​Samsung Display (pvt) is thought to be the sole supplier for Apple’s first run at an OLED MacBook, with the panels to be produced on SDC’s new Gen 8.6 OLED line.  We expect one of the two 7,500 sheet/month lines will be used for the MacBook project, which is expected to run between 2m and 3m units.  This will give Samsung Display a customer that will engage one of the two lines for ~6 months if we assume half the volume to be 14” displays and the other half 16” models.  We assume a 75% yield, which might be optimistic for a new format fab, but we expect SDC has been fine-tuning at least the first line for some time and production will not begin until June of next year at the earliest, giving them even more time to improve yield.
While SDC is not officially dedicating a line to Apple, having a high-paying customer essentially taking 50% of fab capacity for 6 months is a major plus for the new fab, leaving the other 7,500 sheet line for deals Samsung is trying to make with other PC manufacturers.
While Samsung is expected to begin shipping prototypes to Apple later this year, specific to the MacBook, we believe they have or are about to ship more generic prototypes to PC brands for evaluation.  Given that new fabs must qualify production models, and that this is a new format for SDC (Gen 8.6 OLED) filling capacity in a new fab is the key to reducing early operating losses.  If SDC is able to fill both lines for a major part of the 2026 year, it would be a major accomplishment, which makes the MacBook project such a plus.  One or two other large project for the year could help to move the new fab into a profitable position in its first year as long as SDC can bring the yield up above 70%.  Apple certainly will help.

Taiwan’s three major panel producers saw an unusual variance in performance for August.  The largest of the three, AU Optronics (2409.TT) saw a 17.3% m/m increase in sales ($809.68m US), although down 9.2% y/y and almost right on target against the 5-year sales average for August.  On a cumulative y/y basis, AUO is up 0.6%, essentially flat with last year.  Innolux (3481.TT), saw sales decline 3.0% m/m but up 1.0% y/y, although down substantially against its 5-yr. average for the month.  On a cumulative y/y basis Innolux is up 4.6%.  Hannstar (6116.TT) is a different entity as it is primarily a small panel producer.  Hannstar saw a m/m decline in sales of 3.9% but a 38.4% increase in sales on a y/y basis, indicating how poor last year was for the small panel market.  That said, Hannstar’s results were still significantly below its 5-year average, but again, on a cumulative y/y basis, Hannstar was up 25.4%.
All in, AUO continues to keep a close handle on balancing its panel production and maintaining a steady revenue flow and will likely see easy comparisons for the next two months based on the weakness seen in 3Q and early 4Q last year.  Full year results will depend on the build into the holiday period and so far brands have remained mildly optimistic, pointing to a flat to slightly up year for AUO.  Innolux seems to have found a groove this year, with monthly results slightly above last year, but again, the full year for Innolux will depend on the next two months, particularly September, as last year September was the strongest month in the back half, which must be duplicated for Innolux to stay ahead of last year.  While Hannstar is certainly ahead of last year’s results, the back half of this year does not look particularly strong from a demand perspective unless you are a producer for Apple (AAPL), which we do not believe Hannstar is.  It will certainly be a better year than last but still a poor showing against the company’s 5-year averages.

​China’s largest foundry Semiconductor Manufacturing International Corporation (688981.CH), aka SMIC, is purchasing the remaining 49% of SMIC North, making it a wholly-owned subsidiary.  SMIC is issuing new shares to the minority owners of SMIC North at 74.20 yuan ($10.42 US), which cannot be less than 80% of the average price over the last 1209 days, according to Chinese regulations.  It seems that aside from other considerations, the minority shareholders, some of whom have been involved with SMIC North since the company was founded in 2013 are looking for an exit.  We believe the largest minority shareholder is the National Integrated Circuit Industry Investment Fund Co., Ltd., known as the "Big Fund", along with at least these four other state entities - Beijing Integrated Circuit Manufacturing and Equipment Equity Investment Center (Limited Partnership), Beijing Yizhuang International Investment Development Co., Ltd., Zhongguancun Development Group Co., Ltd., and Beijing Industrial Development Investment Management Co., Ltd.
SMIC says they are making the purchase to recover profitable assets, as SMIC North’s production lines are fully depreciated and fully utilized, which will now be attributable to SMIC, raising its ‘profile’, and giving it full control over those assets (although we expect it has had full control since inception).  SMIC North is a 12” wafer foundry, which is the direction in which SMIC (overall) is heading so it is an easy sell to say there is a need to consolidate the 12” assets, but again it seems that with 51% ownership previously, they pretty much controlled it all.  This harkens back to the minority shareholders who seem to be the motivating force behind this change.  We are not sure whether it signals a lack of faith in SMIC’s long-term prospects, or if the Big Fund is looking for more unicorn-like investments, but the press release reads like a carefully worded justification for a transaction that was not necessary.  Chinese corporate bullshit is just like American corporate bullshit.
 

Open AI (pvt) does not give out detailed financial information to the likes of us, but on occasion, they have to give some indication about how things are going financially to their investors and some of that information leaks out.  While one certainly cannot build an accurate model around rumors and hints, to us the issue is more how do the numbers we can see compare to those that the company professed were accurate months ago, sort of a credibility check.  We show the difference between revenue estimates (company) made in 1Q of this year against those most recently made (3Q), and while this year remained the same, the out years saw increases, not unlike most outyear projections.  

There is some detail that we cannot show, primarily higher growth from ChatGPT than originally expected, but we question (not shown) the increase in the ‘New products’ category that accounts for much of the incremental growth, as this includes an increase in the monetization rate, essentially converting more free users to paid plans. OpenAI indicated that user monetization is expected to reach $2/user in 2026, increasing to $30 by 2030, against a projected 2 billion active users at a margin between 80% and 85%.  This gain offset the decrease in API revenue of $5b over the next 5 years and the decrease of $26b from AI agent revenue.
On the cost side, OpenAI is expected to burn through $115b (cumulative) in cash between 2025 and 2029.  This is a mere $80b higher than originally expected, on top of the $2b already spent.  As its costs rose, OpenAI decided to develop its own data center processor and infrastructure, rather than be at the mercy of uncontrollable costs, adding substantially to the cash burn, and the more recent competition between AI developers for talent has increased the cost of stock-based compensation by $20b more than originally forecasted. 
This year, the cash burn has increased from $6.5b to $8b and is now expected to hit $17b next year, $10b more than originally expected while cash burn in 2027 could hit $35b and $45b the following year.  That $45b cash burn estimate is ~4 times the previous $11b estimate.  The company seems to have maintained its own expectations for running its models this year, but through 2030 even small increases each year in computing costs totaled an additional $11b increment during the period, with the total computing cost spend exceeding over $150b over the 5 year period.  Training costs are also running ahead of plan, with the original $7b now expected to be $9b this year and the $17b for training in 2026 is now $19b.
All in, none of this matters because institutional investors are still foaming at the mouth to buy into OpenAI at a $500b valuation, almost 2x the valuation from 6 months ago, likely as they expect the not-for-profit entity to find its way into the public market, although not if the great and powerful Mr. Musk has his way.  I thought I heard someone say “Dot com”?

​China’s largest display producer BOE (200725.CH) has begun shipping OLED displays for the iPhone 17 Pro, marking the first time the company has been qualified to produce LTPO OLED displays for the top models in the Apple (AAPL) iPhone lineup.  BOE has supplied replacement OLED displays for iPhones and a number of display products but has been unable to qualify for the two top models, which have LTPO displays.  However, because of the ongoing patent infringement suit brought by OLED competitor Samsung Display (pvt), BOE is operating under a bit of a cloud when it comes to Apple products, and Apple has limited BOE’s production to only those iPhone Pro’s to be sold in China.
BOE’s original plans were to produce ~10m phones as part of the 100m units that Apple is expected to ship for the iPhone 17 series, however it is now expected that the number will be between 2m and 3m because of the location limitation, leaving the remainder to be  split between Samsung Display (52-54m) and LG Display (LPL) (42 – 44m).  Apple is between a rock and a hard place this year as it is thought that BOE is offering a steep discount in price on their production, helping to boost Apple’s margins or give it some room for discounting, however at the same time Apple is also very wary of BOE’s patent infringement loss, and cannot take the chance that there will be any limitations put on sales of BOE’s displays in the US.  They can still use BOE’s pricing to extract some blood from SDC and LGD but without the threat of making BOE a full volume competitor this year, the effect is limited, especially as BOE is a first time supplier for the iPhone Pro model using LTPO and is therefore expected to have low yields relative to SDC and LGD, who have been producing these models in years past.

On August 29, the US ended it De Minimis package exemption.  Most recently  parcels bound for the US with a stated value of $800 or less (raised from $200 in 2016) were exempted from typical import duties and taxes, creating a massive market for foreign retailers who specialized in low-priced items that were shipped directly from the producer to the purchaser.  China and Hong Kong lost their de minimis status in early May, while the rest of the world awaited the broad brush elimination last month.  Since then 67 countries have restricted or banned accepting packages bound for the US, with most stating that they need time to understand and implement current customs and tax regulations that now apply.
Chinese retailers, like Temu (PDD) & Shein (pvt) have made the US market a priority over the last few years as the unusually high package threshold makes direct shipping lucrative, shown by the increase in DM packages entering the US increasing from 411m in 2018 to 1.36b last year.  TEMU alone saw its GMV increase 239% between 2023 and 2024 to 47.5B under the previous rules, and as the table below shows, the US was by far the dominant source of that revenue. 

Now that the exemption has been eliminated countries have responded, many suspending all goods and documents from shipment to the US. China has responded with shippers bringing in goods via container, rather than paying the higher per package cost, and Hong Kong Post remains documents only, forcing goods to use more expensive private carriers.  On a general basis, according to the Universal Postal Union, international postal traffic to the US has declined by 81% since the de minimis exemption was removed, with 88 postal services reporting the suspension of all or some services to the US.  While document shipments have been penalized less, the shift to private carriers is adding cost to consumers who are now responsible for paying the fees on direct ship packages, while the higher shipping costs are hurting small businesses.  Larger retailers based in the US that have a large number of international 3rd party sellers are also under pressure as the number of sellers on those platforms is decreasing.

The elimination of the de minimis exemption is another ‘big stick’ approach used by the current administration to force other countries to pay ‘their fair share’ of customs’ fees and taxes, yet the income to the government from those fees does little to help consumers and businesses defray higher costs.  That said, it is quite difficult to estimate the true impact of this change to the government, consumers, and businesses, and the estimates we have seen vary considerably and for good reason.  Estimating the number of packages expected to be processed this year will depend on how long the countries in the table above continue their restrictions on US package shipments. Now, each package, regardless of value must be evaluated as to its HTS (Harmonized Tariff Schedule) code, based on the contents, and the appropriate country and product tariff applied.  The code is the responsibility of the sender, whether a company or an individual, and many country postal systems don’t have the resources to collect and process that information, hence the many suspensions.  But the key fact is that the total cost of packages goes from $0 to the total of the processing & administration fee, the tariff for that HTS code (flat fee or ‘ad valorem’) which can be both a country tariff and a reciprocal tariff, and a bond (packages over $2,500).

 
The credibility of de minimis impact estimates are also biased toward the negative, with most of the calculations focused on the cost to consumers and businesses, while far less focus is paid to the additional income and costs that the government will face.  The White House has focused on national security benefits and the revenue-generation with little mention of the cost, while Homeland Security and Customs are singularly focused on that same security aspect.  The estimates for new revenue generation  from the White House and some US industry groups go as high as $10b/year but again use the security aspect as a proxy for offsetting any new costs.  There have been few, if any, legitimate studies that did not predict a negative number for at least the first year in terms of the government P/L, and almost all predicted a negative impact for both consumers and businesses, particularly small businesses.
While the small package market seems minor compared to the broad tariff market, it was (pre-change) headed for over 1.5 billion pieces this year and the status quo of the de minimis market was counted on by both shippers and customs administration.  That has been altered, with many countries trying to figure out ways to manage the change.  Heading into the holiday season, this global disorganization will cause chaos and add to the cost of purchases this year unless things move quickly over the next month or so, which we do not believe will be the case.
Sidebar – Conversations with a number of small business owners also pointed to the fact that many purchase parts and supplies from overseas suppliers and in order to save cost, those supplies are shipped in small quantities on a quarterly or monthly basis.  With that benefit no longer available, small business owners will pay more for those parts and supplies and are likely to increase the size and reduce the frequency of each order, adding to short-term volatility.
 

Toward the end of this month, it is expected that Samsung (005930.KS) will be announcing a number of new products, including its first entry into the ‘smart glasses’ market.    Given Samsung’s profound reach into the CE market, their entry, regardless of its success or failure, will likely stimulate another round of growth in the category and increase the level of competition between brands.  Samsung filed a number of related patents toward the end of last year which began the speculation over what form Samsung’s entry into the smart glasses/XR market might take, with Project Moohan, the code name for the company’s XR project, being developed with Qualcomm (QCOM) and Google (GOOG), and Project Haean the code name for the smart glasses that we expect to be announced this month.  The Google tie-in relates to Samsung’s co-development of an Android XR OS, which will likely be a part of both projects. 
To our chagrin, expectations are that the upcoming Samsung smart glasses will not have a display, making them essentially hands-free access to audio, AI, and a camera.  We expect Gemini, or a subset of, will be the AI, and as noted above, the OS will likely be Android XR, with the Qualcomm Snapdragon AR1 chipset.  More importantly will be the applications, as the device will compete directly with Meta’s (FB) Ray-Ban glasses, which sell for between $250 and $300, so point-to-point feature and price comparisons will be a big focus.  One of the more sophisticated features of the Ray-Bans is ‘look & ask’, where whatever the camera sees the AI sees.  Using that function allows the user to look at an object and ask a question about it, without having to describe the object to the AI first.  We expect Samsung to have a similar function if it is to really compete with Meta, although we believe that the longer-term success of smart glasses will be greatly enhanced by a display.
Smart glasses (formerly Augmented Reality) are becoming a popular way of interfacing with features that might have normally been included in smartphones or their applications.  However the feature sets for smart glasses are varied and increasingly more complex as these devices compete with each other.  In order to better understand and simplify the features that are available to smart glasses users, we break down the feature sets under the broad categories of those that have a display as part of the glasses, and those that do not. 
The smart glasses that do not have a display are relatively easy to understand, with early models providing only audio, either through an open-ear speaker system or through bone conduction.  These devices typically connect through Wi-Fi to a smartphone that the user might keep in a pocket or travel bag, but their functionality was relatively limited and competed with wireless headphones and ear buds, a well-established niche.  In order to improve the value to consumers, a camera was added, which allowed the user to capture images or video that could be played back on the user’s phone, but such devices were still considered gimmicky and not mainstream.  
While AI did not appear in a true sense in mass market smart glasses until Meta’s (FB) Ray-Bans were released, a number of glasses were based on virtual assistants that were able to perform a number of basic functions, including web searches.  However the current crop of smart glasses that is making its way into consumer hands is working toward far more sophisticated AI functions and that is the big selling point for smart glasses that do not have displays.  The more functions that smart glasses’ feature sets have, the more value they create to justify the price, but to us, the real kick for smart glasses begins with the display which adds an additional ‘dimension’ to these devices and helps to justify a higher price.
Unfortunately, the average Joe or Jane does not want to spend hours comparing feature sets for smart glasses, and as smart glasses evolve brand will pack in more features and complexity.  To illustrate, we examined a number of smart glasses and categorized them based on just a few (very simplified) hardware features.  There are a number of subsets for each of these features and many more feature categories and types, but the flowchart shows how complex choosing these devices can be, and we have excluded anything relating to how the devices look, which is another major selling point for most potential users. 
We started with two basic classes of smart glasses, those with displays and those without.  While these seem like simple categories, there is nuance across this level, with some having electrochromatic lenses that can reduce the amount of light passing through the lens.  Those with displays enter into an even more complex path with first, the type of display (Micro-OLED is currently the leader).  Some displays are mini-projectors that project an image on the see-through lens or the user’s eyes, using optics like waveguides or a birdbath to mix a projected image with what the eye is seeing, and some have only one display (monocular), although the majority have two.  From that point the feature set trail for glasses with displays follows the same path as those without displays, which entails what type of audio is being used (speakers or bone conduction), how the glasses connect to the smartphone, and whether the device has a camera and AI.  Again this is a simplified feature set, with the full set decision tree 2x or 3x more complex.
The question that must be answered however, if smart glasses are going to survive as a CE product stand-alone category, do they provide value against cost, essentially are they able to augment the functions of a smartphone enough to justify a $200 to $300 price tag without just duplicating smartphone functions?  Glasses with speakers but no camera, even with AI, are like using earbuds with your phone,  Add a camera and you can take pictures and video, but more importantly you give the AI ‘eyes’.  Add a display and you no longer have to listen your AI chatter away, you can read what it is saying while you are doing other things, and if the applications become more viable over time, eventually you wont need an expensive smartphone and could replace it with a small pocket computer and your smart glasses.  Maybe we are getting a bit ahead of ourselves, but smart glasses (AR) have the potential to be long-term players if CE companies don’t see it as a threat to their lucrative smartphone profits.  They should be able to live side-by-side.

​In 2024 the US District Court for the District of Columbia ruled that Google (GOOG)  had violated Section 2 of the Sherman Act (prohibits any single entity from monopolizing, attempting to monopolize, or conspiring to monopolize any part of trade or commerce in the United States, making such actions a felony punishable by fines and imprisonment), based on a decade of distribution agreements with browser developers, original equipment manufacturers, and wireless carriers to be the out-of-the box, default general search engine.  According to the court, Google paid billions to lock up these channels which prevented rivals from competing and discouraged entry into the search market.  Google used these agreements to build scale and generate what the court (United States v. Google LLC – 2023) called ‘monopoly profits’, essentially freezing the search market.
That said, since then, the courts acknowledge that Generative AI is changing the search market, providing information through chatbots, rather than search, which has put Gen AI in a prominent place at the ‘remedies’ hearing that determines what Google will face as a result of its monopolistic behavior.  The plaintiffs want to make sure that Google’s dominance in search does not carry over into Gen AI and have proposed a number of remedies, while the court is interested in finding an equitable solution.  Google has proposed the idea of an injunction that prohibits it from entering into exclusive distribution agreements, including its GenAI products, the Gemini app and Google Assistant.  Google says it has already stripped from its existing contracts the provisions that the court found anti-competitive and says Gen AI is already highly competitive, and the company should not be restricted in areas where it has not been proven to be anti-competitive.
The plaintiffs want more, stating that they are trying to revive the search market and to protect the Gen AI market from a similar fate, however the court has decided to walk a more moderate path.  Here are the details:
Positives

• Google will not be required to divest Chrome; nor will the court include a contingent divestiture of the Android operating system in the final judgment.  This is a big win as Google, as a company, remains intact, despite the requests from the DOJ and a recent ‘helping out’ offer from PerplexityAI (pvt).
• Google will not be barred from making payments or offering other consideration to distribution partners for preloading or placement of Google Search, Chrome, or its GenAI products as the court found that cutting off payments from Google will impose substantial, in some cases, crippling downstream harm to distribution partners, related markets, and consumers.  Another big win as ending the practice of payments for placement would materially change the mechanics of the search business.
• Google will not have to present users with choice screens on its products or encourage its Android distribution partners to do the same.  This is a win for Google as both the plaintiffs and the DOJ asked for ‘choice screens’ to be part of the ‘remediation’.   When a device (phone, PC, etc.) or application is set-up for the first time the user is given a choice of what browser and search engine they want.   Most users pick the default, which is why plaintiffs wanted to force a choice screen.  Now if Google is already the default, no other choices need to me shown.
• Google will not be required to share granular, query-level data with advertisers or provide them with more access to such data. Nor will it have to restore an “exact match” keyword bidding option.  Query-level data are the search terms that a user typed in before clicking on an ad and Google does not make that detail available in order to keep advertisers using Google’s ad ecosystem.  The keywords in that data give Google more control over ad placement and give advertisers less transparency, forcing them to bid on a wider variety of search terms.  A loss here would have been a serious blow to Google’s ad bidding system, making the Google system more transparent and therefore less competitive for advertisers.
• Google will not have to underwrite a nationwide public education campaign. The court noted that such a remedy does not fit Google’s anti-trust violations and its terms are too indefinite.
• Google will not have to modify its policies to offer website publishers more choice in how Google uses their content.  Another win for Google, with the court deciding not to compel Google to give publishers alternatives as to how their content is used.  Publishers have been concerned that AI search summaries reduce the click-through rate to their content, so there was contention over whether Google should be forced to allow content providers a way to opt out of Ai summaries while still being included in Google’s search index.  Again the court felt this did not relate to Google’s anti-competitive practices.
• Google will not be subject to an investment reporting requirement. This too bears no relationship to Google’s anticompetitive conduct.  Another win for Google as the DOJ had asked the court to force Google to report any transactions or investments, particularly in AI, citing the fact that Google’s resources were so large that it could acquire smaller competitors or proprietary technology before its rivals.  The court did not agree.
• Google will not be subject to anti-retaliation, anti-circumvention, or self-preferencing provisions.  The DOJ requested that Google should be prevented from retaliating against partners that choose to work with Google competitors,  Anti-circumvention, also a DOJ request, would have restricted Google from creating a new deal form, sort of a  ‘quasi-exclusive’ deal that would not violate the restrictions but still allow Google to maintain an exclusivity with its partners.  Self-preferencing refers to situations where a vertically integrated company, operating at a number of different levels of the supply chain, uses its influence in one area to force preferences in another.  The example might be Google’s search algorithm, which puts Google products at the top of the search list, over those of competitors, regardless of the actual rankings.  The court did not consider any of these practices as necessarily prohibitive to the competition under the ruling.

 
Negatives

• Google is barred from entering or maintaining any exclusive contracts relating to the distribution of Google Search, Chrome, Google Assistant, and the Gemini app or enter or maintain any agreement that conditions the licensing of the Play Store or any other Google application on the distribution, preloading, or placement of Google Search, Chrome, Google Assistant, or the Gemini app.  Probably the best Google could have hoped for in light of the anti-competitive ruling.  It eliminates all exclusive placement contracts.
• Google will have to make available to Qualified Competitors certain search index and user-interaction data, though not ads data.  The court narrowed the datasets Google will be required to share to tailor the remedy to its specific anticompetitive conduct, but this means that competitors will now have access to Google’s search index and, in theory, no longer have to scrape the internet to create their own indexes.  Creating an index from scratch is an expensive process and as Google’s index is, by far, the largest (2020 data says ~400 billion webpages, while Microsoft’s (MSFT) Bing is ~14 billion pages) this is a major plus for the competition and a blow to Google’s ability to compete.
• Google has been barred from receiving revenue share payments for the placement of a Google application (e.g., Search, Chrome, Google Assistant, or the Gemini app) on the placement of another such application, or conditions the receipt of revenue share payments on maintaining Google Search, Chrome, Google Assistant, or the Gemini app on any device, browser, or search access point for more than one year, or prohibits any partner from simultaneously distributing any other GSE, browser, or GenAI product.  This allows a multi-year non-exclusive agreement where Google pays for placement but does not allow Google to require multi-year guaranteed payments.  This keeps Google from establishing multi-year non-exclusive contracts that act as exclusive contracts because the partner cannot afford to lose the revenue by switching  to another competitor after a year.
• Google must offer Qualified Competitors search and search text ads syndication services to enable those firms to deliver high-quality search results and ads to compete with Google while they develop their own search technologies and capacity.  This has practical implications… New competitors, who have no index or monetization can send queries to Google search.  The search results from Google appear as if they were the competitor’s results, along with Google ads.  Should a user click on an ad, the new competitor shares in the revenue stream with Google.  Sort of ‘renting’ Google, without the Google logo attached.
• Google will be compelled to publicly disclose material changes it makes to its ad auctions to promote greater transparency in search text ads pricing and to prevent Google from increasing prices by secretly fine-tuning its ad auctions.  This means Google must disclose changes to its ad pricing, rather than secretly increasing or artificially inflating ad prices.

The term of the judgement is six years.  Google asked for three.  Plaintiffs asked for ten years.  While the results of the actual ruling itself were certainly negative for Google, we see the remedies as a win for the company when compared to the potential for some of the more draconian measures that the court could have implemented.  In a sense AI was Google’s savior in that the courts saw AI as a bit of a more level playing field and allowed Google to keep both its Chrome search engine and its Android OS.  Exclusivity was a key point in the original trial so prohibiting exclusive contracts was assumed, although the ding on the data side, where Google must share its search engine and some data with competitors will sting after many billions were spent on developing Google’s massive search index.
The parties involved, the DOJ and a number of State Attorney Generals, have the ability to appeal the court’s rulings 60 days after the final judgement on the remedies is filed.  The appeal would go to the Court of Appeals for the DC Circuit, but the plaintiffs cannot appeal because they are unhappy with the outcome, as the argument must be that the trial judge made an ‘error of law’.  For example they could argue that the judge abused his discretion by creating remedies that were not sufficient to remove Google’s anti-competitive behavior, or they could argue that by allowing Google to keep its auction practices the remedies did not strip Google of the benefits it gained from its illegal activities.  Should an appeal be filed (likely), if either side is then unhappy with the Appellate Court ruling they can petition the US Supreme Court, although it has no obligation to hear the case.  All in, while Google came out ahead in this round, losing the battle (initial decision) but so fr, winning the war (remidies).  

In June China shipped 22.6m smartphones, down 4.7% m/m, down 9.3% y/y, and down 3.9% on a cumulative (6 months) y/y basis.  For the 2nd month in a row Chinese smartphone shipments declined on a y/y basis, adding to the suggestion  that China’s “New for Old” subsidy program is beginning to wear thin.  This seems especially true with high-end phones, after 18 months (smartphones were added 8 months ago) and $43.7b (US$ as of June 30) has been spent to encourage Chinese consumers.  With subsidies focused on phones under $840 and subsidies of up to 15%, early momentum was strong but seems to be fading as the year grinds on with expectations for under 2% growth in smartphone unit shipments for the year,.  So while the subsidies were effective at the onset, they are expected to have only a small effect on longer-term smartphone prospects in China and with a strong 2H last year y/y comparisons could be difficult for the remainder of the year..
 

​Middlebury, Vermont is a beautiful town of under 10,000 folks, set between the Adirondacks and the Green Mountains in the Champlain Valley.  Average summer temperature is 68° but the same in winter is 24°.  Middlebury Falls is on Otter Creek, which runs right through the middle of town, passing a wide variety of restaurants, a farmers’ market, and a number of local breweries, wineries, and cideries.  It has been the home for Middlebury College (University) since 1800, known as one of the country’s most prestigious liberal arts colleges, famous for its language programs.  The school runs about $94,000 per academic year, with tuition ~$70,00 and housing/meals the remainder. 
In 2005 Middlebury signed an agreement with the Monterey Institute and in 2010 acquired the entire facility which became the Middlebury Institute of International Studies at Monterey.  The Institute focused on graduate language studies and language teaching and was recognized for its degrees in conference interpretation and International Policy & Management.  The Institute is situated in downtown Monterey, a town of 30,200, within walking distance of Fisherman’s Wharf and Cannery Row.   Monterey’s average temperature in summer is 60° and in winter 52, and the tuition at the Institute is ~$74,500 for the year.
So, after 4 years of college in rural Vermont and some chilly winters, what could be better than two years in Monterey to garner a Master’s in Language Studies, particularly conference interpretation?  Unfortunately there is no longer an answer to that question as Middlebury recently announced the closing of the Middlebury Institute of International Studies at Monterey, with the graduating class of 2027.  Considering that the Institute was considered one of the three major translation schools in the world, one would wonder why such a prestigious institution would  disappear, but the answer is simple, AI.
Finances were an issue, with a deficit of ~$14m this year and a turnaround plan that failed to meet milestones, leaving the only alternative, the closure of the Institute.  The financial issues, other than the high cost of operating in Monterey, were the result of insufficient enrollment, which had been declining over the last few years as students who previously  were looking to enter the high-paying simultaneous interpreting or translation service industry found that the return on years of study was quickly decreasing as AI put pressure on manual translation.
Those in the language business are quick to say that language remains the cornerstone of cross-cultural communications knowledge acquisition and that the logic of learning English has not changed.  However the value of the ‘old’ model has changed, leading to a new model that is said to combine language skills with data, tools, and processes, however that model has yet to be discerned, while the old model seems to be heading out with the tide.  Middlebury is the first to go, but we expect similar programs and institutions to fade away as their potential students find less opportunity in this new language world order.  Perhaps a new position such as Associate Professor of AI Language Studies might soothe some potential language majors, but more likely that role will be named AI Language Program Manager, at a lower salary, and no tenure after 6 or 7 years.