Lachlan MacGregor

In December I published an article concluding that Google’s Waymo autonomous car division was well ahead of the competition. I stand by that assessment, and its hardly controversial. But I underestimated how much Tesla’s promotion of its own efforts were confusing customers and potentially investors about their place in the... Show More

Lachlan MacGregor

Cable media stocks fell sharply after AT&T announced video subscriber losses, following Comcast and leading to $60 billion being wiped off their valuations. Investors love Netflix but competition is coming. Amazon may move into the $560bn prescription drug market. And more exciting technology developments in transport. Show More

Lachlan MacGregor

This week the news was overrun with announcements by car makers expanding their electric vehicle ambitions. Elon Musk presented SpaceX's plans for colonisation of Mars, as well as rockets that could allow commuting to anywhere on Earth in an hour - for the price of an economy ticket. And Google... Show More

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Lachlan MacGregor

This week there was a major sell-off in tech - including Facebook and the rest of the FAANGs, Instagram announced it has reached 800 million users and at this pace could be larger than Facebook, and Tesla has new competition in the Electric Vehicle market from Dyson. Show More

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Lachlan MacGregor

This week we saw Apple’s share price suffer a hangover from the launch of the iPhone 8 and iPhone X. Tesla surprised the market with the rumour that it is partnering with AMD for an autonomous driving chip, knocking Nvidia’s shares. Google bought HTC’s Pixel hardware team. And amusing (and... Show More

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Lachlan MacGregor

Last Friday the US Technology Index fell almost 3%, with selling concentrated in the largest stocks: Facebook, Amazon, Netflix and Google (the so-called 'FANGs') plus Microsoft and Apple were all down 3-5%. The slide resumed on Wednesday and Thursday and investors must question whether this will continue. I think there... Show More

Lachlan MacGregor

In 35 days Alphabet will expense stock-based compensation in their non-GAAP results. A number of tech titans, including Facebook, have also broken rank from the industry. This shift could change the perception of value in many high-flying stocks in 2017 - a sharp reminder to always focus on real earnings. Show More

Hi Jovan, I agree, I don't think we should dismiss Tesla. In particular they potentially have a strong advantage in autonomous by collecting data from their existing customer fleet. My comment was perhaps too flippant as I needed to keep the article short. However many in the industry are skeptical about their approach to autonomous driving which is different to the rest of the industry. The key difference is they are opting not to use LIDAR sensors, which are sensors which use laser signals in a similar way to radar to produce a very accurate and precise three dimensional image of objects. Musk argues it isn't necessary to use LIDAR, which are currently expensive, and says they are "a crutch" to the rest of the industry. Instead Teslas are equipped with eight cameras supported by a forward facing radar as the primary technology, and 12 ultrasonic sensors for 360 degree vision. Waymo on the other hand uses three different types of LIDAR sensors, five radar sensors and eight cameras. The supporters of Tesla's strategy say that cameras combined with the advancements in machine learning will be sufficient - after all, that is what human's use. If Musk is right then Tesla should be able to develop a cheaper autonomous system and would have an advantage (though I note that Google is focused on reducing the cost of LIDAR and has reduced the cost by 90% already). But Tesla's is a higher risk strategy and may compromise their path and timing to full autonomous driving. The advantage of being first is likely to be huge given both the ride-share business model (natural local oligopolies) and the scale advantages of cost and autonomous learning opportunities. Tesla's skeptics say that the decision not to use LIDAR was forced on Tesla - they wanted to equip their existing fleet with sensors to collect data, yet couldn't afford to put LIDAR on vehicles. Some believe that Tesla know LIDAR will be necessary and will add this down the track. And coming back to the first point I made about Tesla's data. That data is potentially Tesla's real advantage as it has a fleet of tens of thousands of cars collecting data. Some argue that this data is unmatched by other makers, but I would be careful of direct comparisons. Tesla's data isn't of the same quality - they have access to the cars speed, acceleration and braking as well as short video clips. But this data is anonymous (not connected to a car), probably not contiguous and likely very difficult to train a system on. Waymo's data is far more detailed, using LIDAR and collecting the full suite of contiguous data about cars and their situations. Waymo then build full computer models and run simulations with thousands of scenarios. Don't take the simulated miles as a disadvantage vs the real thing - but rather as an important step to test the full range of scenarios. In summary, I'm certainly not dismissing Tesla and they are making great progress on a limited budget. They are doing much better than most automakers, whilst simultaneously disrupting the car industry with electric vehicles. Incredible. But I am skeptical of some of their statements which generate a lot of PR but are often not robust - like Musk's boast in 2016 that a Tesla would drive autonomously from coast-to-coast in the US by the end of 2017 (it still hasn't happened). The rest of the industry are consciously taking a different approach, and I can see why Tesla need to have taken their approach. I'm keen to hear if you see it differently though and why you think that Waymo maybe doesn't have a lead?

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