Posts Tagged ‘smartphones’

Are iPhones Bad for Kids?

March 11, 2018

CreditPatricia Wall/The New York Times

How Your Family Can Balance Digital Media and Real Life
By Anya Kamenetz
266 pp. PublicAffairs. $27.

Stop Banning Seesaws and Start Banning Snapchat
By Naomi Schaefer Riley
251 pp. Templeton Press. $24.95.

There’s one in every neighborhood: a parent who allows unlimited screen time. They exist to make the rest of us feel better. Our own offspring might spend hours texting or watching cartoons. But at least we have rules. Our kids can sustain a conversation, cope with fleeting moments of boredom and last a birthday party without demanding a video game.

When we pass these other families in the supermarket, their dazed toddlers staring into iPads, we think — smug but terrified — we’re not that bad.

Or are we? Two new books about kids and screens — Anya Kamenetz’s “The Art of Screen Time” and Naomi Schaefer Riley’s “Be the Parent, Please” — examine the evidence and offer advice for anxious parents. How much screen time is too much? Is “digital media” like food: O.K. if you consume good-quality ingredients, in moderation? Or is it more like cigarettes or even heroin, possibly unsafe at any dose? And might screens be just another way to guilt parents — and mothers, in particular — into thinking that we’re not doing enough?

Alas, the evidence is incomplete. Researchers aren’t allowed to overstimulate a random sample of babies to see what happens to their brains. (Though as Kamenetz says, you can do this to mice, and they go a little nuts.) Scientists even have trouble running studies in which some participants watch less; one said he could get families to reduce their screen times only by 20 minutes. And the iPad hasn’t even celebrated its eighth birthday.

But there are worrying correlations. Kids who watch more than two hours of TV per day have double the risk of childhood obesity. Those who watch screens before bed sleep less, making it harder to concentrate and learn. And simulated violence can desensitize children to real-life suffering, and is linked to increased anxiety and fear.


CreditPatricia Wall/The New York Times

Kamenetz, lead digital education correspondent for National Public Radio, is the more soothing voice. She points out that not every child — or even every heavy user — will suffer ill effects. As with food allergies, ”for lots of kids, a peanut is just a peanut.” She advocates an approach inspired by Michael Pollan’s well-known dictate on food: “Enjoy screens. Not too much. Mostly with others.” (Her most upsetting conclusion, echoed by Riley and the American Academy of Pediatrics, is that parents should watch alongside toddlers.)

Riley, a former New York Post columnist who is a visiting fellow at the conservative American Enterprise Institute, sees an insidious cultural problem and a moral failure by parents. She compares screens to alcohol and gambling: Not every child will get hooked, but it’s better to be safe. And by handing our kids screens, we are choosing “not to parent.”

Riley advocates radically scaling back children’s screen time, and intensively surveilling online behavior. “Many kids will be fine even without these restrictions, and some kids will fall into trouble even with them. But as parents, it’s time for us to stop playing the odds.”

I might bristle at Riley’s scolding tone, but I recognize her description of a friend who’s in a “constant low-level battle” over screens with her three sons. “It was like watching her swat flies. As soon as she sent one child outside or got one to read a book, another would sneak on to a computer.”

Even if digital media isn’t diabolical, it has opportunity costs. The hours kids spend on devices is time they could have spent reading, studying, interacting with other humans or frolicking outdoors (there’s a bit of nature worship in Riley’s book).

Of course, many parents can’t go an hour without consulting screens themselves. In a 2014 study, researchers in a fast-food restaurant observed caregivers on smartphones, ignoring children’s bids for attention. The caregivers finally scold the children or issue “robotic” instructions, sometimes without even looking up.

But is this proof that screens make us terrible parents? If we’re using them while driving, then definitely. Car crashes are a leading cause of death in school-age children, and cellphones are a factor in a quarter of fatal crashes.

But in the rest of life, the net impact is less clear. Modern parents spend far more time with their children than parents did in the 1960s. Yes, a mother reading work emails at the playground has briefly stopped interacting with her child. But Kamenetz — a mother of two — says if she couldn’t do that, she’d need to be at the office.


CreditPatricia Wall/The New York Times

We know it’s crucial to stimulate and speak to young children, and our generation of parents complies to a possibly unprecedented — and exhausting — degree. Kamenetz notes that we need occasional breaks from this. She bemoans “an ideological stance that judges mothers for not being fully available to their children at all times and that scapegoats working-class families in particular.”

Class issues buzz around conversations about screen time. We’ve all read about the Silicon Valley executives who won’t let their children go online. Mothers who used to boast that their babies drank only breast milk now claim their preschoolers have never touched an iPad. (These same children will later be dispatched to pricey, screen-free summer camps.)

Low-income families — and especially single parents — can’t afford to police their children’s screen use as assiduously. Kamenetz writes that this requires more social supports, like guaranteed paid parental leave. I’d argue that universal health care and a higher minimum wage would help, too.

Of course, screens are an issue even in countries with great social services. In 2016, the city of Helsinki ran a campaign warning Finnish parents that they were neglecting children by spending too much time online.

In France, where I live, parents are struggling to get their heads around the dangers. The government recently announced that, from September, it will ban phones in primary and secondary schools, for reasons of “public health.” There are permissive parents to scoff at here too, but they generally advocate setting firm limits. Meal times are typically sacrosanct, screen-free zones.

Most French parents already believe in a conclusion that Kamenetz and Riley endorse: If you don’t constantly entertain kids, they’ll learn to entertain themselves. And the French are suspicious of too much of anything. The biggest reason I hear for why kids don’t spend more time on devices isn’t that screens are terrible; it’s that they don’t have time.

That’s basically Kamenetz’s message too. Her best advice might be to prioritize other activities, and allow screens only afterward. “You will be more effective as a parent, and have more fun as a family, if you drop the guilt and embrace the good that screens have to offer, while balancing media with other priorities.”

Sleep is paramount: She recommends no screens before bedtime, and none in bedrooms, ever. And she advocates communication over surveillance, making questions like “what did you see online today?” part of dinnertime conversations.

I liked Kamenetz’s unpanicky, thoughtful critique. Both writers digest lots of material. (Kamenetz helpfully includes a four-page summary.) While it wasn’t thrilling to consume even well-written books on kids and screens, it was worth reflecting on the evidence, and reckoning with my family’s relationship to these consuming devices. Then I could return to checking my email.


Video Games and Children: Playing with Violence

February 24, 2018

Playing video games has become a popular activity for people of all ages. Video gaming is a multibillion-dollar industry bringing in more money than movies and DVDs. On average, girls spend more than an hour per day playing video games and boys spend more than two hours. Teens often spend even more time than younger children. Video games have become very sophisticated and realistic. Some games connect to the internet, which can allow children and adolescents to play games and have discussions with unknown adults and peers.

Image may contain: text

While some games have educational content, many of the most popular games emphasize negative themes and promote:

  • The killing of people or animals
  • The use and abuse of drugs and alcohol
  • Criminal behavior, disrespect for authority and the law
  • Sexual exploitation and violence toward women
  • Racial, sexual, and gender stereotypes
  • Foul language and obscene gestures

Store-bought video games are evaluated by the Electronic Software Ratings Board (ESRB) and rated for their appropriateness for children and teens. The ratings are featured prominently on the game packaging.

Studies of children exposed to violent media have shown that they may become numb to violence, imitate the violence, and show more aggressive behavior. Younger children and those with emotional, behavioral or learning problems may be more influenced by violent images.

In moderation, playing age-appropriate games can be enjoyable and healthy. Some video games may promote learning, problem solving and help with the development of fine motor skills and coordination. However, there are concerns about the effect of video games on young people who play videogames excessively.

Children and adolescents can become overly involved with videogames. They may have difficulty controlling the amount of time they play. They may resist their parents’ attempts to limit their time playing video games. Spending excessive time playing these games can lead to:

  • Less time socializing with friends and family
  • Poor social skills
  • Time away from family time, school work, and other hobbies
  • Lower grades
  • Less reading
  • Less exercise and becoming overweight
  • Decreased sleep and poor quality sleep
  • Aggressive thoughts and behaviors

Tips for Parents
Parents can help their children enjoy these video games appropriately and avoid problems by:

  • Avoiding video games in preschool-aged children
  • Checking the ESRB ratings to select appropriate games—both in content and level of development
  • Playing videogames with their children to share the experience and discuss the game’s content
  • Setting clear rules about game content and playing time, both in and outside the home
  • Monitoring online interactions and warning children about potential dangers of Internet contacts while playing games online
  • Allowing video game playing only in public areas of the home, not in the child’s bedroom
  • Remembering that you are a role model for your children including which video games you play and how long you play them
  • Enforcing total screen time limits
  • Ensuring video games are only played after homework and chores are done
  • Encouraging participation in other activities, particularly physical activities

If you continue to have concerns about your child’s gaming habits or if your child is having difficulty with mood or behavior, ask your child’s pediatrician, family physician or school counselor to help arrange a referral to a trained and qualified mental health professional.

No automatic alt text available.


 — Video Games Can Rot Your Brain

Kirk Cameron: CONNECT — What are Your Kids Doing on Social Media and Is It Good For Their Brains

February 23, 2018

by Stephanie Hertzenberg

Image may contain: plant

In “Kirk Cameron: CONNECT,” family advocate Kirk Cameron takes on one of the greatest challenges facing parents today: the rise of smartphones and social media. These devices have become a cultural rite of passage among children, and parents are buying phones for younger and younger children. Ever mounting evidence, however, points toward a myriad of dangers buried in the modern screen-obsessed world.  “[Too much technology] is deeply effecting kids’ perceptions of themselves, their perception of their moral values, their understanding of the world around them, their sense of identity and purpose and their ability to have real relationships,” Kirk Cameron said. “These are all things that are critical for our kids to grow up to be healthy adults… That’s why I made the movie ‘CONNECT,’ to offer real help parenting kids in a social media world.”

Related image

Kirk Cameron

With his six children reaching “smartphone age,” Cameron grew increasingly interested in the effects technology and social media had on children. “All you need to do is turn on the news or Google “kids and social media,” and you’ll find endless articles and videos about the concerning effect of too much technology on children,” Cameron said. “Technology is terrific, and we can use it for so many good things…but we have to be careful that we don’t give our kids tools that are more powerful than we have the ability to handle at a young age. A car is a great piece of technology, but I’m not going to give it to my 10 year old.”

The questions of “how young is too young for a phone” and how to help children prepare for their inevitable exposure to social media haunts many parents of the so-called “digital generation.”  According to Cameron, there is not necessarily a single age where children old enough for a smartphone. “I think that young people should have a phone when they need it,” Cameron said. “Not when they want it or when peer pressure is getting the best of them to have one…If your children are babysitting and the house does not have a landline but the parents need to get a hold of [the babysitter], that may be a time [your child] needs to have a phone. But that doesn’t mean that it automatically has to include access to Facebook, Instagram and SnapChat.”

When it comes to social media, the issue becomes a bit thornier. “Parents have two reactions to social media,” Cameron said. “They either check out and say ‘This is too much to deal with…’ or parents get so scared of the whole thing that they try to wall their kids off from technology. But eventually the world is going to catch up with your kid, and a time is going to come when they need an email address or access to a phone.”

“CONNECT” is likely to resonate with parents far more than most documentaries about social media and children because of the angle Kirk Cameron took with its creation. “I’m making this movie as a father, not as a neuroscientists or a professional family therapist. So, I have the same kinds of concerns that every mom and dad have that deeply love their kids.”

“Kirk Cameron: CONNECT” offers real help for parenting kids in a social media world and screens exclusively in movie theaters nationwide for two nights only on February 27 and March 1. Tickets are available at, and the trailer is available on YouTube.


Broadcom lowers offer for Qualcomm as takeover saga continues

February 21, 2018


© AFP/File | Broadcom CEO Hock Tan is seen at a November 2017 White House meeting with President Donald Trump where he announced the Singapore-based firm would be reincorporating in the United States
WASHINGTON (AFP) – Singapore-based Broadcom said Wednesday it was cutting its offer price for mobile chip maker Qualcomm in the wake of the US firm’s increased bid for Dutch rival NXP.Broadcom reduced its offer to $79 a share, which would still be the largest-ever deal in the tech sector if completed at an estimated value of nearly $117 billion.

The move came amid a closely watched hostile bid for Qualcomm which could reshape the fast-evolving sector of chips for smartphones and connected devices.

A Broadcom statement said the offer was reduced because “Qualcomm’s board acted against the best interests of its stockholders by unilaterally transferring excessive value to NXP’s activist stockholders.”

Qualcomm, the dominant maker of smartphone chips, has moved to fend off Broadcom’s hostile takeover efforts and last week rejected the latest offer of $82 a share as too low.

The California company on Tuesday raised its offer for NXP to an estimated $43 billion, aiming to alleviate concerns of some NXP investors and seal the tie-up which would make a Broadcom acquisition of Qualcomm less enticing.

Broadcom said Wednesday it remained committed to acquiring Qualcomm and its cash-and-stock offer would revert back to $82 per share should Qualcomm fail to acquire NXP.

The Singapore firm accused Qualcomm’s board of acting against shareholder interest “by unilaterally transferring excessive value to NXP’s activist shareholders.”

“Broadcom remains confident that Qualcomm’s stockholders will continue to support its proposal to acquire Qualcomm,” Broadcom said in a statement.

Qualcomm is due to hold an annual meeting March 6 at which Broadcom has nominated six people to replace the majority of Qualcomm’s board of directors.

Broadcom’s original offer for Qualcomm came days after CEO Hock Tan visited the White House and told President Donald Trump the company would be moving back to the United States.

Why the iPhone Is Losing Out to Chinese Devices in Asia

February 19, 2018

Apple’s market share is stagnant or declining in Asia, paving the way for other smartphone makers

Image may contain: phone and screen

NEW DELHI—The iPhone X has set a new benchmark for smartphone prices and bolstered Apple Inc.’s bottom line, but its steep price may be hobbling its future in Asia’s biggest markets and allowing Chinese challengers to grab market share.

Buyers from India to Indonesia are opting for models from Chinese smartphone makers like Xiaomi Corp.—sometimes called “the Apple of China”—along with BBK Electronics Corp.’s Oppo and Vivo.

China’s manufacturers are increasingly churning out higher-priced devices that compete directly with Apple’s smartphones. They often have high-end features, but carry lower price tags than the iPhone X or even older iPhone models. They are targeting potential Apple customers by offering phones with robust hardware such as metal bodies, beefy batteries and unique features iPhones lack, including special cameras for taking better selfies.

“People don’t have to stretch their budget to buy a top-end” smartphone anymore, said Kiranjeet Kaur, an analyst with research firm IDC in Singapore. Chinese vendors “now boast features which compete with the top-end in the market.”

The iPhone X or Apple’s older, more affordable models aren’t aimed at the mass market in emerging Asia, where telecom companies don’t subsidize devices as in the U.S., meaning most people pay full price for their phones up front. The typical smartphone in India and Indonesia sells for under $200, which is less than even the least expensive iPhone model and much less than the iPhone X, which costs $1,000, according to IDC.

Apple’s high-price phones helped its revenues grow 11% last quarter in the Asia-Pacific region, even though its market share has been stagnant or declining in most Asian markets.

Abhay Shahi, a 28-year-old graphic designer in the Indian city of Ludhiana, has given up on Apple for good, recently ditching his iPhone 6 for a new Xiaomi Redmi Note 4. It has most of the bells and whistles for about a fifth the price of the iPhone X. It costs about $100 less than Apple’s most affordable model, the SE, which was released in 2016.

“It has a fingerprint sensor, the camera is pretty good, and there’s no lag” in Xiaomi’s software, which is more customizable than that of the “overpriced” iPhone’s, Mr. Shahi said. “The build quality feels like a premium phone.”

An Apple spokeswoman declined to comment on its strategy for emerging Asian markets or whether it sees Chinese smartphone makers as rivals to the iPhone.

Attendees at a Jan. 31 launch event for the Oppo R11s smartphone in Tokyo walked in front of an advertisement. Oppo, which passed Apple Inc. and Xiaomi Corp. in its home market, plans to introduce the R11s model next month in Japan.Photo: Tomohiro Ohsumi/Bloomberg News

In China, Apple’s market share is roughly 8% now from 13% in 2015, research firm Canalys says. In India—which last year overtook the U.S. to become the world’s second-biggest smartphone market—Apple has had just a 2% market share since 2013. Apple’s shipments to India fell last quarter compared with the year before, a rare contraction, Canalys says.

The iPhone maker’s market share in Indonesia, home to some 260 million people, has fallen to 1% from 3% in 2013. Apple’s market share has also dropped in the Philippines and Thailand, and has remained static in Malaysia and Vietnam.

Meanwhile, Apple’s Chinese rivals are gobbling up customers. Beijing-based Xiaomi has jumped to 19% of India’s market today from just 3% in 2015. While much of that rise has been on the back of inexpensive phones, increasingly it is putting more expensive devices on the market that offer the look, feel and functionality of iPhones and even a few extra features.

Chitra Patricia, a 27-year-old Jakartan, picked an Oppo over Apple for its selfie features.

Oppo’s “selfie expert” F3 offers options such as a front-facing camera for selfies with wide angle that lends itself to “wefies,” or group shots with several people crammed into the frame. The phone also has a “beautify” function that smooths out users’ selfies, making them appear younger and more glamorous.

Previous Coverage

  • China Challenge for the iPhone X: Ending Apple’s Long Sales Slide (Sept. 13, 2017)
  • Good News for Apple: China Still Wants Pricey Phones (Aug. 2, 2017)
  • How to Build Your Own Smartphone — for $70
  • Cheaper Rivals Eat Away at Apple Sales in China (Feb. 1, 2017)

“It can capture around a dozen people in one ‘wefie,’” making it great for gatherings, said Ms. Patricia.

Xiaomi has an edge in many markets because it can customize for each country while Apple creates the same products for everyone, said Jai Mani, Xiaomi’s product manager for India.

Apple has worked to foster the development of mobile apps and mapping services in the country, and iPhones support several local Indian languages.

Xiaomi created special chargers for its smartphones that can handle India’s fluctuations in power supply, for example. And in a country where consumers are flooded by promotional text messages, Xiaomi tweaked its software to weed out advertisements so users don’t miss personal texts from friends.

Many Xiaomi smartphones also come with two SIM-card slots, which allow consumers to use more than one mobile network to save money, a common practice in Asia. Customers can also plug SD memory cards into some models so they can add their own music or video files.

Among the newest India-specific creations, Xiaomi announced at a launch event earlier this week in New Delhi: tweaks to its own selfie-beautification software so it doesn’t erase bindi forehead decorations or nose rings, mistaking them for blemishes.

The Chinese brands also are bringing a lot of local flavor to their advertising. Oppo and its sister company, Vivo, have blanketed Indonesia and India with billboards touting features they offer that aren’t found in iPhones.

Wahyu Adi Setyanto, a 36-year-old IT engineer in Jakarta, traded in his iPhone for a Xiaomi recently. It has a touch screen as big and bright as that of any iPhone, he says, and cost only $210.

“The exterior, when you hold it in your hand, it’s luxurious,” he said. “It feels like holding an iPhone.”

—Anita Rachman in Jakarta contributed to this article.

Write to Newley Purnell at newley.purnell

Sale of $5bn lithium stake to test electric car hype

February 17, 2018

PotashCorp plans to sell a big stake in Chile’s SQM, a key supplier of the metal

Image may contain: car

Henry Sanderson

Financial Times (FT)
February 16, 2018

When Canadian fertiliser company PotashCorp acquired shares in Chile’s SQM almost 20 years ago, the latter’s lithium business appeared an afterthought.

Controlled by Julio Ponce, the well-connected son-in-law of Chile’s former dictator, Augusto Pinochet, SQM was known as a fertiliser company. However, the then obscure lithium business is why the 32 per cent stake is now valued at $4.7bn.

Lithium has hitched a stunning ride on the wave of interest in electric cars, making it one of the world’s hottest commodities. SQM’s lithium business generates about 60 per cent of the profits for the company, which is in talks with Elon Musk’s Tesla over a deal to supply lithium, a key ingredient in electric car batteries.

It is against this backdrop that Potash is being forced by regulators to sell the stake as a condition of its merger with rival Canadian fertiliser producer Agrium. While only a handful of companies are likely to compete for the stake, the eventual price will be an important measure of how seriously the hype around electric cars is being taken.

“It’s a good barometer of where lithium is today,” Simon Moores, founder of London-based consultancy Benchmark Mineral Intelligence, says. “Anyone investing $5bn has to invest for the long term, on a 10- to 20-year horizon, and so there’s no doubt you have to be extremely bullish on lithium.”

The appeal of owning the stake is clear. It offers the buyer significant exposure to one of the lowest-cost producers of lithium in a country with the largest reserves of the metal in the world. Sociedad Química y Minera de Chile (SQM) accounts for more than 20 per cent of the world’s lithium supply, making it one of five companies that dominate the global market alongside China’s Ganfeng, Tianqi Lithium, FMC and Albemarle.

What is more, last month SQM and the Chilean regulator reached a deal that allowed it to more than quadruple its output by 2025, breaking with a previous practice in which SQM had to pour lithium-rich brine back into the desert to avoid exceeding its quota.

Those with a potential interest include Anglo-Australian miner Rio Tinto, according to people familiar with the matter. China’s Tianqi Lithium, which snapped up a 2 per cent stake in SQM for $38 a share in 2016, has also shown interest, they said. Chilean pension funds could also buy some of the shares, according to analysts.

However, analysts say the challenge for a buyer is twofold. Parting with several billion dollars requires taking as clear as possible a view on the future of electric cars, where hyperbole is common and forecasts vary wildly between optimism and caution.

The price for lithium carbonate from South America has more than doubled over the past two years to hit $14,500 a tonne, according to Benchmark Mineral Intelligence. If electric vehicles reach 5 per cent of car and light truck sales globally by 2025 from their current level of 2 per cent, then lithium prices will fall to $6,900 a tonne by 2025, according to consultancy Wood Mackenzie.

However, if that share, including plug-in hybrids, climbs to 12 per cent by 2025 lithium prices will remain at current levels and then move towards a long-term price of $13,600 a tonne, the consultancy forecasts.

Unlike commodities such as oil or copper, lithium is not traded on any exchange. Instead, pricing is set through long-term contracts with buyers or on the spot market in China, the world’s largest electric car market.

Wherever bidders end up sitting on the spectrum of forecasts, they will also be competing against a backdrop in which rising lithium prices have unleashed a surge in supply. Companies are hunting for the metal around the globe, including in Cornwall, Nevada, Mali and Australia, where there has been a rapid build-up of production. As a result, some analysts who follow the industry forecast a surplus for the next few years.

“Why would you buy a $5bn stake in a resource that is geologically abundant?” says one investor.

Shares in SQM, whose investors include Iridian Asset Management and New York-based Renaissance Technologies, according to filings, rose more than fourfold in the past two years, but have fallen 12 per cent since the middle of January to $56 a share.

Ben Isaacson, an analyst at Scotiabank in Toronto, says SQM’s share price reflects lithium prices well above the marginal costs of production “which isn’t realistic”. The lithium price will fall to a long-term average of between $8,000 and $10,000 a tonne, he forecasts.

“There’s a clock ticking on this deal,” he says. “This should be bought at a discount — this should not be bought at a premium.”

In December Mr Ponce signed a deal with Chile’s regulator Corfo to give up his control of SQM, which was exercised via a joint voting pact with Japan’s Kowa Group. He still maintains a 30 per cent stake in SQM through holding companies known as the cascadas, or “waterfalls”, for their complicated structure.

That opens the tantalising prospect for any buyer of the possibility of full control of SQM if Mr Ponce is willing to sell his shares.

“For someone investing in that stake they need to do it for a good return on investment or potentially as a stepping stone to take over the whole company,” says Howard Klein, a New York-based partner at RK Equity, which advises companies in the sector.

“Lithium is experiencing a far bigger demand shock,” he adds.

The sale of the SQM stake will reveal just how valuable the world thinks that shock is.


There’s a Global Race to Control Batteries—and China Is Winning

February 12, 2018

Chinese companies dominate the cobalt supply chain that begins at mines in Congo


A BYD Concept car is displayed during the first day of the 17th Shanghai International Automobile Industry Exhibition in Shanghai on April 19, 2017. AFP

KOLWEZI, Democratic Republic of Congo—Miners push bicycles piled high with bags of a grayish-blue ore along a dusty road to a makeshift market. There, they line up at wholesalers with nicknames such as Crazy Jack and Boss Lee.

Most of the buyers are Chinese. Those buyers then sell to Chinese companies that ship the bags, filled with cobalt, to China for processing into rechargeable, lithium-ion batteries that power laptops and smartphones and electric cars.

There is a world-wide race to lock up the supply chain for cobalt, which will likely be in even greater demand as electric-car production rises. So far, China is way ahead.

Chinese imports of cobalt from Congo, the world’s biggest producer of cobalt, totaled $1.2 billion in the first nine months of 2017, compared with just $3.2 million by India, the second-largest importer, government data show.

“We’re realizing that the Congo is to [electric vehicles] what Saudi Arabia is to the internal combustion engine,” says Trent Mell, chief executive of exploration company First Cobalt Corp. , based in Toronto. Chinese firms are keenly aware of Congo’s importance to electric vehicles, he says, and “trying to control the whole ecosystem…from cobalt mining to battery production.”

China already is the world’s largest electric-car market. In 2011, Beijing listed electric vehicles as one of seven “strategic emerging industries.” Developing a homegrown battery industry became a vital part of the government-sponsored push. The Chinese government provides subsidies to domestic battery makers, essentially locking out foreign companies.

Companies from China now dominate the first steps in the lithium-ion battery production process. Such firms produce about 77% of refined cobalt chemicals, up from 67% in 2012, according to commodities researcher CRU Group . George Heppel, a consultant at CRU, says Chinese companies could soon have more than 90% of the market.

About 54% of the global cobalt supply comes from Congo. Chinese companies dominate the network of middlemen who buy cobalt from freelance miners such as those lining up at the market in Kolwezi.

Congolese cobalt miners at a mine in 2015. Freelance miners, called creuseurs, produce more than 10% of the cobalt output in Congo.Photo: Kenny Katombe/REUTERS

The freelancers are known as creuseurs, the French word for diggers. They unearth cobalt with picks and shovels, earning about roughly $300 per ton of ore, up from $200 a year ago. U.S. and European companies have grown wary of cobalt suppliers who buy from creuseurs, partly because some of the miners are children. They rarely wear masks or other safety equipment. Crippling injuries are common.

“A stone fell on me,” says Jean Kayombo Asani, 20 years old, pointing to a big gash on his forehead. He has been a cobalt miner since he was 15. “There are enormous risks, like landslides. One can fall and die,” he adds.

Industry researcher Darton Commodities estimates that creuseurs produce as much as 14% of the cobalt output in the central African nation.

Tesla Inc. said last year its cobalt supplier in Congo is “very reputable,” without identifying the supplier. The auto maker sent a team to the country to make sure its supply chain doesn’t include child labor or cobalt mined by creuseurs. Tesla hasn’t said if it made any changes as a result.

For years, traders who bought cobalt from freelance miners often sold it to Congo DongFang International Mining, a unit of Chinese giant Zhejiang Huayou Cobalt Co. , according to human-rights group Amnesty International and other people familiar with Congo’s cobalt market.

A Zhejiang Huayou spokesman says it stopped buying last April from wholesalers who cater to creuseurs and is trying to buy more from industrial miners that have greater control over the production process. The company is making the changes with help from a nongovernmental organization called Pact, the Zhejiang Huayou spokesman adds.

Contemporary Amperex Technology Co., based in China’s coastal Fujian province, is one of the country\’s largest makers of electric-vehicle batteries.Photo: Qilai Shen/Bloomberg News

Few commodities have had more dramatic increases in demand than cobalt, primarily a byproduct of copper and nickel mining. Global cobalt production has quadrupled since 2000 to about 123,000 metric tons a year, according to the U.S. Geological Survey.

Demand is growing even faster and is expected to reach more than 200,000 tons by 2025, according to researcher Wood Mackenzie. Electric cars are a big reason why. About 1,300 metric tons of cobalt were used in electric vehicles in 2014, Morgan Stanley estimates. The total is expected to rise to 11,320 tons this year and 62,940 tons by 2025.

Such expectations have caused cobalt prices to more than double in the past year in London trading. Cobalt prices are up more than 230% since the end of 2015, according to Thomson Reuters.

“If our projections for electric vehicles are anywhere near close, there are going to be some serious issues in the cobalt market” after 2020, says Jack Bedder, an analyst who follows cobalt for the London market-intelligence firm Roskill. Tight supply would give China yet another advantage because of its strength in the cobalt supply chain.

Swiss miner Glencore PLC is the world’s largest cobalt producer, including 27,400 tons from Congo last year. Glencore expects its output to more than double in the next few years.

Much of the remaining 30,000 tons to 40,000 tons of Congolese cobalt comes from creuseurs, Chinese companies such as China Molybdenum Co. and Zhejiang Huayou, and small industrial producers, according to traders.

China Molybdenum last year purchased a giant copper and cobalt mine in Congo from U.S. mining giant Freeport-McMoRan Inc. The mine supplies a Freeport facility in Finland that produces about 20% of the processed cobalt sulfate used to make batteries. Analysts say the rest of global cobalt sulfate production is done in China.

“Some of the biggest American car companies are very pleased about how we manage the supply,” says Kalidas Madhavpeddi, CEO at CMOC International, the overseas operations of China Molybdenum.

Congolese state-run mining company Gécamines SA and China Nonferrous Metal Mining Group , known as CNMC, are jointly developing a cobalt- and copper-rich mine that likely will also help China. CNMC will build and operate the mine, owning a 51% stake, while Gécamines will own 49% and got a loan of $870 million from the Chinese company.

China’s State Reserve Bureau has accumulated about 5,000 tons of cobalt, or about 15 days’ global supply, for a reserve stockpile, according to Darton Commodities. In comparison, China has about three days’ global supply of crude oil in its strategic reserve.

“It’s very clear that the Chinese want to be at the center of electric vehicles. There’s no question there’s a laserlike focus,” says Anthony Milewski, chief executive of Cobalt 27 Capital Corp. , which is based in Toronto and owns about 3,000 tons of cobalt, one of the world’s largest stockpiles.

The shift to electric vehicles is happening faster than many experts anticipated just a few years ago, due in part to the rapid evolution of a global supply chain for key components in lithium-ion batteries. That has driven down prices and helped battery makers scale up production.

Baojun E100 all-electric battery cars last year at a plant operated by General Motors and its local joint-venture partners in the Chinese city of Liuzhou. China is the world’s largest electric-car market. Photo: Norihiko Shirouzu/REUTERS

Morgan Stanley says the price of a lithium-ion battery today is about $200 per kilowatt-hour, down from $1,200 two decades ago. It expects the price to fall to $100 by the early 2020s. Electric vehicles will account for 34% of global vehicle sales by 2030, Bank of America analysts forecast.


Battery production and the supply chain behind it remains fragmented, though, complicating efforts by auto makers to ensure supplies. One company mines the minerals, another refines it, a third makes the cells, a fourth combines the cells into a battery module, and a fifth buys the modules to assemble into a battery. Chinese companies are making major investments in each link of the supply chain.

Some companies and battery experts say technological shifts to make rechargeable batteries with less cobalt—or none at all—could make cobalt less important in battery production.

China is lining up behind nickel manganese cobalt batteries. They have a higher energy density than batteries without cobalt, giving cars greater driving range while taking up less space.

Global battery manufacturing capacity is about 110 gigawatt hours a year, mostly for consumer electronics, electric vehicles and electricity storage. In the past year, China has announced plans to add more than 150 gigawatt hours of production in the next three to four years, tripling current capacity. That dwarfs Tesla’s “gigafactory” in the Nevada desert, which aims to add 35 gigawatt hours by 2020.

“The Chinese manufacturers have targets set by the government,” says Luis Munuera, an analyst with the International Energy Agency. “It is not a market response. It is the amount of battery capacity the government wants to have.”

Most Chinese battery production is now focused on low-end, low-density batteries, and many battery makers are relatively small. But the Chinese government has made offers of support contingent on the energy density of the battery. That means more nickel manganese cobalt batteries.

U.S. consumers would benefit if the Chinese cobalt push drives down prices. Lithium-ion batteries “are very quickly becoming a commodity,” says Sam Wilkinson, an associate director for solar and energy storage research at IHS Markit.

A lithium battery pack at the Lexus booth during the Auto China 2016 auto show in Beijing.Photo: Damir Sagolj/REUTERS

After the Chinese government helped engineer a big export market in the solar industry, the cost of a residential rooftop solar array has fallen to $16,000 from $41,000 in 2010, according to the National Renewable Energy Laboratory. A large, 100-megawatt solar installation that cost $544 million to build in 2010 can now be built for $111 million.

About 65% of all solar modules are made in China, and seven of the top 10 module manufacturers are Chinese.

That has caused trade friction with the U.S. Last month, President Donald Trump imposed new tariffs of up to 30% on solar-panel imports after an independent panel concluded that American manufacturers were being unfairly harmed by Chinese rivals.

Some technology experts worry about what could happen as China gains more competitive muscle in the battery industry. They say too much price-cutting could stifle the innovation of better batteries.

“China controls the majority of global production of solar panels, wind turbines and batteries,” says Varun Sivaram, a technology fellow at the Council on Foreign Relations. “Really superior technologies have no chance of breaking in, and that worries me.”

—Alexandra Wexler contributed to this article.

Write to Scott Patterson at and Russell Gold at


China is winning the race to control lithium for electric vehicles    9:14 AM ET Tue, 5 Dec 2017 | 00:56

China is outpacing the U.S. and other countries in a global race to secure supplies of an all-important element for electric cars.

China has emerged as the leading market player for electric and hybrid cars, accounting for approximately half of global sales. And with the world’s second-largest economy keen to develop the industry within its own borders, Beijing is looking to import a lot more lithium.

“Lithium is coming of age in a big way. It’s the core ingredient to 99 percent of electric vehicles and as a result, demand is going through the roof,” Simon Moores, managing director at research and data provider at Benchmark Mineral Intelligence, told CNBC in a phone interview.

As demand for electric vehicles skyrockets, Chinese firms have rapidly been making deals in a bid to secure supplies of lithium — a vital component used in batteries for electric vehicles.

Demand for lithium had been “bubbling under the surface” for several years, Moores said, before a renewed interest in electric cars about 18 months ago triggered a “desperate” global pursuit.

China wants ‘to control electric vehicle supply chain’

Governments and car manufacturers worldwide have taken steps to electrify fleets and further phase out the combustion engine. The lithium-ion batteries are able to produce more electricity per unit than conventional batteries.

The global push to roll out electric cars — which emit less climate-warming carbon emissions — has been amplified by concerns over air pollution, particularly from diesel cars. And Beijing’s pursuit of lithium for electric cars appears aligned to the plans of Chinese President Xi Jinping, although industry analysts said cost, rather than environmental concern, was the primary reason for China to pivot toward alternative energy.


“Given the government’s power in China to direct the economy, if they want to become the world leaders in electric vehicles, they can likely achieve it,” Jay Jacobs, director of research at Global X, told CNBC in an email.

“China is not just focusing on electric vehicle manufacturing, but also buying up lithium projects and supporting the growth of battery producers, so they can control even more of the electric vehicle supply chain,” he said.

Electric vehicle revolution ‘grossly misunderstood’

Western companies have yet to show the same levels of interest in lithium supplies compared to their Chinese counterparts, analysts said.

Like Beijing, the U.S. and Europe also have limited lithium resources of their own and rely on imports from elsewhere. Lithium is most commonly mined from rocks in Australia as well as brine pools in South America, in countries such as Bolivia, Chile and Argentina.

Marcelo Perez del Carpio | Bloomberg via Getty Images

Employees shovel salt into mountains at the Salar de Uyuni (Uyuni Salt Flats) in Potosi, Bolivia, on Sunday, Dec. 11, 2016.

Some observers fear electric car makers, such as Tesla, could end up scrambling to secure crucial resources of lithium where China is the biggest player. However, Jacobs said even China recognized the global arms race for lithium supplies was unlikely to be a “winner-takes-all industry.”

“The move toward electric vehicles is grossly misunderstood and over-simplified in the markets. This is a transition that will take many decades, if it happens,” Jeffrey Christian, managing director at CPM Group, told CNBC via email.

“There are people who speak with great conviction about the future of electric vehicles and lithium batteries, but their convictions are based more on faith and beliefs than on concrete, knowable realities at this time.”

Broadcom Raises Offer for Qualcomm to Over $121 Billion

February 5, 2018

Move aimed at increasing pressure on takeover target in what would be largest-ever technology deal


Broadcom Ltd. sweetened its takeover offer for Qualcomm Inc. in a deal that would be worth more than $121 billion, turning up the pressure on the takeover target in what would be the largest-ever technology deal.

Broadcom said Monday it would pay $82 a share in cash and stock, up from its initial offer in November of $105 billion, or $70 a share in cash and stock. Broadcom said the revised bid—its “best and final offer”–represents a 50% premium to Qualcomm’s share price on Nov. 2.

Combined, Broadcom and Qualcomm would form the No. 3 chip maker by revenue, behind Intel Corp. and Samsung Electronics Co.

The new bid ratchets up the stakes in a hostile standoff that could affect wide swaths of the markets for chips used in data centers and smartphones. Broadcom is a market leader in a variety of chips for wired and wireless devices, including Wi-Fi and Bluetooth chips for smartphones. Qualcomm is a leader in chips that manage cellular communications in smartphones.


  • Qualcomm Expands Licensing Deal With Samsung as Charges Cut Into Profit
  • Wall Street Loves Broadcom’s CEO. Not Everyone Else Is There Yet.
  • Qualcomm Is Slapped With $1.23 Billion EU Fine for Illegal Payments to Apple

Qualcomm, in an effort to persuade shareholders to resist Broadcom’s initial bid, released a presentation mid-January outlining a path to grow adjusted per-share earnings from $4.28 in fiscal 2017 to between $6.75 and $7.50 in fiscal 2019.

It promised that in the event it doesn’t complete its proposed acquisition of NXP Semiconductors NV, which has been held up in regulatory reviews, it would create an equivalent boost to earnings by buying back shares. Qualcomm also promised to shed $1 billion in costs.

Qualcomm in a later letter to shareholders emphasized the difficulty of getting the proposed merger past international regulators regardless of Broadcom’s ultimate offer, saying it was “highly doubtful” the transaction would be approved.

Broadcom and Qualcomm discussed a potential deal as early as 2016, according to regulatory filings. Since launching its offer, Broadcom management has said Qualcomm’s directors refuse to engage. Broadcom responded by nominating its own slate of directors for Qualcomm shareholders to vote on at the company’s annual shareholder meeting, which is slated for early March.

Qualcomm in recent years has been under attack from customers and antitrust regulators who allege the company’s business practices aren’t fair. Apple Inc. is suing the chip maker in multiple countries, and Qualcomm has faced regulatory fines in China, South Korea, Taiwan and the European Union. Qualcomm is appealing some regulatory decisions and fighting Apple in court.

Write to Ted Greenwald at and Imani Moise at

Can Apple Find Enough Customers Willing to Pay Up? — The iPhone X starts at $1,000

January 29, 2018

IPhone ‘supercycle’ more likely to come from higher prices than strong unit sales

Apple’s iPhone X smartphones are displayed during the sales launch at a store in New York in November.
Apple’s iPhone X smartphones are displayed during the sales launch at a store in New York in November. PHOTO: MICHAEL NAGLE/BLOOMBERG NEWS

Generally speaking, technology gets a lot cheaper as it ages. Apple Inc. AAPL 0.23% is counting on precisely the opposite.

The iPhone X, which made its debut in November, essentially ushers in the second decade of the touch-screen smartphone revolution that Apple kicked off with its original iPhone in 2007. Despite the fanfare christening the device as “the future of smartphones,” the iPhone X differs little in basic function from its recent predecessors. But an expanded display and other bells and whistles encouraged Apple to give the device a premium price tag. The iPhone X starts at $1,000—making it the most expensive base model smartphone ever in the U.S.

For Apple, that represents a gamble that customers won’t bolt for cheaper-but-still-premium Android options. In developed markets like the U.S., the company’s market share has stayed largely consistent. Switching is easier than ever in an age of cloud storage and streaming apps, but most smartphone customers by now have picked their platform and seem to stay on it.

That doesn’t mean the so-called supercycle many investors are expecting this year will be a sure thing. Several analysts have cited data from Apple’s supply chain pointing to a mixed picture for the new iPhones. Toni Sacconaghi of Bernstein said his analysis suggests total iPhone unit sales for the March quarter could come in at a range of 51 million to 57 million units—well below the 61 million units Wall Street is currently targeting.

Apple’s fiscal second quarter ending in March is particularly important this time around because the company needs iPhone sales to remain strong in order to hit Wall Street’s current prediction of overall revenue growing 19% this fiscal year compared with 6% last year.

That means Apple’s forecast for the March quarter will likely overshadow results for the December period that the company will report on Thursday. Analysts currently expect March-quarter revenue to surge 28% year over year to nearly $68 billion—a high mark to hit. And Apple’s stock price, which is up 40% over the last 12 months and near a record 15 times forward earnings, is likely to take a tumble if the company’s outlook disappoints.

Much depends on Apple finding enough customers willing to pay up. And higher prices can help the company meet revenue growth targets even if unit sales are weaker. Analysts currently expect the average selling price for the iPhone segment to hit $757 for both the December and March quarters—more than $100 above the average for the last four periods. A thousand bucks will seem ludicrous to many smartphone buyers, and Apple had better hope it has enough devoted fans to help the iPhone X make the connection.

Write to Dan Gallagher at

SK Hynix posts record quarterly net profit in Q4 — world’s second-largest memory chipmaker

January 25, 2018
© POOL/AFP/File | Workers on the operations floor of a plant in Icheon run by SK Hynix, which saw quarterly net profit leap 98 percent year-on-year to 3.22 trillion won (US$3 billion)

SEOUL (AFP) – The world’s second-largest memory chipmaker SK Hynix saw profits nearly double to hit a record in the fourth quarter on strong demand, it said Thursday.Quarterly net profit leaped 98 percent year-on-year to 3.22 trillion won (US$3 billion), the South Korean firm said in a regulatory filing, as expanding data centre capacities and smartphone memory sizes drove chip prices higher.

Shares of SK Hynix were up 4.0 percent in mid-afternoon trade Thursday.

“Market conditions were favourable in the fourth quarter thanks to strong demand for servers and price hikes for products for mobile devices,” the firm said.

Sales soared 69 percent to 9.03 trillion won during the October-December period, it said, with operating profits reaching 4.47 trillion won — up 191 percent and beating market expectations.

The strong performance came despite a currency impact from the strengthening South Korean won.

“This is somewhat better than we expected,” Greg Roh of HMC Investment Securities told AFP.

“SK Hynix is reaping the fruits of its early, large-scale investment in facilities and aggressive research and development efforts,” he added.

Operating profits would be similar in the first three months this year, Roh expected, despite him also forecasting a four per cent quarter-on-quarter fall in sales due to readjustment of stocks.

For full-year 2017, net profit soared 260 percent on-year to 10.64 trillion won and operational profit powered up 319 percent to 13.72 trillion won, on the back of sales growing 75 percent to 30.1 trillion won.

“SK Hynix’s performance eased market concerns over a possible downturn in the global semiconductor market,” said Seo Sang-Young, an analyst with Kiwoom Securities Co.

SK Hynix said it will expand its range by applying new technology to its products for servers and solid state drives to meet increasing demand for internet data centres.

In a conference call, the company said it had invested 10.3 trillion won last year, an all-time high.

It expected this year’s investment figure to be even higher, driven by a new plant in Cheongju, in central South Korea, and expansion of its existing Chinese facility in Wuxi. It also has a manufacturing site in Incheon near Seoul.

Analysts said SK Hynix benefited from price increases in DRAM chips, as global IT companies such as Google, Amazon and Facebook increased their data centre capacities, and smartphone memory sizes expanded.

DRAM chips accounted for 77 percent of SK Hynix’s total sales last year, with the rest going to NAND flash chips.

SK Hynix is the world’s second largest DRAM maker with a global market share of 28 percent, behind number one Samsung Electronics, which has 45 percent.

SK Hynix also has 10 percent of the world NAND flash chip market, putting it in fifth place.