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Introduction:
In this report I will be outlining three articles that have experienced a
technical change, underwent a merger and have experienced changes due to
brexit. The articles will be of 2018 published from online newspapers.

 

Synaptics – Technical
Change

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The term technical change means the level of output produced
from the same amount of inputs. A technical change isn’t always meant as
technological change but as an organisation. A technical change is the act of
reducing input prices and maximising your output and the best market that has
been storming the current generations is smartphones. They are ever increasing
in price but all manufacture at lower inputs to increase their outputs. These
changes are only possible via research and development. The mobile industries
always have to captivate the consumer to buy the next flagship with
intervention, innovation and diffusion. (Technical change – Wikipedia, 2014)

 

There are a number of changes to the Smartphone industry 2018,
most of which are subtle. With the exception of a touch ID sensor embedded in
the screen of a little known Chinese company Vivo along with Synaptics who have
successfully showcased a prototype at 2018 CES (Consumer Electronics Show) this
January (The Indian Express, 2018). Synaptics are the one who have perfected
the technology to be implemented in a Smartphone. You would believe this type
of innovation to be achieved by Samsung, Google or Apple by now. (The Indian
Express, 2018)

 

This advancement in the touch id technology will also
enable a great leap into a truly bezel-less display. Although Synaptics are not
the first bring out this technology infact, it was Toshiba back in 2007 who
revealed something similar but took just over 10 years for Synaptics and vivo
to demonstrate the capabilities and possibilities in this year’s CES 2018. Synaptics
are ready to step into the big leagues with the Synaptics Clear ID being twice
as fast as 3D facial recognition.

 

Synaptic are aware of the growing market for fingerprint
preferences in front of a phone but with the Smartphone industry quickly
shifting to the infinity displays they need to make their unit of production
low. We know that Samsung are the kings of display when it comes to the OLED
UHD+ screens. Synaptics have been trying to match Samsung for some years now.
At CES 2018 apart from the breakthrough of touch id the company have also been
developing their OLED display driver ICs displays as their touch ID only works
on an OLED display as it complements the OLED pixels to work.

(The Indian Express, 2018)

 

The CES 2018 revealed Synaptics wanting to provide to the
OLED mobile companies incorporating Samsung’s famous OLED display. Synaptics
are trying to sell the most expensive component in a mobile phone which is the
touch ID and display advancements. There is a likely chance that the leaders in
smartphones Apple will seek out this technology to propel their competitors out
of the market share for sure. If Apple does turn to Synaptics for fingerprint
scanning solutions for the OLED iPhone, this would represent a very nice
revenue and profit boost for the latter at least through the next iPhone cycle.
The risk, of course, is that it would likely only be a matter of time before
Apple out innovates Synaptics in favour of a homebrew solution, meaning that
any financial boost for Synaptics would be short lived.

 

 

 

 

 

 

 

 

Shell – A Merging
Firm

A merger is an agreement or voluntary fusion that unites
two companies into one legal entity. There are number of reasons for a merger
or even a takeover is the attempt of a company reaching out to diversify into
another market or to gain market shares to create value and satisfy their
shareholders.

 

Shell will soon be selling electricity and gas direct to
householders in the UK for the first time after buying one of the county’s
biggest energy suppliers, First Utility (The Guardian, 2017, Shell). Shell
bought first Utility outright for an undisclosed sum which suspecting industry
assumes a sum of between £200m-£300m (The Guardian, 2017, Shell). This takeover
will supply 825,000 homes if the deal concludes end of this February. (The
Guardian, 2017, Shell)

 

The move is the latest in a buying spree by Shell, which
has acquired two electric car infrastructure firms in recent months as it
diversifies beyond oil and gas (The Guardian, 2017, Shell). “Experts said the
entrance of Shell into UK energy supply would cause a significant shake up” (The
Guardian, 2017, Shell). Shell being a very reputable brand will be an easy
transition for the majority of UK households due to their regular interactions
with Shell as the every presence of oil supplier to the UK automotive
individuals.

 

In 2015, a licensing agreement between Shell Brands
International and First Utility meant that First Utility could operate in the
German household energy sector under the Shell brand (The Guardian, 2017, Shell).
After the deal is completed, First Utility will operate as a stand-alone entity
and owned subsidiary of Shell within its new energies division. (The Guardian, 2017,
Shell)

 

The supply and demand of household energy is rapidly
changing, driven by new technologies and innovation that enable householders to
better manage their energy use, and the need for a low carbon energy system.

 

Faced with the decarbonisation of its core markets for
heating and transportation fuels, the logic for Shell to enter retail household
energy looks compelling. For First Utility the deal underpins its efforts to
sell energy and services to consumers (The Guardian, 2017, Shell). In the
round, at a time when the political impetus is to constrain the market through
price caps, this deal is a clear vote of confidence in its ability to deliver change,
innovation and benefits to customers much quicker. (The Guardian, 2017, Shell)

 

The electricity market will be growing with increase in
electric cars and the ever declining crude oil supply. Shell need to make their
entry in the energies market soon as they have done. Shell already having a
strong brand and stations for fuel adding electrical stations will be easier
and more convenient than most. The price cap regulations boosting shells
profits due to a low cap regulation on First Utility. First Utility will be
less affected by the measure because it has the lowest proportion of customers on
tariffs that will be capped 23% compared to market leader British Gas on 67%.
This makes First utility the best energy supplier to merge with for the UK
market and increase their market share and profits. (The Guardian, 2017, Shell)

 

 

 

 

 

 

 

 

 

EasyJet – A Business
Affected by Brexit

 

What is ‘Brexit?’

Brexit is an abbreviation for “British exit,”
referring to the UK’s decision in a June 23, 2016 referendum to leave the
European Union (EU). The vote’s result defied expectations and roiled global
markets, causing the British pound to fall to its lowest level against the
dollar in 30 years. Prime Minister David Cameron, who called the referendum and
campaigned for Britain to remain in the EU, resigned the following month. Home
Secretary Theresa May replaced him as leader of the Conservative party and as
Prime Minister. Following a snap election on June 8, 2017, she remains Prime
Minister.

 

EasyJet and countless other airlines have been affected
by Brexit and the EU referendum. The biggest impact was the drop of sterling
the past year and profits have declined by over £100m of and pre-tax profits fell
by one sixth to £408m which points to the devaluation of pound after Brexit.

 

For both historical and most importantly technical
reasons, aviation markets are highly regulated. Airlines rights to offer
services between any two locations in two different countries are governed by
specific agreements between the governments concerned. EasyJet along with
British airways are both UK owned airlines meaning they have full freedom of
part of the European Common Aviation
Area (ECAA).

 

When the UK leaves the EU, without special arrangements
the UK’s membership of the ECAA would lapse and these airlines would lose all
their automatic rights to operate to, from and within the ECAA. Furthermore,
their rights would also lapse on routes that are now governed by agreements
between the third party countries and the EU such as the EU to US “Open Skies” agreement.
However, it is important to note that these rights are reciprocal. USA and
other ECAA carriers would lose their automatic rights to fly to the UK.

 

The airline industry undergoes extensive regulations
related to their security, safety, environment and air traffic. Most of these
rules are implemented globally and determined by the international Civil
Aviation Organisation (ICAO) (The Guardian, 2017, EasyJet).  Where they aren’t met, these standards need
to be agreed by the two parties establishing traffic rights. This is to make
sure that the aircraft entering their airspace is to the Aviation standard set
by the ICAO; well maintained, safely operated and not needlessly noisy. They
will also uphold that these rules aren’t limiting competitions. (The Guardian,
2017, EasyJet)

 

The UK would seek to negotiate a bilateral agreement with
the whole of the EU. This has been done once before with Switzerland, but was
part of a much wider trade deal, and crucially required Switzerland to agree to
the four fundamental freedoms of goods, services, Capital and labour.

 

Negotiate a series of bilateral agreements with individual
countries if negotiating with the EU becomes too difficult or costly in terms
of concessions, then the UK can still try and negotiate with individual member
states. It is likely, for example, that countries which benefit from inbound tourism
from the UK would be amenable to a deal that keeps the visitors coming.

 

Although this sounds sensible, there are two potential
problems. (i) it assumes (and it is a big assumption) that the Commission will
allow individual Member States to negotiate their own traffic rights; and (ii)
although access between the UK and, say, Spain, may be relatively easy, the
aviation world is governed by a series of rules (called the freedoms of the
air) which govern onward connections and routings starting outside your country
of registration. If a UK airline wants to fly between, say, the UK and Spain,
then a bilateral agreement is needed only between those countries. If the
airline wants to fly more complex routings, involving multiple countries, then
the agreement of all of those other countries is required (The Guardian, 2017,
EasyJet). Therefore, what starts as a series of apparently straightforward turns
exponentially into a spider’s web of inter-related negotiations about freedoms and
reciprocal traffic rights.

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