Newsletter: California Inc.: The age of virtual reality has arrived
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.
Wall Street was closed Friday for Easter weekend, but traders get back to work today with a hint of good news to chew on. Last week ended with the Commerce Department reporting that even though U.S. economic growth slowed in the fourth quarter, the slowdown wasn’t as sharp as previously estimated. Consumer spending remained relatively strong, which should keep fears of another recession at bay.
LOOKING AHEAD
Virtual reality: Oculus VR’s long-awaited virtual reality consumer headset will begin shipping today. The Oculus Rift costs $599 and will launch with 30 games available. Another virtual reality headset, the HTC Vive, will ship on April 5 and cost $799. A third option, Sony’s PlayStation VR, started taking preorders last week for a $500 “starter bundle” that includes a PlayStation camera and two PlayStation Move controllers. Consumers who just want the VR headset can preorder it starting Tuesday for $400.
Rebate changes: California’s rebate program for electric vehicles will start offering increased incentives on Tuesday to low- and moderate-income residents, while at the same time cutting off higher-income buyers. Rebates — which currently range from $1,500 to $5,000, depending on the vehicle — will go up by $1,500 for people with incomes of no more than 300% of the federal poverty level. For a household of four, the limit would be $72,900. Meanwhile, the program will no longer give any rebate to individuals earning more than $250,000 or couples with income over $500,000.
Airwaves for sale: The Federal Communications Commission will begin an auction Tuesday to sell a huge swath of public airwaves that currently carry TV signals. They’ll instead be committed to wireless services for smartphones and other data-hungry mobile devices. The auction could produce as much as $40 billion in new licensing fees from AT&T, Verizon Communications and other companies. Congress authorized the auction in 2012 to shift airwaves to mobile services, while also raising billions of dollars to reduce the federal budget deficit.
New Tesla: Tesla Motors, the Palo Alto-based maker of high-end electric cars, will unveil its lower-priced, mass-market electric vehicle called the Model 3 on Thursday. Though the car won’t be available to consumers until later in the year, Tesla will start taking $1,000 down payments on Thursday. The Model 3, a sedan, is expected to sell for about $35,000, well below the $80,000 to $100,000 Tesla charges for its current cars. Down payments can be made online or at a Tesla showroom.
Internet privacy: The Federal Communications Commission on Thursday will consider a proposal that would place tough new restrictions on how Internet service providers can use their customers’ personal information, including Web-browsing activity. In most cases, cable and wireless companies that offer broadband service would need permission from customers to use or share the potentially lucrative trove of data collected about them as they surf the Internet, send email or use mobile apps.
THE AGENDA
Monday’s Business section takes a close look at the Southern California housing market. What does it find? Packed open houses. Bidding wars. Rising prices. Competition is fierce as the spring selling season gets underway, and would-be buyers can expect a pitched battle if they want to close a deal. The frenzied start has been driven by a dearth of homes for sale, low mortgage rates and steady job growth.
STORY LINES
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Dodgers channel: Time Warner Cable is cutting its asking price for SportsNet LA — its Dodgers channel — by 30% in an effort to persuade cable and satellite providers to pick it up. However, pay-TV providers don’t seem to be buying it. DirecTV/AT&T and Verizon declined to comment. Cox Communications said it hopes to reach an agreement with Time Warner that does not “burden our customers with excessive price increases.” Analysts say the holdouts are unlikely to take the discounted offer because they don’t want another rate hike to encourage cord cutting.
Scope sales: Soon after doctors at UCLA’s Ronald Reagan Medical Center traced deadly infections to tainted medical scopes last year, they pressed the device maker to lend them replacements. But Olympus refused. Instead, the Tokyo company offered to sell UCLA 35 new scopes for $1.2 million — a 28% increase in price from what it charged the university just months earlier. Emails related to the transaction show how Olympus continued to push sales even as the devices it previously sold to UCLA and other medical institutions were linked to illnesses and deaths.
Hollywood votes no: More Hollywood studios and media companies are putting pressure on Georgia’s governor to veto legislation that’s condemned by opponents as antigay. Time Warner, Disney, Viacom and AMC are among those protesting Georgia’s Free Exercise Protection Act. Backers say the controversial legislation, passed by Georgia lawmakers March 16, would protect religious freedom. Critics say it would step up legal safeguards for opponents of same-sex marriage.
iPhone hack: Federal officials have been tight-lipped about exactly who has offered to help them open the iPhone of San Bernardino shooter Syed Rizwan Farook — without help from Apple. David Bowdich, assistant director of the FBI’s Los Angeles field office, said the third party, which he would not identify, demonstrated the ability to open the phone in testing. That’s why the agency asked a federal judge to delay a hearing in its legal battle against Apple. An Israeli newspaper said that Cellebrite, an Israeli mobile forensics firm, was assisting the FBI.
The Potter effect: Only a few weeks before the opening of its much-anticipated Harry Potter attraction, Universal Studios Hollywood performed a shrinking spell on your wallet. It quietly raised prices up to 20%, pushing its highest-priced daily ticket beyond that of its sister parks in Orlando. And Universal Studios Hollywood isn’t alone. Disneyland adopted a new set of ticket prices last month that raised its highest daily ticket by about 20%. The moves shouldn’t come as a surprise because both Southern California parks are preparing to open what may be their most popular attractions in years.
WHAT WE’RE READING
Some recent stories from other publications that caught our eye:
Amazon’s dream: The New York Times looks at Amazon’s aggressive lobbying efforts to be a delivery powerhouse. “Amazon has emerged as one of the tech industry’s most outspoken players in Washington, spending millions on this effort and meeting regularly with lawmakers and regulators.”
Sky’s the limit: Bloomberg serves up a profile of Vietnam’s Nguyen Thi Phuong Thao, who is “poised to become Southeast Asia’s first self-made woman billionaire known for putting bikini-clad models on her VietJet Aviation Joint Stock Co. planes and calendars.”
Andy Grove: Slate remembers former Intel CEO Andy Grove, who died last week. “He was a brilliant but unsparing manager and ultra-rough competitor. ... Only Bill Gates, Steve Jobs and now Elon Musk are in remotely the same category.”
Edifice complex: Want to understand Donald Trump? Do what Quartz did and pay a visit to Trump Tower. You’ll find “the personification of the real estate mogul” and see “manifestations of the many controversies surrounding him.”
Seeing the light: How’s this for a sign of the times? CNBC says descendants of Standard Oil founder John D. Rockefeller have sold their ExxonMobil stock and plan to dump all other fossil-fuel investments. They’ve concluded there’s “no sane rationale” to be in the oil business.
SPARE CHANGE
Some of you may be saying, “Standard Oil? What’s that?” Nearly every U.S. oil company can trace its corporate DNA back to Standard, which was broken up by the feds in 1911. One of the 34 companies created was Esso, which became Exxon, which became ExxonMobil.
For the latest money news, go to www.latimes.com/business. Until next time, I’ll see you in the Business section.
