Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy morning, folks. 🙏

Today we’re diving into -
- Apple’s Airpod manufacturing green flag,
- Dunzo’s deteriorating business,
- And BYJU’s desperation to calm investors down.

Our read time today is 4 minutes and 58 seconds - faster than you can grab an choco cone from the Mother Dairy cart. 🍦

Let's dive in. 👇

Market Vibe Check

Apple kicks off Airpods manufacturing in Hyderabad. 🎧

TLDR -
- Apple is gonna start making Airpods thru Foxconn’s Hyderabad plant.
- This plant is worth $400mn and mass production is gonna start in December.
- $12.1bn of Airpods alone were sold last year, and it’s a lucrative + high margin product.

After iPhones, Apple is now gonna be making Airpods in India too.

They’re gonna start production in 3 months at Foxconn’s $400mn plant in Hyderabad.

Seems pretty insignificant, but the earphone opportunity is MASSIVE.

Airpods’ last year revenue alone was $12.1 billion.

More than Twitter, Shopify, and Snapchat combined.

Not to mention the 1000s of jobs generated for workers on this line.

Apple’s manufacturing strategy seems to be to try making 5% of their total planned production in a new market, and then lever up if the margins are better.

India is slowly getting more and more affluent and Apple demand is ROCKETING - which is precisely why Tim Cook keeps flying in for dosa and vada pav.

Dunzo drivers turn their scooters off. 🛵

TLDR -
- Tons of Dunzo employees have stopped working after their salaries went unpaid.
- Stuff got so bad that operations had to be halted in a few Bangalore cities.
- Crazy thing, they recently laid off another 30% of their workforce and are now running out of cash.

Dunzo is slowly becoming Done-zo…

Last quarter, they fired 30% of their employees.

Demand for their 10-min grocery delivery cratered and everyone realised that the unit economics DO NOT WORK.

So last month, they capped salaries at 75k INR.

No one in the company could earn above that amount, since they didn’t have the cash to pay them.

But yesterday, drivers hung their helmets up and refused to work.

Salaries haven’t been paid for the last 2 months and things are looking pretty bleak.

Can’t blame them for not wanting to spend 10-12 hours on end in this sweltering heat for a nonexistent paycheck.

Nail in the coffin. ⚰️

BYJU’s talks to 100+ investors over their audited finances. 😬

TLDR -
- 100+ BYJU’s investors were emergency-called to be “reassured” that their money is safe.
- Audited results for FY22 (due almost 1.5yrs back) are gonna be filed now.
- They also held an internal town hall to avoid employee protests and walkouts… 💀

Most big-ticket BYJU’s investors have gotten their fingers burnt badly.

Management issues, operating hell, and financial recklessness have helped put the company on a fast-track to ground zero.

Any sane investor would be worried (to say the least) and management had a call with them to try push these worries away.

They’ll also be filing their FY22 results almost 1.5 years late (to try save what little face they can).

Another crazy thing, almost 9,000 of BYJU’s tuition center employees called off a protest due to some divine intervention from Byju Baba himself.

These folks weren’t paid the performance-linked component of their salary and that (obviously) got them riled up.

The company’s India head had to step in and reassure them that he’d stop delaying the payments and put an end to layoff season too.

Irrational exuberance.

In other news… ☕

Chinese central bank rate cut shows how much the pressure has increased (BBG)

Berkshire Hathaway plows $820mn into American homebuilders (FT)

Foreign investors’ positions in Indian futures markets turn net short (Mint)

Vietnamese EV maker goes public at a $23bn valuation (CNBC)

Fitch tells JP Morgan + others to be wary of a credit rating downgrade (CNBC)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team C