CEO Daily: Thursday, January 7
I spent a couple of hours yesterday wandering the 2.2 million square feet of exhibit space at CES Las Vegas, looking at smart lights, smart washing machines, smart door bells, smart tooth brushes. (As it turns out, there are no stupid products at CES.)
If this extravaganza is any indication, the connected home is just around the corner. You’ll be able to control everything in your house from the screen of your smart phone.
But for all the gee-whiz gadgetry, I still had a hard time finding products whose use case felt compelling. I’m not yet convinced I need to change the color of my house lights while on vacation, or turn on the washing machine from work, or talk to my oven. This, no doubt, reflects a lack of imagination on my part. But I’m just not feeling it yet. One notable exception: the smart refrigerator, which lets you peak inside via smart phone from the grocery store to see what items you are missing.
If the case for the connected home is still shaky, though, the case for the connected factory is not. I spent some time with Volkmar Denner, CEO of Robert Bosch GmbH, who has put the Internet of Things at the center of his company’s strategy. Bosch makes an array of “smart” consumer products, is the world’s leading manufacturer of MEMS (Micro-Electro-Mechanical Systems) sensors, and provides a host of components for automobile makers.
Denner also has pushed to remake his company’s 250 factories around the world using connected technology. His most advanced plant is in Homburg, Germany, which makes hydraulic components for cars. Denner says connected technologies have enabled that plant to increase productivity by 10% and reduce inventory via faster turnover by 30%. That’s smart.
I asked Denner how far Bosch is in realizing the full benefits of the Internet of Things – or “Industry 4.0”, as the Germans like to call it. On a scale of 1 to 10, he put it at 3, and said Bosch is still further ahead than most companies because of its ability to combine technology and manufacturing expertise. That leaves plenty of potential for widespread productivity gains in the decades ahead.
Bosch also deserves credit for making a major investment in research in these game-changing technologies. “We have 55,000 people in R&D,” Danner said, “and spend 10 percent of our sales on it.”
More news below.
• Another short day for China's stock market
Circuit-breaker issues once again halted trading in China's stock market, which remained open for less than half an hour on Thursday before the country's benchmark index dipped 7% and trading ceased. Stocks fell after China's central bank lowered the yuan's reference rate in a move that sparked devaluation fears. This marked the second time this week that trading on China's stock market has been halted and the glitch sent global markets tumbling, with the FTSE 100 and Germany's DAX both down roughly 3%. Fortune
• TransCanada files $15 billion Keystone pipeline lawsuit
TransCanada isn't happy about President Obama's rejection of the Keystone XL oil pipeline project. The Canadian energy company filed a claim against the U.S. Wednesday under the North American Free Trade Agreement. The lawsuit argues that Obama lacked the constitutional power to reject the cross-border pipeline and that the move was made for political reasons only. TransCanada is seeking $15 billion in damages as part of the claim. Bloomberg
• Uber to settle with NY AG over 'God View' tool
After more than a year of investigating Uber's privacy practices, New York Attorney General Eric Schneiderman is reportedly expected on Thursday to announce a settlement over the ride-hailing app's use of its "God View" tool to access customers' usage history without permission. The tool reveals an aerial view of all Uber drivers and their passengers in a specific area. Under the settlement, Uber will pay fines worth $20,000 for its failure to immediately report unauthorized third-party access to the information. BuzzFeed
• U.K.'s Marks & Spencer loses its CEO
Marc Bolland is stepping down as chief executive of the U.K.'s largest retailer after a disappointing holiday season. Clothing and food retailer Marks & Spencer's third-quarter same-store sales, which include the Christmas season, fell nearly 6% and the company's stock is down by roughly a quarter going back to mid-2015. The 132-year old retailer has struggled to remain relevant in recent years, as it faces steep competition from e-commerce rivals such as Amazon as well as discount food chains. Steve Rowe, head of the company's food division, will take over as CEO. Fortune
Around the Water Cooler
• Mary Barra touts GM's new Chevy Bolt EV
In her keynote speech Wednesday at CES in Las Vegas, General Motors CEO Mary Barra responded to critics who have questioned GM's ability to quickly and adroitly transition to electric vehicles. She touted the new Chevrolet Bolt EV, which went from concept to being ready for production in just a year, as an example of GM's ability to use its mammoth size to its advantage.“We can use our scale to bring new technologies to more people faster,” Barra said. Fortune
• Intel reorganizes Wind River
Intel confirmed to Fortune that, starting next year, the company will fully integrate embedded and mobile software subsidiary Wind River into Intel after previously allowing the company to operate independently. The move, which was not announced publicly, comes a week after Fortune reported that Wind River's president had left to run MobileIron. Intel's plan is to better align Wind River with the rest of Intel's groups, while making better use of its products' applications in connected devices. Fortune
• Under Armour makes a bigger push into fitness tech
Sports apparel company Under Armour went to CES to introduce a new line of connected health devices, as the company moves deeper into the fitness technology space in an effort to expand beyond clothing. Under Armour unveiled a family of products that includes the Heart Band, which fits around the wearer's chest to track data such as heart rates during workouts, as well as a HealthBox created in partnership with HTC to track fitness and sleep patterns. Fortune
5 things to know today
More market woes and Walgreens earnings—5 things to know today. Today's story can be found here.