Last week saw the Fed raising rates and the markets jumping up in response. As far as technology companies are concerned, Alphabet (GOOGL Quick QuoteGOOGL - Free Report) spun off its self-driving car business, Cisco (CSCO Quick QuoteCSCO - Free Report) and Arista (ANET Quick QuoteANET - Free Report) saw some wins in their long-running patent infringement battles while Yahoo announced the biggest ever hack ever.

So here are the top stories-

Alphabet’s Waymo

Waymo, or “a new way forward in mobility” is the new name for Alphabet’s self-driving car unit, which the company spun out from its X Labs last week. Heavy investments will likely continue, as the separation appears to be for operational flexibility/independence rather than separate financial reporting.

The goals are now more clearly-defined at this stage: in the words of CEO John Krafcik, “We’re not in the business of making better cars. We’re in the business of making better drivers.” That leaves several options including “personal vehicles, ridesharing, logistics or solving last mile problems for public transport.” 

The ride hailing effort in partnership with Fiat Chrysler, is expected to launch by 2017-end. It will be entering a crowded and highly competitive market where Uber, Lyft and several automakers are also looking to enter.

Google has reportedly made the greatest progress in developing self-driving technology (the unit has been 8 years in incubation with the technology powering 2 million self-driving miles), but this will be a market where regulatory control will be significant, competition will be stiff and there will be a war over who controls the data thus generated. It’s unlikely to have a single clear winner.

Read more: Alphabet's Autonomous Car Project Spins into a New Company

Cisco-Arista: Battles Won But The War Is On

Cisco and Arista (founded and headed by former Cisco employees) have taken their rivalry to the courtroom. Cisco understandably has a huge number of patents in networking technology and its clinging on for dear life as it attempts to make inroads into the new-age software defined space. Upstart Arista on the other hand has more software defined technology, but there’s still reliance on some basic networking technology, which is the reason for their long-running legal battles.

Both companies had some wins last week. In Cisco’s favor was the ITC ruling, which found that Arista infringed on two out of an alleged six Cisco patents. But there will be a review (to be completed in Apr 2017) and Arista is already developing a workaround for one. The other patent will expire in 2018. The ITC, which can only ban import of infringing products is therefore unlikely to have a huge impact on Arista. Read more: Cisco Wins Patent Infringement Lawsuit Against Arista

Later in the week, a federal jury decided that while Arista infringed on other Cisco patents related to command line interface (CLI) technology, it didn’t owe Cisco any damages. The case was decided on the doctrine of “scènes à faire,” which can be invoked in cases where certain creative works were the result of circumstances rather than creative pursuit, for example, where software needs to be compatible with technical standards or certain hardware.

Cisco asked for $335 million in damages for Arista’s infringing of over 500 CLI commands. Cisco will appeal the decision and a representative told the press, “We respectfully disagree with the verdict.” Read more: Cisco Receives Adverse Ruling Against Arista in California

Yahoo Hacked

Yahoo has now announced the second major data breach, this one being the largest to date involving names, email addresses, telephone numbers, dates of birth, hashed passwords and, in some cases, encrypted or unencrypted security questions and answers related to a billion customers. Moreover, the company believes that this attack, which took place in 2013, was different from the one announced in September, when data related to 500 million accounts was compromised.

People familiar to discussions at Verizon are now saying that the company is looking to renegotiate the purchase price, last fixed at around $4.8 billion. Verizon does have that option: citing the “material adverse effect” clause, which has reportedly been used for just this purpose in Delaware, where Yahoo is domiciled. It hasn’t ever been used to terminate merger agreements. This can extend the date of closure as the companies determine the total financial impact of the data breaches.

So far, there is no indication that Verizon won’t go through with the deal.

The FBI and senators are also looking into the matter to see if Yahoo’s security measures were adequate, or whether there was any negligence involved.

Read more: Yahoo!'s Latest Data Breach to Jeopardize Verizon Deal?

Other stories -

Corporate

Porsche Engineer Joins Apple: It was revealed last week that Apple (AAPL Quick QuoteAAPL - Free Report) had, earlier this year, nabbed the technical director of Porsche's race car program who was instrumental in taking the company back to endurance racing. Alexander Hitzinger helped Volkswagen-owned Porsche develop the 919 hybrid sports car from scratch and took the team from ten to over 150 in the process.

Apple in Softbank Tech Fund: Apple has decided to invest up to a billion dollars in Softbank’s Vision Fund. The company will be able to use its overseas cash (currently around $200 billion) for the purpose. Around half of the cash raised by the fund (around $50 billion) will be ploughed back in to the U.S. to create manufacturing or other capacity and resulting in jobs growth.

Apple Investment in Indonesia: The country became the latest of the emerging markets looking to drive FDI. It has now ruled that starting from Jan 2017, all 4G handsets sold there must have a local content of at least 30% that can be met with hardware, software or an investment commitment. Apple, after committing to spend $44 million in a research and development center in Indonesia over the next three years will be allowed to sell its latest iPhones in the country.

Samsung OLED for Apple: JP Morgan’s JJ Park, as quoted by Barron’s says, “We expect one of three iPhone models in 2017 to use OLED and the total supply volume to be in the 70M range, followed by a sharp increase in 2018. We think the technology and capacity gap between competitors is high, and our base-case assumption is that Samsung will be a sole supplier until 2018.”

Samsung May Spin Out Foundry Business: Business Korea reported that Samsung may spin off its foundry business as a separate unit after Apple took its A10 manufacturing business to Taiwan Semiconductor.

More on Facebook Fake News: While voicing a desire to not become arbiters of truth, Facebook has appointed a group of third-party fact checking organizations in Poynter's International Fact Checking Network that conservatives view as left-leaning. Worse, this group has the authority to flag stories as “disputed” that Facebook will rank lower. It will also prevent the stories from being promoted or advertised. Sharing by a user will be allowed but the disputed flag will pop up whenever there is an attempt to share.

Facebook Occulus Splits: Facebook has split its AR/VR effort into two groups, one focused on the PC side of things and the other, mobile. Brendan Iribe who co-founded Occulus and headed the unit after it was sold to Facebook, will now head the PC focused effort.

Microsoft Fund: Microsoft (MSFT Quick QuoteMSFT - Free Report) has created an AI-focused fund, in which it has invested a billion dollars. The fund will be focused on driving standards in the segment and investing in startups that will help develop the market or the technology.

New Technology/Products

Dual-SIM iPhone: Apple may be thinking of launching a dual SIM iPhone for customers in India, China and some other emerging markets where the feature is popular. The advantages of dual SIM include having separate work and personal phone numbers and the ability to take advantage of deals from more than one carrier.

Apple ties closely with carriers in North America, Europe, Japan and some other markets, so the dual SIM feature probably won’t work there. But since smartphone growth will largely come from emerging markets in the next few years, the move makes sense. The patents for the technology were registered by people in Apple’s employ.

Apple Airpods: Three months after they were announced, Apple is now ready to take orders for its new wireless headphones. But supply seems limited because delivery times were pushed back four weeks within just a few years. The $159 devices have practically missed the holiday season, which is perhaps the first times this has happened to Apple. Technology websites reported that the wireless headphones are smart (Siri gets activated if you simply tap on them). They are however expensive to replace or repair (Apple will charge $69 a piece if you damage or lose any one).

Facebook Wants Original Video Content: Facebook is reportedly looking to acquire both scripted and unscripted programming and sports to boost its video offering. It isn’t clear yet whether this is just a start or whether it will get deeper into the content creation business. This would diversify its revenue but hugely increase costs/shrink margins and probably not be worth the effort.

Cisco Closes Cloud Unit: Cisco, which had committed to spend a billion dollars on its Intercloud service has now decided to shutter the unit. The company will help its customers transition to other public cloud providers, such as Amazon’s AWS or Microsoft Azure. This wouldn’t be the first time that such a thing happened, the two big cloud infrastructure providers and more specifically, Amazon, have been nabbing customers at regular intervals on the strength of their broad offerings and large number of partnerships.

Amazon Echo Expansion: Amazon scored a major win at Wynn Las Vegas that will equip all its 4,748 rooms with the AI-powered Echo devices. The voice controlled personal assistant device market is heating up although Amazon is well ahead of the others. Google’s Home device still has a long way to go and Microsoft only just announced an agreement with Harman for a Harman-branded Cortana powered device.

M&A and Collaborations

Google Acquires Wearables Startup: Google has acquired a wearables company called Chronologics, which has developed a smartwatch OS and a device called the CoWatch. The device supports Amazon Alexa and can be instructed through voice commands to do things like ordering food or getting weather reports.  

Some Numbers

Pixel Bite from Apple iPhone:Mike Walkley of Canaccord Genuity reduced his iPhone sales estimates. Accordingly, March quarter estimates have gone from 56 million to 53 million units and June quarter from 46 million to 44 million units. The 7 and 7S will lead to slight growth on a year over year basis through calendar 2017 with iPhone 8 leading to higher growth rates the following year. The analyst says that after the first four weeks of launch, iPhone 7 sales slowed down as some users went back to Android, especially Google’s Pixel.

Instagram User Base: Instagram has announced that its user base has increased by a 100 million over the past six months to 600 million currently. The company is expected to generate $1.5 billion in advertising revenue this year, according to research firm eMarketer.

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