Consumer Technology World Brief

The recent unveiling of the Microsoft Office for IPad is not just a standard release of software with additional OS support but it signifies a more symbolic gesture in terms of the change in direction of Microsoft’s strategy in terms of support for crucial support on competing platforms. Rather than offering basic stripped-back versions on IPad they have released a slick and efficient version showing their seriousness in supporting the Apple platforms. The other massive news in the Consumer Technology world was the acquisition of Oculus VR Inc., a 20-month-old maker of virtual-reality goggles, by Facebook for USD 2 billion in cash and stock. This move is seen as a part of Facebook’s strategy to be the leading ecosystem in connecting people across all kinds of devices and modes of communication. In the battle for supremacy over online content solutions Amazon is planning to take up a new strategy by providing an advertising-supported streaming television and music-video service. This move, different from its current model of linking video to its USD 99-a-year Prime subscription service, is considered as one of the strategic moves planned by Amazon to transform itself from a retailer into a key player in the multimedia domain.

North America Review

Consumer spending in the U.S. climbed by the most in three years, leading to a more rapid economic growth in the fourth quarter than previously estimated and showing the expansion had momentum heading into this year’s harsh winter. Analysts claim that this year’s slowdown is partly due to heavy snowfall and freezing temperatures. Between December and February, snow covered 1.42 million square miles in the contiguous U.S., the tenth-largest seasonal snow cover in records dating to 1966 and energy demand was 27 percent above average. The theory of the effect of the heavy snowfall on economic growth was further strengthened by the fact that robust consumer spending on services, particularly health care, helped accelerate the recent expansion in the economy. In another important event in the U.S. that could considerably affect the growth and usage of new-age currencies like Bitcoin, the U.S. Internal Revenue Service made its first substantive ruling on this issue by ruling that it will treat Bitcoin as property for tax purposes, applying rules it uses to govern stocks and barter transactions. This guidance has both positive and negative significance in that it will provide certainty for Bitcoin investors and at the same time include income-tax liability that wasn’t specified before.

Asia Review

In the Asia region, the sensitive issue of international trade and protection of local economic ecosystems came to the fore (again) with the recent protests in Taiwan over a China trade pact that opens 80 of China’s service sectors to Taiwan and 64 Taiwanese sectors to China. It is being claimed by the protestors that the trade deal was rushed through and could have significant negative impact on Taiwan’s economy and political ecosystem. The officials are trying to highlight the significance of this trade pact to the future economic growth of Taiwan while the protestors are particularly worried about its negative impact on small Taiwanese companies and the potential increase in influence of China on Taiwan’s economy. Asia’s major economies finished the first quarter on a weak note with manufacturing surveys in China and Japan fuelling expectations that policymakers will be forced to act in coming months to prop up faltering growth. Manufacturing PMIs hit multi-month lows in China and Indonesia while South Korean exports, PMI data suggest recovery of their economy. A sales tax rise in the Japanese market projects a weaker business outlook in the short term in Japan.

Europe Review

The biggest event that had the attention of all of Europe and other superpowers in the recent weeks was the Ukraine crisis – an ongoing international crisis principally involving Russia and Ukraine. The key aspects of the crisis were the secession of Crimea and its subsequent accession of the Republic of Crimea and Sevastopol in the Russian Federation. Even though the U.N. General Assembly passed a non-binding Resolution that declared invalid Crimea’s referendum in March the conflict has still not been resolved and the effects of this crisis are slowly being seen in the European economy due to the slowing and stagnation of trade with the affected regions. As per a recent Bloomberg report, Europe’s two-speed economy was underscored in data showing strengthening in the German labor market just as Italy’s jobless rate reached a record. The divergence between the region’s third-biggest and largest economies highlights the challenge faced by the European Central Bank’s Governing Council to ensure a sustainable and more consistent economic recovery across the European region.