Economist 8/7/15

  1. Cyanogen was born in 2009 as an open-source project. The platform is fully compatible with Android but is also more customisable and boasts more features, such as better privacy settings. Although installing it is tricky and often voids the device’s warranty, around 50m smartphone owners worldwide have done so.Mr McMaster convinced Steve Kondik, its founder, to turn it into a business in 2012. Initially, investors were reluctant. But Cyanogen has since raised $110m, with several big Silicon Valley venture-capital firms getting involved.Cyanogen is best seen as an attempt to unbundle this package. Upstart handset-makers, such as Micromax in India and Kazam in Europe, want to stop competing mainly on price and tailor their products to specific markets, for instance by integrating local mobile services. The model is China: most of Google’s services are banned or unavailable there.Mobile carriers, for their part, would welcome more variety in handsets and a less dominant Google; Telefónica, a global telecoms operator, participated in Cyanogen’s latest funding round.
  2. IN FEBRUARY and April the German blog Netzpolitik.org published two posts with leaked information about the plans of Germany’s secret service to expand its digital-surveillance budget. They received little attention.But on July 24th the blog’s publishers, Andre Meister and Markus Beckedahl (pictured), received a letter from Germany’s federal prosecutor saying that they and their anonymous sources were being investigated—for treason. This pressed not one, but two German panic buttons: data privacy and press freedom.Angela Merkel, the chancellor, and Heiko Maas, the justice minister, distanced themselves from the prosecutor, Harald Range. The case will probably be dropped.
  3. Foreign manufacturers are set for a race into Iran to take advantage of a car-hungry population of nearly 80m. Its huge domestic market is the largest in the Middle East after Egypt’s.French carmakers, once the market leaders in Iran, are seeking to re-establish their grip. PSA Peugeot Citroën, which alone accounted for around a third of sales in 2011, and Renault are well-placed, given their pre-sanctions presence, to join forces with the domestic carmakers that now account for most sales. Indeed Peugeot has agreed to restart production with Iran Khodro, its former partner.They will have their work cut out. Peugeot’s rapid exit from the country in 2012, after joining an alliance with General Motors, still rankles. That could leave the door ajar for Chinese carmakers.
  4. After heated arguments and a vote that passed by three ballots to two, on August 5th the SEC approved rules (themselves tied to provisions in the Dodd-Frank act of 2010 that overhauled financial regulation) which will require public companies to publish the ratio of their chief executive’s pay to that of their median earner, starting in 2017. The reality is that the proposal was included in Dodd-Frank after lobbying by trade unions aiming to shame bosses into paying themselves less and lowlier workers more.The final version of the rules seems riddled with potential loopholes. Companies will be able to use statistical sampling to derive median pay. Firms will also be allowed to exclude 5% of non-American employees. Allowances will be made for differing costs of living in foreign countries and for countries banning the collection of data. Meanwhile, foreign, private and even some publicly-listed American companies will be exempt.
  5. The financial crisis caused commercial-property prices to collapse and rooms to remain vacant. Hotels have suffered relentless disruption from the internet. Yet the large American and European hotel firms are thriving.The industry’s favoured measure of success, revenue per available room (RevPAR, revenue divided by rooms available in a given period), has climbed for the past five years in America, surpassing peaks in 2000 and 2007, according to Smith Travel Research. Hoteliers are nimbler and more resilient than they were two decades ago. For one thing, they own fewer hotels. Of the 4,942 hotels operated by InterContinental, a giant British firm, it owns just eight. The “asset-light” approach brings in franchising and management fees. Hotel firms have also broadened their base of customers in two ways. First, they have created a variety of lodgings for different travellers. The top five hotel companies have more than 60 brands between them, serving everyone from families to thrifty businessmen and health nuts. Second, the big chain hotels are courting more travellers around the world. International brands swiftly moved to control about half of the rooms in fast-growing markets such as China and India. Accor, a French firm, is trying to fight online travel agents by beefing up its own booking system and opening it to independent hoteliers. Hyatt, an American firm, has invested in Onefinestay, a rival to Airbnb.
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