Will the Apple Watch change the workplace? Right now, it’s just a vanity play for early adopters. (I spotted at least one at this weekend’s White House Correspondents Dinner.) But our Stacey Higginbotham has already found technology leaders planning on how it can change their businesses. Imagine being able to find people wherever they are in the office; getting notified whenever important people or packages arrive; being able to access key databases without annoying “two-factor authentication.”
Eight years ago, I was part of a group of journalists who met with Steve Jobs shortly before the launch of the iPhone. When asked about its use in business, he replied: “I don’t give a —- about enterprise.” (I’ve forgotten the exact expletive.) Today, Tim Cook takes a very different line. “We want to change the way people work,” he told me earlier this year. Wearables will be a part of that. If you want to start now, VentureBeat has already rated “The 5 best Apple Watch apps for the enterprise” here.
Have a happy Apple day. The company reports earnings and will continue to defy the law of large numbers. Also, be sure to check out our list of the Five Most Underrated CEOs below.
• Could some of the world’s largest banks shrink?
Two of the world’s biggest financial giants are considering ways to become smaller and simpler. Germany’s Deutsche Bank is planning to shrink its investment bank by around $218 billion and cut its retail bank branch network by over 25%. In the U.K., HSBC is reportedly planning a full separation of its two biggest operations: its British main street bank and Asia-focused commercial and investment bank. Why make such moves? Well it seems that new regulation makes it costly to be a bank deemed too big to fail, so to avoid or lessen those expenses, it might be prudent for big banks to change. Fortune
• Analysts scramble to lift iPhone sales estimates
Most of the headlines and buzz that Apple has generated of late have focused on the company’s newest tech gadget, the Apple Watch. But when the electronics giant reports earnings results on Monday, Wall Street will be focused on iPhones, and perhaps a few tiny details about how well the watch is selling. The watch went on sale on Friday but Apple’s quarterly results cover January through March. IPhone sales, meanwhile, look like they were stronger than analysts had anticipated, with several firms raising their estimates in the final days before the report is due. Fortune
• Volkswagen power struggle leads to chairman’s exit
The chairman of Volkswagen, the world’s second largest auto maker after Toyota, has resigned after a power struggle involving the chief executive. Chairman Ferdinand Piech has left his role on the board after he had criticized CEO Martin Winterkorn in an interview with a German news magazine. And while the issues Piech expressed concern about weren’t made public, there is speculation the two couldn’t co-pilot a way to break into the lucrative U.S. market. Piech’s wife also resigned from the board. BBC News
• Corinthian Colleges is shutting down
For-profit educator Corinthian Colleges is shutting down its remaining 28 for-profit career schools, ending classes for about 16,000 students, in the biggest collapse in U.S. higher education. For-profit companies were once at one point a popular sector on Wall Street, as huge gains in enrollment led to big profits. But demand has collapsed, in part due to concerns about the quality of the education many of those companies provided and the job opportunities that could be secured after graduation. Corinthian collapsed last summer after the U.S. Education Department curtailed its access to federal student aid. Bloomberg
Around the Water Cooler
• The five most underrated U.S. CEOs
Fortune has put together a list of the top executives that are the most “underrated”: a look at an executive’s success in steering a firm to strong profit growth and swelling shareholder returns, while also receiving a somewhat modest increase in pay. Gary Kelly, the CEO of Southwest Airlines, is ranked first as his airline has outperformed all rivals since he took over. But he only received a raise of 25% in 2014, despite delivering total stockholder return of more than 126%. For the rest of the list, check out Fortune’s story. Fortune
• How big firms carve out space for startups
“Big companies tend to hire managers, not explorers. You tell them to do this and keep doing it, not explore new ways to do it. Early-stage companies employ nothing but explorers.” That’s a fascinating quote attributed to David Butler, Coca-Cola’s vice president of innovation, discussing the differences in corporate cultures between large firms and startups. But with more and more Millennials interested in working for the latter group, how can big companies like Coke compete for talent? Fortune is reporting that a handful of corporate titans are tinkering with ways to develop their own mini startups to lure younger employees. Fortune
• Pharmaceutical firms raising prices on branded drugs
Here’s an unusual strategy to boost profits: more and more pharmaceutical companies are buying drugs that they see as undervalued, then raising the prices. For example, on Feb. 10, Valeant Pharmaceuticals bought the rights to a pair of life-saving heart drugs. The same day, their list prices rose by 525% and 212%. Though the strategy isn’t resulting in a huge increase on total health care spending, some hospitals and drug-benefit managers worry about having to absorb higher costs. And because there weren’t many big patent expirations looming, few cheap generics can come to market to pressure the pricing power of brand-name drugs. WSJ (subscription)
• More Millennials are moving West
More and more Millennials are moving to the West to pursue economic opportunities. And corporations are also migrating. In the past two decades, the number of Fortune 400 companies based in Texas grew to 50 from 15. During the same period, New York lost 50. Bloomberg reports cities in the West and the Southwest are now experiencing economic growth that exceeds records set before the financial crisis, with younger workers creating housing shortages and traffic jams, as they also drive up wages. So what’s driving the migration? Well, the tech industry has been a big draw since the 1990s. East Coast Millennials are also looking for more affordable housing, though income inequality in Western cities is also rising. Bloomberg
President Obama’s best zinger
President Obama’s best line at the White House Correspondents Dinner: “Joe Biden and I are so close that some restaurants in Indiana won’t serve us pizza.” Cecily Strong’s best line: “The Secret Service is the only law enforcement organization that will get in trouble if a black man is shot.”