A bipartisan group of US Senators published a letter yesterday calling for updated minimum standards for broadband access across the United States. Current Standards dictate a 25Mbps minimum but even by Federal Communications Commission household broadband guidelines, it is clear that a 25Mbps connection is inadequate for most families even prior to the Covid-19 pandemic. This touches on our Digital Lifestyle theme but plays directly to the core premise of our Digital Infrastructure and Connectivity theme and will provide momentum for this industry along the virtuous circle of increased capacity leading to innovation and increased demand leading to…
Today, U.S. Senators Michael Bennet (D-Colo.), Angus King (I-Maine), Rob Portman (R-Ohio), and Joe Manchin (D-W.Va.) wrote to the Biden Administration urging it to update federal standards for high-speed broadband to reflect modern uses and align those standards across the government.
Source: Bennet, King, Portman, Manchin Urge Biden Administration to Create Modern, Unified Federal Broadband Standard | Press Releases | U.S. Senator Michael Bennet
While providers are still working on upgrading their networks, Qualcomm has moved ahead and developed a next-gen modem capable of 10Gb throughput.
What’s New: Qualcomm Technologies, Inc. today announced the Snapdragon X65 5G Modem-RF System, its fourth-generation 5G modem-to-antenna solution. It is the world’s first 10 Gigabit 5G and the first 3GPP release 16 modem-RF system, which is
Source: Qualcomm Announces World’s First 10 Gigabit 5G Modem-RF System
One of the wonderful things about thematic investing when it is done right, is the number of recognizable and relatable points of confirmation to be had once an investor has fine-tuned their focus, or as we at Tematica like to say, strapped on your thematic lens. The traditional investor analyzes and assess a variety of data points ranging from monthly and quarterly economic data to survey findings and third-party research reports as well as industry and company specific news and events. We at Tematica do all that as well, given our fundamental and global macro upbringing, but we also look for other confirming data points such as new product introductions, M&A activity as company’s look to reposition their offerings, new partnerships and the like. This has us being those pesky people that slowly walk the aisles of store, be it grocery or other, looking for the new, new thing while also noting how much of the floor and shelf space has been usurped by products that fit hand in glove with our investment themes. That’s pretty much week in week out for the Tematica team but from time to time there is a confirmation blitz, and it so happens the 2021 Super Bowl was just such an event.
While the 2021 Super Bowl may have been a meh event to many, it was still the most watched television event so far this year and was likely at least on par with the 100 million people in the US that have watched each Super Bowl over the last decade. On a global basis, total viewership is estimated to be another 30-50 million more. The sheer magnitude of eye-balls being captured during the game means it’s a big-ticket item for a company to reach all those viewers, roughly $5.5 million in 2021 for a 30-second spot. In today’s digitally connected world, that increasingly favors ad placement with focused online content, it means the Super Bowl is one of the last bastions of major mass marketing in which advertisers can reshape their brand awareness, oftentimes looking to become a household name. And that doesn’t factor in the additional views to be had on YouTube and other video platforms, given the penchant to discuss them as part of pop culture and the latest zeitgeist.
From our perspective, it means companies are looking to use this event to reach viewers they may not normally speak to and reveal to them, sometimes in a subtle way, how they are tilting their businesses into the thematic tailwinds that are unfolding before our very eyes. For Tematica, this year’s Super Bowl ads were a cornucopia of confirming data signals for many of our themes. Here are some examples:
Digital Infrastructure & Connectivity
Unlike many thematic strategists Tematica doesn’t just look for themes that “could be happening if” or the companies that are “skating to where the puck will be.” We focus on the themes arise from structural changes in behavior and spending and the companies whose business models allow them to prosper. And yes, we recognize that neither Verizon (VZ) nor T-Mobile (TMUS) are in our Digital Infrastructure & Connectivity Index, but the focus of their commercials on 5G speak to the one of the key drivers of that theme and index as well as as the corresponding ETF. The bottom line is this – the ad spending on Super Bowl LV while providing pivot points for some, re-enforced to us that our investment themes and indices are on track.
- Chipotle Mexican Grille (CMG) is a constituent in Tematica Research’s Cleaner Living Index.
I’m either blessed or cursed, depending on your perspective, to live a life across both sides of the Atlantic, with operating bases in California, Ireland, and Italy This gives me a rather in-my-face perspective on how the various regions operate and respond to global events. One of the most striking differences is, and sorry to say this, the archaic nature of the US retail banking system. Ask someone in Ireland if they’d like to be paid by check and they’ll look at you like you just asked if they’d like their pint out of a can or from the tap.
It really is astounding that a nation known for its tech hubs has payment processes that have remained unchanged for decades. As with many other things digital, the pandemic accelerated the shift towards electronic banking.
By May, more than 45% of Americans had changed the way they dealt with their bank, a survey of 1,000 people by consultancy FIS found.
According to an article in the Financial Times (referenced below), Well Fargo (WFC) has seen a 35% increase in the number of checks deposited digitally and a more than 50% increase in online wire transactions. The push to get clients to do more digitally is driven in no small part by its promise to investors that it will cut $10 billion in costs.
Bank of America, the country’s second-biggest bank by assets, after Wells Fargo, reports that nearly 40% of the clients’ checks are deposited online. Digital sales of mortgages have accounted for about 60% of the activity in 2020. The bank’s AI chatbot is handling about 400,000 interactions per day now, twice the level a year ago.
As retail banking consumers become increasingly comfortable with digital banking services the need for robust digital infrastructure only becomes greater. Yet another visible tailwind to Tematica’s Digital Infrastructure theme.
Source: Covid nudges US bank customers into digital era | Financial Times
While there have been announcements concerning public edge computing buildouts, this agreement is one of a recent few that focuses on private edge computing services that will serve manufacturers and other heavy users of industrial IoT to manage production.
Samsung Electronics on Wednesday signed a partnership with IBM to combine “edge computing” with private 5G networks, the latest tie-up among big technology firms trying to help customers automate production.
Source: Samsung ties up with IBM to combine private 5G with “edge computing”
Just when you thought that the digital infrastructure underlying the internet and overall connectivity wasn’t strained enough in the work-from-home, learn-from-home, stay-at-home era, it appears that Google has joined the ranks of direct streaming services switching on direct to YouTube capabilities on its Stadia gaming platform.
Rolling out to some users now, Stadia appears to finally be adding support for direct streaming to YouTube without any extra software.
Source: Stadia YouTube direct streaming is rolling out – 9to5Google
The coronavirus pandemic is radically altering how people go about their daily lives, and that includes how they interact with their healthcare providers. With quicker data speeds brought on by 5G, WiFi 6 and other broadband technologies that also feature lower latency, the telemedicine experience will continue to improve, chewing up network capacity along the way. Needless to say, we see this as a positive driver for the Tematica BITA Digital Infrastructure & Connectivity Index.
This year, 41.7 million adults in the US will use telemedicine, representing 98.8% growth from a year prior, according to our latest estimates.We expect this behavior to stick and for growth to continue through the end of our forecast period in 2023, when the number of users will be more than triple that of 2019. By the end of 2023, there will be 64.0 million telemedicine users.
Data from CivicScience published in July also signals a change in telemedicine adoption. For example, in January, just 11% of US adults said they had used telemedicine. That figure more than tripled by July. During that same time period, the percentage of respondents who reported having no plans to use telemedicine—or simply no awareness of it—decreased by 25 percentage points.
Source: US telemedicine users will surpass 40 million this year – Insider Intelligence Trends, Forecasts & Statistics
In a move to appease hawks pushing for tighter restrictions on Huawei Technologies, the UK is considering a ban on the installation of 5G equipment from Huawei as soon as next year, well before a blanket ban in 2027. UK lawmakers are set to debate the bill next week, and should it come to pass it would be a shot in the arm for Ericsson (ERIC), Nokia (NOK) and other company’s in the Tematica BITA Digital Infrastructure and Connectivity Index
Any further installations of Huawei equipment by carriers would carry fines of as much as 10% of sales or 100,000 pounds a day ($133,000).
The government already set limits on telecom companies including BT Group Plc, Vodafone Group Plc and CK Hutchison Holdings Ltd.’s Three UK buying gear from Huawei that are set to kick in after December. However, there are no rules yet barring the companies from using Huawei equipment they already bought but haven’t yet installed.
Under the new proposal, that ban could come into force as soon as September next year, the people said, asking for anonymity as the talks are confidential.
The latest proposals may not go far enough for some lawmakers, who are calling for the government to consider forcing carriers to remove Huawei equipment from their 5G networks earlier than the current 2027 plan.
Source: U.K. Looks at Huawei Install Ban Next Year to Placate Hawks – Bloomberg
Whether retail consumers are aware of it or not, co-location services aren’t just for high frequency trading firms anymore. In an era of moving quickly and breaking things, it seems like the executives of these companies are doing more of the first part and (hopefully) not too much of the last part.
Dell Technologies, FedEx and Switch Team Up to Deliver Exascale Multi-Cloud Capabilities to the Edge
Source: 2020.11.12 | Dell Technologies, FedEx and Switch Team Up to Deliver Exascale Multi-Cloud Capabilities to the Edge
In as much as everyone is focusing on 5G, self-driving cars, and an impending IoT revolution there is already plenty of demand for high bandwidth digital infrastructure.
Virgin Media has revealed that Tuesday 10 November saw its busiest day on record for internet traffic across its network.
Source: Virgin Media sees record breaking network traffic on day of Xbox Series X/S launch