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CEO Daily: Friday, 6th January

EDITOR’S NOTE: We’re resending this morning’s CEO Daily after the first version fell victim to some technical gremlins.

Good morning.

It’s not easy to grasp the dimensions of the gadget-palooza taking place in Las Vegas this week. CES started fifty years ago for the benefit of buyers and sellers of televisions and pocket radios. Today, it’s a five-day affair hosting 180,000 people and displaying tens of thousands of new products in 43 football fields’ worth of convention space.

I spent a couple of hours wandering through the morass yesterday, looking at products that ranged from a self-cleaning cat litter box to an indoor wall that grows lettuce under LED lights. There are “smart” products of all kinds – including smart toothbrushes, smart hairbrushes, smart mattresses, smart breast pumps. You can see some of our favorite new products here.

A few takeaways:

First, Amazon’s voice-controlled virtual assistant, Alexa, has established the early lead in becoming the operating system for the smart home. While Google, Apple and Lenovo all offer competing services, it’s the silver-throated Alexa who has convinced the most third-party vendors to develop clever new products in synch with it.

Second, sleep is becoming big business. ResMed was pushing a sleep sensor, which monitors your sleep patterns from your bedside. And a company called NuCalm had conference attendees stretched out in lounge chairs, after first giving them a “proprietary formulation of amino acids,” hooking up “neuropatches” that provide a “sub-sensory microcurrent,” and giving them an eye mask and headphones that “modulate brain wave function between Alpha and Theta frequencies – where healing, recovery, and restoration occur naturally.” I was sorely tempted to join the slumbering crowd, but all chairs were taken.

Finally, CES has become the ultimate proof of a point I’ve made here before: tech is no longer an industry, it is a strategic piece of every industry. For auto executives, CES has become as important as the auto shows. Our Brainstorm Tech dinner Wednesday night even included a top executive from the insurance industry — Allstate CEO Tom Wilson — and one from the fashion industry — Ralph Lauren Vice Chairman David Lauren. To anyone in Vegas this week, it’s clear: We are all technology companies now.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

Top News

Dollar Falters On Fears of Soft Jobs Report

What’s this? Can it be…a two-way market in the dollar? The greenback fell against most major currencies Thursday after a weaker-than-expected report on new private-sector jobs from ADP caused traders to trim their expectations for today’s more important Employment Report from the BLS. Non-farm payrolls are expected to have risen 178,000 in December, according to Reuters. A second factor moving the dollar is the state-driven rebound in China’s currency, which had the side-effect of a 20% intraday drop in the value of Bitcoin yesterday. Bond yields have also fallen sharply, and while Nasdaq hit its first new high for 2017 yesterday, the Dow Jones still refuses to go through 20,000. Reuters

The March of e-Commerce Tramples Sears (but not Gap)

Online sales over the holiday season rose 11% to a new record of $91.7 billion, according to data from Adobe Insights. Nearly one-third of that – $28.4 billion – was executed through mobile devices, a rise of 23% from 2015. Needless to say, that’s alarming news for retailers still wedded to bricks and mortar. Among the worst hit – Sears and Kmart, whose comparable sales fell over 12%. Sears also said it’s selling Craftsman tools for a fire sale-price of $900 million to Stanley Black & Decker to plug the hole in its balance sheet. There was better news from Gap, another retailer that has been struggling with the disruption from e-commerce. Gap shares rose 10% after it announced a strong 4% rise in comparable sales over the holiday season, due largely to an improvement at its namesake brand. Fortune

• The Incredible Rebounding Samsung

Samsung confounded fears that the Galaxy Note 7 smartphone fiasco would be a long-lasting burden on its profitability. It said operating profit in the fourth quarter was probably 50% higher than a year earlier at around $7.8 billion, thanks to strong demand for memory chips and organic LED displays. That number was higher than even the most optimistic analysts’ forecasts. Its shares rose 1.8% in Seoul. Fortune

Trump’s Mission Creep Reaches Toyota

The President-elect widened his Twitter attacks on automakers to foreign companies, specifically, Toyota. As with GM, Donald Trump threatened a “big border tax” if it moved production of the Corolla sedan to a plant currently being built in Guanajuato in Mexico. As of today, Toyota makes its U.S.-bound Corollas in, er, Canada. Toyota said it would wait to see what policies Trump enacts before changing its plans. Trump’s threats to GM and Ford have been counter-balanced by the incentives of lower taxes on repatriated profits. That’s not an incentive he can offer to a Japanese company. In related news, Mexico’s central bank was forced to intervene to defend the peso yesterday after fears of an all-out assault on its manufacturing sector by the new U.S. administration drove it to new record lows. Fortune

Around the Water Cooler

Tillerson’s Payout Is Even Sweeter Than It Sounds

Rex Tillerson’s deal with ExxonMobil to avoid conflicts of interest will also allow him to avoid over $71 million in taxes, at least for now, according to an analysis by Fortune’s Stephen Gandel. In the early 1990s, George H.W. Bush’s administration added a loophole to the tax code that allows political appointees to defer  capital gains taxes they would ordinarily have to pay on investments that their new role  requires them to divest. That covers the $54 million in unrestricted stock that Tillerson is selling. The $180 million in restricted stock that he is swapping for cash will vest over the next 10 years, also avoiding an up-front tax liability. Gandel argues it all adds up to Exxon bending its own rules on compensation to please an old friend who’s soon to assume a very high place. Fortune

Erdogan Turns a Threat Into an ‘Opportunity’

Turkey’s President Recep Tayyip Erdogan is increasingly using the security scare caused by last year’s failed coup to expand his control of the economy. Prosecutors ordered the arrest of 380 businesspeople yesterday on suspicion of providing financial help to the network of Fethullah Gulen, a self-exiled cleric living in the U.S.. In reality, recent events have shown, such actions are little more than a fig-leaf for stealing businesses and handing them out to loyal supporters. Among those detained were two executives of Dogan Holding, one of the country’s biggest conglomerates, which includes the CNN-Turk television service. Its shares fell nearly 10%, while Turkey’s currency hit a new record low against the dollar. FT, metered access

App Store Underlines Importance of Services to Apple

Apple had stressed in its last quarterly report how it expects services to have an increasing impact on its top and bottom lines in future. That was illustrated Thursday as Apple said its App Store generated $20 billion in collective revenue for developers last year. It was cagey about how much revenue it generated for itself, although it can take up to 30% under the revenue-sharing agreements it has with third-party developers. Certainly, the app world is expanding much faster than the hardware market: the number of apps in the store rose 20% in 2016, while Apple’s own app subscription billings rose 74% (albeit to a still-modest $2.7 billion). Fortune

SoundCloud Warns It May Go Bust

SoundCloud, the German music streaming company recently touted as a takeover target for Google and Spotify, warned that it may run out of cash this year, in accounts filed in the U.K.. Founder Alexander Ljung said in a statement he still expects the company to pay all its bills this year, but the company lost 51 million euros on only 21 million of revenue in 2015. Precise figures for 2016 aren’t yet available. SoundCloud was conceived as a platform for budding artists rather than established ones. Spotify gave up plans to buy it last month. FT, metered access

Summaries by Geoffrey Smith Geoffrey.smith@fortune.com;

@geoffreytsmith