fortune--2020-01-28--Running on EV: The race to solve lithium-ion battery recycling before it’s too late

Late last year, the Japanese chemist Akira Yoshino won the Nobel Prize for his instrumental work in developing stable lithium-ion batteries, which are found in everything from mobile phones to electric vehicles. But after winning the award, Yoshino, 71, cautioned that there was more work to be done. To satisfy the extraordinary demand for rechargeable batteries—and the limited quantities of raw materials needed to make them—industry must devise solutions for recycling them. Especially as EVs, as they’re known, become more widely adopted.
Battery-powered electric vehicles are primed to be a significant presence on the road in the next decade. Estimates for exactly how many EVs will sell vary by millions, depending on the source. (Yoshino, for one, predicts that by 2025, about 15% of new cars sold will be EVs.) The truth is that no one really knows at what rate EV adoption will occur. What is clear is that EVs are coming soon, and en masse. Whenever that happens, the fate of the many millions of used lithium-ion batteries that power these vehicles will become an urgent environmental issue.
“If you talk about the future and battery recycling, it’s one of my biggest concerns,” says Adrian Hallmark, chairman and CEO of Bentley Motors.
Demand for EVs has steadily increased over the past decade. The splashy arrival of Tesla’s pricey Model S sedan in 2012 seemed to ignite interest in the all-electric category. In 2016, General Motors began selling the mass-market positioned Chevrolet Bolt, a subcompact spiritual successor to its pioneering hybrid Volt sedan from nearly a decade before, helping to broaden the appeal of the all-electric. But it was the (admittedly rocky) 2017 launch of Tesla’s Model 3—a $35,000 sedan aimed at the middle of the market and widely considered to be the company’s ride to sustainable economies of scale—where EV chatter reached a fever pitch.
Today, automakers of all sizes are working to show the public that they are on board with electric vehicles in every segment, from pickup trucks to full-size SUVs. Most major manufacturers have a partially or fully electric vehicle coming to market in the next two years; more than a dozen models are expected to go on sale in the U.S. next year. The movement is hardly limited to North America, either: Automakers in China, the world’s largest automotive market, are leading the globe in electric vehicle development. More than a million EVs sold in the country in 2018, according to estimates—more than triple the number in the U.S.
Still, the question remains: What to do with all of those batteries?
On the precipice without knowing it
Americans can be forgiven for thinking that the battery recycling problem is a long ways away. Electric vehicles constitute only about 2% of the U.S. market, notes Jay Whitacre, the director of Wilton E. Scott Institute for Energy Innovation at Carnegie Mellon University.
“We’re not close to the tipping point yet. The actual percent of electric vehicles that are on the road right now in the world is extremely small,” says Whitacre, who spent two decades researching batteries. “Now, in 2030, if we actually are fielding 25 million electric vehicles per year, that’s about four and a half million metric tons of battery material. That’s about one-fifth of the global annual production of aluminum.”
In other words, we’ve been consumed with finding alternatives to petroleum when we really ought to be worried about better understanding the commodities that will help usher in a new automobile age. In the future, our streets will be powered by lithium, not fueled by gasoline. Why aren’t we more concerned about the ramifications of this change?
Indeed, it will take years before people begin to notice the pileup of spent lithium-ion batteries—and then it may be too late to stem the tide. “We really don’t have many end-of-life batteries that aren’t covered by warranty right now,” says Jeff Spangenberger, director of the ReCell Center in Chicago. He notes that an electric car battery is covered by manufacturer warranty for eight years. “We’re in a good position to tackle this before we get huge onslaught of batteries that’s going to continuously grow,” Spangenberger says.
The alternatives leave much to be desired. Battery recycling centers, for example, do exist—but the varied (and still-changing) shapes and chemistries of today’s lithium-ion batteries promise to make recycling them costly and dangerous relative to conventional lead-acid car batteries. Meanwhile, burying old lithium-ion batteries in landfills is both unsustainable and environmentally devastating.
Labs around the world are investigating more efficient techniques. Among them: Pyrometallurgy, which involves melting down metals to extract valuable materials like cobalt and nickel for reuse; hydrometallurgy, which involves leaching the materials from the battery by immersing it in a solution; and directly reusing certain components of a spent battery in new ones. The catch: The current costs associated with these processes often outweighs the value of the recovered materials.
What’s more, who will bear the cost of recycling lithium-ion batteries—the automaker, the consumer, someone else? It remains unclear, at least in the U.S.
“At the end of the day, after your car is out of warranty, as far as I know, [automakers] are not responsible for the battery’s end of life,” Spangenberger says. “They are responsible for ensuring that there is place where a battery can be recycled, but at the end of 15 years, the cost would fall on whoever is going to be the last owner of the vehicle.” To say nothing of the fact that lithium is flammable and must be expensively handled like hazardous waste—unlike conventional lead-acid car batteries.
But where there is a problem, there is business potential.
“The industrialization opportunity for autonomous and battery-electrical vehicles is bigger than the telecommunications industry,” Hallmark says. “It’s a huge economic opportunity.”
Defining a dead battery
It may come as a surprise that a “spent,” “used,” or “end-of-life” automotive lithium-ion battery is far from it, retaining about 60% to 70% of its original capacity. That means the faded battery is no longer desirable for automotive use—so long, driving range—but is still coveted for other uses.
So-called “second-use” li-ion batteries, which could be used in applications such as residential and commercial electric power management, power grid stabilization, and renewable energy support, help delay the need to recycle or discard them.
The University of Warwickshire is one institution conducting research on second-use batteries. In one study partially funded by Jaguar Land Rover, researchers repurposed EV batteries from Jaguar’s I-Pace electric SUV into small energy storage systems that could power homes, farms, and businesses in developing economies.
James Marco, the lead researcher on the project, says he focused on whether a second-use system could accommodate several types of EV batteries. “Even if you think you’re buying the same chemistry, the devil is in the details,” he says. “Imagine you are making a cake. You might have the same cake, but the recipe is subtly different.” The lab is also researching safer ways to transport batteries, including cryogenically freezing them.
Several automakers are funding studies of battery recycling or second-use applications, including Ford, Volkswagen, GM, Nissan, and Honda. Meanwhile Tesla announced in its April Impact Report that it is building a battery recycling center at its Sparks, Nev. battery and vehicle assembly facility, Gigafactory 1.
Argonne National Lab, a federal research center for science and engineering in Chicago, is also studying lithium-ion battery recycling. In November, Argonne researchers published a study in Nature that found that there are already 250,000 tons of battery waste in the one-million EVs on the road today. Argonne is investigating how to make recycling EV batteries cheaper to recycle as part of a program called ReCell, launched by the Vehicle Technologies Office of the Department of Energy’s Energy Efficiency and Renewable Energy division.
“We’re working on coming up with new technologies that are not typically studied by industry,” Spangenberger says. ReCell focuses on direct recycling, material recovery, and the development of battery designs that optimize for sustainability.
Despite all the effort, most industry observers see lithium-ion batteries as a stepping stone to better kinds of rechargeable batteries, such as solid state. Top automakers including Ford, Hyundai, Nissan, Toyota, and Volkswagen have invested in research in this area, with hope that the technology will be on the road by the mid 2020s, according to Navigant Research.
“Lithium-ion batteries are not the future as they are currently defined,” says Hallmark, the Bentley executive. “We do want to go electric as fast as we can. But we’ve also got to think ahead.”
There is confidence that the work to improve lithium-ion batteries will help the industry take that next step. In the meantime, the race is on to address EVs’ fast-approaching problem.
“Everyone sees that when you introduce a solution to an energy problem, the scale is huge,” says Whitacre, the Carnegie Mellon professor. All the more reason to put the pedal to the metal.
More must-read stories from Fortune:
—Why Elon Musk could be headed for a big pay day
—How Western automakers are faring in China
—Aston Martin is on the ropes, financially
—Can Tesla keep up the momentum in China?
—Carlos Ghosn shares what he thinks about Nissan-Renault


fortune--2020-01-28--Airbus reaches deal on bribery charges in the U.S., France and the U.K.

Why 2020 is shaping up to be a strong year for IPOs

Airbus SE reached an agreement to settle long-running bribery investigations in the U.K., France and the U.S., in a deal that could cost the European airplane manufacturer in the range of $3 billion.
A final settlement could be announced as early as this week, according to people familiar with the matter. The preliminary deal remains subject to approval by courts and authorities in the three countries, Airbus said in a statement Tuesday.
The charges involve the use of intermediaries in securing jet orders, a practice that Airbus employed as it tried to reach parity with U.S. rival Boeing Co. A settlement, among the largest in recent years, would allow Airbus to move past the long-running probe at a time when Boeing is struggling with the grounding of its 737 Max aircraft following two deadly crashes.
“If you’re going to get a charge like this and put it behind you, right now is good, while your competitor is having problems,” said George Ferguson, a Bloomberg Intelligence analyst.
The planemaker said that for legal reasons it can’t comment on the details of the discussions. The U.K. Serious Fraud Office declined to comment late Monday, as did the U.S. Department of Justice and representatives at the office of France’s financial prosecutor, the Parquet National Financier.
Airbus shares gained as much as 3% in Paris and were up 2.4% as of 9:33 a.m.
Record Fine
The U.K. part of the settlement is set to surpass the record 500 million-pound ($651 million) fine paid by jet-engine maker Rolls-Royce Holdings Plc., the Financial Times reported earlier.
The corruption saga has lasted almost four years. The company reported itself to authorities in 2016 after then Chief Executive Officer Tom Enders launched an internal probe. The Serious Fraud Office opened its investigation that year, followed by its French counterpart and, late in 2018, the Department of Justice.
The impact of the corruption allegations reached high into the ranks at Airbus and was partly responsible for an exodus of top management. Last year, the company canceled publication of a book it had commissioned on its 50-year history, because a chapter that addressed the bribery episode could have interfered with the cases.
One focus of the U.K. inquiry was Airbus’s failure to disclose its use of third parties to the company’s Export Finance agency, which arranges credit guarantees for overseas sales.
The decision to cooperate in the probes allowed Airbus to keep receiving government-backed loans for overseas sales. But it also forced Enders to clean house before retiring last year.
Airbus’s sales staff weathered a major shakeup. Kiran Rao, who had already been announced as the replacement to longtime sales chief John Leahy, was sidelined and has since left the company.
After an outsider, former Rolls-Royce executive Eric Schulz, didn’t work out, Airbus went with Christian Scherer, who led its regional aircraft business, for the top commercial-jet sales role.
Fabrice Bregier, Enders’s longtime second-in-command and a candidate to become CEO, was also forced out. Guillaume Faury, who had earlier headed Airbus’s helicopters unit, replaced him and became CEO in April.
Progress toward a settlement has been slowed by numerous issues, including the availability of judges in France and the U.K., holiday scheduling and procedural differences, according to a person familiar with the situation.
The deferred prosecution agreement marks the most significant settlement by the SFO since it changed leadership 17 months ago. Conservative politicians, including former Prime Minister Theresa May, have questioned whether it’s worth keeping the country’s top white-collar crime prosecutor.
The success of the DPA will depend on prosecutors’ ability to prosecute individuals responsible for the wrongdoing, particularly after the SFO decided not to charge any in individuals in connection with the Rolls-Royce case.
The Parquet National Financier was set up in 2014 to focus on major financial crime after a former French budget minister was found to have used a secret Swiss account to dodge taxes. The PNF last year reached its largest settlement with Google, which agreed to pay 500 million euros to end a tax fraud case. In court, UBS Group AG was ordered to pay a €4.5 billion penalty in a case led by the PNF.
More must-read stories from Fortune:
—Europe may be next in Trump’s trade war offensive
—Berlin’s ‘ghost’ airport might finally open, billions over budget and 8 years late
—The long ocean voyage that helped find the flaws in GPS
—Mysterious GPS outages are wracking the shipping industry
—Into the ‘crucible’: How the government responds when GPS goes down
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-01-28--The 2020 candidates’ positions—and records—on economic issues that affect women

This week, Fortune published a joint project with Time’s Up Now featuring interviews with the 2020 presidential candidates about some of the economic issues that directly affect women and working families: paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership.
Thirteen of the remaining 15 candidates, including President Trump, participated in the project. Two—Republican primary challengers Bill Weld, former governor of Massachusetts, and Joe Walsh, former Illinois congressman—chose not to participate.
Time’s Up Now, a 501(c)(4) organization dedicated to promoting safe working conditions for women, faces limitations on asking primary candidates personalized questions. In this companion article without participation from Time’s Up, Fortune has provided more context and information on candidates’ records and positions on these issues.
Michael Bennet
Sen. Michael Bennet (D-Colo.) has served in the Senate since he was first appointed to the seat in 2009. Bennet was previously chief of staff to Denver Mayor John Hickenlooper—another former 2020 presidential candidate—and superintendent of Denver Public Schools.
A centerpiece of his proposals related to women’s economic issues is the American Family Act, which he introduced in the Senate in March of 2019; the legislation would increase the child tax credit for young children and make the tax credit fully refundable, an effort the Bennet campaign acknowledges is largely targeted at helping middle-class families.
Read his answers about paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership here.
Joe Biden
Former Vice President Joe Biden has a long legislative record to point to on these issues, from his decades in the Senate to his eight years in the Obama Administration. In 1990, Biden wrote the Violence Against Women Act, and worked to pass the Family and Medical Leave Act in 1993, which guaranteed 12 weeks of unpaid leave to workers.
Biden’s stewardship of the Senate committee that heard Anita Hill’s testimony during Supreme Court Justice Clarence Thomas’s confirmation hearings has at times been an issue in the race for the Democratic nomination. Biden has “expressed regret” over his role in the proceedings to Hill, while Hill has declined to characterize their conversations as an apology.
During his presidential campaign, some women have raised concerns about touching and behavior by Biden that they considered inappropriate. Biden has previously said he would try to be “more respectful of people’s personal space.” The Biden campaign declined to provide a comment to Fortune.
Biden says that as President, he would work to pass the FAMILY Act, the BE HEARD Act, the Paycheck Fairness Act, the Pregnant Workers Fairness Act, and the Domestic Workers Bill of Rights Act. His campaign has put out a plan to end violence against women.
Read his answers about paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership here.
Michael Bloomberg
Michael Bloomberg earned his fortune—which is now funding his presidential campaign—as the founder of financial services firm Bloomberg L.P.; in responses to Fortune/Time’s Up’s questions, his campaign pointed out that his company offers 26 weeks of paid family leave to all employees.
Bloomberg went on to serve as mayor of New York City from 2002 to 2013. His tenure as mayor was distinguished by a focus on public health issues, a trend that has continued with the Bloomberg presidential campaign, which released a plan to fight the maternal mortality crisis. The campaign also released a plan to support women as small business owners and touts Bloomberg (the company)’s Gender Equality Index.
Bloomberg and his company have been named as defendants in multiple lawsuits alleging gender discrimination. Bloomberg’s campaign said in response to Fortune via email: “We have zero tolerance for sexual harassment or discrimination of any kind. We have always created an environment where women can and do succeed. We provide equal pay, good benefits, and opportunities for advancement.”
Recently, Bloomberg has said that he will not release women from nondisclosure agreements signed in relation to those lawsuits and settlements.
Read his answers about paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership here.
Pete Buttigieg
Pete Buttigieg, a Democrat, served as the mayor of South Bend, Ind., from January 2012 to January 2020. During his time in office, Buttigieg implemented six weeks of paid family leave for city employees and appointed the city’s first diversity and inclusion officer.
As part of his presidential campaign, Buttigieg released a Women’s Agenda, which includes plans to close the gender pay and wealth gaps, reduce racial and income-based disparities in women’s health outcomes, and prevent domestic violence, sexual harassment, and online harassment. He has also pledged to choose women for 50% of his cabinet and judicial appointments as President.
Read his answers about paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership here.
John Delaney
Former Rep. John Delaney (D-Md.) represented Maryland in Congress for six years. In his prior career in business, Delaney served as CEO of two publicly traded companies, Health Care Financial Partners (later acquired by Heller Financial) and commercial lender CapitalSource.
As part of his presidential campaign, Delaney issued a plan for women’s rights, pledging to support the Paycheck Fairness Act, eight weeks of paid family leave, reproductive rights, and the Equal Rights Amendment.
Read his answers about paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership here.
Tulsi Gabbard
Rep. Tulsi Gabbard (D-Hawaii) was elected to the House of Representatives in 2012; she announced in 2019 that she would not seek re-election to the House and would instead focus on her presidential campaign.
An Army veteran, Gabbard has been a leading voice on addressing and preventing sexual assault in the military. She also supports the FAMILY Act, the POWER Act, the Paycheck Fairness Act, and the Pregnant Workers Fairness Act.
Read her answers about paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership here.
Amy Klobuchar
Sen. Amy Klobuchar (D-Minn.), a former lawyer and county attorney, was elected to the Senate in 2006.
She introduced the Child Care Workforce and Facilities Act, which seeks to improve access to childcare by investing in facilities and training, and supports legislation including the Paycheck Fairness Act, the Child Care for Working Families Act, the BE HEARD in the Workplace Act, and the Combating Sexual Harassment in Science Act. Klobuchar’s plan for her first 100 days in office includes expanding VA benefits for women veterans and their children, providing incentives to federal contractors to offer paid family leave, and putting rules in place to prevent pay discrimination.
Read her answers about paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership here.
Deval Patrick
Deval Patrick, a Democrat, served as Governor of Massachusetts between 2007 and 2015. His 2020 platform includes support for paid family and medical leave, subsidized childcare and universal prekindergarten through either a tax credit or direct contribution, and expanded family tax credits.
Read his answers about paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership here.
Bernie Sanders
Sen. Bernie Sanders (I-Vt.) has served in Congress since 1991 and in the Senate since 2007. Throughout the 1980s, Sanders was the mayor of Burlington, Vt.
Sanders supports six months of paid family leave, universal childcare, the BE HEARD Act, and the Paycheck Fairness Act. His campaign highlights how his economic agenda, which is focused on working and low-income people, would benefit the women who hold two-thirds of minimum wage jobs in the U.S.
Former members of Sanders’ 2016 presidential campaign staff have accused the campaign of pay discrimination based on gender and of being tolerant of sexual harassment. In an email statement to Fortune, the Sanders campaign responds: “During his 2016 campaign, there were women who were harassed and mistreated. Bernie is deeply sorry and recognized that the safeguards and standards were inadequate. As a result of meeting with 2016 alumni who were willing to come forward, meet with him, and share their stories, Bernie put forward a comprehensive blueprint committed to safety, inclusion and equity for his 2020 campaign.”
Read his answers about paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership here.
Tom Steyer
Tom Steyer earned his fortune—which is now funding his presidential bid—as the founder of Farallon Capital and at private equity firm Hellman & Friedman.
As a presidential candidate, he supports six months of paid family leave, legislation on equal pay, and subsidized childcare.
Read his answers about paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership here.
Donald Trump
President Donald Trump was known for his career in business and real estate and as a reality television personality before he was elected president in 2016. While the other candidates for President have only proposals for what they would do in the White House and, for some, Congressional voting records, Trump, as President, has a three-year record in executive office to examine.
The White House, answering a Fortune/Time’s Up question about funding affordable childcare, emphasized an effort spearheaded by Ivanka Trump to double the child tax credit from $1,000 to $2,000 as part of the administration’s 2017 tax reform. That effort has benefited largely middle-class and wealthier families, with many lower-income families earning too little to qualify for the full credit. The White House did not respond to request for comment about this discrepancy.
In response to a question about the gender pay gap, the White House cited the low unemployment level among women and did not directly address the gap. The Trump administration attempted to reverse an Obama-era rule that required businesses to report salary data to the EEOC. While a judge blocked that effort, Trump’s appointed EEOC commissioner then decided to halt the data collection effort, claiming that the data collected did not outweigh the burden on employers.
Neither the White House nor Trump’s re-election campaign answered questions about sexual harassment, pregnancy discrimination, or legislation on the diversity of corporate boards. The Trump administration overturned a rule that prevented federal contractors from forcing employees into arbitration when they’re sexually harassed or assaulted at work.
More than 20 women have accused Trump of sexual misconduct, including sexual assault. Two separate women are suing the President over claims that he defamed them when he said their claims that he sexually assaulted them were fabricated. This 2016 campaign is the subject of a pregnancy discrimination lawsuit. Trump has repeatedly denied allegations of assault and harassment, and the campaign has in the past declined to comment on the pregnancy discrimination suit. Neither the White House nor the campaign responded to requests for comment from Fortune on these claims.
Read his answers about paid family leave, affordable childcare, and the gender pay gap here. Neither the White House nor the campaign answered questions about pregnancy discrimination, sexual harassment, or diversity in corporate leadership.
Elizabeth Warren
Sen. Elizabeth Warren (D-Mass.) was elected to the Senate in 2012 after a long career as an academic and expert in bankruptcy. In 2007, she proposed the idea that would eventually become the Consumer Financial Protection Bureau.
She launched her presidential campaign with a plan to fund universal childcare, and has since released plans to address the maternal mortality crisis, protect reproductive rights, provide paid family and medical leave, and to boost wages for women of color.
In October of 2018, a conservative website questioned the veracity of Warren’s description of losing out on a teaching job in the 1970s because she was pregnant, a story she tells frequently on the campaign trail. Warren has stood by her story and pointed out that pregnancy discrimination was not often noted in official records.
Read her answers about paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership here.
Andrew Yang
Entrepreneur Andrew Yang entered the Democratic presidential primary after a career in business and tech. His platform is centered around a proposal for universal basic income, or a $1,000 a month “freedom dividend” to American adults, which he points out would pay women for often unpaid care work. He also supports six months of paid family leave, subsidized childcare, increased support for single parents, and legislation on diversity of corporate boards along with other efforts to increase women’s representation in leadership positions.
Two former employees have claimed that Yang discriminated against them based on gender when he was CEO of a tutoring company, as reported in this BuzzFeed story. The Yang campaign’s national press secretary said in a statement emailed to Fortune: “Like many CEOs, Andrew Yang has had the unfortunate task of letting staff go who did not meet the organization’s standards. The information provided by the letter-writer does not reflect the reality of the situation.”
Yang’s wife, Evelyn Yang, spoke to CNN this month about being sexually assaulted by a gynecologist who later lost his medical license.
Read his answers about paid family leave, affordable childcare, the gender pay gap, pregnancy discrimination, sexual harassment, and diversity in corporate leadership here.


fortune--2020-01-28--The top corporate apps in 2019 included some surprises

Tech titans like Microsoft and Amazon dominate the corporate app market, but upstarts that specialize in managing data and cybersecurity are growing faster.
The three most popular corporate apps in 2019, based on the number of companies using them, were Microsoft Office 365, Salesforce, Amazon Web Services, according to a survey published on Tuesday by workplace software company Okta. Microsoft and Salesforce have come in first and second place for the past six years, the report said.
In terms of fastest growth, data management startup Snowflake led the list, followed by Atlassian’s OpsGenie app for IT workers, and Google Cloud, Okta said.
Okta CEO Todd McKinnon said the survey’s findings show that apps that are accessed online from third-party providers and are available by subscription, have become mainstream. Now, the fastest growing corporate apps tend to be ones that help companies monitor their cloud infrastructure and data along with training employees about security and fending off phishing attacks.
Google Cloud’s appearance on the list of fastest growing apps is noteworthy because it shows that many companies are using the search giant’s cloud computing service as a supplement to Amazon Web Services. While AWS is still the leading cloud computing provider in terms of use, according to analysts, companies are increasingly depending other cloud services, a setup known as a hybrid cloud.
As for predicting the results of next year’s survey, McKinnon said he expects the video conferencing app Zoom to become one of the six most popular workplace apps. In 2019, it was No. 7, just behind workplace messaging service Slack.
“It’s the only one that’s on the most popular apps and fastest growing apps,” McKinnon said about Zoom.
Okta’s sixth annual report is based on its monitoring of 7,400 customers that use its software. Okta’s software verifies employee identities across multiple apps.
The company’s findings do not include the specific numbers of companies that use individual apps.
Here are the top ten most popular corporate apps for 2019:
Microsoft Office 365 Salesforce Amazon Web Services G Suite Atlassian Product Suite Slack Zoom Box SAP Concur Cisco Meraki DocuSign Zendesk GitHub Dropbox Lucidchart
Here are the fastest corporate growing apps for 2019:
Snowflake Opsgenie Google Cloud Splunk KnowBe4 Looker Jamf Pro Envoy Freshservice Zoom
More must-read stories from Fortune:
—The long ocean voyage that helped find the flaws in GPS
—Atari-themed hotel deal punctuates the gaming pioneer’s turnaround
—Into the ‘crucible’: How the government responds when GPS goes down
—This tech giant says A.I. has already helped it save $1 billion
—What is tech doing to protect the whistleblower’s identity? Not much
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-01-28--Verizon is the best wireless carrier, report says, but 5G could change everything

Verizon is still the best mobile network carrier for overall quality, according to a new report. The nation’s biggest consumer wireless company placed first by sweeping all six categories (with one tie) for the second half of 2019, according to mobile evaluator RootMetrics.
Verizon placed first in best network overall and also won for reliability, speed, data connections, and calling, RootMetrics said. As in prior years, Verizon tied for first place with AT&T for texting.
AT&T placed second nationally, with T-Mobile and Sprint bringing up the rear.
The final 2019 rankings come at a time of transition for the wireless industry. The carriers have spent billions of dollars building out even faster 5G networks, but will have to spend tens of billions more to achieve the coverage and reliability of today’s 4G coverage. RootMetrics tested some of the early 5G services but didn’t include the data as part of its rankings.
“Verizon once again delivered the strongest combination of stellar reliability and fast speeds among all networks,” the firm noted in its report. “No other carrier came close to matching Verizon’s consistency of delivering fast speeds in metro (areas) across the U.S.”
The industry is also awaiting a judge’s decision in the court case case challenging the merger of Sprint and T-Mobile. If the deal is allowed to go forward, the combined network could offer much better speed and coverage than either of the two carriers ever produced on their own.
Across the country, AT&T actually had the fastest median download speed at 33.1 megabits per second. That’s fast enough to download a song in 1 second but would require 10 minutes or longer for a movie file. Verizon was second at 32.7 Mbps, but also had the most consistent speed results, with only one market out of 125 seeing speeds under 20 Mbps. T-Mobile’s median speed nationwide was 24.6 Mbps and Sprint’s was 23.1 Mbps.
In its separate look at 5G, RootMetrics found uneven coverage and speeds in the cities where service is offered. For example, in Los Angeles, the only city where all four carriers offer 5G, maximum download speeds ranged from 627 megabits per second on Verizon to 201 Mbps on Sprint to 126 Mbps for both T-Mobile and AT&T. But T-Mobile’s 5G signal covered 39% of the Los Angeles metro area, Sprint’s 36%, AT&T’s 7%, and Verizon’s only 0.4%.
“The promises of 5G include dramatically faster data speeds and lower latency,” the firm noted. “That said, access to the fastest 5G speeds depends on what spectrum each carrier has available. We’re still in the early days of 5G and expect to see even faster speeds over time as 5G network coverage expands and as the carriers make technology upgrade.”
That’s similar to what Fortune found in our recent test of 5G networks from Verizon, AT&T, and Sprint.
RootMetrics’ methodology is different from several other firms, like Ookla and OpenSignal, which issue ratings based on crowdsourced speed tests performed by customers using free apps on their phones. AT&T topped OpenSignal’s most recent download speed ranking, though it tied with or was passed by Verizon and T-Mobile in some other categories like 4G availability and upload speed.
RootMetrics, a unit of IHS Markit, conducts its tests with professionals driving around the country. Its surveyors conducted 3.9 million tests, driving more than 225,000 miles and also checking almost 8,000 indoor locations to compile the latest rankings.
RootMetrics also ranked the carriers in its six categories in each of 125 major metropolitan areas. Verizon won the most awards, at 660, followed by AT&T with 401, T-Mobile with 217 and Sprint with 80.
More must-read stories from Fortune:
—The long ocean voyage that helped find the flaws in GPS
—Mysterious GPS outages are wracking the shipping industry
—Into the ‘crucible’: How the government responds when GPS goes down
—Google CEO Sundar Pichai on managing a tech giant’s growing pains
—5G is supposed to be the future. But here’s what it’s like today
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-01-28--Kobe Bryant and the science of grief

Kobe Bryant and the science of grief

This is the web version of Brainstorm Health Daily, Fortune’s daily newsletter on the top health care news. To get it delivered daily to your in-box, sign up here.
Happy Monday, readers. I hope you had a wonderful weekend.
But I understand if, for many of you, this weekend was unsettling or upsetting. Since the news of Kobe Bryant’s death on Sunday, there’s been a great deal of public mourning and discussion about Bryant on news shows and social media.
That’s had me thinking about grief and how it works.
How does the death of a talented, controversial, problematic, beloved, and larger-than-life figure like Kobe Bryant, along with his 13-year-old daughter, Gianna, and seven other people, impact the public at large?
I admit I have a personal connection here. I grew up in Southern California. I watched all those legendary games back in the day with my father. We’re immigrants who developed a kinship with our neighbors and community by cheering on the purple and gold. The sudden shock of the tragedy has many of us in the community shaken, even if we’d never met any of these people in person.
So how does the kind of grief we’re feeling since hearing the news of Bryant’s death compare with the kind of grief that hits when somebody you know personally dies? Modern research has made it clear that there’s not just one kind of grief.
We’ve all heard how grief comes in stages, but the reality is far more complicated than the Kübler-Ross model suggests. There’s also considerable controversy within the mental health community when it comes to just defining the word “grief.”
In 2013, the American Psychiatric Association unveiled the fifth edition of its manual of mental disorders—the Diagnostic and Statistical Manual of Mental Disorders, commonly known as the DSM-5.
This is, for all intents and purposes, the tome when it comes to categorizing and describing psychiatric afflictions. The book is an imperfect attempt to suss out and understand the kinds of wounds you can’t see on an MRI or X-ray, but which have a profound effect on the health and livelihood of so many people.
The DSM-5’s definition of grief has a critical difference from its previous iteration—it cut the DSM-IV’s “bereavement exclusion.” The exclusion defines grief as a fleeting thing separate from more serious mental conditions like major depressive disorder (MDD)—as long as it doesn’t last too long.
The DSM-5 shook up that notion and eliminated the exclusion. Under the revised criteria, grief isn’t necessarily just a blip, it may be the harbinger of a more serious and long-lasting condition.
That’s not to say that clinical depression and ordinary grief are the exact same thing (they aren’t). But, in a sense, this was an effort by the psychiatric community to parse the intricacies of human sadness. It’s a complicated science.
That all leads to our current understanding that, no, you don’t have to feel strange about grieving somebody you’ve never met. We bereave the death of our own loved ones. Communities grieve for those they’ve known. That grief can even pour out to complete strangers, even ones people may have mixed feelings about. That’s all OK.
Recognizing this has helped me process my feelings about Bryant’s death. I hope it does the same for you.
Read on for the day’s news. And stay well.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
The brewing battle over interoperability rules. Med tech firms are waging a war against the Department of Health and Human Services' (HHS) proposed interoperability rules—a long-standing thorn in the industry's side. HHS Secretary Alex Azar has voiced frustration on the pushback, which he paints as an effort to drag the health care industry's siloed and "balkanized" system of storing medical data into the 21st century so that such information becomes more accessible. One of the key tensions here is HHS' proposals to allow patients to download health data via third party applications—which medical providers say aren't held to the same rigorous standards as health insurers and other stakeholders. HHS' central effort is to create standardized APIs (the programs at the heart of digital applications) so that systems will be able to communicate with each other. (ModernHealthcare)
INDICATIONS
AbbVie divests in prep for Allergan deal. Biopharma giants AbbVie and Allergan have spun off three products to AstraZeneca and Nestle as the former firms attempt to finalize their massive corporate marriage. Nestle will be snapping up two of Allergan's pancreatic drugs, Zenpep and Viokace, while AstraZeneca will wrest back control of an experimental IL-23 inhibitor to treat Crohn's disease and other inflammatory gut disorders. The divestments may be the last road bump to clear before final FTC approval of the $63 billion M&A. (FiercePharma)
THE BIG PICTURE
The shifting contours of the coronavirus. The Centers for Disease Control (CDC) says that there are currently 110 potential coronavirus cases in the country (on top of the five cases confirmed as of Sunday). All of the cases to date appear to be related directly to travel from the Wuhan region of China, where the respiratory outbreak began. In China, at least 81 people have died from the virus, and more than 2,800 cases have been reported. (Reuters)
REQUIRED READING
Fortune Poll: Investors Want Corporations to Focus on More Than Just Shareholders, by Lance Lambert
10 Stocks That Are Poised for a Stellar 2020, by Anne Sraders
Purdue Pharma Bankruptcy Is Now Open to OxyContin-Related Personal Injury Claims, by The Associated Press
Martin Shkreli Sued for Alleged Violation of Antitrust Law, by Bloomberg
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fortune--2020-01-28--J.Crew finally found a new CEO: Jan Singer, formerly of Victoria’s Secret

New York Times reporter writing a bin Salman book was targeted with NSO Group spyware , report says

J.Crew Group’s long search for a chief executive willing and able to fix the struggling fashion company is finally at an end.
The company, which owns the J.Crew and Madewell brands, said on Tuesday that it has hired former Victoria’s Secret lingerie chief executive Jan Singer to be its new CEO and take on the herculean task of bringing the J.Crew brand back to health after years of sales declines and the ongoing disinterest of previously loyal shoppers. Her appointment ends the apparel company’s 15-month search for a new chief.
J.Crew’s 15-month search for a new CEO came to a close when the company hired Jan Singer. (Photo by Jim Spellman/WireImage)
Singer was most recently with L Brands as the CEO of Victoria’s Secret’s $4 billion lingerie business (the broader division also includes PINK). She left the company in 2018 after a short stint. Beginning Feb. 2, Singer will oversee the J.Crew and J.Crew Factory brands, the company announced in a press release.
The J.Crew brand, which is by far the company’s biggest division, took in $1.74 billion in sales in its four most recent quarters, and operates 190 stores. But it has been slumping for years, hurt by fashion missteps, undependable quality, and shifting shopping habits. In the first nine months of the current fiscal year, sales fell 4.8%. At Madewell, in contrast, they rose 14.3%.
It wasn’t all that long ago that J.Crew was a fashion powerhouse. Though the brand had humble beginnings as the catalog of choice for the preppy set, it grew under the guidance of former CEO Mickey Drexler into a multi-billion dollar apparel brand in the 2000’s favored by the likes of former First Lady Michelle Obama.
But by 2015, cracks were starting to show in J.Crew’s business, and sales started their long decline. The brand had gone too far upscale, particularly for women’s wear which generates about 80% of sales, and too fashion forward for customers who had long turned to it for stylish basics. What’s more, J.Crew sat on its hands while big new trends like athleisure, casual athletic clothing popularized by Lululemon Athletica and Gap Inc.’s Athleta, emerged.
Even as Drexler complained about the aggressively promotional environment in retail, J.Crew kept building up its outlet business and focused on discounting. Drexler was reportedly one of the executives most opposed to plans by his successor, Jim Brett, to sell J.Crew on Amazon.com, believing that doing so would cheapen the brand. Drexler stepped down as CEO in 2017 and left the board a year ago. Brett left J.Crew in 2018 after only 16 months.
Singer, 55, will have her hands full trying to repair J.Crew’s image with shoppers who, thanks to the rise of many new brands, have far more options than just a few years ago.
But the executive has a track record of being in tune with today’s shoppers: at Victoria’s Secret, Singer wanted the brand to focus more on comfort and fit and less on sexiness but left after only two years. Victoria’s Secret’s sales had been declining already but since Singer’s departure have worsened: during the recent holiday season, comparable sales (which exclude recently opened or closed stores) fell 12%. Before Victoria’s Secret, Singer was first a senior executive at Nike and then led Spanx.
Singer won’t be in charge of Madewell, a brand favored by younger shoppers. That unit, which has submitted plans to be spun off as a separate, publicly traded company, will continue to be led by Libby Wadle.
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fortune--2020-01-28--New York Times reporter writing a bin Salman book was targeted with NSO Group spyware, report says

J.Crew finally found a new CEO : Jan Singer , formerly of Victoria ’ s Secret

A New York Times reporter was targeted with spyware designed to infect his phone, cybersecurity researchers say, news that comes just days after the United Nations declared that the phone belonging to Amazon CEO Jeff Bezos was also targeted with a spyware attack.
While instances of smartphone spyware aimed at journalists, human rights workers, and even public figures are on the rise, this the first public accusation that the software was used to target an American journalist.
In a detailed report released Tuesday, Citizen Lab, a University of Toronto-based cybersecurity research laboratory, writes that a link texted to Ben Hubbard, the Times’s Beirut Bureau Chief, led to a site used to infect phones that was also used against multiple critics of the Saudi government.
CitizenLab concluded that it was part of a campaign that uses software created by Israel’s NSO Group, likely the world’s most infamous spyware-for-hire company. Hubbard has authored an upcoming book about Saudi Crown Prince Mohammed bin Salman.
NSO markets its phone-hacking capabilities to “legitimate” government agencies to help law enforcement and fight terrorism. In the past, the company has declined to comment on specific cases where its software was allegedly used, citing terms of its contracts, but Citizen Lab says its analysis has found the software deployed against journalists and civil rights lawyers in Mexico.
In a statement sent to Fortune, NSO says CitizenLab’s report was “unsubstantiated.” According to the company, the software is designed to not operate on Americans’ phone numbers, and therefore by definition couldn’t be used against Bezos. While Hubbard is American, the phone that received the spyware message is not U.S. phone number, a person familiar with the incident said.
NSO adds Hubbard “seems to have forgotten, or has deliberately concealed the fact that we worked closely with him,” noting the Egypt-based journalist had previously let the company analyze his claims.
A Times spokesperson tells Fortune that Hubbard had insisted his conversations with NSO at the time would be conducted off the record. But since NSO spoke to Fortune on the topic, “we have been released from that agreement,” the spokesperson says.
According to the Times, the NSO did not inspect Hubbard’s phone; it was provided with a screenshot of the suspicious text message. “Off the record only, it told Mr. Hubbard that its software had not been used to target his phone,” the spokesperson says. “NSO had multiple opportunities to say on the record how it had come to this conclusion and to state for the record whether its technology had been used to target Mr. Hubbard’s phone. It did not, nor did it address this issue in its most recent statement.”
Citizen Lab’s director, Ron Deibert, defends his group’s research. “We present detailed, peer-reviewed evidence,” he tells Fortune. “For their part, they provide dubious claims and never directly address our evidence.”
Notably, Citizen Lab’s report does not list any connection to the alleged hack on Bezos’s phone. On Wednesday, U.N. investigators looking into the murder of Saudi dissident Jamal Khashoggi released a statement that did openly suggest NSO was likely responsible: “Experts advised that the most likely explanation for the anomalous data egress was use of mobile spyware such as NSO Group’s Pegasus,” it said.
Citizen Lab’s claims rely on a report by the US firm FTI Consulting, which found that Bezos’s phone was hacked when he received a poisoned video file over WhatsApp, sent by bin Salman’s own phone after the two men traded phone numbers at a dinner. The Saudi embassy has denied that claim.
Recent media reports that suggest the Kingdom is behind a hacking of Mr. Jeff Bezos' phone are absurd. We call for an investigation on these claims so that we can have all the facts out. — Saudi Embassy (@SaudiEmbassyUSA) January 22, 2020
In the Bezos case, NSO responded with a much stronger denial that it was involved, writing on its website that the company “is shocked and appalled by the story that has been published with respect to the alleged hacking of the phone of Mr. Jeff Bezos.” The company pledged to help with any investigation.
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fortune--2020-01-28--Apple holiday results top estimates on rebounding iPhone demand

Apple reported holiday-quarter revenue that beat Wall Street expectations on rebounding iPhone demand and surging sales of wearable devices. The results marked a remarkable comeback from a year ago, when the most valuable technology company missed its own targets.
A sales forecast for the current quarter also exceeded analysts’ projections, sending Apple shares up more than 2% in extended trading.
The Cupertino, Calif.-based company reported $91.8 billion in revenue for the fiscal first quarter, up 9% from a year earlier. Wall Street was looking for $88.4 billion, according to data compiled by Bloomberg. Profit was $4.99 a share, also beating analysts’ expectations.
For the fiscal second quarter, Apple said sales will be between $63 billion and $67 billion. Analysts estimated $62.3 billion, on average.
“The strength is coming from the iPhone and continued really strong growth in wearables and the App Store,” said Shannon Cross of Cross Research. “The iPhone was very strong.”
Apple shares have marched higher in recent months on increasingly bullish expectations for new iPhones, AirPods and revenue from iCloud storage, the App Store and other services. That elevated the stock’s valuation to the highest level in at least a decade, raising the bar for Tuesday’s results.
After years of rapid growth, Apple’s expansion has slowed as demand for smartphones waned and competition from Chinese rivals intensified. Under CEO Tim Cook, the company’s strategy has evolved. It now aims to sell new handsets to customers every three to five years, and then offer as many services and accessories as possible in the intervening years.
Analysts have been particularly excited about wearable accessories, such as the Apple Watch and AirPods.
However, the iPhone still generates the majority of Apple’s revenue. And this crucial business has improved from a dire performance in last year’s holiday period. The iPhone 11 and 11 Pro models were well received in their debut in the fall and demand in China has been particularly strong, outselling 2018’s releases in a market that has otherwise been shrinking.
Apple generated $56 billion in revenue from the iPhone in the fiscal first quarter, up 8% from a year earlier. That was a lot better than the 2018 holiday period, when sales of the handset dropped about 15%. Apple cut the price of its entry-level flagship iPhone by $50, luring buyers. There are also millions of older iPhones that are losing software support from the company, spurring new purchases.
Wearables and other accessories generated $10 billion in revenue in the holiday quarter, up 37% from a year ago.


fortune--2020-01-28--It’s time government starts to better manage its online spending

A penny here, a penny there, and pretty soon we’re talking about $6 billion. Every year, the government spends more than $6 billion in small purchases. Surprisingly, we don’t have good visibility into what we’re buying with those dollars. Under federal law, these micropurchases don’t require an existing contract. While this lets agencies efficiently buy goods and services worth less than $10,000—such as printing services or office supplies—it also means the federal government has little or no visibility into those transactions. This opens the door to counterfeit goods and security risks.
As we enter a new decade, we owe it to citizens to ensure this $6 billion is spent transparently and responsibly, without adding unnecessary bureaucracy.
E-commerce has revolutionized how people and organizations buy and sell things. It’s rewired the American economy and shifted the purchasing process; however, the federal government has not kept pace with these trends. The last major round of acquisition reform was a generation ago—before the Internet and all things digital dominated how business got done. Online retailers were untested novelties.
Fast forward to today, where federal purchases and procurement spending through commercial e-commerce portals are increasing at a rapid pace. Agency charge card spending through commercial online portals has grown 92% from fiscal year 2014 to fiscal year 2018; that trend will only increase. And that’s just the tip of the iceberg, as it only captures spending to those companies who exclusively have an online presence. It doesn’t account for spending with companies who have both brick-and-mortar and online storefronts.
While this growing trend offers promise when it comes to efficiencies, it is not without risk. These one-off purchases add up quickly, leaving the government with limited visibility into online spending, increasing exposure to supply chain risk, and posing significant accountability and fraud-related concerns. It also risks missing opportunities to buy from disadvantaged socioeconomic groups and small businesses. We can do better.
Congress has challenged the U.S. General Services Administration (GSA) to provide a solution. The agency was charged with establishing a program to procure commercial products through partnerships with commercial e-commerce portals, as part of the fiscal year 2018 National Defense Authorization Act (NDAA).
To answer Congress’s call, GSA established the Commercial Platforms Initiative and is launching a proof of concept this year, partnering with e-marketplace platforms that offer business-to-business capabilities. Federal agencies will be able to manage their accounts, approve real-time purchases, and access large numbers of suppliers that are selling on these e-marketplaces—all through a modern buying experience. Furthermore, companies can highlight their platforms’ advanced technology when selling to the government.
This whole-of-government approach will provide agencies with critical insight into their spending, leverage the government’s buying power, take advantage of constantly evolving pricing to include sales and bulk discounts, ensure small business participation, and increase supply chain visibility. This initiative enables GSA to move forward on a small scale and expand the program based on lessons learned.
By enabling government buyers to use modern tools and technologies, we’ll have immediate visibility into their order status and spending trends. The proof-of-concept approach will modernize the buying experience and offer a solution that better serves our government and American taxpayers. Not only is GSA leveraging capabilities offered in the commercial market, but doing it at a time when a number of Fortune 500 companies are considering the same actions. In this sense, the government is helping lead this change.
Agencies across government are eager to participate in the proof of concept, having expressed a strong desire to gain better visibility into their online purchasing, including key insights on buying patterns. GSA has met with close to a dozen agencies to better understand how the commercial platforms can improve their procurement process, provide value, and ensure we are even better stewards of taxpayer money.
Don’t forget about transparency. Federal agencies want to know what’s being bought, who’s selling it, and where it’s coming from. Today, if a federal employee with a government charge card buys a prohibited product under the $10,000 threshold, or receives an item from a prohibited company, it’s very difficult to track. However, if those same products are bought through commercial platforms in the proof of concept, agencies will receive real-time data so they can take the appropriate corrective action.
To that end, some agencies are already forming partnerships with online marketplaces to get access to their data to help mitigate supply chain and purchasing concerns. But these ad hoc e-commerce agreements will lead to a fragmented view of spending data and inconsistent terms and conditions, limiting the government’s buying power and contributing to a largely inconsistent federal market. A better, more unified solution starts with launching the proof of concept. The unique role GSA plays in government provides an opportunity to strategically bring together federal buying by offering a unified, cross-agency approach to e-commerce purchasing.
I’m confident that the Commercial Platforms Initiative will take an important step in bringing increased transparency and purchasing discipline into the small-dollar procurement space—unlocking purchase trends and insights to better serve Americans. At the front end of a new decade, the time to make this change is now.
Emily W. Murphy is administrator of the U.S. General Services Administration.
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fortune--2020-01-28--Wawa breach: A hacker is selling 30 million stolen credit cards on the dark web, cyber experts say

In late December, the popular Northeast convenience store chain Wawa disclosed hackers had obtained payment data for some of its customers. Now, the scope and the fallout from the hack is becoming apparent, as criminals this week reportedly began to sell millions of credit and debit card accounts on the Internet.
According to Gemini Advisory, a firm that researches cybercrime, a well known hacker known as Joker Stash posted the data for sale on Monday evening on the so-called dark web—an anonymous layer of the Internet popular with criminals.
In a screenshot given to Fortune by Gemini Advisory, the criminal boasts of possessing more than 30 million card numbers from more than 40 different states stemming from a “nationwide breach.” The screenshot, shown below, does not name Wawa but Gemini is confident the company is the source of the breach:
Courtesy of Gemini Advisory
Philadelphia-based Wawa, which has over 850 stores, issued a statement on Tuesday acknowledging the post on the dark web.
“Today, we became aware of reports of criminal attempts to sell some customer payment card information potentially involved in the previous Data Security Incident … We continue to work closely with federal law enforcement in connection with their ongoing investigation,” said the statement, which also noted Wawa is working with partners to monitor for fraud.
In a letter disclosing the breach in December, Wawa CEO Chris Gheysens stated the company was not aware of any unauthorized use of the card information, and that customers would not be responsible for unauthorized charges. Hackers obtained the data by infecting Wawa’s payment system with malware.
According to Andrei Barysevich of Gemini Advisory, which published its own account of the hack, the alleged sale of the Wawa data by Joker Stash fits a familiar pattern used by multiple hackers. The pattern involves selling the data in small batches to other criminals, who will then seek to use the credit card information for fraudulent purposes.
The median price for such data is $17 per card, says Barysevich. In the case of Wawa, he says, the likely buyers will be criminal gangs in the Northeast, since overseas banks are likely to identify many of North American cards as suspicious and block criminals from spending them.
According to Wawa, the hackers did not obtain the security codes on the cards, which will make it difficult for criminals to use them online or at stores with chip readers. As such, Barysevich says, gangs will likely use the stolen data to print new cards, and to seek out merchants that still accept swipe-based credit card payments.
If hackers indeed stole more than 30 million accounts from Wawa, the breach would rank among the country’s biggest, after similar hacks that befell the likes of Target and Hilton Hotels.
This article was updated at 4:20pm ET to include Wawa’s response.
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fortune--2020-01-28--Recycling hasn’t changed in years, but America is on the cusp of a reckoning

Since the dawn of curbside recycling some 40 years ago, millions of Americans now subscribe to the idea of recycling. That success was helped along by the advent of single-stream recycling around 2005, which allowed people to put everything in one bin rather than sorting according to material. Many U.S. communities hopped on board.
Single-stream was seen as a positive evolution: It was easier for people to do, and it cost haulers—and cities, by virtue of downstream savings—less than the previous dual- and multi-stream systems. Today, people dutifully toss their used water bottles, tuna cans, pasta sauce jars, broken-down Amazon boxes, and junk mail into the recycling bin, diverting it from the trash. Even better, some might even place their eggshells, coffee grinds, and apple cores into a composting bin.
But then someone comes along and dumps a container that still has soup, oil, or coffee in it into your blue bin. Or a glass bottle explodes upon impact inside your apartment building’s communal recycling receptacle, sending a million shards into a pile of otherwise clean paper and cardboard. This inadvertent contamination can spoil the whole batch, which in the best case scenario means it loses some of its value on the resale market. The worst case scenario? It goes to landfill.
This is a major reason why, despite the belief of 80% of Americans that recycling is important, the country still struggles with poor recycling rates. On either end of the spectrum for big cities, New York City recycles just 17% of its total waste, while San Francisco tops the country with an 80% diversion rate. Nationally, the recycling rate is just over 35%. That figure has been more or less stagnant for years, speaking to a much larger—institutional, even—problem with how the U.S. approaches recycling.
That problem was exceptionally easy to ignore for a very long time. Beginning in the 1980s, China bought a huge amount of foreign trash and recyclables. The country had ample cheap labor to sort through it to find those coveted higher-quality Western plastics, which were excellent raw materials for sandals, phones, and takeout containers. The Asian country gobbled up millions of tons of the world’s waste.
Until two years ago.
Since China enacted its National Sword policy at the start of 2018, the superpower now refuses 99% of the world’s recyclable plastic because it exceeds the new contamination threshold. Contamination is what happens when things get put into recycling that really shouldn’t be there; as it turns out, Americans love to “wish-cycle” by tossing in soiled containers and paper, lightbulbs, and other items that are not recyclable. The U.S.’s contamination rate sits at around 25%—much higher than China’s 0.5% allowance.
Other Asian countries initially picked up the slack that resulted from China’s ban. But now they don’t want to be the world’s trash can anymore, either. Malaysia recently returned 150 shipping containers’ worth of refuse to their Western countries of origin. That smuggled trash had been illegally imported by local companies, the Malaysian government said. These de facto embargoes have led to the bottoming out of recyclables markets.
In his 45 years in the waste, organics, and recyclables hauling industry, Louie Pellegrini has never seen market prices for recyclables so low. With China purchasing only clean recyclables, waste haulers are having a hard time finding new buyers.
“China was a once-in-a-lifetime deal. There’s never going to be another China,” said Pellegrini, the owner of the San Francisco Bay Area’s Alameda County Industries. “[Now] we have to learn how to deal with ourselves.”
The overwhelming majority of Americans see recycling as a righteous act. Private waste hauling companies, however, see recycling as a matter of economics. They provide the equipment, crew, and processing facilities, and they earn money by charging cities—or by charging households directly, in some cases—to get rid of waste and recycling.
They also earn revenue by handling the resale of the materials they collect and by landfilling trash. Pellegrini said he used to get a pretty penny for his recyclables; now, in some cases, he is paying to get rid of them. Glass in particular is a material that normally fetches a high price on the resale market when properly handled and transformed into cullet (the fancy name for recycled glass). Even that is being thrown out in large quantities because of contamination.
In California, where he operates, the penalties can be quite severe if a hauler were to be caught landfilling recyclables. But Pellegrini can see why some haulers would be tempted to dump recyclables in a trash heap instead.
“It is definitely cheaper to landfill it. Every time you touch it, it costs more,” he said, noting the labor it takes to sort bags of contaminated recycling.
The downturn in the recyclables market makes recycling less profitable to haulers, who now have to choose between reverting to and investing in dual- or multi-stream recycling, or continuing with the lower-value single-stream and instead landfilling contaminated materials.
Neil Seldman, a recycling expert with the Institute for Local Self-Reliance, said China’s National Sword policy could actually be one of the best things to happen to American recycling. “Until that happened, there was no incentive [to do higher-quality recycling], and people didn’t realize that single-stream systems contaminated material so much that they became worthless on the international market,” he said.
Seldman believes the U.S. recycling business is in need of a real reckoning, since recycling rates have slowed to a crawl. “We’ve been stagnant for maybe 15 years now, and the reason is that the industry is structured so that large companies control enough of the market to qualify as monopolies.”
That regional market dominance gives haulers—especially those who handle both trash and recycling—enormous leverage over cities and towns to dictate the terms of waste hauling contracts, as well as to determine their collections’ final resting places.
Scott DeFife, president of the nonprofit industry group Glass Packaging Institute, said that the fractured nature of U.S. decision-making on waste—and many public officials’ lack of basic understanding on the topic—has helped rob communities of their ability to get collective buying power.
“The level at which we [make these decisions] is hyper local compared to other countries or continents,” DeFife said. “The private sector companies who have national programs have benefited from this because no one city or county has enough market power to shape the contracts in a way that is more balanced. The market power is on the side of the large companies.”
Because of how China’s policy has affected those large hauling companies, there have been subsequent ripple effects across the U.S., hitting some areas hard. As waste haulers pass off higher costs to their customers, a few dozen communities across the U.S.—especially those that had a noncommittal relationship with recycling in the first place—have suspended or outright canceled their recycling programs, according to an exhaustive list of local and state program changes published by Waste Dive. Others have restricted the kinds of materials they’ll accept, with plastic bags and glass at the top of the recycling non grata list because they are the most likely to contaminate.
“We mainly did dual-stream recycling because we were able to get revenue from the paper, but we haven’t made any revenue from our paper for the past two years,” says Melissa Simoncini, senior environmental and regulatory coordinator for the department of public works in Concord, Mass., a 16,000-person town northwest of Boston. Concord’s hauler previously shared some of the profits of selling the town’s recycled paper, which went toward offsetting the cost of the service. She said without the Chinese market, the community was struggling to find a buyer and was just stockpiling the paper in the meantime.
For now, Concord is keeping its 22-year-old dual-stream system even though it doesn’t generate revenue, simply for the fact that it diverts waste from landfill.
Changes to China’s recycled paper market was a central reason why New York City quietly backed away from a plan to switch to single-stream recycling a few years back. The city had considered single-stream because it had hopes of increasing its participation rate, explained Kathryn Garcia, New York City’s sanitation commissioner—a move that local experts like Maggie Clarke, a chair of two committees at the Manhattan Solid Waste Advisory Board, advised against. “We gathered a lot of information from elsewhere where these communities had signed up for single-stream and then had buyers’ remorse [because of high contamination],” Clarke said.
Today in New York City, Garcia said the city is taking some steps to expand and improve education about its voluntary composting and mandatory dual-stream recycling programs, as well as extended producer responsibility policies—an approach that shifts the responsibility onto manufacturers instead of consumers—that are popular in Canada.
Even with the logistic headaches, Seldman argued that, in the long run, China’s policy could actually be a blessing in disguise because it is helping to relocalize recycling—in essence, bringing materials recovery facilities (MRFs) and paper mills back to the U.S., and pushing better recycling practices overall across the country. For instance, last year former paper mills in Oregon, Maine, and Wisconsin, along with a decommissioned MRF in Santa Fe, reopened.
When it comes to reckoning with its recycling crisis and the corporations at the heart of it, the U.S. is facing an enormous task. Still, citizens do have the power to make a change. “What I always like to say is, I’m only dealing with the end of the line,” Garcia said. “What you decide to buy today makes a huge difference on how we manage it at the end of the cycle.”
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fortune--2020-01-28--The war between Popeyes and Chick-fil-A is putting a strain on the supply of little chickens

Fast-food titans, embroiled in a chicken-sandwich battle, are trying to beat each other with small weapons.
Little chickens, whose quarter-pound breasts fit perfectly inside a bun, are proving essential to the war effort. In the process, they’re getting harder to come by.
A shortage of the smaller birds derailed the Popeyes challenge to reigning champion Chick-fil-A last summer, and most petite poultry are sold in grocery stores, not in chain restaurants. Now the supply will be further tested as more competitors jump into the fray. McDonald’s Corp., the world’s biggest restaurant chain, is testing new fried-chicken sandwiches in four U.S. cities with the added pop of MSG, a controversial flavor enhancer it says it doesn’t use in its national menu. Wendy’s Co. is going all in, spending $30 million to beef up its chicken supply chain.
“Consumers don’t want tough and tasteless big chickens,” said Scott Sechler, owner of poultry producer Bell & Evans. There’s “increasing consumer demand for smaller, premium-quality birds.”
Chickens have been the most popular meat in America for a long time. More chicken is devouredin the U.S. than anywhere else in the world — an average of 93.5 pounds per person last year, according to the National Chicken Council. The birds have been getting progressively bigger over the years. Today’s broiler varieties, the ones raised for meat, average more than 6 pounds (2.7 kilograms) each. In 1925, they weighed 2.5 pounds.
So how did these fast-food chains so quickly find success with their chicken sandwiches? Birds lighter than 4.25 pounds.
Small is beautiful
The summer skirmish focused Big Chicken’s attention on the smaller and less plentiful variety. Breasts from wee birds recently reached nearly triple the cost of breasts from a “jumbo” nine-pounder, a historically wide difference, according to Russ Whitman of commodity researcher Urner Barry.
Jumbo boneless breasts on Tuesday were at a record low of 87 cents a pound, while prices for the smaller version jumped to $2.53, the highest in a year, Urner Barry said.
When it comes to sandwiches, small is beautiful. Cutting up a bigger portion takes labor, and what does one do with the trim? Restaurants want product that comes ready to go at the right specifications, said David Maloni, executive vice president of analytics at supply-chain consultant ArrowStream.
“It’s getting harder and harder to get that” smaller bird, “so they’re paying a premium,” Maloni said. The fast-food chains won’t settle for bigger birds, he said.
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fortune--2020-01-28--What Walmart and Target need to do to stay on top in a reshaped retail world

Who knew that the rise of Amazon would turn out so well for Walmart and Target?
It was only a few years ago that both of those titanic big-box retailers were in peril, losing customers in droves to the e-commerce giant. But the past decade’s radical reshaping of how Americans shop, a change fueled by Amazon’s inexorable ascent, has paradoxically resulted in Walmart and Target—along with a few other big U.S. retailers—evolving to become stronger and more successful companies than ever. The massive shock of e-commerce’s encroachment, analysts agree, gave them the jolt they needed to reinvent themselves.
The result has been a stunning return to form for both Walmart and Target, each of which was founded back in 1962. Walmart is expected in February to report its 22nd straight quarter of comparable sales growth in the United States. Target, despite a disappointing 2019 holiday season, says it should post an 11th quarter of growth by that metric, which excludes the impact of newly closed or opened stores.
Most crucially: Both chains are getting more shoppers to come to their stores. Each company has poured billions into updating both the technology and the décor at their massive brick-and-mortar fleets—4,800 stores for Walmart U.S, and 1,800 for Target.
“What they did that was brilliant was to leverage their stores and sales associates in way to compete against Amazon on convenience, defining convenience in a different way,” Barbara Kahn, a professor of marketing at the Wharton School in Philadelphia, says of the two companies.
Walmart’s shares have roughly doubled since October 2015 when it announced massive investments to counter Amazon. And the top line is also at record levels, with U.S. sales likely to top $340 billion for the fiscal year that’s about to end. Target’s shares, despite a recent mini-slump, are up 60% compared to last January.
The question now is: How long can Walmart and Target extend their winning streaks? Leaders at both companies know they can ill afford to rest on their laurels. In November, Walmart chief executive Doug McMillon, ranked by peers as one of the most underrated CEOs in a recent Fortune survey, expressed dissatisfaction with the company’s U.S. e-commerce progress. And Target got a rude awakening during the recent holiday season, when comparable sales rose only 1.4%.
Each company is also coping with big changes in the c-suite. Greg Foran, the architect of the vast improvement of Walmart’s U.S. stores, has stepped down to return to his native New Zealand to lead an airline there. He’s been replaced by John Furner, until recently CEO of Walmart’s Sam’s Club. Walmart’s well-regarded chief merchant Steve Bratspies is also on his way out. Target, meanwhile, also recently lost its chief merchant, Mark Tritton, who oversaw the creation of many of its successful new brands; he left to become CEO of Bed Bath & Beyond.
Both Walmart and Target have begun to telegraph how they plan to build on their success. The two companies will update investors on their respective plans with analyst days, Walmart next month and Target in early March. Each will likely be rolling out new strategies while building on current strengths. And each is painfully aware that hot competition and fickle customers can bring a sudden change of fortune. “At any moment, things can turn,” says Forrester analyst Sucharita Kodali.
Here’s a preview of what investors—and shoppers—can expect.
Walmart: Better clothes and a better website
Walmart has been posting explosive online growth, with its e-commerce sales up 41% year-over-year last quarter. According to a Recode report, the company’s 2019 U.S. e-commerce should come in at $22 billion or so. It has spent billions to build up the infrastructure to steer customers toward curbside pickup of online orders, particularly for groceries, and in-store pickup.
It’s largely Walmart’s grocery business that has fueled that recent e–commerce growth. Overall, the online business is still losing money, with losses estimated by Recode to be $1 billion for the fiscal year winding down. All that has left McMillon frustrated about the costs and pace of expansion in Walmart’s other online sectors – its general merchandise business and its marketplace for smaller independent vendors. “We need to do more and move faster,” the CEO told investors in November, saying he wants “a stronger Walmart.com business that’s profitable over time.”
Many observers expect Walmart to tighten the purse strings on e-commerce investments to focus on those that will pay off. As Wharton’s Kahn puts it, Walmart has “to offer value but do it in a way that doesn’t make them bleed.” Indeed, Walmart is reportedly looking into shedding its Jetblack concierge service and has drastically streamlined jet.com, the e-commerce service it acquired in 2016 for $3 billion.
Amazon’s online sales are currently about six times as big as Walmart’s. And Forrester’s Kodali says Walmart still has a lot of work to do if it wants to truly challenge Amazon in that arena. That includes mastering some e-commerce fundamentals: Providing more reliable information on whether an item is in stock at a store, for example, is one such arena, Kodali says. That need for up-to-date information on availability and speed of delivery also applies to Walmart’s third-party marketplace, and Kodali says it’s crucial to keeping customers on the site in general. “If you lose a customer’s confidence, it’s that much harder to get ever get anyone to try something again,” she notes.
One key area where analysts expect Walmart to try to make bigger inroads is clothing sales, both online and in its stores. The company has struggled to turn e-commerce clothing brand acquisitions like ModCloth, which it is selling off, and Bonobos into successes. Yet it’s clear Walmart has not thrown in the towel, recently reviving defunct women’s fashion brand Scoop as its own brand, and selling some Karl Lagerfeld merchandise via a partnership with Lord & Taylor. A better women’s clothing assortment, beyond the $7 camisoles Walmart is known for, would go a long way to getting shoppers to spend more time, and therefore more money, at its stores.
A shopper in the grocery department at a Wal-Mart store in Alexandria, Va. Andrew Harrer/Bloomberg via Getty Images
Walmart is the biggest grocer in the country and gets 56% of its revenue by selling food. It built much of its recent growth by leaning in on nicer presentation of fresh food and a better assortment of offerings. This year, though, the pressure will only grow on Walmart to keep its grocery offering enticing to shoppers, particularly at the lower end. Aldi, the German deep discounter whose generic store brands are increasingly popular, continues to expand in the U.S, often opening stores catty-corner from a Walmart. And Lidl, another German low-price grocer taking root in the U.S., is also likely to pinch Walmart. (Those two chains severely dented the market share of Walmart’s Asda chain in Britain in recent years.)
How could Walmart play offense in the grocery aisle? Look for the company to continue to expand its fresh food assortment. Beyond that, Walmart could try offering services like meal delivery plans, as well as selling higher-end prepared foods, says Forrester’s Kodali.
Analysts also expect Walmart to branch out beyond its traditional business for new sources of revenue—much as Amazon has done. Walmart has already been dipping its toes in the digital advertising world, where it uses its masses of customer data to sell ads on its web site to other companies. By some estimates, that could become a $5-billion-a-year business in short order. The Wall Street Journal recently reported that Walmart was looking into selling warehouse and shipping capacity to third-party sellers doing business on its online marketplace, as well as selling some of its computing firepower to outside parties.
In a multifront retail battle, “The only retailer that can compete head-to-head with Amazon is Walmart,” says Wharton’s Kahn.
Target: More hot brands, more groceries
Target slumped in the mid-2010s in part because its store brands had lost their appeal. But it has recaptured its Tarzhay cheap-chic aura, ditching many stale brands, including some billion-dollar labels, and replacing them with new, instantly popular names.
That strategy continues to pay off, enabling Target to poach business from department stores and clothing chains. Yes, the recent holidays were disappointing for the company, but its clothing department wasn’t to blame. Apparel sales rose 5% during the holidays, while at Kohl’s, Target’s frequent strip mall neighbor, women’s clothing was weak. That was no coincidence. Last year, Target convinced Levi’s to let it start selling its better red-tab jeans in a big threat to the likes of Kohl’s and J.C. Penney.
“When you walk through a renovated Target, there’s a Lululemon, there’s a plus-size store, there’s a Victoria’s Secret,” says Stacey Widlitz, co-founder of SW Retail Advisors, of the needs filled by Target’s new brands. “There is no need to go anywhere else.” The challenge will be to keep trotting out those new brands—Target’s own, and others’—while staying in sync with shoppers’ tastes, she adds.
An employee stocks clothing at a Target store in Chicago. New in-house clothing brands have been a key to Target’s recent revival. Daniel Acker/Bloomberg via Getty Images
It will also be challenging for Target to preserve its merchandising Midas touch under its two new chief merchants, Jill Sando and Christina Hennington. Nonetheless, analysts expect the steady rollout of new brands to continue. Just last week, in fact, Target launched the “All In Motion” sports clothing label to replace the discontinued C9 athletic brand made by Champion.
Analysts expect to see a lot more progress in the grocery department, where Target derives a significantly smaller share of its revenue than Walmart does. Last year Target launched its health-focused “Good & Gather” brand, and it will add more products to the line this year to bring the brand’s assortment to 2,000 different items. The chain has won kudos for its alcoholic-beverage assortment at some 1,500 stores and its strong variety of organic food. A more appealing grocery lineup would go a long way to driving customers to visit its stores more often, a linchpin of Target’s strategy.
On the e-commerce front, Target has gingerly waded into the marketplace waters, selling other companies’ brands online. Target has so far kept its marketplace selective and invitation-only, selling only 55 brands in a few specific product categories. But after digital sales rose a scant 19% during the holidays compared to the 2018 period, barely more than half the clip they hit in the summer and early autumn, the pressure is on Target to keep pushing its e-commerce.
There’s no guarantee that Walmart and Target will continue to correctly anticipate shoppers’ desires. They’ll have to remain relentless in investing in their stores, adding to the conveniences they already offer and avoid falling into the ruts that hurt both chains over the last decade.
“Even just one off day will throw your numbers off,” says Forrester’s Kodali. And it takes perpetual hustle to keep those numbers in the black.
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fortune--2020-01-28--Apple’s iPad turns 10: Experts look at the decades behind and ahead

Apple co-founder Steve Jobs once predicted the iPad would replace notebooks. A decade since its launch, with laptops still entrenched, it hasn’t achieved that mission. But that doesn’t mean the iPad, which remains important to Apple’s business, has lost its way.
In conversations with Fortune on Monday, the ten-year anniversary of the iPad’s unveiling, analysts say there’s both good and bad in Apple’s iPad division. And whether Apple likes it or not, they say, some things will need to change.
As Apple looks ahead to the iPad’s second decade, here are several key facts and figures that may drive one of the company’s most puzzling products.
The “post-PC” era?
According to data from Statista, PC makers shipped 201 million notebooks worldwide in 2010, the year Steve Jobs unveiled the iPad and called it the beginning of the post-PC era. If the iPad was to destroy the notebook, it would have some work to do.
That same year, according to Statista, just 19 million tablets shipped worldwide. That figure grew to an estimated 134.1 million last year, suggesting the iPad helped build what is today’s tablet industry. Notebook shipments, meanwhile, fell to 166 million units last year, so not exactly the demise Jobs hoped for.
The problem, according to Creative Strategies analyst Tim Bajarin, is that the iPad hasn’t proven to be a suitable notebook replacement. “It has not had the productivity capabilities one still has with a laptop,” he says.
IHS Markit analyst Wayne Lam believes Apple made a strategic error by not focusing enough of its iPad energy on enterprise users and their unique needs. “Tablets are about getting day-to-day activities like email and viewing content,” Lam says. “For heavy computing purposes, Macs or PCs are preferred.”
‘Sputtering’ growth
A combination of slow upgrade cycles and more consumer interest in smartphones than tablets has tempered the iPad’s success, analysts say.
“Initially, the iPad was a resounding market success,” Lam says. Now, though, he says the iPad’s growth has “sputtered.” Apple shipped about 10 million iPads per quarter last year.
This is sobering news for the company, which has watched iPad sales drop for years. In Apple’s first fiscal quarter of 2014, its iPad reached a peak of 26.04 million unit sales. A year later, iPad sales dropped to 21.4 million. In the first quarter of 2016, they fell again to 16.1 million units.
The iPad’s slow sales descent has stood in stark contrast to the iPhone, which despite some small sales drops in recent years, has remained strikingly steady. Apple’s best year for iPhone sales came in 2015, when the company sold 231.2 million units worldwide. In 2018, the last full year of data provided by Apple, the company sold 217.8 million units.
The smallest of big divisions
Despite those shipment declines, Apple’s has managed to keep its iPad business growing—and quite large. For most other companies, that would be a victory, but context matters. Inside Apple, even a division the size of the iPad is far less impactful than you might think.
During Apple’s 2019 fiscal year, iPad revenue was up 15.8% from $18.4 billion in the prior year to $21.3 billion. If the iPad were its own company, it would be big enough to top Lear for the 147th spot in the Fortune 500.
But tucked inside a company that generated $260.2 billion in revenue overall last year, iPad accounts for less than 10% of its total revenue.
By comparison, Apple’s iPhone business generated $142.4 billion in revenue last year. And with $24.5 billion in revenue on 41% year-over-year growth, Apple’s wearables and smart home business is both bigger than iPad and growing much faster. The same holds true for Apple’s Services business, which grew more than 16.5% year-over-year to $46.3 billion in revenue. Even the aging Mac, with $25.7 billion in revenue, outpaced iPad in 2019.
The 7-year wait
Over the past decade, iPad has clung to a chunky rectangular design, with no built-in keyboard, and an operating system in iOS (and iPadOS) that can’t quite match macOS in power or capability. High-priced accessories, like keyboards and the Apple Pencil stylus are required to get more from the tablet.
The iPad’s stuck-in-the-mud reality has become more acute in recent years, thanks to its long-time rival Microsoft, the analysts say.
With hybrid Surface laptops that have keyboard and touchscreen capability in one product, Microsoft has been able to bridge the gap between laptops and tablets. Microsoft has also opted for a full version of Windows on its Surface machines, creating a clear distinction between Apple’s mobile-focused iOS and a more robust operating system in Windows 10.
“If you look at Microsoft’s Surface laptops that are both tablet and laptop, you already see the eventual mobile computing platform of the future,” Bajarin says. He believes “a mobile computer in both modes will eventually displace the traditional laptop.”
The analysts say Apple has felt that pressure in recent years and has taken steps to target the Surface with features like its Smart Keyboard accessory that turns the iPad into a more traditional notebook. Ultimately they believe Apple will have no choice but to go all the way and create a hybrid device that can compete on the same level, productivity-wise, as Microsoft’s Surface.
“Giving people the ability to use a mobile computer in both modes will eventually displace the traditional laptop,” Bajarin says, pointing to the importance of the Surface on the mobile market. “It may still be 7-10 years away, but Apple clearly is driving the iPad in this direction.”
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