Good morning from New York, where I’m attending Fortune’s first CEO Initiative, which I’ll tell you about below.
I’ve written repeatedly about the quest by corporations everywhere to transform themselves digitally. Michal Lev-Ram has a fascinating piece in the current issue of Fortune about Mattel’s efforts to do just that under its digitally savvy new CEO Margo Georgiadis, who joined the toymaker by way of Google.
What I love about this story is that nothing about Mattel’s planned reinvention is straightforward. The company’s products are a bunch of exceedingly old brands, like Barbie and Hot Wheels. Though sales have stalled, those workhorses still perform exceedingly well for Mattel. And it’s not even clear tech toys are what’s called for. Kids and their parents tend to love the old stuff—even though Georgiadis and her colleagues get the need to go digital.
And they’re going to try. Georgiadis orchestrated the deconstruction of a Barbie Dream House to show how poor the existing internal technology was. Some of her ideas for adding to it are a bit creepy. But they might help spruce up an aged franchise.
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At our China dinner last week in San Francisco, a recurring theme around innovation was that China’s size and relatively new modern infrastructure is a huge advantage. As an example, payment systems like Alipay represent a “beyond credit cards” moment that is difficult for Westerners to appreciate. McKinsey’s Jonathan Woetzel, who appeared on our dinner panel, sent me this amusing anecdote from a colleague of his: “I went to Bangkok last week and bought some instant noodles from a convenient store located at a well-developed area. But they refused to take my credit card because I didn’t meet the minimum threshold. Then, magically, I saw the Alipay sign at the counter and they happily accepted my Alipay.”
This is progress.
Finally, Fortune will spend an entire day discussing, celebrating and learning how businesses can be a force for good, not merely by being charitable, but through their normal business operations. Leaders including JPMorganChase’s Jamie Dimon, Allstate’s Tom Wilson, PepsiCo’s Indra Nooyi and many others will share their thoughts. We’ll conclude the day by hearing from UN Secretary-General Antonio Guterres. There’ll be a livestream at Fortune.com, and you can view the agenda here.
Too little, too late. The Washington Post uncovered yet another chapter in then-president Barack Obama’s toothless response to Russian hacking in last year’s election. Obama reportedly twice warned Mark Zuckerberg about the risk of Russian-implanted fake news on Facebook last year. Zuckerberg blew off the warnings.
Just in the nick of time. After Apple dumped mobile graphics chips made by Imagination Technologies, shares of the British company plunged more than 60%. Now it may be bought out on the cheap by a fund with controversial links to China’s government. The $744 million sale of most of the business goes to CBFI Investment Ltd, which is indirectly owned by the Canyon Bridge Fund. Canyon Bridge was barred from buying U.S. chipmaker Lattice Semiconductor over security concerns.
Timing improving. Speaking of cheap deals, Sprint majority-owner Softbank Group and T-Mobile majority owner Deutsche Telekom are reportedly near a deal to combine their wireless carriers. But Sprint shareholders may get no premium to the current stock price, Bloomberg reports.
Too little, too late, Chapter 2. New Uber CEO Dara Khosrowshahi apologized for “mistakes we’ve made” in an open letter to customers in London, where the service effectively was banned last week. But the crow-eating missive followed an aggressive publicity campaign bashing London authorities and threatening a lawsuit, which raised the ire of Mayor Sadiq Khan. “You can’t have it both ways,” he said.
Timing not improving. Intel’s slow rollout of its eighth-generation Core CPU chips, previously code named Coffee Lake, continued on Sunday with the release of several moderately priced desktop chips aimed at gamers. With a price of $359, the top-of-the-line i7-8700K has six computing cores and runs at a top speed of 4.7 GHz.
Aptly timed. Microsoft will turn up the volume on its cloud computing story at its Ignite tech conference Monday, announcing a product called Azure Stack that will allow businesses to run the company’s cloud applications in their own, privately-managed data centers. Microsoft CEO Satya Nadella and cloud chief Scott Guthrie, along with their lieutenants, will be on hand at the Orlando event this week.
FOOD FOR THOUGHT
China was once the engine of Apple’s growth, but the last few years have seen sales plummet in the country with the world’s second-largest economy. Over the summer, Apple CEO Tim Cook appointed Isabel Ge Mahe, a veteran of the company’s wireless development team, to oversee the Greater China region and get sales back on track. Mahe spoke with Fortune’s Claire Zillman to discuss how she’ll attack one of Apple’s biggest current weak spots. As Zillman writes:
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BEFORE YOU GO
A single bitcoin has surged in value from about $600 a year ago to almost $4,000 currently. But as a wholly digital creation, the cryptocurrency always lacked a certain physical quality. Not anymore. Artist Mathias Dorfelt has created a series of money-like paper bills imprinted with bitcoin codes. You still have to transact online, but they sure look pretty.