published a 6,000-word treatise about the value of globalization in an update to the vision statement he crafted when the company went public back in 2012. “The default assumption was that the world was just incrementally moving in that direction,” he told The New York Times. “Now, that’s actually a real question.” But Facebook stands behind its commitment to create a “global community.” (Reuters, New York Times)
Tech jobs took a big hit last year. The industry cut more than 96,000 positions in 2016, up 21% from the previous year. Many of those cuts came from five familiar companies undergoing massive business model transitions—EMC (as it prepared for the Dell merger), Cisco, Microsoft, IBM, and Intel. (Fortune)
Price tags for personal computers are getting higher. The primary culprit? Shortages of components like solid state drives, memory, liquid crystal displays, and batteries. (IDG News Service)
Airlines are reconsidering investments in seat-back screens. Outfitting planes with onboard entertainment systems is an expensive proposition, especially with technology changing quickly and so many passengers carrying their tablets and smartphones onto flights anyway, reports The New York Times. Jet Blue and Virgin America are bucking that trend, though. Whether or not you like that idea, rest assured that it won’t happen overnight. (New York Times, Fortune)
Apple inches ahead of Samsung in global smartphone shipments. The fierce rivals both shipped approximately 77 million devices worldwide from October to December of last year, reports research firm Gartner. The last time Apple pulled ahead was in the fourth quarter of 2014. (Fortune)
AT&T is pressured to revise its unlimited data plan. The carrier has been selling an unlimited mobile data plan for some time—but only to its digital TV and cable services subscribers. After Verizon surprised the industry with a more aggressive plan early this week, AT&T is dropping that requirement. (Fortune, Fortune)
Orrin Hatch is setting himself up as a champion of the tech industry. The Republican senator from Utah is pitching a plan he calls the “Innovation Agenda.” His proposal includes tax cuts that could encourage companies like Apple and Google to keep more of their cash in the United States, reforms in U.S. patent laws, and suggestions for the H1-B visa program. (Fortune)
What the rise of Uber says about the gig economy today. A significant share of the workforce in advanced economies has always been self-employed, dating back 100 years to when farming and craftsmen were the predominant occupations.
Today the options for making a living without a “regular” 9-to-5 job are far more varied—and as a result, a large slice of the labor force doesn’t fit neatly into government statistics. It’s been hard to get a handle on how many people work independently, what they do, and what motivates them to go it alone. To fill in these gaps, the McKinsey Global Institute (MGI) asked 8,000 people across six countries about their working lives.
The revelation: Between 10% and 15% of the workforce in the U.S. and Europe consider themselves free agents. Their responses offer some surprises but one thing is clear: digital marketplaces like Uber are turning more people into independent workers than many of us realize. Here’s what McKinsey found.
It’s time to take AI seriously. The more intensely tech thought leaders proclaim that a trend is here to stay, the more rapidly it tends to vanish. (Daily deals were “the future of commerce.” SoLoMo—social, local, mobile—was “the future of marketing.” On-demand services were “the future of work.” Chatbots were “the future of customer service.”)
And yet the smart money continues its embrace of AI startups. Last year VCs invested $5 billion in 658 companies, a 61% increase over the year prior, according to CB Insights. Acquirers are getting aggressive too. Last year corporations, mostly big tech companies, bought at least 40 AI startups, a trend that’s expected to continue in 2017. Fortune‘s Erin Griffith weighs in on why this isn’t just a fad.
IN CASE YOU MISSED IT
Apple Is Making a Big Change to WWDC This Year, by Rachel King
The Snap IPO Just Got a Lot Cheaper, by Jen Wieczner
Warren Buffett Could Be Wrong About Apple, by Shawn Tully
This Powerful Video Game Executive Isn’t Worried If Virtual Reality Fails, by Jonathan Vanian
This Is Uber’s Strategy for Appeasing Employees Who Want an IPO, by Polina Marinova
Twitter Limits Reach of Abusive Users to Curb Harassment, by Mathew Ingram
Secret Messaging App Used by Trump Staffs Has Seen ‘Enormous Spike’ in Sign-Ups, by Polina Marinova
ONE MORE THING
IBM and Visa want to stick mobile payment services in just about everything. Need a new part for your car? Sensors can alert you to the need, and new payments technology envisioned by the two companies could help you place an order in the moment simply by pushing a button. It’s somewhat akin to Amazon’s Dash service. (Money)
MARK YOUR CALENDAR
IBM Connect 2017: Redefining work with Watson. (Feb. 20-23; San Francisco)
CIO Leadership Forum (West): Strategy in the age of digital disruption. (Feb. 26-28; Phoenix)
Mobile World Congress: The world’s largest gathering for the mobile industry. (Feb. 27-March 2; Barcelona)
Humanity.AI: Ideas for keeping humanity at the forefront of AI advancements. (Feb. 28; San Francisco)
Marketing Nation Summit: Marketo’s annual event for digital marketers. (April 23-26; San Francisco)
Pure//Accelerate: The future of data storage. (June 12-14; San Francisco)
Gartner Data & Analytics Summit: Strategies for generating business value. (March 6-9; Grapevine, Texas)
Google Cloud Next: Products and perspectives for developers and customers. (March 7-10, 2017; San Francisco)
CIO Leadership Forum (East): Strategy in the age of digital disruption. (March 19-21; Hollywood, Fla.)
IBM Interconnect: Tap into advanced cloud technology. (March 19-23; Las Vegas)
Enterprise Data World: Become a data-driven business. (April 2-7; Atlanta)
AppianWorld: Accelerate your digital business transformation. (April 3-5; San Francisco)
Magento Imagine: Strategies and technologies for digital commerce. (April 3-5; Las Vegas)
Open Networking Summit: The future of open source communications. (April 7-9; Santa Clara, Calif.)
MuleSoft Connect: Connect apps, data and devices. (April 18-20; San Francisco)
JiveWorld: Strategies and technologies for workplace collaboration. (May 1-3; Las Vegas)
Apttus Accelerate: Perspectives on automating the “quote-to-cash” process. (May 2-4; San Francisco)
Collision: A tech conference created by the organizers of Europe’s Web Summit. (May 2-4; New Orleans)
Knowledge17: ServiceNow’s annual customer gathering. (May 7-11; Orlando, Fla.)
Outperform: The PROS annual conference about omnichannel commerce technology. (May 10-12; Chicago)
Build: Microsoft’s annual conference for software developers. (May 10-12; Seattle)
Google I/O: Alphabet’s annual developer conference. (May 17-19; Mountain View, California)
Signal: Twilio’s annual developer confab. (May 24-25; San Francisco)
MongoDB World: A gathering of the world’s fastest-growing database community. (June 20-21; Chicago)
Cisco Live: Education for technology innovators. (June 25-29; Las Vegas)
Microsoft Ignite: Hands-on learning and industry insights for business leaders. (Sept. 25-29; Orlando, Florida)