Tuesday, October 20, 2015

Apple sees major car industry upheaval; Extraordinary demand surge for Lego toys; Halal tourism as business niche

1 Apple sees major car industry upheaval (FT/Gulf News) Tim Cook, chief executive officer of Apple, has warned that the global automobile industry is on the brink of a technology-led upheaval, in his most direct public comments yet addressing reports that the iPhone maker is planning to start making its own cars.

“It would seem that there will be massive change, massive, in that industry,” Cook said during an interview. “I do think that industry is at an inflection point for massive change, not just evolutionary change.” Apple has been assembling a team of automotive experts and studying what it would take to become a carmaker, according to people familiar with its thinking.

Cook did not respond to questions about whether Apple would make its own cars, but made it clear that a series of technology shifts were coming together to create a rare opportunity for outsiders to break into the business.

The growing importance of software, both in controlling vehicles and acting as the interface with drivers, has already opened the way for electric car maker Tesla Motors to become the auto industry’s most significant insurgent in decades. Tesla has released new software for its Model S saloon to bring self-driving features like automated highway driving and self-parking, and has promised to use over-the-air updates to keep advancing the capabilities of its existing vehicles.

The emergence of electric vehicles was also threatening to destabilise the existing car makers, according to Cook. “A lot of the major technologies in the car shift from today’s combustion engine focus,” he said. Apple’s CEO said that, for now, his company’s focus would be on winning over car owners with its CarPlay system, which provides a way to plug an iPhone into a car’s systems to act as an entertainment, information and communications gateway.

Cook also revealed that Apple’s new Music service has already amassed 6.5 million paying subscribers, or around a third as many as market-leading subscription music service Spotify. Apple Music represents the company’s biggest overhaul of its digital music business since the launch of the iTunes store in 2004. Along with paid subscriptions that echo rivals like Spotify, it has added a digital radio service with human curators, a move that Cook claimed had given it a leg up over competitors.

2 Lego toys sees demand surge (The Guardian) Some children may not see their Christmas wishes fulfilled this year, as Lego’s factories, although running at full speed, may not be able to make enough plastic bricks to keep up with the demand from Europe’s toy stores. The Danish company has become the world’s largest toymaker by sales, overtaking Mattel, the US manufacturer whose toys include Barbie dolls.

Lego’s success is thanks partly to toys linked to movies, including The Lego Movie. But difficulties in forecasting demand accurately means some orders may not be filled on time. “We will not be able to deliver all of the orders coming from customers in the remainder of the year,” said spokesman for Lego, Roar Trangbaek.

“It is really extraordinary and it has exceeded both ours and our customers’ forecasts,” Trangbaek said when asked why the company had not foreseen the surge in demand. The Danish company’s sales grew by 18% in the first half of this year to 14bn Danish crowns (£1.36bn), putting it ahead of Mattel and Monopoly-board maker Hasbro, whose revenues came in at $1.9bn (£1.23bn) and $1.5bn respectively.

The unlisted company, owned by the family of founder Ole Kirk Kristiansen, invested more than 3bn crowns in plants and equipment last year to manufacture more toys. Before Christmas last year, there were some shortages in some countries including Denmark and Canada.

The company is building a factory in Jiaxing, China, 100km from Shanghai, which is expected to be up and running in 2017 and should go on to produce most of the Lego toys for Asia. Lego already has factories in Denmark, Hungary, Czech Republic and Mexico.

3 Halal tourism as business niche (San Francisco Chronicle) A rental company in Orlando, Florida, is offering "halal vacation homes" with curtained pool decks and rooms with prayer mats and copies of the Quran. A British company's app lists gourmet restaurants serving halal meat in London and Dubai, while a Boston-based developer's app offers travel guides for 90 cities with local prayer times and a compass pointing Muslims toward Mecca for daily prayers.

The so-called "halal tourism" market was once seen as a niche revenue stream, limited to pilgrimages like the multi-billion dollar-a-year revenue stream generated by Muslim travelers to Mecca. But now there's a movement in the tourism industry to widen the "halal tourism" market to cater to Muslim travelers worldwide, particularly those from wealthy Gulf Arab states.

Travelers from Saudi Arabia, Kuwait, Qatar, the United Arab Emirates, Bahrain and Oman will spend $64 billion traveling this year and are expected to spend $216 billion by 2030, according to a 2014 study for the travel tech company Amadeus. The study found that, on average, a traveler from these countries spends around $9,900 per trip outside the Gulf. For Emiratis, the figure reaches $10,400.

Halal in Islam literally means that which is permissible. Observant Muslims typically avoid alcohol and areas where there can be excessive nudity, like beaches and nightclubs. For women who adhere to Islam's modest dress code, swimming can pose a challenge. That means resorts that offer gender-segregated beaches and pools have an advantage.

Along Turkey's southern coast, several all-inclusive resorts have expansive private beaches and pools for women. One resort even built a structure in the sea to keep people on boats from catching a glimpse. Malaysia is also aggressively seeking more Muslim tourists, promoting itself as "Muslim-friendly Malaysia".

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