fortune--2020-02-03--China will struggle to spend its way out of the coronavirus economic slowdown

China’s stock markets plummeted early Monday as they reopened after an extended Lunar New Year holiday. But while the markets are back to work, many manufacturers remain closed. Fourteen major regions in China have lengthened the national holiday for another week as authorities grapple with how to contain the spread of the deadly new coronavirus.
The 14 regions, home to the majority of the economic powerhouses and ports that line China’s east coast, accounted for 69% of China’s $14.3 trillion GDP last year, according to Bloomberg. The majority of the cities will remain on holiday until February 10, while Hubei province—the epicenter of the outbreak that has so far infected 17,205 and killed over 360—will remain on leave until February 14.
Under normal circumstances, the longer holiday might be celebrated among workers, but the prolonged shutdown is cause for concern for policy makers, who will struggle to get China’s already-weakened economy back to work after the virus dies down.
Shutting down
The Chinese New Year, also known as Spring Festival, is normally marked by a five-day public holiday that begins on the first day of the Lunar New Year. Manufacturing output always falls during the break, as workers return home to their families, but the holiday is normally a major boon for merchants.
“The new year festival is when lots of businesses make their profit for the entire year,” said Patrick Perret-Green, head of research at London-based consultancy AdMacro.
Last year, domestic tourism generated over $145 billion in spending during the holiday period. This year, with travel slumping 30% over the same period in 2019, consumer spending is bound to take a fall as travel restriction and fear of contagion keep shoppers at home.
“Most businesses exist with very small margins so you don’t need a big loss of sales to have a very big effect,” said Perret-Green. For smaller retailers living on razor-thin margins, the loss of business could be dire but even companies with extra wiggle room will be more frugal in the year ahead, Patten-Green said, meaning the spending slowdown will have a long tail.
“There’s a short term hit to activity that is unlikely to be made up for later in the year. A loss of sales remains a loss of sales,” Perret-Green said.
Shot in the arm
In 2003 when China was in the grips of Severe Acute Respiratory Syndrome (SARS)—a viral epidemic of a similar nature to the current coronavirus outbreak—the local economy suffered a drop of 1.1%. With memories of that epidemic still fresh, policymakers in Beijing already have enacted much harsher measures to prevent the spread of the new coronavirus and to limit the scope of its economic fallout.
Tommy Wu, senior economist at Oxford Economics in Hong Kong, estimates China’s GDP growth will slow by two percentage points in the first quarter alone, costing roughly $60 billion. However, Wu anticipates there will be a strong recovery by the third month, bolstered largely by government intervention.
“We expect policy measures will be rolled out to target sectors and geographic regions that are affected. We also expect policymakers to roll out measures to support the broader economy, especially after the virus outbreak is under control,” Wu said.
Some measures are already in place. As trading resumed Monday, the People’s Bank of China injected $173 billion into the money markets through reverse repurchase agreements. The central bank cut interest rates on the reverse repurchase agreements by 10-basis points to stimulate more liquidity in the market.
Under guidance from the China Banking Insurance and Regulatory Commission (CBRIC), major banks have cut interest rates for borrowers and pushed back repayment dates on loans in certain areas that have been hit particularly hard by the outbreak.
Unsustainable growth
Wu expects future policies to focus on more tangible sectors of the economy and will likely include support for infrastructure spending and advanced manufacturing. However, following a two year trade war with the U.S., Beijing is not well-positioned to sustain support for the economy.
“The fact that policy makers will have to engage in even more risky stimulus to cushion the blow of this is pretty worrying in terms of how it might erode the already pretty weak macroeconomic fundamentals,” said The Economist Intelligence Unit (EIU) lead on global trade Nick Marro, citing issues such as bad debts, low productivity, and weak private sector investment activity.
China’s household debt rose to a record high of 55% of GDP in Q3 last year, the Institute of International Finance (IIF) reported in January. China’s overall debt was close to 310% of GDP—one of the highest in emerging markets.
Meanwhile, manufacturing productivity slowed to a five month low of 51.1 in January, according to the Caixin purchasing managers index (PMI), which surveys small to medium enterprises (SMEs). The PMI survey was taken before Beijing started to move against the coronavirus epidemic, so manufacturing will likely dip further in February.
The EIU, for its part, predicts the current epidemic could knock two percentage points off of its forecast for China’s economic growth in 2020, dropping the rate to as low as 3.9%—significantly lower than the roughly 6% growth rate Beijing maintains as a psychological threshold.
“Before all this happened we were expecting those factors and risks would have subsided,” Marro said, “but the coronavirus has thrown a wrench into those plans.”
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fortune--2020-02-03--‘The results look good so far:’ Thai doctors tout promising treatment for Wuhan coronavirus

Those controversial ‘ Peloton wife ’ ads may not have hurt sales after all , say analysts

A cocktail of antiviral drugs appeared effective in treating a seriously ill coronavirus patient, a Thai health official said.
The HIV medicines lopinavir and ritonavir, which are sold by AbbVie Inc. as the product Kaletra, was used on three patients in conjunction with the anti-flu medication oseltamivir, sold by Roche Holding AG and Chugai Pharmaceutical Co. as Tamiflu, Somkiat Lalitwongsa, director of the Rajavithi Hospital in Bangkok told reporters Monday.
Kaletra is already being studied in a randomized, controlled trial — the gold standard for testing new medical products — in novel coronavirus patients in Wuhan, China. The decision by Thai doctors to give the flu drug was based on research that indicated it helped some patients afflicted with the more-deadly coronavirus that causes Middle East respiratory syndrome. A study by researchers in France recommended it be used in these so-called MERS patients, but discontinued if tests show they don’t have the flu.
“There’s not enough evidence to support the effectiveness just yet,” Somkiat said. “But we report to contribute to the medical community globally. The results look good so far.”
Of three patients in Thailand on whom the unique three-drug therapy was initiated, two are continuing to receive the medications, Somkiat said. Treatment was discontinued in one patient who developed a rash. One of the two continuing to receive the medicines has tested negative to the 2019-nCoV virus, he said.
“Because there’s no standard procedure yet, we’re trying new combinations of drugs,” Somkiat said.
Thailand has 19 confirmed cases of the so-called 2019-nCoV virus. Eleven are hospitalized and the rest have returned home. The nation is also monitoring 311 people for possible infections in hospitals as of Sunday, according to a health ministry statement.
Thailand will repatriate more than 100 people from Wuhan on Feb. 4 after they pass medical screening in China, Deputy Prime Minister and Public Health Minister Anutin Chanvirakul said Sunday. They will then be quarantined for 14 days after returning to Thailand.
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fortune--2020-02-03--Chinese markets plummet amid coronavirus spread in first trading since New Year break

Chinese stocks plummeted by the most since an equity bubble burst in 2015 as they resumed trading amid the worsening virus outbreak.
The CSI 300 Index dropped as much as 9.1% as onshore financial markets opened for the first time since Jan. 23. More than 2,600 stocks fell by the daily 10% limit. China’s benchmark iron ore contract declined by its daily limit of 8%, while copper, crude and palm oil also sank by the maximum allowed. The yield on China’s most actively traded 10-year government bonds dropped the most since 2014. The yuan tumbled more than 1% to weaken past 7 per dollar.
The rout comes as regulators unleashed targeted measures to help blunt the pain for companies, banks and individuals, as well as pledging financial stability. China injected cash into the financial system Monday, with the central bank seeking to ensure ample liquidity as markets plunge. It cut the rates on the funds by 10 basis points. Officials also urged investors to evaluate objectively the impact of the coronavirus, which has killed more than 360 and spread to more than 17,000 people.
“It is really hard to trade stocks,” said Li Shuwei, chairman at Beijing WanDeFu Investment Management Co. “It’s impossible to predict how this disease will develop. Even the experts have no clear idea when the outbreak will end, let alone stock traders. It’s too early to buy stocks right now and it’s also difficult to sell as all shares are limit down. So I will just have to wait and see.”
The CSI 300 of companies listed in Shanghai and Shenzhen pared some losses to trade 7.6% lower at 1:19 p.m. local time. Declines were led by telecom, technology and commodity producers. Hong Kong’s Hang Seng Index, which dropped 5.9% in three days of trading last week, rose 0.5%.
The People’s Bank of China added 900 billion yuan ($129 billion) of funds with seven-day reverse repurchase agreements at 2.4%. It also injected 300 billion yuan with 14-day contracts at 2.55%. While the total is the largest single-day addition of its kind in data going back to 2004, it implies a net injection of just 150 billion yuan as more than 1 trillion yuan of short-term funds mature.
The outlook for China’s onshore markets was already bleak when investors went on holiday last month. The Shanghai Composite Index sank 2.8% on Jan. 23, its worst end to a Lunar Year on record.
A number of Chinese provinces and cities have extended the Lunar New Year break until the end of Feb. 9, including Shanghai and Guangdong. Beijing, the country’s administrative center, stopped short of declaring this week a holiday. Instead employees are encouraged to work from home.
“A lot of people in the market have not been through situations like today, and you can’t blame people for wanting cash when they feel like their health is at risk,” said Fang Rui, managing director at Shanghai WuSheng Investment Management Partnership. “There’s not a lot we can do today, we are already very heavily exposed with very little remaining funds to use to buy.”
The outbreak is leaving China increasingly isolated. The U.S., India, Australia, Indonesia, Singapore, Israel, Russia, New Zealand and the Philippines have all imposed restrictions on visitors from China. In Hong Kong, the government said it was studying further controls on travel from the mainland in response to a planned strike by medical workers aimed at pressuring the government to shut the border with China.
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fortune--2020-02-02--For what ails Super Bowl athletes? Former NFL player talks up a new long-lasting knee treatment

In the week leading up to Super Bowl LIV, broadcasters, retired athletes, and, yes, retired athletes who are now broadcasters descended upon Miami for an annual spectacle called “Radio Row.” The event gives former pro athletes the chance to promote a wide range of products. As The Ringer dubbed it in a recent piece, Radio Row is the “sport world’s greatest native ad.”
“We end up serving as leaders in the space, we want to continue to stay in the game,” former NFL star Solomon Wilcots told Fortune.
The former free safety, who played in Super Bowl XXIII for the Cincinnati Bengals against the San Francisco 49ers, was in town to promote a drug that may be of particular interest to athletes sporting (or hiding) a limp: Flexion Therapeutics’ Zilretta.
Zilretta was approved in 2017 as the Food and Drug Administration’s (FDA) first cleared long-acting injection to treat osteoarthritis knee pain (a common injury among many athletes, especially football players).
Importantly, the medicine isn’t an opioid—it’s a long-acting formulation of corticosteroids that dispenses the active ingredients over the course of weeks or months instead of just days.
“Many who receive immediate release steroids are one and done; Our goal was for at least three months,” Mike Clayman, CEO of Flexion, told Fortune.
Flexion is hoping to expand its market reach for Zilretta in the coming years—including for non-athletes.
“We are just scratching the surface on the number of patients who could be benefiting from Zilretta,” said Clayman.
To that end, Flexion got some pretty bullish news at the end of 2019. The FDA swapped out language on Zilretta’s drug label that said the treatment wasn’t meant for repeated administration to a more mild warning.
Flexion stock is down 15% year-to-date but up 27.5% over the past 12 months.
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fortune--2020-02-02--How the Iowa caucuses work—and what’s new for 2020

The Iowa caucuses, on Feb. 3, will start the process of anointing the Democrat who will take on President Donald Trump in November. A vestige of old-style organizing in an age when most political action has moved online, Iowa’s caucuses can seem obscure and anachronistic to outsiders. Some changes this year in response to long-running criticism of Iowa’s importance and procedures might make things even more complicated.
1. What’s meant by a caucus?
The state-by-state contests that the Democratic and Republican parties rely on to choose their presidential candidates come in two varieties: a primary election, in which voters select their preferences on ballots in private, or a caucus, where voting is public and participatory. Caucuses were once the norm, requiring more time and effort than merely casting a vote in a polling place. A decades-long movement toward greater participation has made them an endangered species. On the Democratic side, only Iowa and three other states — Nevada, North Dakota and Wyoming — will hold caucuses rather than primaries this year. And Republicans have canceled caucuses in many states as part of an effort to clear Trump’s path to re-nomination.
2. How does a caucus work?
At 7 p.m. Central Time on Feb. 3, Iowans in 1,683 precincts will convene in schools, libraries, church basements and private homes to register their preferences for president. Republican caucuses will be relatively straightforward, confirming Trump as their party’s candidate. For Democrats, the process is more complicated. After some introductory business, participants physically divide themselves, Westminster-style, into groups according to their candidate preferences. The process can be chaotic, with precinct captains using all manner of persuasion — up to and including baked goods — to win over supporters. Some participants might even form an uncommitted caucus as a protest or out of indecision, inviting entreaties from candidate groups.
3. So that’s it?
Not quite. That initial division is called the first allocation, and it determines which candidates are viable. Those that fail to make the threshold — set at 15% to 25%, depending on the size of the precinct — have a choice to make: Try to win enough new members to become viable, join the caucus of their second choice, become uncommitted, or even go home. There’s intense face-to-face lobbying as candidate surrogates try to woo supporters of non-viable candidates into their camps. In this re-alignment, a non-viable candidate could gain enough supporters to win delegates, but a candidate that was viable in the first round can’t lose support in the second round. Following this one round (and only one round) of re-shuffling, a final allocation tally is taken to determine the number of precinct delegates sent to later county conventions.
4. How are the results reported?
That could get confusing this year. Historically, the Iowa Democratic Party has reported the results in terms of state delegate equivalents — an estimated number of delegates each candidate will get to the state convention June 13. But there’s a wrinkle this time. In the interest of greater transparency, the party will release three numbers: The first allocation (the number of caucus goers supporting each candidate before non-viable candidates are eliminated); the final allocation (the number supporting viable candidates); and the state delegate equivalents. If those numbers differ, candidates could cherry-pick the number that suits them best. The Associated Press, the de facto arbiter of how election results are reported, will continue to use state delegate equivalents, as will the state and national parties.
5. What’s different this year?
In a bid to increase participation, Iowa’s Democratic Party is holding a number of “satellite caucuses” in nursing homes and union halls in hopes of including people who otherwise would have difficulty traveling to their precinct caucus site or getting time off from work at 7 p.m. Some of those caucuses will even take place out of state to accommodate snow birds and college students, and for Iowa expatriates in Paris, in Glasgow, Scotland and as far away as Tblisi, Georgia. Iowa Democrats abandoned plans for a “virtual” caucus held by telephone, because of concerns over security.
6. Why is Iowa so important?
Only because it’s the first state to vote. It’s not because Iowa is a representative cross-section of America; about 90% of the population is white. It’s not because of its voting strength; Iowa will send just 49 of the 4,746 delegates to the national convention. And it has a pretty poor record of picking winners. Since 1972, only three presidents have won both the Iowa caucuses and the presidency: Jimmy Carter, George W. Bush and Barack Obama. But even if Iowa doesn’t always pick winners, it does eliminate losers. The axiom is that there are “three tickets out of Iowa,” and it’s mostly true. John McCain is the exception that proves the rule — he finished a close fourth in Iowa and won the nomination in 2008. That track record has led to criticism that Iowa has too much influence and should give up or share its first-in-the-nation status with more diverse states.
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fortune--2020-02-02--How to watch the Super Bowl live online for free—even without cable

It has all led up to this. Super Bowl LIV wraps up the 2019 NFL season this Sunday. And it has everything a football fan could want.
The Kansas City Chiefs haven’t seen a Super Bowl, other than on TV, in 50 years. The San Francisco 49ers have been largely unstoppable this season, losing just three games—one in overtime and never by more than seven points.
When the two teams met in the pre-season, the 49ers walked away with the game, winning 27-17, but pre-season football doesn’t accurately reflect the strengths and weaknesses of either team.
Whether you’re hosting a Super Bowl 54 party after cutting the cord, plan to watch yourself or will be on the go, but want to keep up with the “big game,” there are plenty of alternative ways to view. Here are a few.
Which NFL teams are playing in the 2020 Super Bowl? And what channel is airing the games?
Pre-game broadcasts for Super Bowl LIV begin 4.5 hours before kickoff this year on Fox at 2:00 p.m. ET. There will be plenty of retrospective looks at the season and both teams’ performances, past Super Bowl highlights, a Sean Hannity interview with Donald Trump and likely a few memorable commercials, warming the audience up for the multi-million dollar ones that air during the game.
Sunday, February 2
San Francisco 49ers vs. Kansas City Chiefs, 6:30 p.m. ET on Fox
Who’s singing the National Anthem at Super Bowl LIV?
Demi Lovato will sing the National Anthem this year.
Who’s performing at halftime for Super Bowl LIV?
TIMOTHY A. CLARY—AFP/Getty Images
Jennifer Lopez and Shakira will take over the field for Halftime.
Where is this year’s Super Bowl being held?
Rich Graessle—PPI/Icon Sportswire via Getty Images
The Chiefs and 49ers will face off at Hard Rock Stadium in Miami. The Chiefs are considered the ‘home’ team in this year’s game.
How can I watch Super Bowl LIV for free—even if I am out of market?
The Super Bowl, naturally, isn’t blacked out in any market, so you shouldn’t have to worry about finding the game. Regardless, the best way to watch any NFL game for free on a big screen is with a good HD antenna. Super Bowl 54 will be broadcast by Fox—meaning you’ve got a good chance of capturing the game over the air, which costs nothing beyond the equipment prices. Be sure to test the antenna in multiple locations in your home to find the most reliable signal.
How can I stream Super Bowl LIV live online for free—even without a cable subscription?
There are loads of online options to watch NFL games, including the Super Bowl, some completely free and others with free trial periods. If you’re not near a TV, you can log into Fox.com to watch the game or use the Fox Now app. Another option? Yahoo Sports and the NFL have teamed to stream live NFL games, including the Super Bowl, on mobile devices this year. Just download the Yahoo Sports app or Yahoo Fantasy Football mobile app and watch on your phone or tablet. Prefer another method? Here are a few that work just as well.
Locast.org
This free service lets you watch local broadcast channels with no monthly fees or contracts. The hiccup is: It only services part of the country.
Hulu with Live TV
You can try the service free for a week. Once that’s up, you’ll pay $45 per month.
YouTube TV
After a seven day trial, you can expect monthly charges of $50.
Sling TV
Dish Network’s Sling is one of the OG cord cutter options. It has an extensive selection of ESPN options in its lower tiered “Orange” plan. That will run you $30 per month, but you won’t get Fox Sports in that bundle. (For that, you’ll also need to subscribe to Sling’s “Blue” plan, which bumps the cost to $45-per-month.) You’ll have a 7-day free trial first.
AT&T TVNow
Formerly known as DirecTV Now, AT&T’s streaming service will run you $65 per month and up after a 7-day free trial.
Disney+
Disney’s bundle of Disney+, Hulu and ESPN+ can be enjoyed for free for seven days, after which you’ll pay $12.99 per month for all three combined
Fubo TV
This sports-focused cord cutting service carries CBS in most markets. There’s a seven-day free trial, followed by monthly charges of $55.
Can I watch Super Bowl LIV on Amazon?
Nope. Amazon struck a deal with NBC to air select Thursday night games this season, but the last one was broadcast on the retail giant’s streaming service on Dec. 12.
Does the NFL offer any viewing packages to watch the Super Bowl?
Kind of.
NFL App
The NFL App will let you stream games that are being broadcast locally in your market on Sundays. If you want to watch an ‘out of market’ game, you’ve got two choices.
There are couple hitches with this service. You can’t use it to watch live games, but you can watch anything once its main broadcast ends. There’s a seven day free trial, after which you’re looking at a $100 charge per season.
DirecTV customers have access to it, but if you’re not a subscriber and live in an area where it’s not available, you can watch any NFL game live, online or on TV for $73.49 per month or $293.36 for the entire season.
Will there be fewer commercials in this year’s Super Bowl?
Fox, last May, announced plans to eliminate one commercial break per quarter from Super Bowl LIV. The move was part of the league’s attempt to revive sagging ratings.
But after declaring the game to be sold out last November, Fox and the NFL came up with a way to add more commercials to the game, effectively reversing that decision in part. Two ‘floating’ commercial breaks have been added, so there might be a couple less ads, but that’s it.
Read: 10 Super Bowl ads that might make you laugh—or cry—during the big game
What time will Sean Hannity’s interview with Donald Trump air during Super Bowl LIV?
The conversation between the Fox News host and the president will be broadcast at approximately 3:30 p.m. ET. It will cover a variety of topics. Trump, last year, did not do a traditional pre-Super Bowl interview, declining NBC’s invitation as part of a feud with the network at the time. (He did, though, appear on CBS before the game.)
Where is next year’s Super Bowl being played?
Super Bowl LV will take place on on Feb. 7, 2021, in Tampa, Florida at Raymond James Stadium. This will be the fifth time Tampa has hosted a Super Bowl.
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—In the age of Twitter and group chats, seconds-long streaming delays can make or break live entertainment
—Why Super Bowl ads still matter in the streaming age
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—Super Bowl LIV tickets could be the most expensive in the game’s history


fortune--2020-02-02--‘Parasite’ and ‘Jojo Rabbit’ take top Writers Guild Awards

“Parasite” has continued its march through Hollywood’s awards season by winning the best original screenplay honor at Saturday’s Writers Guild Awards.
The Nazi satire “Jojo Rabbit” took home the best adapted screenplay honor.
The Writers Guild Awards were roughly a week before the Academy Awards, where both films will compete in the best picture category.
The “Parasite” win went to Bong Joon Ho, who is also the film’s director and Han Jin Won. Taika Waititi won for “Jojo Rabbit,” a film he also directed and starred in.
HBO swept the top television awards, winning the drama category for “Succession,” the comedy category for “Barry” and the best new series honor of “Watchmen.”
The premium cable network’s limited series also won the original long form prize, while FX’s “Fosse/Verdon” won the adapted long form award.
Saturday’s awards were handed out in concurrent ceremonies in New York and Beverly Hills, California.
More must-read stories from Fortune:
—Taika Waititi on Kiwi humor, directing as Hitler, and why kids should see Jojo Rabbit
—Parasite director Bong Joon Ho dissects his tale of two families
—The Assistant director Kitty Green on capturing in-office dynamics
—Oz Perkins on Gretel & Hansel, feminist fairy tales, and suggestive triangles
—In the age of Twitter, seconds-long streaming delays can make or break live entertainment
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-02-02--What the producer of the hit YouTube series ‘Eat China’ wishes people knew about Chinese food

Over the course of the past two years, Clarissa Wei has learned what it takes to become a Chinese opera singer, pushed back against racism-fueled tropes about dog-eating, and traveled to almost every corner of China to meet the people growing, cooking, and sharing what feeds the most populous country on earth.
But her most recent video series, Eat China, goes back to basics: a 13-episode introduction to the regional cuisines of four major regions in China in which she gets to tell Americans what she wishes they knew about Chinese food while pickling bamboo in Sichuan, touring a Hong Kong market with a local, and attending dim sum school.
For the American-born producer at Goldthread—Hong Kong–based South China Morning Post’s sub-vertical dedicated to food, culture, and identity—this was a passion project. Wei jokes that she created the back-to-basics series to have something to forward to her friends in the U.S. when they ask her about Chinese food. But in reality, the series fills a knowledge gap about the cuisine without resorting to dumbing anything down or using clichés, which—along with the snappy, fast-moving pace of the four- to eight-minute episodes—makes it intriguing and watchable even for those who already know a fair amount about the cuisine.
The first episode provides an overview of Chinese cuisine, broken down into four regions, then a trio of episodes focus on each region. Each episode comprises an introduction, a food tour guided by a local, and a cooking demonstration.
An explainer on Sichuan cuisine. The videos fill what Wei saw as an empty space in the media landscape: a visual exploration of what Chinese food is. Courtesy of Goldthread
“There’s been plenty of articles and books,” Wei says about the Chinese food landscape, but few film crews have the budget to go in deep with the kinds of fixers and producers necessary for these. So, with the paper’s backing, Wei took advantage of her position working out of Hong Kong and covered those fixer, writer, producer, and host roles herself.
“Chinese food is nuanced and very dependent on geography,” Wei says. And that’s her top message, if viewers take nothing else away from the series. Wei recently returned from filming in a village in Yunnan that had its own wild greens the locals foraged, while “the neighboring town has no idea what it is.” Even at the province level, she found, it was hard to generalize about Chinese cuisine. In the U.S., the history of immigration spread new ideas and changed cuisines, but in China, she explains, “[the cuisine has] just been rooted in what that village has been producing for hundreds of years.”
The deep knowledge of those villages is a crucial part of Wei’s work in China. “Farm-to-table influencers are becoming so big,” she says of the YouTube and social media stars she films. “Now there are people who can just use the phone and some basic editing software, and they show a glimpse of their daily life, and they’re going viral because we haven’t seen these things before.”
But the difference between the foreign viewers and the Chinese audience, one influencer mentioned, is that the Westerners consider it a sort of fantasy world, while the videos make domestic fans want to go home and spend time with their grandmothers. It has become a major movement, with influencers endorsed by the Chinese government, going on to conduct TED talks and even getting sponsored to go back to their familial villages to properly learn the food.
A deep dive into the rice noodle roll, a Cantonese dish from southern China and Hong Kong. Courtesy of Goldthread
Producing a program about one culture for a different one, as with Eat China, highlighted another audience difference for Wei. “The biggest challenge was getting sound bites relevant to [foreigners],” she says. In Tianjin, she interviewed a man whose family had been making baos (buns) for hundreds of years, hoping to hear about how he makes them, how he got good at it, and what his struggles were. But he wanted to discuss how many government certificates the company had received.
Still, moments like eating a raw shrimp from the Shanghai market, dressed in fermented tofu—her favorite bite from the show—made the uneven discussion worth it. “I was skeptical, because you don’t eat raw river shrimp here,” she says, but it was tasty and illustrated the hyper-local, hyper-seasonal nature of Chinese food.
Wei gets excited talking about harvesting fish from rice patties with the food influencers as part of her various videos, and she sees Eat China as a method to help more people acquire the foundation they need to explore those more intricate parts of Chinese food culture. “You can see a chef from a different region and understand why she uses a bunch of peppercorns or understand if they’re from the north, why they eat a lot of offal or cumin,” Wei explains. “After a while, you begin to see these patterns.”
Ultimately, Wei hopes the series makes Chinese cuisine more accessible, enticing viewers to grow their taste buds and explore new flavor profiles. “It’s sort of a guide,” she says. “Pick your flavor, and go.”
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fortune--2020-02-02--Privacy, bias and safety: On facial recognition, Berlin and London choose different paths

At lunchtime on a very chilly January Wednesday, most commuters at Berlin’s Südkreuz station are more interested in catching their trains than considering the security cameras that record their movements. But many have strong opinions on the facial recognition technology that could revolutionize such surveillance by comparing everyone’s faces with those of known criminal suspects.
“I think automatic facial recognition is unnecessary and should be rejected. There are too many failures—too often a person is identified even though they aren’t a criminal at all,” complains Dietmar Lutze-Stallmann, 71. Janina Kirn, 35, takes the opposite view. “It can hinder major crimes. We live in times when terrorism is a major issue,” she says. “I think it makes society safer.”
It is no surprise to find these varied opinions at Südkreuz, the site of two prominent trials of automated facial recognition technology in recent years. The pilots were run by Germany’s Federal Police, which has responsibility for counter-terrorism and for security at the nation’s transport hubs, in partnership with national train firm Deutsche Bahn.
Although the police deemed the trials a success, the German government unexpectedly pressed pause on the technology’s rollout last Friday, when it deleted authorization from a legislative package on the reform of police powers.
“We think facial recognition is a very useful tool for the work of the police,” a spokesperson for the interior ministry tells Fortune. “We just wanted to make clear that there is acceptance among the citizens for this technology. We want to make sure the debates are carried out now, before we pass the law.”
By coincidence, on the same day London’s Metropolitan Police announced that it would be rolling out the technology, despite a raging debate in the U.K. about its implications on people’s rights.
“As a modern police force, I believe that we have a duty to use new technologies to keep people safe in London,” said assistant Met commissioner Nick Ephgrave in a statement at the time. “Independent research has shown that the public support us in this regard.”
Privacy and bias
The issues around facial recognition technology are the same in Berlin as they are in London, or in San Francisco, where its use by police was banned last May. Or, for that matter, in Moscow and Beijing, where deployments are rolling out at speed despite local concerns.
Thielker/ullstein bild via Getty Images
Privacy is the most obvious issue, as the technology can hugely increase the potential for indiscriminate and largely invisible mass surveillance. But technologists and civil liberties advocates alike also warn of the racial and gender bias that can result from the systems’ A.I. being trained predominantly on images of light-skinned men, leaving women and people of color more vulnerable to incorrect identification.
Notably, Microsoft last year rejected a request from a Californian law enforcement agency to use its facial recognition technology, because of the bias issue. And it also turned down an unidentified country’s request to use the tech in its capital’s camera network, because that country would probably have used it to suppress human rights.
In both Germany and the U.K., activists fought hard against the rollout of facial recognition by the police—obviously with very different results. London-based Privacy International responded to the Metropolitan Police announcement by warning of “a radical threat to our freedoms which threatens to undermine democracy under the cloak of defending it.” But Berlin’s Digitale Freiheit (Digital Freedom) is in a cautiously celebratory mood after the German government took a less bullish tack.
“We’re really happy with them pausing, though we want automated facial recognition to be forbidden for German authorities in public spaces, so we’re not done yet,” says Viktor Schlüter, a Digitale Freiheit activist. “We really hope it is not a trick to wait until public pressure goes down.”
Schlüter calls for “an open evaluation of the technology to see what risks it has and how well it performs”—he is deeply skeptical of the accuracy claims made by authorities that want to deploy facial recognition, and wants to see external, independent audits of the trials.
London’s Metropolitan Police claims its internal studies “have shown that in relation to ethnicities there’s no difference in how the algorithm behaves.” The police force also maintains that its facial recognition systems only generate false positives—in which scanned faces are incorrectly identified as those on a watch list—0.1% of the time. However, Sky News last year reported on an independent evaluation of the system that showed a stunning 81% inaccuracy rate.
“Our testing showed the facial recognition systems had a minimal percentage of false positives,” says the German interior ministry spokesperson of the system trialed at Südkreuz. “From a technical point of view facial recognition systems can be implemented.”
Legality
Another major question is that of the systems’ legality under existing privacy law—particularly in Germany, where the history of surveillance by communist and Nazi regimes spurred strong restrictions in the country’s constitution, known as the Grundgesetz (Basic Law).
“The issue is whether to allow this kind of recognition or not, and what it means for the Grundgesetz,” says Sara, 34, a commuter at Südkreuz who—like almost everyone there who criticizes the technology when questioned by Fortune—refuses to fully identify herself. “It’s a question of constitutional rights when it comes to the police listening to people or watching them.”
Indeed, the German government’s sudden change of heart on the subject came days after Federal Data Protection Commissioner Ulrich Kelber said there was no legal basis for allowing automated facial recognition in public spaces. If it becomes impossible to move around without being observed, Kelber warned, people might refrain from participating in demonstrations even though they are legally allowed to do so—and that, as the Federal Constitutional Court has consistently maintained, is “a clear red line for governmental interventions,” he said.
The U.K.’s privacy regulator, the Information Commissioner’s Office (ICO), set out its own concerns in October. It said the police could legally deploy automated facial recognition, but would have to do so very carefully to stay on the right side of Europe and the U.K.’s tough privacy laws—the technology can only be used when necessary, proportionate and of “demonstrable benefit to the public.”
“We have received assurances from the [Metropolitan Police Service] that it is considering the impact of this technology and is taking steps to reduce intrusion and comply with the requirements of data protection legislation,” the ICO said in a statement when the Met announced its rollout.
The London police force told Fortune that its system was designed to automatically delete the images of people whose faces did not match those on its watch list. “Where a match is made but no prosecution follows and there is no legitimate policing purpose for retention, biometric data will only be retained for up to 31 days,” it added.
“I don’t think [the German police] will try to identify and get into every citizen’s private life,” says Dan Sirbu, 27, on one of Südkreuz’s chilly Ringbahn platforms. “I don’t think it’s a bad idea as long as it’s very well protected by law and also very well protected against cyberattacks…Let them [debate the issue] of course—every voice must be heard—but everybody must be reasonable and talk with logic, not just conspiracy theories.”
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fortune--2020-02-01--Bloomberg could qualify for next Democratic debate under new party rules

The Democratic National Committee has dropped grassroots fundraising qualifications for the party’s Feb. 19 debate before the Nevada caucuses, opening the possibility that billionaire Michael Bloomberg could make his first appearance on stage.
The party announced Friday three different ways for candidates to reach the debate stage that involve reaching certain polling thresholds or banking a convention delegate in the first two nominating contests held in Iowa and New Hampshire. All previous debates have included a fundraising element, and since September, candidates have had to reach both polling thresholds and grassroots fundraising marks. Bloomberg, a former New York City mayor, has not yet hit the polling marks, but he will have until Feb. 18, the day before the debate, to do so — a prospect that pleases some rivals and incenses others.
Under the DNC rules, candidates have multiple paths to the stage: reach 10% support in some combination of four national polls or early state polls from Nevada or South Carolina; reach 12% support in two polls from Nevada or South Carolina or both; or bank a convention delegate in Iowa or New Hampshire, which host the first two nominating votes in early February.
Party Chairman Tom Perez and his aides have said for months that the DNC would likely shift to qualifying standards based on actual results once voting began. But the move is nonetheless significant given Bloomberg’s unique presence in the race. The ultrabillionaire is self-funding his White House bid — spending at least $188 million from the time he entered the race on Nov. 24 until the end of the year, according to disclosures filed Friday — and thus never could have qualified had Perez continued to require debate participants to reach a certain number of donors.
Rival campaigns have complained for weeks that Bloomberg has been avoiding scrutiny as he spreads his personal fortune across Super Tuesday states, part of his unusual campaign that is skipping the first four states of Iowa, New Hampshire, Nevada and South Carolina.
But how to treat him on the debate stage is a tricky proposition for the campaigns. Some candidates have argued he should be subjected to the same questioning they’ve endured for months, yet rival campaigns also are wary about validating Bloomberg as a legitimate threat. And they already privately acknowledge that his personal fortune makes him a variable they must consider, regardless of the debates, as they try to amass the nearly 2,000 delegates that will be necessary to win the nomination.
Relaxing rules that govern debates almost certainly will leave some former candidates unhappy. Julián Castro and Cory Booker, in particular, have complained that the DNC’s rules unfairly targeted minority candidates because even grassroots donor bases are whiter than the Democratic electorate.
In response to the rules change, Booker’s former campaign manager Addisu Demissie sent out a tweet with a gif of Justin Timberlake looking incredulous. Asked for additional comment, Demissie pointed back to the tweet.
Jeff Weaver, a senior adviser for Bernie Sanders, said it would be “wrong” to change rules that would “accommodate Mayor Bloomberg, who has raised no grassroots donations and is instead flooding the airwaves across the country funded by his billions of dollars of personal assets.”
“Now, at this late hour, to change the rules to accommodate a billionaire who wants to buy his way into the party would be unconscionable,” Weaver said. “No one should be allowed to buy their way onto the debate stage or the nomination.”
Other Democrats have encouraged the DNC to allow Bloomberg’s participation.
Minnesota Sen. Amy Klobuchar said this week that she’d be “fine” with Bloomberg being on the debate stage.
“I think that instead of just putting your money out there, he’s actually got to be on the stage and be able to go back-and-forth so voters can evaluate him in that way,” she said on MSNBC.
Liberal groups like the Progressive Change Candidate Committee, which is supporting Sen. Elizabeth Warren, also want Bloomberg on the debate stage.
The group’s co-founder Adam Green fears that Bloomberg is rising without having to face media and voters.
“We’re now at the stage where a billionaire is spending a quarter billion dollars to buy his way into the polls,” Green said. “He needs scrutiny.”
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—Fortune Explains: The debt ceiling
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fortune--2020-02-01--10 Super Bowl ads that might make you laugh—or cry—during the big game

This year’s Super Bowl won’t be a politics-free zone, as both President Donald Trump and Democratic presidential candidate Michael Bloomberg will air campaign ads during the game.
But most other advertisers will offer escape from impeachment and the upcoming presidential election by stuffing multiple celebrities in their ads, appropriating iconic songs, going for inoffensive humor, and trying to tug at people’s heartstrings.
Here are 10 ads to watch for during Sunday’s game in Miami:
Amazon
Amazon’s ad stars Ellen DeGeneres and her wife, actress Portia de Rossi, imagining life before the company’s voice assistant Alexa. A maid named Alexa throws some burning firewood out a window when she is asked to turn the temperature down; an Old West pioneer asks his companion Al to “play that song I like.” In one of the few political allusions of the night, a newsboy says his newspaper has “fake news” and a character resembling Richard Nixon asks his secretary to remind him to delete his tapes (although she tells the camera she won’t do it).
Audi
Arya can sing as well as stab, it turns out. “Game of Thrones” actress Maisie Williams belts out the hit song “Let it Go” from “Frozen” as she promotes Audi’s e-tron family of electric vehicles. The ad airs in the fourth quarter.
Budweiser
The Anheuser-Busch brand enlisted Oscar-winning director Kathryn Bigelow for a 60-second ad that contrasts a voiceover of “typical American” behavior with real-life video of Americans doing heartwarming things. For instance, the narration says typical Americans are “always so competitive” while the ad shows Hannah Gavios, who is partially paralyzed, completing a marathon.
Cheetos
The MC Hammer classic “U Can’t Touch This” is 30 years old this year, but that’s not keeping Cheetos from embracing it. The snack-food ad features a man with bright orange Cheetos dust on his hands who can’t stop moving furniture or performing office tasks. Hammer himself — “Hammer pants” and all — also keeps popping up to utter his iconic catchphrase.
Doritos
The snack chip is betting people will connect with “Old Town Road,” the smash hit of the summer by Lil Nas X. In the Western-themed ad, Lil Nas has a dance off with grizzled character actor Sam Elliott. Billy Cyrus, who features in the song’s remix, also makes a cameo.
Facebook
The social media site hasn’t unveiled its first-ever Super Bowl ad but it will star Rocky himself, Sylvester Stallone, with comedian Chris Rock to promote the site’s Groups feature. The 60-second ad airs late in the game during the fourth quarter.
Google
Google’s 90-second ad is one of the few ads this year that doesn’t use humor or celebrities. It features a man reminiscing about his wife, using the Google Assistant feature to pull up old photos of her and past vacations. The ad is set to an instrumental version of “Say Something” by Great Big World.
Hyundai
The automaker pokes fun at Boston accents with a 60-second ad in the first quarter that uses Boston-affiliated celebrities including actor Chris Evans, John Krasinski, Saturday Night Live alum Rachel Dratch and former Boston Red Sox David Ortiz. They discuss Hyundai’s feature that lets car owners park remotely with exaggerated accents that make “Smart Park” sound like “smaht pahk.”
Michelob
Wrestler-turned-actor John Cena tries to convince Tonight Show host Jimmy Fallon that there’s a “lighter side” to working out, with cameos by Tonight show band The Roots and Olympic sprinter Usain Bolt. The ad ultimately hawks Michelob Ultra, which Anheuser-Busch promotes as a lower calorie beer.
Pepsi
Pepsi tries to reignite the Cola Wars with Missy Elliott and H.E.R. performing an updated version of the Rolling Stones’ classic tune “Paint It Black.” As singers intone the lyrics “I see a red door and I want it painted black,” a red cola can resembling a Coke changes into a black can of Pepsi.


fortune--2020-02-01--A Bernie Sanders win in Iowa could prolong the Democratic primary fight

The increasing likelihood that Bernie Sanders could win Monday’s first-in-the-nation caucus threatens to fundamentally redraw the path to the Democratic presidential nomination and challenge the conventional wisdom that there are only “three tickets out of Iowa.”
Iowa often acts more as a bar bouncer than a kingmaker, culling the field but not anointing a leader. Candidates strive to finish in at least the top three to seize some momentum as they speed toward later nominating contests.
But there are reasons to question whether that thinking still applies. Four candidates are closely clustered at the top of the polls. National front-runner Joe Biden, Pete Buttigieg and Senator Elizabeth Warren are all polling well enough to have a chance at securing delegates.
“You may need more than a four-passenger car for all these folks to get out of here,” said Iowa Democratic Party Chairman Troy Price at a Bloomberg News breakfast of political reporters Friday. He said as many as six could move on, including Amy Klobuchar and Andrew Yang.
A top finish would give Sanders, a senator from Vermont, an early lead going into New Hampshire, a state that gave him a 22-point win over Hillary Clinton in 2016 and a consistent lead in 2020. And wins in both of the first two contests would provide him undeniable momentum. But he is a polarizing figure in the Democratic Party, with both fierce supporters and voters who find his ideas too liberal to be viable.
That could prompt a “Stop Sanders” movement — putting increasing pressure on lower-polling candidates to drop out and throw their support behind a more moderate alternative.
“Things tend to boil down to a person who’s leading, and the alternative to the person who’s leading,” said political scientist Josh Putnam, an expert on party nominations who runs the blog Frontloading HQ. “There are differences in every cycle, but these things tend to operate in a similar fashion.”
Yet it’s not like any of the three moderates in the race — Biden, Buttigieg or Klobuchar — are ready to fold and anoint one of the others as the Bernie-stopper.
The most recent RealClearPolitics average of Iowa polls shows Sanders leading Biden by 3.2 percentage points. But polls aren’t unanimous: One Monmouth poll Wednesday had Biden leading by 2 points, well within the margin of error.
Also complicating the storyline are rule changes that will give greater transparency into the performance of the entire field. In previous years, Iowa reported only the number of state delegates each candidate was expected to win. This time, the party will reveal how many Iowans backed each candidate in the first round of voting — even if that candidate didn’t meet the 15% threshold that’s a major hurdle for lower-polling candidates.
Those reporting rules, written in the aftermath of Sanders’ complaints about his narrow loss in Iowa in 2016, could ironically blunt the impact of his finish this year. Candidates who come in second, third or even fourth in the final tally could claim much better standing if they do well in the first round.
Still, Iowa punditry is partly an expectations game. A front-runner who stumbles into second place can be judged more harshly than a second-tier candidate who unexpectedly comes in third. So the candidates are already working to blunt any blow from a poor showing.
Despite investing early and extensively in an Iowa organization, Warren is not polling well, and her campaign is trying to make clear she will carry on regardless.
“We expect this to be a long nomination fight and have built our campaign to sustain well past Super Tuesday and stay resilient no matter what breathless media narratives come when voting begins,” campaign manager Roger Lau wrote in a memo last week.
Yang said this week that regardless of how he finishes in Iowa, he expects to do even better in New Hampshire — where the state’s libertarian streak might be more receptive to his message.
Iowa awards 41 delegates to the Democratic National Convention, or just a little more than 1% of the total delegates. But its importance far outweighs the delegate count, given it is the first actual votes of the 2020 election year and gives Americans a chance to see which candidates are living up to their claim of electability.
A Front-loaded Calendar
Most candidates may have little incentive to drop out after Iowa, regardless of their showing, given that contests in New Hampshire, Nevada and South Carolina quickly follow in February.
Biden has built a firewall in South Carolina’s Feb. 29 primary, where his support among black Democrats could make up for any early stumbles. And it’s not just Biden: The Martin Luther King Day events there this month became virtually mandatory for any serious candidate for president.
“South Carolina has come into its own this time,” said Elaine Kamarck, author of “Primary Politics: Everything You Need to Know about How America Nominates Its Presidential Candidates.” “It’s the last, best stop before Super Tuesday.”
Super Tuesday — a 14-state primary on March 3, three days after South Carolina — will award 34% of all delegates. And unlike Republicans, who allow states to award delegates on a winner-take-all basis, Democratic delegates are awarded proportionally. Any candidate getting at least 15% — statewide or in a congressional district — is eligible to win delegates.
That could increase the likelihood that the front-runner could divide and conquer the opposition.
“Let me put it this way: The Democrats can choose to repeat the Republican folly of 2016,” said Kamarck, a member of the Democratic National Committee’s rules committee. “They all stayed in the race. They did not rally around the alternative, and Donald Trump became the nominee.”
Another harbinger of a drawn-out nomination fight: money.
The importance of Iowa is as much about fund-raising as it is about delegates, said Jeff Link, a Democratic Iowa political strategist.
Klobuchar, a senator from neighboring Minnesota, may feel the most pressure if she doesn’t do well, but Warren and Buttigieg could also struggle with donors if they have a poor showing,” Link said.
But candidates sustained by small-dollar donors — like Sanders and Yang — can keep going as long as the recurring monthly donations continue.
“If Bernie got seventh, he’d move on,” Link said.
And the two billionaires in the race — Tom Steyer and Michael Bloomberg — have already spent hundreds of millions on states that vote after Iowa and New Hampshire. Bloomberg is skipping the early states entirely and isn’t seeking any delegates until March 3.
Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.
Age, too, might be a factor in keeping more candidates in the race longer. Younger candidates often have more incentive to drop out early in the interests of party unity — and their political futures. For candidates over 70 — Sanders, Biden, Bloomberg and Warren — waiting four to eight years for another chance at higher office is an unlikely option.
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—2020 candidates’ positions, and records, on economic issues that affect women
—Bernie Sanders wants the future of the far left to be female. Is that enough?
—Michael Bloomberg’s radical plan to cut prescription drug costs
—Fortune Explains: The debt ceiling
—Millions have been purged from voter rolls—and may not even realize it
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.


fortune--2020-02-01--Apple’s iPhone and services businesses impress as the iPad turns 10

While much of the talk surrounding Apple in recent months has centered on services, the iPhone and iPad made the biggest splash this week.
Over the past several days, the company marked the 10th anniversary of the iPad and also reported 9% revenue growth to $91.8 billion in its latest quarter. The gain was led by the iPhone, which after a couple of years of declining sales, roared back to life.
But Apple couldn’t end the week without a bit of bad news. In a court ruling this week, a jury ordered Apple to pay $838 million to the California Institute of Technology for violating the university’s patents.
Below are the major headlines about Apple this week:
A big holiday season
Apple’s first fiscal quarter, which ended December 28, was a big one. The company’s $91.8 billion in sales topped Wall Street’s expectations of $88.4 billion and easily exceeded the $84.3 billion in revenue during the same period last year. Profits were also up, to $4.99 per share from $4.18 in the year-ago period.
The resurgent iPhone
The sales gain in Apple’s latest quarter was driven in large part by a resurgent iPhone division that generated a record $56 billion in revenue. The performance stood in stark contrast to the same period last year, when iPhone sales fell 16% to $52 billion. Apple said its latest quarter was bolstered by strong demand for the iPhone 11 and iPhone 11 Pro models, but it didn’t share unit sales data.
An eye on services
Earlier this week, I spoke to analysts and industry experts who dissected Apple’s services business, which includes iCloud, Apple Music, and other digital tools. They said Apple’s services business is a likely source of future growth that could help offset any declines in iPhone sales. During Apple’s fiscal first quarter, Apple’s services revenue topped $12.7 billion, up from $10.9 billion in the prior year.
The iPad enters a new decade
It’s hard to believe, but late Apple co-founder Steve Jobs unveiled the iPad 10 years ago this past week. To mark the occasion, I spoke to several analysts who looked back on the first 10 years of the iPad, and discussed where they think the iPad is headed in its second decade.
Apple tops Q4
Apple shipped 70.7 million iPhones worldwide during the fourth quarter, according to market researcher Strategy Analytics. That was enough to top China-based Huawei’s 68.8 million shipments and Samsung’s 56 million shipments during the period, the researcher said. While Apple doesn’t disclose iPhone unit shipments, which means the Strategy Analytics data can’t be verified, the researcher said Apple shipped a total of 197.4 million phones worldwide last year. Huawei and Samsung shipped 295.1 million and 240.5 million phones, respectively.
Caltech’s (possible) payday
A jury in California this week ordered Apple and Broadcom to pay a combined $1.1 billion to Caltech this week for violating Wi-Fi-related patents owned by the university. Apple is responsible for $838 million of that amount, and Broadcom has been ordered to pay $270 million. Both companies argued that they didn’t violate the patents, which center on technology that corrects data transmission errors over Wi-Fi networks. Apple and Broadcom are likely to appeal the verdict, according to Bloomberg.
The Apple Maps facelift
Apple rolled out the new Apple Maps this week. In a statement, the company said all U.S. users should now have access to the new version, which includes redesigned maps and more accurate navigation. Apple also said that it has enhanced the privacy features in Apple Maps, so Apple won’t be able to track users’ locations or destination, or see when they search for a location.
One more thing…
There are plenty of new and updated devices ahead for Apple, according to TF International Securities analyst Ming-Chi Kuo. He told investors that Apple will release in the first half of this year a new budget-friendly iPhone SE 2, an iPad Pro, and new MacBooks. Location trackers called AirTag might also be planned.
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—Predicting the biggest tech headlines of 2020
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fortune--2020-02-01--Find some of the world’s best Italian food in Morocco

When the king of Morocco calls, you answer.
In truth, the ruler of the North African nation didn’t actually dial up chef Massimiliano “Max” Alajmo, whose Le Calandre in Rubano, Italy, has been on the World’s 50 Best Restaurants list for 13 consecutive years now. But his people did. And after such wooing, the 45-year-old chef—who was the youngest in history to earn three Michelin stars, in 2002—finally decided to hop a flight south and dip his spoons into some fleur d’oranger to open Sesamo inside the ruler’s Royal Mansour hotel last month.
“Normally, we don’t work with hotels, because we want to manage [things ourselves] or speak with the top line,” says Alajmo, who is also responsible for the cuisine at nine other spots in Italy, as well as one in Paris. “In this case, the top line is the king, but we were promised to speak with the third or the fourth, so we agreed.”
Chef Massimiliano “Max” Alajmo (right), of famed restaurant Le Calandre in Rubano, Italy, leads the way in Sesamo’s kitchen, while his brother Raffaele manages the front of the house. Courtesy of Royal Mansour Marrakech
The Venetian-inspired restaurant replaces Yannick Alléno’s French gastronomic spot La Grande Table Française. (Though his Moroccan experience remains.) When guests pull their Range Rovers up to the 10-year-old property—masterfully built by 1,500 artisans complete with rose-adorned marble fountains and metallic carved ceilings—they can choose to go right for Alléno’s prawn tagine with smoked eggplant, or left for Alajmo’s creamy ricotta, sweet tomato, and basil lasagna.
Behind curtain No. 2, they’ll find a dining room designed by Fabrice Bourg and Nicolas Papamiltiades of 3BIS agency, who made a splash with Le Meurice in Paris and the Carlton in Cannes. Here, giant glass chandeliers from Murano descend from three sectioned out areas that seat 42 people. Fourteen tables are each decorated with one whole fruit (a lemon, a pomegranate, etc.) floating in a thick glass square.
Behind the bar, an antique mirror from Venice reflects a convivial yet chic atmosphere further uplifted by specialty cocktails, such as the subtle “Spritz Sesamo” made with citron. All around, the space buzzes with one server for nearly every diner, and other staff including Raffaele “Raf” Alajmo, Alajmo Group CEO (and brother of the chef), who ensures no plate is removed too soon and no wineglass is left empty too long.
Sesamo at the Royal Mansour hotel in Marrakech evokes Venice with its giant brocade curtains and glass chandeliers from Murano. Courtesy of Royal Mansour Marrakech
Speaking of vino, the list is impressive considering Morocco is a fairly dry country, and sommelier Sebastien Lilio, who has worked with Alajmo since 2016, takes pride in filling glasses—crafted specifically for Sesamo in an array of sizes ranging from orange to cantaloupe—with a rare Tuscan Brunello or a Nebbiolo from Piedmont.
But of course, it’s all about the food, which has been conceptualized to charm a wide range of clientele.
“To work in another country, you must respect and know the guest,” Alajmo says. “Cuisine is like a language. What I want to say is very important, but I must speak in a way that many people can understand. I cannot make something that is so extreme, because this may be the first time someone tries Italian. On the other hand, I must cater to Italians and their taste, too.”
The menu features an array of both those extreme dishes as well as those he calls more “direct.” Broken into four traditionally Italian sections—antipasti, primi, secondi, and dolci—there’s something for everyone, from simple rigatoni carbonara served in a small steel pot to fanciful saffron risotto that arrives looking like a colorful canvas painted by Picasso. And for those who can’t decide, the 14-course, 1,950 Moroccan dirham ($200 USD) degustation menu offers a bountiful blend of the best, including crispy cannelloni, grilled lobster, and eggplant Parmesan.
At Sesamo, various dishes, such as the spaghetti with peperoncino, feature vegetables from the Royal Mansour’s own gardens. Courtesy of Royal Mansour Marrakech
The tasting is also an opportunity for those who follow Alajmo’s cuisine to sample some of his specialties with a Moroccan twist. The “cuttlefish cappuccino,” for example, receives oohs and aahs at each of his restaurants because of the way it’s served: layered in a glass as if it were a post-meal caffeinated drink. In Marrakech, it’s given a dusting of desert by way of blue spirulina, which pays homage to the bright blue tint of the city’s famed Majorelle Garden.
The chef’s classic Milanese is updated by swapping out veal for lamb, because lamb meat is particularly tender in Morocco. Diners are encouraged to eat the meat with their hands, and tips of the small leg bones even come wrapped in tinfoil.
“We work a lot with the senses,” Alajmo explains. “It’s necessary to have contact with the ingredients and the material. The service is also not so formal. We like to feel good, like when you eat at home.”
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fortune--2020-02-01--Europe’s refugee crisis is getting worse—for these children

Mohammed didn’t quite understand the question. A charity worker approached the 10-year-old Syrian boy and asked him what kind of supplies he needed to survive his new life in Greece—a tent, maybe? A sleeping bag?
Lacking any kind of possession, he eventually spoke up.
A football, he said.
Mohammed is one of 5,300 unaccompanied refugee children residing in Greece. He lives alone in a refugee camp on Samos, a Greek island in the eastern Aegean Sea. Turkey, one mile away across the water, feels so close.
Mohammed lives with 7,200 others in a refugee camp built for 640 people. Around 400 of these are unaccompanied children like him who have made their way to Greece, often fleeing war, abject poverty and political repression in their own countries. The densely packed camp they call home rises on a hill above Samos town, the island’s capital.
The population has grown so big that many people now live outside of the official camp boundaries. And every week more tents appear on the increasingly packed hillside.
The cramped conditions leave wide ranging and serious health implications for those living in the camp. The medical charity Doctors Without Borders (MSF), which focuses on mental health support for camp residents, has raised its concerns about the number of camp dwellers suffering from depression, post traumatic stress disorder and self-harming.
Some 7,200 refugees cram into a camp on the Greek island of Samos that was built to serve just 640. Original Photography: Rob Zimmerman. Rob Zimmerman
Ali is also from Syria. He is 14, and he too arrived on the island with no family or loved ones to watch over him.
Charity workers find him often sleeping on the beach. He finds it safer than the camp, he told them, where fights amongst the overcrowded population are common.
In spite of the challenges, the youngest children of the camp make themselves heard—playing games, chasing each other and squealing with delight when one catches the other along the narrow, muddy (or dusty, in summer) tracks that divide the rows of tents. The laughter stands out, belying an existence of dire living conditions for the children and adults alike.
Officials from Still I Rise an NGO, which runs a youth center for children on the island, told Fortune theft is a big problem. The unaccompanied minors store valuables—as much as they are—in lockers at the center. It’s the kids’ psychological wellbeing that worries them most.
As one worker recounted, some kids are really struggling, telling the staff: “I feel so empty” and even “I want to die”
The numbers are down, but the crisis persists
Those crossing the Mediterranean in search of safer shores has dramatically decreased from the peak of the refugee crisis in 2015. In that year, 1 million made the journey, compared to just 125,000 in 2019, official statistics show.
The numbers may be down, but Europe’s refugee crisis persists, particularly on the Greek islands where officials report the refugee camps are thousands over capacity. Those who are most affected are children, and many of them are unaccompanied.
Of the massive number of unaccompanied children in Greece, 2,000 are live in camps on the islands. Last year UNICEF warned the number of minors on their own could easily go up.
A 2016 EU-Turkey deal means that everyone, including unaccompanied children, must wait on the islands to have their claims processed. On the island of Samos there are a shortage of adult guardians who can look after the children.
By law every unaccompanied minor must be assigned to a legal guardian. Guardians are essential for ensuring unaccompanied children’s access to healthcare, amongst many other basic services. But in the absence of enough qualified individuals, it often falls to the local public prosecutor, untrained in such matters, to take up this role.
The shortage of trained adults to look after the kids is evident. Many of the children have chronic scabies, amongst other ailments, aid workers told Fortune on a recent tour of the island.
Boris Cheshirkov, a spokesperson for the United Nations High Commissioner for Refugees, shared with Fortune observations that sounded like life in a war zone. He noted that eight unaccompanied girls had been taking turns to sleep in a small container. Other children make do with sleeping wherever they could find shelter, often without access to hot water or heating, he added.
UNHCR has consistently appealed to other European states to help provide funding and resources to aid the children living in the Greek refugee camps.
United Nations High Commissioner for Refugees has been pressing EU members states for increased funding to improve living conditions at the refugee camps. Original Photography: Rob Timmerman. Rob Timmerman
Hannah Green from Help Refugees, an NGO, echoed the plea.
“The situation on Samos is not some unavoidable state of nature. It is the obvious and inevitable product of years of hostile European refugee policies and underinvestment in desperately-needed support,” she said.
In a recent interview with Dutch media, Greece’s migration ministry secretary Manos Logothetis, compared conditions at the Samos camp to that of the Ter Apel refugee camp in the Netherlands where he said there was a budget of around 60 euros allocated daily to each asylum seeker. In Greece, it’s closer to 20 euros per person.
Logothetis also noted that the budget of Ter Apel was around 80 millions euros compared to the 2 million for the camp on Samos. It’s unclear where the refugee crisis money is being spent in Greece. Figures published this January from the European Commission put the amount of funds Greece has received to handle the waves of migration to its shores as over €2.23bn since 2015.
The Greek government did not respond to Fortune‘s request for comment.
Katerina Glyniadaki, a researcher and teaching fellow in Migration Studies at the London School of Economics, told Fortune that a lack of transparency muddied the situation. She said that a range of issues, including complex bureaucracy, poor coordination among key actors and money mismanagement (intentional or not), could account for why the money hasn’t adequately trickled down to those on the ground.
Nevertheless, EU anti-corruption officials are investigating the matter.
Meanwhile, the failure of Athens and Brussels to find a sustainable solution to a crisis entering its fifth year is obvious on Samos. A maze of bureaucracy means asylum claims can take months—sometimes over a year—to process, and the fate of many unaccompanied children remains in limbo. Only those granted asylum have the possibility of formally re-starting their education in Greece or another European country.
Meanwhile, as the seams of the Samos refugee camp burst at the edges, ordinary children demonstrate a level of smarts and resilience beyond their years. They build their tent dwellings, teach each other English and begin to form friendships with other kids.
Living in the camp alone is a game of waiting and survival. They’re so close to their desired destination, but it’s futile to obsess over how they might get there.
Mohammed and Ali understand this much.
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fortune--2020-02-01--Looking at Trump’s likely acquittal, Republicans shift defense from ‘no quid pro quo’ to ‘already be

Looking at Trump’s likely acquittal, Republicans shift defense from ‘no quid pro quo’ to ‘already been proven’

With a 15-part statement on Twitter late Thursday night, Senator Lamar Alexander (R-Tenn.), a key swing vote, sunk Democrats’ hopes of calling new witnesses to testify in the impeachment trial of President Donald Trump.
And on Friday evening, those hopes were completely dashed, as the U.S. Senate voted against witnesses, 51-49, mostly along party lines.
Alexander conceded that the President did what Democrats had accused him of, but that it wasn’t an impeachable offense, and the Senate, contrary to the hopes of Democrats and two Republicans, did not need to hear any more evidence about something that had “already been proven.”
“It was inappropriate for the President to ask a foreign leader to investigate his political opponent and to withhold United States aid to encourage that investigation,” he said. Alexander further added that House managers had already proven their case, but the voters should decide whether to re-elect the Trump in November.
Alexander’s vote ensured a swift acquittal for the President without the testimony of former National Security Adviser John Bolton.
Bolton wrote in a forthcoming book that Trump directly tied the withholding of $391 million in military assistance for Ukraine to investigations into Democrats, including the Bidens, discarding a defense that Trump and House Republicans had made for months—that there was “no quid pro quo,” or “a favor for a favor.”
Alexander spoke for “lots and lots” of Senate Republicans, according to Senator Ben Sasse (R-Neb.), who has rarely talked to the press during the trial, but made an exception Friday to tell reporters that he agreed with Alexander. Sasse did not answer and walked away when asked whether the President’s conduct was inappropriate.
Senator Rob Portman (R-Ohio) echoed Alexander, releasing a statement saying that Trump’s actions regarding Ukraine were “wrong and inappropriate.” But, he added, they weren’t an impeachable offense, and he would be voting against witnesses.
“[Alexander] said out loud what I think most Senate Republicans believe in private, that yes, the President did withhold military assistance to try to get him in his elections,” Senate Minority Leader Chuck Schumer (D-N.Y.) said at a press conference.
Indeed, several Senate Republicans Friday were unwilling to criticize Trump’s conduct on the July 25 call with Ukrainian President Volodymyr Zelensky in which Trump asked his counterpart to “look into” the Bidens— even after it was certain that Trump would be acquitted without potentially damaging testimony from Bolton.
“Well, I know it wasn’t impeachable,” Senator Richard Shelby (R-Ala.) said, not responding to shouted questions about whether the President’s actions were inappropriate as the doors of his elevator closed. Similarly, Senator Mike Rounds (R-S.D.) said “the actions were not of an impeachable offense,” but did not say whether they were inappropriate.
“I don’t agree with every specific component of [the Alexander statement], but it was the right decision with regard to witnesses,” Senator John Barrasso (R-Wyo.) told Fortune.
Trump had warned Republicans not to defend the phone call as imperfect.
“Republicans, don’t be led into the fools trap of saying it was not perfect, but is not impeachable. No, it is much stronger than that. NOTHING WAS DONE WRONG!” he tweeted in November.
Some were still saying that the “quid pro quo” didn’t happen.
“I don’t see enough evidence at this point to believe that there is a quid pro quo in the legal sense,” Senator Kevin Cramer (R-N.D.) told Fortune. “I think [Alexander] comes to a different conclusion with as much thoughtfulness and consideration…at the end of the day, the conclusion is the same.”
Other Republican senators said that not only was there a “quid pro quo,” but suggested that Trump was justified in asking Ukraine to investigate the Bidens, despite the fact that there is no evidence of wrongdoing on the part of the former vice president, who was in office when his son worked for Ukrainian gas company, Burisma.
“There’s ample evidence to suggest a public reason to be concerned about the Biden activities in Ukraine, undercutting our message about corruption,” said Senator Lindsey Graham (R-S.C.). “I think you can look at the evidence and say for all practical purposes there was a quid pro quo, but in this case there was some legitimacy to be asking, the mechanism investigating wasn’t right, and the conduct is not what the founders had in mind to remove a President from the ballot.”
Bolton has said he would testify before the Senate and has a forthcoming book to be released in March. According to fresh reporting from the New York Times on Friday, Trump told Bolton last May to direct a pressure campaign against Ukrainian officials to get them to dig up potentially damaging information on Democrats. However, with the witness vote failing, it was certain that the Senate would not hear from him.
A final vote on the articles of impeachment against Trump will be held on Wednesday.
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fortune--2020-02-01--On a terrible day for stocks,  One Medical sees its stock pop 47% from the IPO price

While markets were roiled Friday over fears about the Chinese coronavirus epidemic, an unprofitable healthcare unicorn had its trading debut—and was a rare bright spot in a day where many sectors were deep in the red.
On Friday, healthcare provider One Medical raised $245 million in an offering of 17.5 million shares priced at $14—at the low end of its previous range. But the public market pushed shares up 47% in trading Friday even as the wider S&P 500 Index fell 2%—giving the company a valuation of $2.7 billion.
“As a public company we can now start raising more funding more cost effectively by getting our name out there,” said CEO Amir Rubin Friday following the company’s public debut. It listed as “ONEM” on the Nasdaq.
Founded in 2007 by entrepreneur Tom X. Lee, One Medical says it plans to simplify the healthcare process by charging consumers a $199 annual membership fee upfront. That fee gives access to a centralized platform that, among other things, includes a telemedicine offering, appointment booking, and online prescription renewals. Visits and other services, which may be completed at one of the company’s 77 locations, are billed separately.
Lee stepped aside as CEO in Aug. 2017, leaving the reigns to Rubin, then more recently stepped down as Executive Chairman. Lee now runs a telemedicine startup known as Galileo, and remains a shareholder in One Medical.
The company’s largest backers also include PE firm the Carlyle Group, venture capital firm Benchmark, and Oak Investment Partners as well as GV (backed by Alphabet), according to its S-1.
Even though public markets gave One Medical a thumbs up Friday, it’s still unclear how the company plans to reach profitability. While net revenue grew 20% to $212.7 million in 2018 compared to the year prior, losses also widened by 44% to $44.4 million.
“The jury is still out if you can still make money from this,” said Sandeep Dahiya, professor of finance at Georgetown’s McDonough School of Business. “And how big is demand is for the service and how many are willing to sign up?”
Early studies show that 52% of those 65 and up were open to using telehealth, according to an American Well study published September. In comparison, 74% of those in the 18-34-year-old range felt the same. And ostensibly, it’s the former group that requires the most intensive care.
One Medical’s filing does not delve into the average age of its clientele or their affluence.
Much of One Medical’s revenue comes from partnering with enterprises, which then spread the company’s services to their employees. While roughly 10% of its revenue comes from Google Inc., (one of its investors), One Medical’s Rubin says its enterprise clientele aren’t solely from Silicon Valley, but also include manufacturers and state governments.
In the wake of lackluster IPOs in 2019 including the likes of Uber and SmileDirectClub, the directive for hypergrowth has been paved over by talks of profitability and projections in many startups. When asked whether this broader trend had affected the company’s plans to expand into three new markets this year, Rubin says One Medical cannot yet give guidance on profitability yet, but that: “We believe in responsible growth,” he said. “Both top and bottom line are important.”
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fortune--2020-01-31--Vertex CEO takes an earnings victory lap right before he exits

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.
Hello and happy Friday, readers!
It’s earnings week in the biopharma world. Though 2020 is still young, there’s already news of yet another company exceeding Wall Street expectations.
Vertex Pharmaceuticals, a rare disease specialist focused on cystic fibrosis (CF) treatments, touted the striking sales growth of Trikafta, a triple-combination CF treatment that was approved by the Food and Drug Administration (FDA) in October 2019.
The “Trikafta” name plays off the company’s earlier work to find a CF treatment. The new drug—and its name—combines the medical ingredients elexacaftor, ivacaftor, and tezacaftor (all manufactured by Vertex). What sets this particular trifecta apart from competitors?
For one, it managed to bring in $420 million in sales in the fourth quarter of 2019 even though it was only approved in October. That is, a drug that had only been out for a part of one quarter was somehow able to become the company’s best-selling therapy for a single three-month period.
Cystic fibrosis is a rare, inherited disorder that afflicts some 30,000 people in the U.S. and 70,000 globally, according to the Cystic Fibrosis Foundation. The condition causes respiratory and digestive problems, hitting the lungs and digestive system.
Vertex is the dominant player in this treatment space, controlling approximately 46% of the global market.
There’s another milestone here: It’s the last earnings boost that Vertex CEO Jeffrey Leiden will boast about before leaving the CEO role behind. Not a bad swan song. (But he’s not leaving the company completely. Leiden will become the executive chairman of the company’s board.)
In April, Reshma Kewalramani, the former chief medical officer of Vertex, will take on the chief executive role, making her one of the rare big biotech CEOs who is both a woman and person of color. She’ll be inheriting a company that appears to have the wind at its back.
Read on for the day’s news, and have a wonderful weekend.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
One Medical goes public. Digital health firm One Medical's parent firm, 1Life Healthcare, priced its public offering at $14 to $16 per share and raised some $245 million with the help of JP Morgan and Morgan Stanley. The company offers concierge services for primary care visits, including a suite of telehealth and virtual doctor meetings, and has reached a reported $1.5 billion valuation through partnerships with major clients including Google. (CNBC)
INDICATIONS
China isn't pleased with the U.S.'s newest warning on coronavirus. Chinese authorities were not happy to see the following warning come out of the U.S. State Department: “Do not travel to China due to the novel coronavirus first identified in Wuhan.” Chinese officials responded by calling the statement, literally, "mean," and in opposition to what the World Health Organization (WHO) has said in its own statements about China's containment efforts for the virus and its caution against issuing travel restrictions. (Reuters)
THE BIG PICTURE
Can a face mask save you from coronavirus? The face mask is on the rise in the midst of the coronavirus outbreak in China. As my colleague Naomi Elegant eloquently writes, it's proven to be both a symbol of protection—and a lighting rod for fear. And they may not even be particularly effective. "The facemask is a cultural symbol of protection in East Asia—for yourself and others," Ria Sinha, a senior research fellow at the Centre for the Humanities and Medicine at the University of Hong Kong, tells Naomi. "So while there is plenty of evidence that suggests masks do not prevent a person getting an airborne disease such as influenza, it is seen as respectful to others to wear one in public if you are ill."(Fortune)
REQUIRED READING
How marketers are increasingly using A.I. to persuade you to buy, by David Z. Morris
The Fortune 500 loses another female CEO, by Kristen Bellstrom
A.I. is learning how to write ads. What could possibly go wrong?, by David Z. Morris
Sign up for other Fortune newsletters.


fortune--2020-02-03--The first coronavirus vaccine is set for testing in China

Mayors : Why gutting minor league baseball would be disastrous for our cities

The World Health Organization (WHO) declared the Wuhan coronavirus outbreak a global health emergency last week. There have now been more deaths in China from this iteration of the virus (more than 350 to date, according to Chinese health officials) than there were from the SARS outbreak of 2003—a respiratory disease resembling the flu and pneumonia which also has similarities to the Wuhan coronavirus strain, dubbed 2019-nCoV.
To date, global health officials—including the WHO itself—have emphasized that panic isn’t an ideal response to such an outbreak as it could make matters even worse, especially in countries with relatively robust health systems like the U.S.
But in China and other nations with high population densities, which may exacerbate the coronavirus infections rate, the development of a drug could prove critical.
So where do we stand on that front?
U.S.-based biotech Gilead, known for its HIV and hepatitis C treatments, has struck a partnership with Beijing’s China-Japan Friendship Hospital to test out an antiviral drug called remdesivir in actual humans in Wuhan, the apparent origin site of the coronavirus outbreak. (Gilead shares rose 5% in Monday trading.)
Atypical for drug production, this is an example of how private companies and government organizations can work together in the event of a crisis to speed things up. In emergency situations, drug companies are able to perform safety trials to prove that treatments won’t actively harm people without the usual red tape that can make new therapies take years to get to market.
It appears that Chinese authorities believe the situation is serious enough in the country to warrant a hurry-up approach.
Beside Gilead, there are a number of biopharmaceutical companies reaching into this space. Those span the gamut from Johnson & Johnson, to Inovia Pharmaceuticals, to Moderna Therapeutics, to a coalition of public institutes led by researchers from Baylor’s College of Medicine.
The latter has a SARS vaccine, according to Baylor’s Dr. Peter Hotez, dean for the National School of Tropical Medicine at Houston’s Baylor College of Medicine, that may be able to protect against this new coronavirus strain given the striking genomic similarities with the virus that led to SARS.
Still, the biggest issue will be deploying these treatments on the ground as quickly as possible—and cooperation between corporations and governments across the globe in order to make it happen.
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fortune--2020-02-03--Apple’s Push Into TV Is ‘Failing to Resonate,’ Analyst Says

The first coronavirus vaccine is set for testing in China

Apple’s streaming-video service has gained limited traction with consumers, and this could represent a cautious signal as the company moves away from hardware sales and toward services, according to Bernstein.
Analyst Toni Sacconaghi estimated that fewer than 10 million consumers had opted for their free 12-month trial of Apple TV+, citing an analysis of the company’s first-quarter results. This equates to 10% or fewer of eligible customers, he wrote, a take rate he called “surprisingly low.” Apple hasn’t disclosed subscriber numbers for the TV+ service.
Sacconaghi speculated that Apple TV+ may be “failing to resonate with customers, perhaps due to its limited content offerings.” Unlike other streaming services such as Netflix Inc. or Amazon Prime, which offer reruns to well-known content, Apple only offers original shows on its service, with “The Morning Show” being the most high profile. Meanwhile, Walt Disney’s Disney+ service has benefited from the company’s pool of well-known intellectual property, like “Star Wars” and Marvel.
In December, an expert panel hosted by UBS said that Apple TV+ “needs a mega-hit original series to ultimately retain subscribers,” adding that the company “may likely have to ultimately also acquire an asset with a big backlog of catalog content — most of which will be very expensive at this point.”
Bernstein suggested other reasons why Apple TV+ may not have caught on in terms of subscribers. It could be that Apple “hasn’t been able to effectively promote TV+,” Sacconaghi wrote, encouraging the company “to more directly leverage its 1.5B device installed base.” He also reflected that the company may be conservatively estimating the take rate or “deliberately scaling its promotions of TV+ slowly to mitigate the negative accounting impact.”
In any case, he added, investors should “closely monitor the adoption of TV+ going forward,” as the take rate will “provide some indication of potential acceptance of the service, as well as Apple’s ability to successfully launch meaningful new revenue-generating services.”
Bernstein has a market-perform rating and $300 price target on the stock. Sacconaghi wrote that he was “torn” about its prospects, as the valuation is “off the charts vs. history, with increasingly high expectations.”
Shares of Apple are up nearly 80% from a June low, although it has recently dropped on concerns over the coronavirus outbreak in China.
Apple’s services business grew less than expected in the first-quarter results, in a performance that was seen as disappointing. While the magnitude of the miss was “slight,” Credit Suisse analyst Matthew Cabral wrote, the business is “key to the [long-term] bull thesis and is often cited as a driver of multiple expansion.”
The services business generated more than $46 billion in revenue over 2019, according to data compiled by Bloomberg; this represents nearly 18% of overall revenue. Despite uncertainty related to the TV+ business and the overall pace of growth at the division, analysts still see rapid growth for services revenue. Last month, Evercore ISI wrote that it was “an underappreciated growth lever,” and that services revenue could grow above $100 billion by the end of Apple’s 2024 fiscal year.
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