In this blog we discuss:
- Meta (Facebook) announced Make-A-Video
- Apple’s AirPods success
- China’s retreating Belt & Road Initiative
Meta (Facebook) announced Make-A-Video
It’s hard to read news about technology lately without seeing the rapid development of AI image-generating capabilities. These new tools allow anyone to enter text input and generate AI synthesized images. Dall-E is one of the prominent examples, which recently made public its image-creating services. Midjourney is another such tool.
A few days ago, Meta announced another breakthrough in the field of AI generative technology: Make-A-Video, a tool that can convert text prompts into short videos and can create videos out of images. Here’s an example:
The AirPods empire
Imagine if the maker of your favorite smart TV decides not to include the TV remote as part of the purchase, that you have to pay for it separately. Sure, the TV still works without a remote, you just have to walk up to it every time you want to use it. Wouldn’t you be irate?
Well, that is what Apple did when, in 2016, it stopped providing wired headphones with the iPhone and started selling the AirPods. To execute this strategy, Apple first had to make wired headphones obsolete. With the introduction of the iPhone 7, Phil Schiller, SVP of Worldwide Marketing, stated that the company exhibited the “courage to move on”, a statement that was widely ridiculed by the public. At the time of the iPhone’s release, the company introduced the $159 alternative to the wired earphones: the AirPods.
Fast forward to today, three out of four US teens own AirPods. It is Apple’s fastest-selling accessory. In 2021, it was estimated that the company sold 120 million pairs and, according to Bloomberg, sales of AirPods generated $38 billion in revenue (Figure 2).
Despite initial ridicule, the AirPods strategy has been a smashing success. It looks like Tim Cook has had the last laugh.
A Belt and Road Retreat
The Belt and Road Initiative (BRI) is the central component of Beijing’s strategy to expand its influence on the global stage. Now, after nearly a decade of spending more than a trillion dollars on the initiative (for projects in 150 countries), China is working to restructure it into a more conservative program.
One key difference between the US’ and China’s overseas development projects is that Beijing’s BRI primarily finances the development effort through debt to other countries, whereas the US does so with aid. Since the inception of the BRI in 2013, China has increased its balance sheet significantly, outpacing the lending of G-7 countries (Figure 3 below).
With the rapid expansion, the BRI has become overly complex. Most of the development target countries are struggling. Currently, nearly 60% of China’s overseas loans are held by countries in financial distress. Countries such as Sri Lanka and Pakistan have already failed to meet payment obligations. In such cases, Beijing preferred to extend its maturity rather than face the music and be held accountable for the defaults.
So now, Beijing is looking to refocus. Even as China is battling various crises at home, they are now exploring ways to make the initiative more sustainable.