Introduction:In this report I will be outlining three articles that have experienced atechnical change, underwent a merger and have experienced changes due tobrexit.
The articles will be of 2018 published from online newspapers. Synaptics – TechnicalChange The term technical change means the level of output producedfrom the same amount of inputs. A technical change isn’t always meant astechnological change but as an organisation. A technical change is the act ofreducing input prices and maximising your output and the best market that hasbeen storming the current generations is smartphones. They are ever increasingin price but all manufacture at lower inputs to increase their outputs. Thesechanges are only possible via research and development. The mobile industriesalways have to captivate the consumer to buy the next flagship withintervention, innovation and diffusion.
There are a number of changes to the Smartphone industry 2018,most of which are subtle. With the exception of a touch ID sensor embedded inthe screen of a little known Chinese company Vivo along with Synaptics who havesuccessfully showcased a prototype at 2018 CES (Consumer Electronics Show) thisJanuary. Synaptics are the one who have perfected the technology to beimplemented in a Smartphone. You would believe this type of innovation to beachieved by Samsung, Google or Apple by now. This advancement in the touch id technology will alsoenable a great leap into a truly bezel-less display. Although Synaptics are notthe first bring out this technology infact, it was Toshiba back in 2007 whorevealed something similar but took just over 10 years for Synaptics and vivoto demonstrate the capabilities and possibilities in this year’s CES 2018. Synapticsare ready to step into the big leagues with the Synaptics Clear ID being twiceas fast as 3D facial recognition. Synaptic are aware of the growing market for fingerprintpreferences in front of a phone but with the Smartphone industry quicklyshifting to the infinity displays they need to make their unit of productionlow.
We know that Samsung are the kings of display when it comes to the OLEDUHD+ screens. Synaptics have been trying to match Samsung for some years now.At CES 2018 apart from the breakthrough of touch id the company have also beendeveloping their OLED display driver ICs displays as their touch ID only workson an OLED display as it complements the OLED pixels to work.(http://indianexpress.com/article/technology/mobile-tabs/vivo-smartphones-will-be-first-to-feature-in-display-fingerprint-sensor-report-4984121/) The CES 2018 revealed Synaptics wanting to provide to theOLED mobile companies incorporating Samsung’s famous OLED display. Synapticsare trying to sell the most expensive component in a mobile phone which is thetouch ID and display advancements. There is a likely chance that the leaders insmartphones Apple will seek out this technology to propel their competitors outof the market share for sure.
If Apple does turn to Synaptics for fingerprintscanning solutions for the OLED iPhone, this would represent a very nicerevenue and profit boost for the latter at least through the next iPhone cycle.The risk, of course, is that it would likely only be a matter of time beforeApple out innovates Synaptics in favour of a homebrew solution, meaning thatany financial boost for Synaptics would be short lived. Shell – A MergingFirm A merger is an agreement or voluntary fusion that unitestwo companies into one legal entity. There are number of reasons for a mergeror even a takeover is the attempt of a company reaching out to diversify intoanother market or to gain market shares to create value and satisfy theirshareholders. Shell will soon be selling electricity and gas direct tohouseholders in the UK for the first time after buying one of the county’sbiggest energy suppliers, First Utility. Shell bought first Utility outrightfor an undisclosed sum which suspecting industry assumes a sum of between £200m-£300m.This takeover will supply 825,000 homes if the deal concludes end of thisFebruary. The move is the latest in a buying spree by Shell, whichhas acquired two electric car infrastructure firms in recent months as itdiversifies beyond oil and gas.
“Experts said the entrance of Shell into UKenergy supply would cause a significant shake up” (Guardian, 2018). Shell beinga very reputable brand will be an easy transition for the majority of UKhouseholds due to their regular interactions with Shell as the every presenceof oil supplier to the UK automotive individuals. In 2015, a licensing agreement between Shell BrandsInternational and First Utility meant that First Utility could operate in theGerman household energy sector under the Shell brand. After the deal is completed, First Utility will operateas a stand-alone entity and owned subsidiary of Shell within its new energiesdivision. The supply and demand of household energy is rapidlychanging, driven by new technologies and innovation that enable householders tobetter manage their energy use, and the need for a low carbon energy system. Faced with the decarbonisation of its core markets forheating and transportation fuels, the logic for Shell to enter retail householdenergy looks compelling. For First Utility the deal underpins its efforts tosell energy and services to consumers. In the round, at a time when thepolitical impetus is to constrain the market through price caps, this deal is aclear vote of confidence in its ability to deliver change, innovation andbenefits to customers much quicker and more effectively than through regulatorydiktat.
The electricity market will be growing with increase inelectric cars and the ever declining crude oil supply. Shell need to make theirentry in the energies market soon as they have done. Shell already having astrong brand and stations for fuel adding electrical stations will be easierand more convenient than most. The price cap regulations boosting shellsprofits due to a low cap regulation on First Utility. First Utility will beless affected by the measure because it has the lowest proportion of customers ontariffs that will be capped 23% compared to market leader British Gas on 67%.
This makes First utility the best energy supplier to merge with for the UKmarket and increase their market share and profits. EasyJet – A BusinessAffected by Brexit What is ‘Brexit?’Brexit is an abbreviation for “British exit,”referring to the UK’s decision in a June 23, 2016 referendum to leave theEuropean Union (EU). The vote’s result defied expectations and roiled globalmarkets, causing the British pound to fall to its lowest level against thedollar in 30 years.
Prime Minister David Cameron, who called the referendum andcampaigned for Britain to remain in the EU, resigned the following month. HomeSecretary Theresa May replaced him as leader of the Conservative party and asPrime Minister. Following a snap election on June 8, 2017, she remains PrimeMinister.
EasyJet and countless other airlines have been affectedby Brexit and the EU referendum. The biggest impact was the drop of sterlingthe past year and profits have declined by over £100m of and pre-tax profits fellby one sixth to £408m which points to the devaluation of pound after Brexit. For both historical and most importantly technicalreasons, aviation markets are highly regulated. Airlines rights to offerservices between any two locations in two different countries are governed byspecific agreements between the governments concerned. EasyJet along withBritish airways are both UK owned airlines meaning they have full freedom ofpart of the European Common AviationArea (ECAA).
When the UK leaves the EU, without special arrangementsthe UK’s membership of the ECAA would lapse and these airlines would lose alltheir automatic rights to operate to, from and within the ECAA. Furthermore,their rights would also lapse on routes that are now governed by agreementsbetween the third-party country and the EU (such as the EU-US “Open Skies”agreement).However, it is important to note that these rights arereciprocal.
USA and other ECAA carriers would lose their automatic rights tofly to the UK. The airline industry undergoes extensive regulationsrelated to their security, safety, environment and air traffic. Most of theserules are implemented globally and determined by the international CivilAviation Organisation (ICAO). Where theyaren’t met, these standards need to be agreed by the two parties establishingtraffic rights. This is to make sure that the aircraft entering their airspaceis to the Aviation standard set by the ICAO; well maintained, safely operatedand not needlessly noisy.
They will also uphold that these rules aren’tlimiting competitions.(https://www.theguardian.com/business/2017/nov/21/easyjet-profits-passenger-numbers-weak-pound) The UK would seek to negotiate a bilateral agreement withthe whole of the EU. This has been done once before with Switzerland, but waspart of a much wider trade deal, and crucially required Switzerland to agree tothe four fundamental freedoms of goods, services, Capital and labour. Negotiate a series of bilateral agreements with individualcountries if negotiating with the EU becomes too difficult or costly in termsof concessions, then the UK can still try and negotiate with individual memberstates.
It is likely, for example, that countries which benefit from inbound tourismfrom the UK would be amenable to a deal that keeps the visitors coming. Although this sounds sensible, there are two potentialproblems. (i) it assumes (and it is a big assumption) that the Commission willallow individual Member States to negotiate their own traffic rights; and (ii)although access between the UK and, say, Spain, may be relatively easy, theaviation world is governed by a series of rules (called the freedoms of theair) which govern onward connections and routings starting outside your countryof registration. If a UK airline wants to fly between, say, the UK and Spain,then a bilateral agreement is needed only between those countries. If theairline wants to fly more complex routings, involving multiple countries, thenthe agreement of all of those other countries is required. Therefore, what startsas a series of apparently straightforward turns exponentially into a spider’sweb of inter-related negotiations about freedoms and reciprocal traffic rights.