A confession: I spent an hour Friday wandering the streets of Portland, Oregon, chasing Zubats and Bulbasaurs and wondering how long it would take me to qualify for the PokeGym.
I’m talking about Pokemon, of course – the addictive “augmented reality” game that as of yesterday had added a stunning $20 billion – yes, you read that correctly – to the market value of Japan’s Nintendo in just two weeks time. I didn’t pay Nintendo a penny – there was a PokeStop in the fountain outside my hotel that allowed me to replenish my supply of Poke Balls for free. But I did see a surprising number of other people chasing the same phantom creatures. And I guess there is some value – perhaps even $20 billion? – in provoking such an outbreak of mass hysteria.
I won’t predict how long the Poke craze lasts – although I’m inclined to think any fad that takes off so quickly may crash just as fast. But I do suspect we will look back at the last two weeks as the beginning of an era of augmented reality. The editors at Bloomberg point out that “AR” is already starting to invade the workplace, with factory workers experimenting with headgear that displays safety alerts, and engineers using devices that help them repair sophisticated machinery. We likely will move quickly from using augmented reality to waste time – which is what I did Friday – to using it to boost productivity and save lives.
In the meantime, the Republican convention got underway yesterday, and the first night’s star was Melania Trump. But Fortune’s Tory Newmyer says her speech probably didn’t achieve its goal of “humanizing” the candidate. And her lifting of passages from Michele Obama has raised a few eyebrows.
• The Old Ones Are the Best
Maybe a Donald Trump presidency won’t be as mold-breaking as he promises. Trump’s wife Melania, who topped the bill at the Republican National Convention last night, borrowed liberally from none other than the current first lady in her speech, lifting some passages verbatim from the address that Michelle Obama gave to the Democratic convention in 2008. The brazen plagiarizing of a person so closely tied to everything that Donald Trump says is wrong with politics seems almost calculated to invite accusations of fakery and cynicism. All that’s missing now to complete the national head-fake is for Vice-President Joe Biden (who wasn’t above a bit of plagiarism himself back in the day) to admonish the third Mrs. Trump that “you are no Michelle Obama.” Fortune
• Your Bad, Vlad
A report by the World Anti-Doping Agency confirmed that Russian state agencies systematically encouraged, facilitated and concealed doping by athletes across a wide range of disciplines including, but not restricted to, the last Summer and Winter Olympic Games in London and Sochi. WADA called on the International Olympic Committee to ban Russia entirely from the games that start in Rio next month. The IOC is due to discuss the report by teleconference Tuesday. The report is a personal humiliation for President Vladimir Putin, who staked considerable political capital and blew billions of the country’s stash of petrodollars to host the Sochi games—much of it going to construction companies controlled by his closest associates. Putin criticized the report as politically biased, but said the officials named in the report (potentially including Sports Minister Vitaly Mutko, charged with delivering the 2008 Soccer World Cup) would be suspended. Fortune
• Netflix Feels the Churn
Shares in Netflix fell over 16% in after-hours trading after the company reported that net subscriber growth fell well short of expectations in the second quarter. Much of the problem was due to old customers canceling their subscriptions after being moved from cheaper plans to more expensive ones. As a result, net subs growth in the U.S. was only 162,000, rather than the half million expected—the worst quarterly result in over four years. At that rate, it’s going to take Netflix another 20 years to reach the low end of its target (upheld yesterday) of 60-90 million subscribers. A further sign that rival content providers are getting warier of giving too much away to Netflix came as CBS allowed it to stream a new series of Star Trek in 188 countries—but not in the U.S. or Canada. You’ll have to pay CBS own streaming service $5.99 a month for that. Fortune, Fortune
• Ailes Bails?
New York magazine reports that the Murdoch family has decided that Roger Ailes is more of a liability than an asset to Fox News, in the light of former anchorwoman Gretchen Carlson’s sexual harassment suit against him. New York reports that, having commissioned an investigation from a law firm, 21st Century Fox CEO James Murdoch wants to offer Ailes the choice of resigning or being fired sometime this week. Father Rupert and brother Lachlan, the executive co-chairmen, want to wait until the RNC is over. The report is eye-catching not least because Murdoch senior is loyal to a fault to his most trusted lieutenants (the reinstatement of Rebekah Brooks at News International despite her role in a phone-hacking scandal being the obvious point of comparison). Fortune
Around the Water Cooler
• Fiat Chrysler Probed by SEC, DoJ
Federal authorities—the DoJ and the SEC–are investigating whether Fiat Chrysler padded its monthly sales figures, according to Bloomberg. A criminal probe into possible securities fraud has been opened, it said. The probe centers on allegations that FCA reported its revenues based on shipments to dealers and customers, rather than on reported vehicle sales to end buyers, in what seems to be the latest chapter in a never-ending epic of how the tyranny of sales targets breeds misconduct. The investigation appears to focus exclusively on its practises in the U.S. FCA said in January that an internal investigation had concluded that the allegations were baseless. Bloomberg
• A Red Flag From the Truckmakers
Volvo became the latest big truckmaker to revise down its forecast for the North American market, a worrying sign given the place of the truck as a (very) rough proxy for corporate investment. Volvo, which owns the Mack and UD brands, cut its forecast for the North American market this year by 4% to 240,000, after posting a disappointingly steep 8% drop in orders in the second quarter. It’s only two months since Daimler, which owns the Mercedes and Freightliner brands, said demand for heavy trucks would fall 15% in the NAFTA region this year. Reuters
• A Boost for Snooping in Europe
A senior lawyer at the European Union’s top court handed down an opinion indicating that much-criticized data retention laws in member states such as the U.K. and Sweden may be legal after all. The opinion will feed into a case currently being heard by the European Court of Justice that is supposed to fill the legal vacuum created in 2014 when the ECJ struck down the EU directive that governed national laws on data retention for being too intrusive. Such opinions are a generally reliable, but not definite, guide as to how the final ruling will fall. If the ECJ does rule to allow data retention, it will smooth the passage of a new generation of privacy laws in Europe such as the U.K.’s Investigatory Powers Bill, aka ‘The Snooper’s Charter’, which is opposed by Apple and other Silicon Valley giants. Fortune
• China Keeps a Lid on It
A senior Chinese official on Tuesday brushed off calls for a boycott of the Philippines after an international arbitration court found for Manila in its dispute with Beijing over the South China Sea. China angrily rejected the verdict last week by the Permanent Court of Arbitration in The Hague, describing the case as illegal and farcical. It has repeatedly said it will not change its approach or its sovereignty claims in the South China Sea. Some Chinese have reacted by calling for boycotts on products from the Philippines and the United States, which many in China blame for pushing the case. So far, there has been only sporadic evidence of these calls being heeded. Likewise, official media have focused as much on calming more incendiary public reactions as on voicing Beijing’s displeasure. Fortune
• AirBNB Edges Out of the Gray Zone
Airbnb has agreed to start remitting hotel taxes to the city of Los Angeles on behalf of its hosts in the area, in another step towards the exit of the fiscal gray area that it has inhabited since its launch. Estabilished hoteliers the world over routinely complain of unfair competition from AirBNB because its hosts prefer not to disclose the income to tax officials. The LA deal will go into effect in August. As of June, Airbnb has struck similar hotel tax payment deals with 190 cities, states, or other tax jurisdictions globally. It has already paid out more than $85 million in hotel taxes. Because of its huge population and status as a tourist destination, Los Angeles is a major addition. Airbnb estimates that it would have paid out about $23 million in taxes on behalf of hosts in 2015 if Los Angeles city officials had partnered with the company earlier. Now all it needs to do is to persuade LA to make short-term rentals of less than 30 days legal. After all, the city surely doesn’t want to be seen drawing its income from illegal activities… Fortune