Netflix share price slumps 11% as Q2 falls short of expectations

Netflix blames price increases and an under-performing content slate for poor performance in the second quarter of 2019.

Revenues and profits might be up, but these are two metrics which have never seemingly bothered Netflix shareholders that much. What seems to be bothering the twitchy investors is tepid subscriber growth and increased competition in the streaming segment; ultimately these will both lead to the revenue and profitability metrics, but the point is to cast an eye on the horizon not today.

And it appears some investors do not share the same optimism as the Netflix management team as share price slumps 11% in overnight trading.

“… as you can see over the past 3 years, sometimes we’re forecast high,” CEO Reed Hastings said during the earnings call. “Sometimes we forecast low. This is one where we forecasted high. There was no one thing.

“And if I think about three years ago, we were also light, and we never really were confident of the explanation. Then, we were $2 billion in quarterly revenue. Now, we’re going $5 billion. And so, it’s easy to over-interpret the quarter membership adds, which are a bit noisy. So, for the most part, we’re just executing forward and trying to do the best forecast we can.”

Subscription numbers are of course all important for what effectively is a single revenue stream business model, and the numbers aren’t the most flattering. 2.7 million net additions compared to the 5 million which were forecast at the beginning of the quarter, including a net loss of 130,000 in the US. When you consider the US currently accounts for roughly 48% of total revenues, this becomes an issue.

Hastings is playing his hand exactly as you would expect. In the early years, Netflix told investors not to worry about the money as subscriber gains are going through the roof; the money would come eventually. Now, Hastings and co. are telling investors not to worry about subscribers because the money is rolling in.

Netflix subs

What is worth noting is that one bad forecast, one dip in subscribers, does not engulf Netflix in flames. Its not ideal, but as long as it doesn’t become a trend there shouldn’t be much to worry about.

Understanding why is of course critical however should Netflix want to rebound to the 7 million subscription gains it is promising over the next three months.

Firstly, price increases have not landed well with the subscribers according to CFO Spencer Neumann. The biggest churn rates across the world were in the markets where Netflix had announced price increases, the US for example, though strong performance in Q1 and a poor content slate over Q2 were also factors which contributed to the numbers.

Neumann suggests the first quarter of 2019 was particularly strong, perhaps pulling forward subscriptions and emptying the sales funnel for the second quarter, while the team has suggested the content slate was not as attractive as previous periods. This should change in the future however as the business moves from a licensing model to one which is more governed by original content.

Over the next couple of years, certain companies are going to start pulling back content from the Netflix catalogue, Disney and WarnerMedia/AT&T are prime examples. Not only will this decrease the variety of content on the platform, removing some fan favourites as well, but it will also strengthen the opposition.

Netflix has not blamed competition for the poor performance this quarter, suggesting there has been not material change to the competitive landscape just yet, though some shareholders might be getting a bit worried. Netflix is facing some difficulties at the moment, while bigger disruptions are on the horizon with Disney and AT&T readying their own streaming services.

Netflix Financials

What is also worth noting is content; Netflix is the market leader in the streaming market and is in the strongest position to deal with increased competition. There of course will be some difficult conversations to be had in the future, but this is still a business heading in the right direction.

Total revenue for the quarter was $4.9 billion, up 26% year-on-year, while the management team is forecasting $5.2 billion for the next three months, a 31% year-on-year jump. Globally, paid memberships increased to 151.5 million, while there were more than 7 million free trials across the second quarter.

On the pricing front, although this might have a slight negative impact on churn and subscription gains in the short-term, collecting additional revenue each month is only going to be a positive in the long-term. Netflix is still very affordable for the majority.

Looking forward, the team has suggested the first couple of weeks of the current quarter has demonstrated an acceleration in subscriptions, while churn is returning the levels experienced prior to the price increase. And while it might seem internet TV is taking over the world, there is still plenty of room for growth according to the team, both in terms of the linear/streaming dynamic and the opportunity on mobile.

Another factor to consider is the spend which is being allocated to original and localised content; few in the industry can compete with the Netflix numbers in this column. And as content becomes more fragmented through the various streaming platforms, the more original content Netflix produces, the more attractive is becomes as a service to consumers.

Netflix is still in a very strong position, but it is not going to have the same free-reigning dominance as it has experienced over the last few years. A diluted content library, price hikes and increased fragmentation will have a say in the fate of the business, but it is still in the strongest position of this increasingly competitive segment.

Swisscom signs first 5G roaming agreements with SK Telecom and Elisa

Swisscom has signed its first roaming agreements with South Korea’s SK Telecom and Finland’s Elisa - with its customers being able to use a fast mobile network abroad.

Swisscom customers with a 5G-enabled mobile phone will now be able to access the new 5G data network in Finland as of July 17 and in South Korea by the end of the month.

Both countries are seen as forerunners when it comes to expanding the latest generation of mobile communications. For instance, South Korea has over 62,000 5G antennas and nearly 1.64m active users, whereas Finland leads the domain in Europe together with Switzerland. 5G went live in Switzerland in April 2019 and now Swisscom is planning to spread its coverage to 90% of the population by the end of year.

Earlier this month, Telecom Italia (TIM) announced that it will be rolling out 5G initiatives in major cities and industrial districts, along with digital literacy initiatives set to launch all over the country after the summer. TIM has already initiated the 5G movement in Rome and Turin and recently added Naples to the list wherein the telecom company has activated 5G and made the first commercial services available for families and companies.

Additionally, Canalys has predicted that around 800m units of 5G-enabled handsets will be shipped in 2023, which will account for 51.4% of all smartphone shipments. It says the CAGR between 2019 and 2023 will be 179.9%, whereas vendors will ship nearly 1.9b devices to market by the forecasted period.

Picture credit: (c)iStock.com/assalve

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US Senators start snapping Trump’s China olive branch

The President’s opponents have promised to be difficult and now they have begun the process of making it official.

A horde of Senators, led by the Republican representative of Arkansas Tom Cotton and Democrat Chris Van Hollen of Maryland, have tabled a new bill which will be known as the Defending America’s 5G Future Act. The bill aims to reinforce the Executive Order signed by Trump, prohibiting the removal of Huawei from the Commerce Department Entity List without an act of Congress.

Other Senators backing the bill include the Republican representatives of Florida and Utah, Marco Rubio and Mitt Romney, as well as Democrats from Virginia and Connecticut, Mark Warner and Richard Blumenthal.

“Huawei isn’t a normal business partner for American companies, it’s a front for the Chinese Communist Party,” said Cotton. “Our bill reinforces the president’s decision to place Huawei on a technology blacklist. American companies shouldn’t be in the business of selling our enemies the tools they’ll use to spy on Americans.”

“The best way to address the national security threat we face from China’s telecommunications companies is to draw a clear line in the sand and stop retreating every time Beijing pushes back,” said Van Hollen. “By prohibiting American companies from doing business with Huawei, we finally sent an unequivocal message that we take this threat seriously and President Trump shouldn’t be able to trade away those legitimate security concerns.”

Despite Trump’s efforts to demonstrate the power of US sanctions, it seems there are politicians who genuinely believe the Chinese threat to the US, even if Trump doesn’t. That, or they just want to be awkward.

It has appeared over the last couple of weeks that the President has only be stirring the national security pot as a means to drive China back to the trade talks table, but other politicians haven’t read the playbook; if this was a demonstration of strength, with the intention to back down one the message had been heard, things are not going to plan.

Rubio is using the argument Huawei is a front for the Chinese Government, Warner objects to the use of national security as a bargaining chip, Blumenthal has bought into the dangers of Huawei as a company and so does Romney, who is also protesting to IP theft. It should come as little surprise, Trump has done an excellent job of rousing xenophobia and fear of globalisation, there were always going to be objections when Trump climbed down off the pillar of propaganda.

Soon enough, Trump will learn he is not able to run the US like a private business. He might be one of the most powerful people in the world, but his word is not gospel; the separation of powers in US Government prevents such suspect strategies. Amazingly, despite efforts to escalate an atmosphere of discord, Trump is managing to convince Senators to reach across the aisle in opposition.

It’s a rather beautiful representation of unity.

Switzerland surprised to hear it will be regulating Facebook’s cryptocurrency

In a testimony before the US Senate Facebook indicated its Libra cryptocurrency will run from Switzerland, but it forgot to ask the Swiss if that was OK.

David Marcus, who is heading up Libra on Facebook’s behalf, testified before the US Senate Banking Committee in response to profound alarm from US lawmakers at the prospect of the social media giant developing its own currency. According to CNBC he said the data and privacy regulation of the currency will be overseen by a Swiss agency, as that’s where Libra will be based, but they say that’s the first they’ve heard of it.

In his testimony, which you can watch in full here if that’s your thing, Marcus said the Swiss Federal Data Protection and Information Commissioner (FDPIC) will keep an eye on the data protection side of things, which must have only offered partial reassurance to US senators worried their citizens were vulnerable to having their data exploited yet again.

Imagine their horror, then, when they read the CNBC report and learned that Facebook and its Libra pals haven’t even made contact with the FDPIC yet. This failing, later confirmed by Facebook itself, it just the latest slip-up in what has been a frankly shambolic launch. You’d think Facebook would have dotted every ‘i’ and crossed every ‘t’ before unveiling a grand plan to revolutionise the global banking system and its failure to even check in with one of the proposed regulators it just embarrassing.

As TechCrunch notes, the data privacy side of all this is arguably the greatest concern as there will apparently be little control over developers that use the platform. Given the negative consequences of a fairly minor misuse of Facebook user data by Cambridge Analytica it’s baffling to see Facebook be so cavalier about this. The likelihood of Libra ever being set free is, on balance, increasingly small.

Amazon becomes the latest giant to face Europe’s antitrust wrath

The European Commission has formally opened an antitrust investigation into Amazon’s dual role as a retailer and marketplace and how it uses data derived from independent retailers.

Europe has a track-record of taking on the industry’s biggest players on the grounds of antitrust and Amazon is next in-line. The case which the European Commission will attempt to prove is that Amazon abused its position of power as a leading eCommerce platform, using this position to aid it in selling its own products.

“European consumers are increasingly shopping online,” said Margrethe Vestager, Commissioner for competition policy. “eCommerce has boosted retail competition and brought more choice and better prices.

“We need to ensure that large online platforms don’t eliminate these benefits through anti-competitive behaviour. I have therefore decided to take a very close look at Amazon’s business practices and its dual role as marketplace and retailer, to assess its compliance with EU competition rules.”

This investigation is based around two points which the European Commission hopes to prove are anticompetitive. Firstly, Amazon collects marketplace data from its third-party partners to inform its own sales strategies. Secondly, with a ‘buy box’ only available to certain partners, and the Commission wants to understand what impact this differentiation has on competition.

On the first point, as the overarching platform owner, Amazon is privy to sensitive marketplace information from independent retailers who sell products through the platform. Using this insight to create more effective sales strategies is very likely to fall foul of Europe’s competition rules, should Vestager be able to prove a competitive advantage.

On the subject of Vestager, perhaps this is not the last we will hear from the bureaucrat. Vestager has worked up a reputation over the last few years for taking on some of the US’ most influential, and sometimes slippery, technology companies. With Vestager’s tenure at the European Commission ending in October, perhaps she will be aiming to make a bigger splash.

This is also not the first time Amazon has found itself on the bad-side of Vestager either. In 2017, Amazon was forced to pay €250 million in back taxes to Luxembourg, after the relief which was offered to the internet giant between 2003 and 2016 was deemed illegal.

The second point focuses on the ‘buy box’. This feature allows customers to add items from some retailers directly to their shopping carts. As not all retailers are able to access the feature, the European Commission would like to understand how this impacts competition. It is also not entirely clear why some retailers are able to access this feature and others are not.

Unfortunately for Amazon, this difficult situation is not one which will be resolved quickly. In such cases, due to the complexity of digital businesses and the vast amount of information involved, the European Commission has not set itself a deadline to conduct the investigation.

Another element to consider is the criticism faced by Amazon in the US. Not only has the eCommerce platform found itself as an enemy of the White House, the other aisle is poking. Senator Elizabeth Warren, a Democrat candidate for the 2020 Presidential campaign, wants to ban companies from operating and selling on a platform simultaneously.

With an antitrust case in Europe, potential enemies on both sides of the Presidential campaign, various Congressional committees investigating big tech, Germany’s anti-trust authority sniffing at the front door and its fulfilment centres never too far away from controversy, Amazon is not in the most comfortable of positions.

Sprint customers victim of another hack

Sprint is the latest telco to become the victim of cybercrime as an unknown number of customers have had their personal data eyed over by nefarious parties.

In a letter sent to customers, Sprint has suggested a huge amount of personal information has been exposed to the darker corners of the internet. The hackers gained access via the Samsung ‘add a line’ website, with the total number of impacted customers being unknown for the moment.

“On June 22, Sprint was informed of unauthorized access to your Sprint account using your account credentials via the Samsung.com ‘add a line’ website,” the letter states. “We take this matter, and all matters involving Sprint customer’s privacy, very seriously.”

An ‘add a line’ website is one utilised by third-parties, mainly device manufacturers, if customers want to add an additional phone line to an existing contract with a telco. Sprint offers this feature to customers who would like to add more individuals or devices to existing contracts.

This is of course not the first time Sprint customers have been the victim of the darker practices of the web, with the pre-paid brand Boost being compromised in March. Again, Sprint was not transparent with the severity of the breach, though in this instance a common technique called a credential stuffing attack was used.

Looking at the latest breach, exposure is quite severe. The hackers gained access to phone number, device type, device ID, monthly recurring charges, subscriber ID, account number, account creation date, upgrade eligibility, first and last name, billing address and add-on services.

Sprint has played down the risk in the letter, suggesting no other information ‘that could create a substantial risk of fraud or identity theft’ had been accessed. Sprint might want to play down the severity of the hack, but many will disagree with the laissez faire attitude.

“When attackers manage to hijack legitimate access rights, they can remain undetected for extended periods of time,” said Saryu Nayyar, CEO of cybersecurity firm, Gurucul.

“Many organisations don’t have the ability to identify subtle behavioural anomalies that are indicators of cyber threats. But with advanced machine learning algorithms it’s possible to spot behaviours that are outside the range of normal activities and intervene before the damage is done.”

Details are relatively thin on the ground right now, it is possible Sprint does not fully understand the severity of the breach at this point, though this is further evidence of security being an afterthought. Attitudes are changing for the better, though it is clear not enough firms are secure enough for today’s digitally-defined society.

S&P prepares to downgrade Vodafone after spending spree

Standard & Poor’s has suggested it will downgrade Vodafone from its current ‘BBB+’ credit rating should the European Commission approve its acquisition of Liberty Global assets.

Vodafone has struck an agreement to buy Liberty Global’s operations in Germany, the Czech Republic, Hungary and Romania for €18.4 billion, including debt, though S&P believe this acquisition could put it in a slightly precarious position. With S&P suggesting approval for the transaction could be granted during the next three months, the firm has placed Vodafone on its Creditwatch list.

This acquisition is not the only factor S&P has taken into account, but it seems it will be straw heavy-enough to break the camels back. Aside from this purchase, the financial services firm has also pointed towards spectrum auctions and operational challenges in Spain, weaknesses in South Africa and the re-pricing saga in Italy as contributing factors. India has not been mentioned by the firm, but the on-going difficulties here should also be noted.

In short, S&P believes the firm might be getting a little bit too carefree with its spending.

The Creditwatch function of S&P effectively informs investors of the firm’s closer inspection of a business which is under-going some sort of change. Inclusion on the list can either be positive or negative, indicating whether the credit rating has the potential to go up or down, and in this case S&P feel Vodafone is heading in the wrong direction.

This is all very complicated, and unless you have an avid follower of spreadsheets, there is a blur of numbers and multiples to get your head around. However, this is not good news for Vodafone and will create a negative perception around the business when engaging investors.

Currently, Vodafone’s credit rating is ‘BBB+’, which isn’t necessarily the worst position to be in. A ‘BBB’ rating, any one of the three measurements included, suggests a company ‘has adequate capacity to meet its financial commitments’, though adverse market conditions could impact its ability to meet financial demands. Cutting through the noise, Vodafone has too much debt and poor performance could put it in financial strife; its spending too much money according to S&P.

Looking at the state-of-play for Vodafone, it could be better. There are of course markets where the trends are heading in the right direction, see the UK, but quite a few where it is facing challenges. These trends combined with financial outlay is not painting the prettiest pictures.

The acquisition of some Liberty Global European assets is a big commitment, while the business has also had to fork out €1.9 billion during the German spectrum auction. The Spanish and Italian auctions were also expensive for the telco, while there is another on the horizon in the UK. This is not the time exposure to spectrum auctions has been highlighted at Vodafone, RBC Capital Markets put out its own negative outlook in January.

That said, spending is not an issue if everything is going well. However, macroeconomic weakness in South Africa is decreasing consumer spending on mobile contracts. Considering this is largely a pre-paid market, this should be seen as a worrying trend. Iliad is continuing to cause chaos with aggressive pricing strategies in Italy and Spain is another operational difficulty after losing the rights for domestic football, hitting TV subs hard. As mentioned before, India has not been mentioned by S&P, but it appears the worst damage is in the past following the merger with Idea Cellular.

Vodafone has of course made effects to limit the negative impact. Dividends have been cut and cost-efficiency strategies have been set into motion, while integration costs of the Liberty Global acquisition should be offset by operational synergies. This is not to say Vodafone is going under at any point in the future, but it is a consideration creditors will have to take into account.

This is not the worst news Vodafone could have expected to hear, S&P has said it does not expect to downgrade the credit rating of the firm further, but it is far from good news. It is a slight dent to confidence in the business.

Ericsson happy to remain on track with Q2 numbers

Swedish kit vendor Ericsson is determined to make life difficult for journalists these days by delivering solid but unspectacular quarterly numbers.

Gone, it seems, are the heady days of quarterly high drama that accompanied the end of the Vestberg era and the start of the Ekholm one. For the past year or so Ericsson has just boringly hit its numbers, sometimes beating them, sure, but never spectacularly so. Where’s the story in that?

We chatted to Head of Networks Fredrik Jejdling, who has stepped into the void left by the departure of Helena Norrman to handle the hacks at quarterly time. His core narrative was that Ericsson is laser-focused on hitting its 2020 target numbers and remains on course to do. We noted that a share-price fall of 5% indicates investors expected more and Jejdling, reasonably, declined to speculate on the workings of investors’ minds.

As ever Ericsson’s numbers are all about the networks division, which we focused on since Jejdling is in charge of it. As you can see from the tables below Networks accounted for the majority of the revenue and pretty much all of the growth. While North America continues to be by far its biggest region, Jejdling was keen to bring attention to North East Asia, which includes China and Korea, as a significant source of growth. He also echoed his CEO’s regular comments that global regulators could do a better job of making more spectrum available.

The big macro driver for this growth was, of course, 5G. Jejdling said client conversations are much more focused on upgrading to 5G than they were only recently and indicated that interest in is more globally ubiquitous than is was for 4G at a similar stage. He did stress however, in classic Ericsson style, that it’s still early days and nobody’s getting too carried away. “As long as we feel we’re meeting the key milestones on the 2020 track then we’re quite happy,” said Jejdling.

We didn’t really get into the other business units, so here’s some of CEO Börje Ekholm’s statement accompanying the quarterly report. “We see strong momentum in our 5G business with both new contracts and new commercial launches as well as live networks. To date, we have provided solutions for almost two-thirds of all commercially launched 5G networks.

“5G momentum is increasing. Initially, 5G will be a capacity enhancer in metropolitan areas. However, over time, new exciting innovations for 5G will come with IoT use cases, leveraging the speed, latency and security 5G can provide. This provides opportunities for our customers to capture new revenues as they provide additional benefits to consumers and businesses.

“In Digital Services we continue to execute on the plan to reach low single-digit margins for 2020. In Managed Services the strategy is to enhance the customer offering by relying more on automation, machine learning and AI, which will longer-term change and improve the margin profile of the business. Near-term margins are negatively impacted by the increase in R&D investments.

“Organic sales growth in Emerging Business and Other was 24% driven by a continued growth in iconectiv. In this segment we invest in initiatives that aim to scale and help create future business for Ericsson. With the exception of iconectiv, the portfolio is still in an early investment phase.”

Ericsson’s share price was down 6% at time of writing, which seems a bit harsh, but that probably reflects disappointment from investors that all the early 5G hype hasn’t translated into even bigger gains and a more bullish outlook. But 5G was never going to result in sudden massive spikes in investment and, however difficult it may find it to do otherwise, Ericsson is probably sensible to caution against too much exuberance at this stage.

Ericsson q2 19 numbers

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Arm shakes up the IP game

Arm has announced the launch of its flexible licensing model to allow customers to access to its IP without breaking their bank accounts.

It’s a model which has the potential to shift traditional dynamics in the segment as Arm aims to shift its customer base outside its traditional mobile market. With the connected era promising a ridiculous number of devices there are riches available for those who can prove their IP is suitable for this varied plethora. This seems to be the strategy in mind.

In short, customers pay a ‘modest’ fee upfront and then negotiate contracts when the team is moving towards production phase.

“By converging unlimited design access with no up-front licensing commitment, we are empowering existing partners and new market players to address new growth opportunities in IoT, machine learning, self-driving cars and 5G,” said Rene Haas, President of the Intellectual Property Group at Arm.

As it stands, Arm works like many other IP businesses. Customers pay the full-amount for access to licences and agree royalty payments, depending on the potential scale of the devices, upfront. Although this is the traditional way in which business is conducted, it is risky as it is an expenditure irrelevant as to whether the Arm IP is used in production or not.

The Arm Flexible Access model effectively delays payment. SoC design teams will be able to engage Arm and its IP before any licences or royalty payments are agreed. In short, customers will only pay for what they use when they get to production, paying only a trial fee at the beginning of the process.

Arm has said the Flexible Access portfolio includes all the essential Intellectual Property (IP) and tools needed for an SoC design. Prototypes can be designed and evaluated in numerous ways before any significant financial commitments are made. Theoretically, it should offer customers more opportunity to experiment without the fear of irreversibly-expensive mistakes or assumptions.

There are now three ways to work with Arm:

Arm DesignStart Arm Flexible Access Standard Licensing
Cost $0 for Cortex-M0, M1 and M3$75k for Cortex-A5 $75k entry package annual access fee$200k standard package annual access fee Upfront license fees based on license terms
Licensing Simple license agreement for DesignStart Pro Sign one-time access and manufacturing agreements Agreement terms vary to cover single or multiple uses
Support Community-based support Standard support and maintenance for all included products Standard support and maintenance for licensed products
Portfolio Click here Click here Access to the most advanced Arm IPLocked-down system-on-chip (SoC) roadmaps with multiple uses of specific Arm IP products

“We are working on several products to address AI use cases in automotive, IoT gateways and edge computing,” said Nagendra Nagaraja, CEO of AlphaICs, an AI start-up. “For this, we need access to a wide range of IP and the ability to rapidly evaluate, prototype and design. Arm’s Flexible Access model gives us that agile approach to IP for the first time.”

This is where the model can be incredibly beneficial for both the ecosystem and Arm. Companies like AlphaICs would have struggled financially to scale under the traditional IP model, it is a 50-strong start-up exploring an embryonic segment of the technology industry. In paying a modest amount up-front, AlphaICs has the opportunity to prove the business case before making any significant financial commitments.

This approach obviously helps the start-ups who are exploring unproven ideas, but it also gains Arm traction in currently unprofitable segments which could scale extraordinarily quickly. AlphaICs is aiming to create the next-generation of AI compute for autonomous edge and data centre applications, not a traditional stomping ground of Arm, but there are certainly growth opportunities.

Another Trump tweet paints an uncomfortable picture for Google

Twitter is the battlefield and an iPhone his weapon; the hawkish President Trump has seemingly declared war on the hipsters and IT geeks of Google.

Once again, with little evidence, Trump has declared war on a technology company. This time however, the Commander in Chief has directed his venom towards a domestic enemy of the Oval Office. Thanks to the seemingly unfounded accusations of tech entrepreneur Peter Thiel, the President now has the idea Google is under the influence of the Chinese Government.

Speaking at a conference, Thiel used his keynote speech to launch an attack at the internet giant. Theil posed three questions to the audience; firstly, how many foreign intelligence agencies have infiltrated Google’s AI work. Secondly, whether Google’s management team believes it has been infiltrated by China. And finally, why it was working with the Chinese Government and not the US Government.

To be clear, aside from Thiel’s accusations, there is little evidence of such grand conspiracy theories.

That said, the burden of truth is not a consideration which is greatly appreciated by the current administration. Throughout the entire Huawei saga, no evidence of collusion with the Chinese Government has been presented to the general public, and it seems it hasn’t been presented to allied Governments either. Numerous nations have refused the call to ban Huawei without suitable evidence, and the resistance continues today.

Bearing this in mind, the Googlers should have something to worry about. Trump has demonstrated he can make life awkward for those who get his wrong side.

For the moment, there are no details of what an investigation would entail or whether the threat of treason is genuine. Another trend which we have witnessed over the last 29 months is the huffing and puffing nature of the President. This might be nothing more than a bicep flex against a company deemed to be a domestic enemy.

Trump has had a difficult relationship with Google over the last few years, with the President and many of his supporters suggesting conservative voices are being supressed on the digital highway. Perhaps we should not be surprised Trump has targeted another mainstay of Silicon Valley.

One has to question how many fronts the Trump war campaign can fight simultaneously; the enemies of the White House are starting to add up.