Apple continues its transition from products to services

Quarterly revenues for gadget giant Apple were up year-on-year but down for the full year, as the company increasingly relies on services.

The headline of Apple’s latest quarterly announcement read: ‘Services Revenue Reaches All-Time High of $12.5 Billion’. This achievement masked the fact iPhone revenues continue to decline, which in turn dragged full year revenues into the red. On the whole, however, these were solid results for Apple and it seems to be managing its strategic transition well.

“We concluded a groundbreaking fiscal 2019 with our highest Q4 revenue ever, fueled by accelerating growth from Services, Wearables and iPad,” said Tim Cook, Apple’s CEO. “With customers and reviewers raving about the new generation of iPhones, today’s debut of new, noise-cancelling AirPods Pro, the hotly-anticipated arrival of Apple TV+ just two days away, and our best lineup of products and services ever, we’re very optimistic about what the holiday quarter has in store.”

The services side of things was the focus of the tech press in its analysis. Apparently Apple pay transaction volume overtook that of PayPal in the most recent quarter. A significant initiative that illustrates the symbiosis of the services and hardware side is Apple’s decision to offer interest-free financing of new iPhones through its own credit card. This will also be a significant blow for the postpaid phone contract sector as subscribers will no longer be dependent on operators for handset financing.

The fact that iPhone shipments are declining is not disastrous, so long as Apple maintains the massive iOS installed -base. As the Apple Pay numbers show, Apple’s services are bound to do well so long as there are lots of iPhones in use. The financing initiative implies Apple is worried about that installed-base declining, however, and may not be the last time we see Apple further incentivising people to buy iPhones.

The columns in the table below are as follows: fiscal Q4 2019, Q4 2018, full fiscal year 2019, full year 2018.

Highways England propose plan to make roads more visually appealing

Riding for a long time can be tiring, especially when you’re looking at the same kind of landscape for hours on end.

This is the case with many of the UK’s busiest roads and according to statistics from the Department for Transport, fatigue led to 67 deaths and 479 serious injuries in 2016.

To combat fatigue, Highways England have proposed a ten-point plan to make the roads more visually appealing and environmentally stable. Previous projects have involved using traditional dry stone wall to strengthen the connection between the A590 and the Cumbrian landscape and a bridge that provides a safe crossing for small animals on the A556 in Cheshire.

By creating better vistas, it’s hoped that motorists will be able to maintain their focus for longer. Chief highways engineer, Mike Wilson, has given his opinion on the plan. “Creating different vistas for people to consider is a way of stimulating the road user. You might argue they’re safer because of it.” Wilson was asked about the possibility of drivers being distracted by the scenery and he responded by saying “they should be focused on the road. But fatigue is a challenge for road users.”

The kind of structures that make the environment more interesting include the Angel of the North in Gateshead and the Willow Man in Somerset. The angel was built in 1998 and represents the heritage of the area, while the Willow Man was crafted in 2000.

Director of the RAC Foundation, Steve Gooding, has also mentioned that fatigue needs to be reduced. “Driving long distances in heavy traffic can be a monotonous business, and that’s not good for helping drivers stay awake and alert. It is encouraging to see Highways England building the journey experience, including the views along the way, into its design thinking to give us better, safer travel.”

Fatigue is one of the biggest dangers for motorcyclists and drivers, so the plan proposed by Highways England is certainly an interesting one. There is still the possibility that more structures could lead to distraction because a rider may be more focused on what they see rather than the traffic around them.

Ofwat calls for water sector improvements

Ofwat has called on the sector to improve its performance with its latest service delivery report finding that there is a real gap between the best and worst performers in the sector.

The report also found that the industry as a whole has not kept up the progress made in earlier years and performance has stagnated.

For example, despite increasing since 2015-16, customer satisfaction across the sector has deteriorated in 2018-19. Eight companies have made modest reductions in leakage, but these are more than offset by the increases made by the poorer performing companies.

The service delivery report compares performance on the outcomes that matter to customers such as leakage and pollution, and how much was spent to deliver them, by the 17 largest water companies in England and Wales. Anglian Water, Wessex Water and Portsmouth Water lead the sector in delivering services for customers overall and spent less than anticipated doing so. In contrast Thames Water and Hafren Dyfrdwy languish consistently at the bottom of the table, having been ranked among the poorest performers in multiple areas, including customer service and supply interruptions.

Ofwat examined performance in the most recent year, 2018-19 in addition to indicating the direction of change from 2017-18, for example whether outcomes performance (such as leakage) has improved or got worse. The companies have been grouped into three categories (better performers, average performers, and poorer performers) based on their performance against the commitments they made in 2014.

Chief executive Rachel Fletcher said: “This latest report card on the water sector shows some real variation in company performance. Customers served by Anglian, Wessex and Portsmouth tend to have a better service. But it also shows some inertia at the bottom of the pack with Thames Water and Hafren Dyfrdwy underperforming across a wide range of measures.

“It’s great that we are seeing some real improvements on things that matter – like reducing sewer flooding. But in other areas the industry’s performance is stagnating. Ofwat’s new strategy and the challenges we are setting in the price review for the five-year period to 2025, require companies to transform their performance, particularly those at the bottom of the pile. We are raising what we expect from companies and in responding to that, they will need to show innovation and real ambition.”

As part of its new strategy Ofwat aims to make more use of the insight and data it holds. By ranking companies according to their measured performance, Ofwat is looking to make it clear for companies where they need to focus their efforts in delivering improvements for customers and the environment.

Electric cars have too many hang-ups for almost half of Brits

Electric cars are the next big push for the motoring industry as manufacturers release new models in a push to crack the market.

Electric car sales may be on the rise but British drivers are still unconvinced by the new technology. Research shows less than half of UK motorists are considering making the jump to buy an electric vehicle with many concerned about whether the infrastructure is ready for the move.

The Lex Autolease study shows just 49 percent of drivers would consider getting an electric car at all.

A total of 17 million drivers still need convincing before the Government’s planned target for all new cars to be zero-emission by 2040.

However, the survey shows just 61 percent are aware of the Government’s zero-carbon ambitions despite being just two decades away from revolutionary change.

Ashley Barnett, head of consultancy at Lex AutoLease said: “The Government has pledged to eradicate the UK’s greenhouse gas emissions by 2050, which will mean reducing our reliance on fossil fuels, generating more renewable energy and, crucially, ensuring the mass-market adoption of electric vehicles.

“The way we live our lives – and the way we travel around – will have to change radically, but a significant number of drivers remain reluctant to get on board.”

Over half of motorists surveyed blamed concerns about running out of battery as one of the main barriers to accepting the new technology.

A total of 40 percent of drivers said they believed the electric car was too expensive as 22 percent confirmed they were not sure about the different types of vehicle available.

The survey revealed infrastructure was one of the key reasons why UK motorists have rejected electric cars.

A massive 50 percent said they were concerned about access to charging facilities for electric vehicles.

Just over one-third said they had an off-street parking bay where a charging port could be fitted.

A Government funding boost will see a further 3,000 rapid charging bays installed across the UK by 2024 as part of a massive £70million Government fund.

The scheme will see a total of 5,000 chargers across the UK as part of a bid to get Britain’s roads ready for electric vehicles.

However, 38 percent of those surveyed revealed they would still be worried about how long it would take to charge vehicles compared to the simplicity of petrol stations.

Ashley Barnett said: “The upfront price of electric vehicles is often higher than petrol or diesel equivalents, but that gap is closing all the time – and the savings available throughout the lifetime of an electric vehicle mean it’s likely to cost less in total.

“Where drivers have access to charging facilities at home or work, electric vehicles can fit seamlessly into everyday life.

“For lower-mileage users who mainly drive in urban areas, there’s simply no reason to delay enjoying the benefits of electric.”

More than 40 percent of those surveyed said they understood the appeal of cheaper fuel and limited road tax costs as one quarter said they liked the idea of low maintenance charges.

Electric cars are exempt from paying expensive road charges such as London’s Congestion charge and ULEZ.

Recent data from the Society of Motor Manufacturers and Traders revealed electric car sales were on the up.

Battery Electric Vehicle new car registrations were up a massive 122.1 percent year-on-year compared to figures from 2018.

The Hybrid electric vehicle sakes were also up 15.3 percent year-on-year as sales of mild hybrid electric vehicles (MHEV) rocketed.

Diesel MHEV machines saw sales surpass 19,000 in a staggering 949.5 percent increase on last year’s data.

Amazon profits fall and its share price follows

Internet giant Amazon announced strong sales growth but that didn’t translate into profit after it invested heavily in one-day shipping.

The consequent significant year-on-year rise in operating expenses, combined with shrinking margin at AWS, where most of Amazon’s profit comes from, resulted in quarterly operating income declining for the first time in a while. While investors had been warned about the increased overheads, they were apparently even greater than expected, because Amazon’s share price declined 6% on the news.

“We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery,” said Jeff Bezos, Amazon founder and CEO. “Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year.

“It’s a big investment, and it’s the right long-term decision for customers. And although it’s counterintuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfillment centers very close to the customer — it simply becomes impractical to use air or long ground routes. Huge thanks to all the teams helping deliver for customers this holiday.”

As you can see from the table below, Amazon’s total overheads were 14 billion bucks higher in the most recent quarter than they were a year ago. North America is still where most of its sales are and thus where most of the overheads come from too. Profits disproportionality come from its AWS cloud services division, but even there margins are significantly reduced year-on-year.

Amazon has spent its entire history sacrificing profit on the altar of investment, and that seems to have paid off. So it’s hard to read too much into the share price fall other than a realisation among investors that Amazon is serious about this one-day delivery stuff. That will probably pay off in the long term too, and we expect Bezos isn’t very bothered about the short term reaction to his grand plan.

Design contract for £1 billion A66 transformation up for grabs

A £45 million contract to design the £1 billion transformation of the A66 northern trans-Pennine route is now open for tenders.

Highways England is developing plans to fully dual the remaining single carriageway sections of the A66 which links the M6 at Penrith in Cumbria and the A1(M) at Scotch Corner in North Yorkshire.

The project, a key commitment in the Government’s Road Investment Strategy, is focusing on dualling the remaining 18 miles of the 50 mile route – providing quicker, safer and more reliable journey for thousands of drivers including a significant proportion of hauliers travelling to and from northern ports.

The formal notice for the A66 Preliminary Designer, Construction Technical Advisor and Supervision tender process was published today (Friday 25 October) in the Official Journal of the European Union (OJEU).

Highways England senior project manager Matt Townsend said:

“The A66 northern trans-Pennine project will be one of the biggest infrastructure investments ever delivered in the north of England and we want to attract and work with the best suppliers to help deliver and realise the benefits that dualling the remaining single sections of the A66 will bring.

“This is the first contract we’ll be awarding as the project moves towards the design and statutory processes phases. The successful supplier will work closely with us to help deliver the best design for the transformation of this trans-Pennine route.”

A study into improving northern trans-Pennine routes was commissioned as part of the first 2015 to 2020 Road Investment Strategy period and completing the dualling of the A66 was chosen as the option to take forward.

In July 2017 Arcadis Consultancy (UK) Ltd was appointed to help Highways England deliver initial options phases as part of the company’s project control framework (PCF). This included delivering a two month consultation across the route on the different options for the remaining single carriageway sections of the A66 route.

With the design tender process moving forward, Highways England will be unveiling the designs for dualling the remaining sections in its preferred route announcement (PRA) next Spring. This will be followed by publication of the report from this year’s consultation and it’s hoped construction work can start before the end of the second, 2020 to 2025, Road Investment Strategy period.

The current timetable is:

  • August 2019 to May 2020: Analyse consultation feedback and prepare consultation report and other materials
  • Spring 2020 – preferred route announcement (PRA)
  • Spring 2020 – publish consultation report
  • Summer 2020 – stage public information events on the PRA

Highways England has launched a brand new video setting out the processes it follows when developing and delivering schemes of the scale of the A66 northern Trans-Pennine improvement. The A66 Northern Trans-Pennine project is known as a Nationally Significant Project (NSIP) and means Highways England must apply for a Development Consent Order (DCO) to proceed with the project.

Oxfordshire CC £218m fund sees a boost for road improvements

A Contract for millions of pounds of funding to help roads in Didcot cope with new housing has been signed, but worries about a housing plan were aired as it was agreed.

As Oxfordshire County Council discussed signing a contract for £218million for new infrastructure around the planned Didcot garden village on Tuesday, October 15, Robin Bennett, a green councillor and cabinet member from South Oxfordshire District Council spoke to give his support to the project.

Mr Bennett addressed the district council’s intention to scrap its local plan, a decision taken out of its hands by the minister for housing, communities and local government, Robert Jenrick, 24 hours before its meeting on Thursday, October 10.

Mr Bennett said: “Officers from our council have worked closely with OCC officers to explore alternatives that would enable infrastructure funded by HIF to proceed regardless of what happens with South Oxfordshire’s emerging local plan.”

He added: “Reading your officer recommendation today, it appears to me that it is entirely in the secretary of state’s gift whether this project now proceeds, and from his correspondence to us, it seems that he strongly wishes it to do so.”

The district had sought assurance earlier this year, that if it withdrew its local plan then it would not affect the HIF bid.

OCC cabinet members criticised the district council’s intent to scrap the plan.

Lorraine Lindsay-Gale said it had implications for the whole county.

There was also criticism as SODC’s intent to scrap the plan would scupper new cycle routes and walking paths.

The cabinet also heard from Emily Smith, who spoke on behalf of Vale of White Horse district council to support the HIF agreement.

OCC’s cabinet agreed to sign the contract, and council chiefs will now finalise the details of the plan with the government agency for housing, Homes England.

Four projects in Didcot are set to be funded by a £234million budget, with the majority coming from the £218million fund, and the rest from developers.

They include a new Didcot Science Bridge from the A4130 over the Great Western railway line into the Didcot ‘A’ Power Station site; widening the A4130 from Milton Interchange to the new Science Bridge by making it a dual carriageway; a new river crossing and link road between the A4130 at Didcot and A415 Culham; and a Clifton Hampden Bypass from the A415 at Culham Science Centre and B4015 north of Clifton Hampden.

Southern Water tenders £150m AMP7 business management consultancy framework contract

Southern Water has gone out to tender with a contract for a business management consultancy framework panel worth up to an estimated £150 million in total.

The water company is seeking to establish a framework panel with the expertise to support its ambitions and is looking for suppliers with expertise in a range of business areas, including:

  • business strategy
  • change management
  • corporate planning
  • financial
  • HR
  • IT
  • procurement
  • regulation
  • pensions
  • risk management
  • tax

The contract is being tendered in five separate Lots and sub-Lots.

Lot 1: Strategy and change

Lot 2: IT Consultancy

Lot 3: Procurement and supply chain

Lot 4: Finance

Lot 5: Regulation

The initial contract term is 4 years with a further 4 year extension option.

State-of-the-art innovation set to change the way the UK’s busiest motorway is cleaned

A custom-designed, vehicle-mounted vacuum litter picker has been developed and built by Balfour Beatty Plant & Fleet in partnership with Connect Plus Services (CPS), the company which operates and maintains the M25 on behalf of Connect Plus and Highways England.

The innovative new design enables maintenance crews to collect litter of various sizes, shapes, and weights from the roadside with the use of a handheld vacuum pipe secured to a custom-built machine, mounted on a truck bed. The litter is then deposited into a compartment within the vehicle, and any dust contained through a specialised filter.

The litter picker was designed and built by the partnership, working collaboratively with CPS’ litter picking crews to ensure the new device improved the workers’ health and safety when working on the UK’s busiest motorway, whilst also improving the rate of litter picking.

Through the implementation of the vacuum pump, which pulls litter in with suction as opposed to teams manually collecting the waste, the machine will increase the speed at which litter can be collected whilst reducing the amount of time workers spend on a live highway environment. In addition, the new vacuum pump also removes the chance of crews coming into contact with hazardous or unpleasant substances.

Following a successful trial on the M25 network, the vehicle will now form a crucial part of Connect Plus Services’ fleet.

David Neal, Managing Director of Connect Plus Services, said: “We are delighted to have worked with Balfour Beatty Plant and Fleet to develop this innovative piece of equipment. In 2018 we collected over 50,000 bags of litter from the M25 and its surrounding roads, which requires extensive resource and expert planning to ensure the network remains clean and clear, with minimal impact on the travelling public.

“The M25 is one of the busiest and most strategic road networks in the UK. Through continuous innovation, we can reduce the time our highways maintenance teams spend litter picking on live highways networks, as we strive to create the safest working environment and better journeys for all.”

Andy Ormerod, Managing Director of Balfour Beatty’s Plant and Fleet Services business, said: “With health and safety at the heart of everything we do, we are pleased to have been able to provide an innovative solution to our workforce which reduces risk and increases productivity.

“Our expert capabilities have allowed us to design and build a state-of-the-art piece of equipment, taking into consideration challenges currently being faced by those working on highways projects. Embedding innovation into our projects allows us to offer a solution focused outcome for our clients.”

Nicola Bell, Highways England South East regional director, said: “Hundreds of thousands of people use the M25 each day, and litter is a real problem. This innovative vehicle will help roadworkers to clear litter much more quickly than picking it by hand, and will also free up time for other maintenance and safety priorities – and also our work together with Connect Plus to encourage people not to drop litter in the first place.

“Litter on roads can cause a hazard to drivers, our workers and wildlife, so I’d urge everyone to keep a bag in their car which they can use for rubbish, and then put it in the bin when they get home to improve the experience of everyone who drives on or lives near the M25.”

With safety a key priority, litter picking crews will receive in-depth training to use the machine and measures will be taken to ensure a safe environment when in action.

Knaresborough railway station upgrade complete

Network Rail has carried out a £150,000 upgrade to Knaresborough railway station, improving the roof of the Grade II listed building and bringing benefits for passengers, visitors and businesses in the local area.

As part of the work, structural repairs were carefully carried out to protect and restore the historic building. The roof covering was also renewed to ensure it was more watertight – improving the experience for passengers using the station.

Mark Bloor, route asset manager for Network Rail, said: “The safety of our passengers is a priority and this project will make sure that the roof will be a reliable asset for years to come.

“We thank the passengers, customers, businesses and colleagues at the station for their patience during this work.”

Pete Myers, stakeholder manager at Northern, added: “Knaresborough is a key station for us and we are absolutely committed to working hand-in-hand with Network Rail and the wider industry to deliver the best possible service for our customers.

“We’d like to thank everyone involved for helping to complete such important structural work on a building which plays a significant role in the community.”