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Vending Machines: Candy Bars, Sodas and Cars?

Ford Motors and e-commerce giant Alibaba has opened the first car vending machine in Guangzhou City, China. This bold move has transformed the traditional car-buying model and made it part of the online shopping industry – an arena where Alibaba has long held dominion over.

This new development will undoubtedly trigger a ripple effect in the automotive industry. Once seen as the last bastion of brick-and-mortar sales, car buyers can now begin the process on their smartphones, via Alibaba’s e-commerce app. The actual visit to the vending machine will be to pick up and test drive the car of their choice. This cuts down the car buying process to literally minutes.

Try Before You Buy

According to Ford, buyers get a three-day trial before deciding whether they would like to buy the car or not. This offers potential buyers a generous “try before you buy experience”, especially for young professionals who are buying cars for the first time.

So how does it work? Users of Alibaba’s Tmall online platform can use the Taobao app to browse dozens of car models. They only need to snap a selfie to confirm a booking for a test drive. Under the car-vending scheme, users need a score of 700 or higher on Sesame Credit, Alibaba’s social credit scoring system, before they can schedule a test-drive.

From there, they will pick up their car of choice from the vending machine and take it for a spin. Alibaba says their car vending machine is an innovative sales model that had made buying cars as easy as buying a can of soda. It eliminates negotiations with sales people since inquiries are made on a smartphone. The car brand Alibaba is pushing is Ford. After the test drive, the end goal is to have the buyer purchase a car at the nearest Ford dealership.

The vending machine technology will eventually be rolled out to the rest of the car industry. Alibaba is also working with Ford Motor to find ways both companies will be able to upgrade customer experiences in the industry.

Alibaba’s Foray in the Car Industry

Alibaba has been aiming its sights on transportation earlier with its investment in the electric car start-up Xiaopeng Motors. This is in line with its new retail policy that will involve merging the online and offline company businesses.

Xiaopeng, founded three years ago, is chaired by He Xiaopeng, former Alibaba executive and founder of the UCWeb. The startup has additional investments from the luminaries of the tech domain and venture capital.

Xiaopeng aims to build internet-connected cars, which led the company to recruit core employees from the major automakers like Ford Motor Co., Guangzhou Automobile Group Co Ltd, and BYD Co Ltd, as well as from tech companies Samsung and Huawei. Internet connection is not necessary for a V2V vehicle, but will allow the car to be able to access and communicate with other vehicles with internet-of-things (IoT) functionality in mind.

Xiaopeng will produce its first batch of the prototype electric SUVs that will be featuring intelligent driving, mobile-phone-enabled remote control functions, and self parking. Xiaopeng motors collaborated with Chinese automaker FAW Group subsidiary Haima Automobile to begin producing its first model this year, with the finalized version of the electric SUV expected to hit the market before the end of 2018.

Xiaopeng Motor’s clean energy vehicle startup fits well with Alibaba’s strategic focus in the automobile sector. Alibaba’s open-platform approach will continue as the company works with a range of automotive manufacturing partners to benefit the Chinese consumers.

Alibaba’s venture in the automobile industry came after the BAT companies – the acronym of China’s major players Baidu, Alibaba, and Tencent – made their own investment in electric vehicle development.

Tencent acquired 5 percent, worth $1.78 billion stakes in Tesla in early 2017. Baidu and Tencent both invested in the vehicle start-up Nio. Baidu has also invested in another electric vehicle start-up WM Motor Technology.

Alibaba has also invested in other vehicle-based tech ventures including Grab in Southeast Asia.

 

The Warren Buffett Investment Strategy And Speculations of Buffett Eyeing a Big Purchase

Berkshire Hathaway has $116 billion in cash according to its 87-year-old CEO, Warren Buffett. However, he isn’t exactly too thrilled with this, expressing it in his annual letter to shareholders. In fact, he goes on to say that this extraordinary level of liquidity earns a very small amount and is nowhere near the level that they wish to have. They will be more than happy once they get this amount redeployed to more productive assets—as according to the Warren Buffett investment strategy.

Most people won’t complain about having excess money in their bank accounts. But for the most successful investor of all time, money not being invested is money that doesn’t earn. This case is the reason why Buffett’s net worth is now up to $86.6 billion and isn’t showing any signs of plateauing any time soon. Still, this fact doesn’t mean that Buffett is going for a hasty acquisition deal. In fact, Berkshire Hathaway is on an acquisition drought as it has barely made any purchases in 2017.

The year was rough for Berkshire Hathaway as their attempts in buying Unilever ended in failure. Its only sensible purchase last year was a standalone deal in buying a stake in Pilot Travel Centers LLC. Buffett notes that one of the biggest barriers for purchase was the steadily increasing purchase price as well as the low-interest rates.

Looking for the Next Big Investment

Nevertheless, speculations are now high on what could be the next big purchase for the company. And according to a recent interview, Buffet isn’t ruling out the option of buying an airline. If this speculation does materialize, then it wouldn’t be surprising—as Berkshire already has stocks in four major airlines. The company has already bought stocks in American, Delta, and United Airlines back in 2016 and has recently bought stocks in Southwest earlier last year. Interestingly, all four stocks rose by 2 percent, which adds incentive to acquiring any of the four airlines.

United is possibly the cheapest of the four which is worth $20 billion, while Delta is the most expensive at $40 billion. However, some speculate that acquiring Southwest would be a better deal due to its strength in the Domestic market and it is slightly cheaper coming in at $34.1 billion. If Buffett does go through with an airline acquisition of any of the four, he would still have more than double the amount left for another huge buy.

Other Possible Investment Options Aligned with the Warren Buffett Investment Strategy

Still, until Buffett makes a move, people can only speculate on what he will buy next. The amount of $116 billion is a huge amount of money and opens up a lot of potential investment and purchase options. Berkshire is also rumored to be considering a food and consumer purchase such as General Mills or Kellogg or even Mondelez, which owns Oreo. There are also rumors of buying Coca-Cola as Berkshire already has 400 million shares, making them the biggest investor in the company.

Others think the Warren Buffett investment strategy should include him purchasing a utility company such as NextEra Energy. And going by his track record, he always considers buying companies that are basic necessities. Still, others think that he should double up on tech stocks as five of the biggest companies in the US are all in the tech sector. Berkshire has recently increased its stakes in Apple by 23 percent and now owns 3.3 percent of the company. With the numbers steadily growing in this sector, perhaps another purchase or an increase in stocks in the tech area is imminent as well.

Qurate Retail Group – The bold overhaul that QVC and HSN are undertaking

Liberty Interactive, the owner of QVC, is joining forces with long-time rival, the Home Shopping Network (HSN), in a $2.1 billion QVC and HSN Merger deal.  This bold move merges the two home-shopping television networks at a time when the retail world is experiencing an unprecedented upheaval.

What’s even more surprising is that the merger will take them a totally different path – they will now be curating experiences, conversations and communities for discerning shoppers. The new company will be known as the Qurate Retail Group and will specialize in making shopping a more pleasurable customer experience.

QVC’s SEO Mike George will become the new CEO and president, while Greg Maffei, currently president/CEO of Liberty Interactive, will become chairman.

Combined Power for a Competitive Edge

Maffei believes that the increase in the scale after the merger will allow them to effectively compete in the evolving retail and digital environment.

It is also significant in terms of what the merger hopes to achieve. The new company is named Qurate, with the logo to match, expounding on creating a new user experience for buyers. The emphasis is no longer on selling individual items on TV.

Rather, there will be curated content catering to specific market segments. The product curation will also extend to feedback with the customers, instigating conversations over the long term.

According to Mike George, “Our new logo and name reflect our unmatched expertise in curation, which goes far beyond product.”

The idea behind curation is to allow the customers to choose to follow product segments and groupings according to their individual preferences. Although this is done by online stores, this has not been attempted on TV buyers before. 

“We will be unrivalled leaders in curating experiences, conversations, and communities for millions of highly discerning shoppers — bringing joy, inspiration and humanity to shopping,” says Mike George.

Qurate will be made up of eight retail brands, QVC, HSN, Zulily, Ballard Designs, Frontgate, Garnet Hill, Grandin Road and Improvements. Each one is focused on taking shopping beyond websites and traditional brick-and-mortar stores.

The new company will be riding on the influence of social media and social networking sites such as Facebook, Instagram, and Snapchat to get a pulse of what buyers want.

Variety quoted Maffei in a statement: “Qurate Retail Group will be a new venture in more ways than just a change of name. We will be a select group of like-minded businesses that provide customers with curated collections of unique products, made personal and relevant by the power of storytelling, combining the best of retail, media and social.”

Qurate has also formed a new ventures deal which is tasked to develop new retail concepts and as well as explore expansion opportunities. This arm is being led Darrell Cavens, co-founder of Zulily.

Keeping Up with the Changing World of Retail

The merger between Liberty Interactive and HSN happens just as Amazon seems to be non-stop in its dominance in the online marketplace.  At the same time, rival Walmart is refocusing its attention on e-commerce by purchasing promising startups, which include Bonobos and Jet.

The continuous rise of e-commerce in the retailing world has resulted in trendy clothiers like J. Crew to struggle for survival. A number of retailers such as Radio Shack and American Apparel have filed for bankruptcy protection.

The once dominant home-shopping television networks are not exempted from the crippling online competition. Both HSN and QVC are experiencing a decline in their sales. As QVC’s sales have slowed, HSN experienced a 3% decline in its sales last year. A sign that not all is too well with HSN was the departure of its long-time executive Mindy Grossman, who is now running Weight Watchers International.

The rationale behind the merger of the two home-shopping television networks is to combine resources and cut costs and at the same time gain scale. The two networks, QVC and HSN, will remain as stand-alone operations under the new QVC Group structure after their merger.

Business Dealings

The merger deal is an all-stock transaction. Liberty Interactive is technically buying the 62% of HSN that it does not own yet. Liberty Interactive will then spin off the company’s non-retail assets, such their stakes in the cable operation of Liberty Broadband and Charter. Liberty Interactive will rename what remains of their operations as the QVC Group.  The new company will be composed of HSN, QVC and Zulily, which Liberty bought two years ago for $2.4 billion.

HSN, which is based in St. Petersburg, Florida, broadcasts to 95 million households in the US via cable and online streaming. It sells home apparel brands through the company’s Cornerstone business through catalogs, e-commerce websites, and 14 outlet and retail stores. The Cornerstone brands include Ballard Designs and Frontgate. The company, which employs about 6,000 workers, has a reported sales of $3.6 billion in 2016.

 

 

 

Nuclear Fusion Energy: A Step Closer Towards Being Harnessed

The Massachusetts Institute of Technology (MIT) and Commonwealth Fusion Systems (CFS) recently unveiled plans to have commercially viable nuclear fusion energy systems in 15 years. The partnership between MIT and CFS is backed by funding from the Italian firm ENI worth $50 million. This is only an initial investment and it is expected that the venture will have more funding in the coming years, considering that a full-fledged power plant can cost upwards of a billion dollars.

The Challenge

Nuclear fusion is the power behind the sun’s energy. The sun uses light chemicals, specifically hydrogen, and fuses it with other hydrogen atoms to create energy. This reaction occurs in the center of stars which reach extreme temperatures in the hundreds of millions of degrees Celsius.


Researchers trying to recreate this nuclear fusion here on earth first had to overcome the heat problem. Metals would melt before reaching sun-level temperatures and matter would exist as plasma. To keep the heat under control, magnets are used to control the plasma.

The CFS and MIT collaboration is not a magnet science experiment. Its goal is to create an economically viable fusion reactor. The MIT solution (called “Sparc”) revolves around newly-developed magnets built around a superconducting material. With it the MIT scientists are designing a much smaller and less expensive fusion chamber. The material is called yttrium-barium-copper oxide or YBCO, and it is fabricated as a coating for a tape.

Sparc project leaders, Georg Bednorz and K. Alex Muller were awarded the Nobel Prize in 1987 for their research on high temperature superconductivity with the use of a lanthanum-based material. Further research by Ching Wu-Chu, professor of Physics at the University of Houston led to the discovery that replacing lanthanum with yttrium would raise the required temperature for superconductivity to 92K.

The advantage of this method is that liquid nitrogen could be used to cool the material due to its boiling point of 77K at normal atmospheric pressure. Liquid nitrogen is commercially available, and its most popular use is in modern commercial kitchens.

Notable Nuclear Fusion Research

There have recently been other notable discoveries in the field of conductivity conducted at the University of Alabama and University of Houston. In March 2010, Roy Weinstein, professor emeritus of Physics at the University of Houston was awarded a patent for superconductive magnets cooled by liquid nitrogen. He applied for the patent in March 1990.

The magnet Weinstein developed has a strength of 2 tesla. As of March 2018, the world record for magnet strength is held by a YBCO magnet which was created by the National High Magnetic Field Laboratory. It has a strength of 32 tesla.

 

With the YBCO superconducting magnet, less energy is used to create the stabilizing magnetic fields. It also has a stronger magnetic field, which in turn squeezes more energy out of the fusion fuel. The MIT project will be about 1/65th the size of the International Thermonuclear Experimental Reactor (ITER) which is currently under construction in southern France.

There are other technologies being developed worldwide to harness nuclear fusion. Besides Sparc and ITER, there is also the Wendelstein 7-X stellarator project in Germany. With the initial investment of $50 million, Sparc will be used to study the use of the YBCO super magnets and how capable the material is in keeping a “stable reaction.”

A stable reaction is when the resulting fusion sustains itself within the plasma enclosure, with fusion continuing until all the hydrogen fuel material is spent, or the fusion process is shut down by the researchers. Once that happens, it means that fusion can be controlled with the use of super magnets and the plasma chamber configuration.

Nuclear fusion would provide an alternative energy source to fossil fuels. It would also relieve the reliance on nuclear fission which yields nuclear waste. Successful development of a working nuclear fusion plant will enable harnessing huge amounts of energy enough to reverse the results of burning coal and oil.

Proponents of the project understand that developing a full-scale nuclear fusion plant capable of producing 100-500 megawatts of energy will cost billions of dollars. If the super magnet experiments provide positive results, it would be much easier to raise the needed money for the succeeding phases of development.

Development Efforts Not A Race

Here’s what makes these bold actions by different development groups truly unique. They aren’t competing with one another. The various research projects working towards a nuclear fusion reactor are not racing to see who creates it first or to prove this technology is superior to that. Rather, these varied projects, along with other research projects worldwide, are meant to tackle specific pieces of the problem. The resulting information or research breakthroughs are intended to be shared among the other teams.

The situation is much like the development of the first nuclear reaction where there were also multiple engineering problems and approaches under development at the same time. Today’s research projects may or may not lead to new technologies individually, but the results of each provide direction for other projects.

Nuclear Fusion Benefits

Research into nuclear fusion has been going on since the first nuclear fusion bomb was first tested in November 1952. Two of the things that immediately hampered development of nuclear fusion reactors were the amount of energy required to start a reaction and the high temperatures following a reaction. Keeping a reaction under control has been another stumbling block to development.

The advantages of nuclear fusion, however, are tremendous:
• A purely fusion-based nuclear reactor does not have any radioactive by-products
• Fusion does not release extra neutrons which can produce radioactive materials
• The reaction only requires hydrogen as fuel which is plentiful element
• The reaction releases an enormous amount of heat and energy

Initiating the Reaction

In 1977, the Lawrence Livermore National Laboratory built the Shiva laser to study inertial confinement fusion (IFC). Shiva was a powerful infrared neodymium glass laser composed of 20 beams pointing at a single target. Shiva was named after the Hindu god with multiple arms, in reference to the multiple lasers it uses.

The goal of the Shiva experiments was to recreate temperatures found in the center of the sun. If they could do that, for a split-second there would be enough heat to generate a nuclear fusion reaction.

Short of a nuclear fusion explosion, the concentrated heat of the lasers was the only method believed to be able to spark a fusion reaction. Scientists using different lasers as well as an increasing number of lasers worked on this problem for almost 40 years. Although promising, the main hurdle of using lasers is the cost in terms of energy used. The energy used was more than the energy produced, which made commercial production impractical.

The use of lasers led to new machines which tried to create a reaction. These efforts resulted in even larger machines and more costly experiments and failures. Eventually researchers decided that further studies couldn’t be sustained by only one country. This lead to an agreement between the United States and the then Soviet Union to jointly develop a laser initiated nuclear fusion development project.

Called ITER, the original collaborators included the United States, the Soviet Union, the European Union and Japan under the International Atomic Energy Agency (IAEA). Since the 1980s, other countries have joined the research effort, including India, the South Korea and China. The ITER site is currently under construction in the south of France. The ITER is expected to cost more than $20 billion when it is finished.

Controlling the Reaction

Since regular materials are not able to hold and keep the reaction in a stable state, other ways have been developed to enable a controlled chain reaction. Scientists now use a torus-shaped containment chamber with powerful magnets to create a magnetic field strong enough to control the confined plasma. Called a tokamak, this has proven to be the most promising solution to house a nuclear fusion reaction.

In 2015, a German research center successfully fired up the Wendelstein 7-X stellarator. It was developed over a period of ten years at a cost of more than $1 billion. Although technically still a torus, the stellarator functions more like a Moebius strip as super magnets twists the plasma around inside the containment unit. The size of the stellarator is a relatively small 16-meters wide, with 50 6-ton magnet coils inside. The resulting plasma twists help to make the reaction more stable.

The Wendstein 7-X has proven to have a 1 in 100,000 error rate, which the researchers called “unprecedented accuracy.” After providing a small-scale proof of concept for stabilizing the reaction, the next step will be to make it efficient. with the goal being to produce considerably more energy output than the energy used.

Each one of these research projects provides an important step towards harnessing nuclear fusion. Once the reaction is both stable and controllable, we’ll be on our way to having a nearly inexhaustible, clean and natural source of energy.