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Careem to Suspend Pakistan Service After Nearly a Decade Amid Economic Challenges

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Careem, the ride-hailing service owned by Uber in the Middle East, announced it will suspend its Pakistan operations on July 18, ending a near 10-year presence in the country due to economic difficulties, rising competition, and capital constraints.

Launched in 2015, Careem was a pioneer in app-based transport in Pakistan, helping to popularize digital payments, app bookings, and increasing female ridership. However, the company said the tough macroeconomic environment, intensified competition, and challenges in global capital allocation made continued investment unsustainable.

Newer competitors such as Russia-backed Yango and Latin America’s inDrive have expanded aggressively in Pakistan’s major cities with low-cost ride models. This follows Uber’s exit from Pakistan in 2022, signaling mounting pressure on the country’s digital economy.

Pakistan’s startup ecosystem has struggled since 2022 amid drying venture capital, soaring inflation which peaked at 38% before easing to 3.5%, and weakening consumer demand. Several startups like Airlift, Swvl, VavaCars, and Truck It In have shut down or downsized.

Globally, ride-hailing companies including Uber, Lyft, and Grab have been exiting unprofitable markets or shifting toward adjacent services such as deliveries and payments, due to rising costs, regulatory hurdles, and thin margins in emerging markets. Uber continues to operate in parts of the Middle East and North Africa but has withdrawn from Pakistan as of 2024.

Cognizant Increases Share Buyback Plan by $2 Billion Amid Economic Challenges

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Cognizant Technology (CTSH.O) announced on Tuesday that its board has approved a $2 billion increase to its existing share repurchase program, bringing the total authorized amount to $3.1 billion. The company now expects to repurchase $1.1 billion worth of shares this year, a $500 million increase over previous expectations.

This move comes as part of Cognizant’s ongoing efforts to enhance shareholder returns, despite facing challenges in the IT services market. Shares of the company rose 1.7% in early trading following the announcement. Cognizant is set to host its investor day later today, where it will unveil its long-term growth strategies, including plans to improve its artificial intelligence (AI) offerings.

The company has been grappling with fluctuating IT services demand due to economic uncertainty and high interest rates, which have put pressure on enterprise budgets and caused clients to reduce spending. This uncertainty led to Cognizant lowering its annual revenue forecast last month, falling short of analysts’ expectations.

In addition to these financial concerns, Cognizant is also dealing with activist investor involvement from Mantle Ridge, which has been in discussions with the company since mid-2024. The Wall Street Journal reported earlier this month that Mantle Ridge has acquired a stake worth more than $1 billion in Cognizant and has been privately engaging with the company to address its performance and share price growth.

Apple Faces Mounting Challenges as Foreign Smartphone Sales Plummet in China

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Foreign-branded smartphone shipments to China, including Apple’s iPhone, plunged 47.4% in November compared to the same period last year, according to data from the China Academy of Information and Communications Technology (CAICT). This marks the fourth consecutive month of decline, with shipments falling to 3.04 million units from 5.769 million units in November 2023.

The downward trend, which also saw a 44.25% year-on-year drop in October, reflects challenges faced by foreign brands in the world’s largest smartphone market. Apple, the leading foreign smartphone maker in China, has struggled amid a slowing economy and stiff competition from domestic brands like Huawei.

Economic Challenges and Consumer Behavior

China’s economic slowdown and deflationary pressures have dampened consumer spending. In November, Chinese consumer prices hit their lowest level in five months, compounding uncertainty in the market. This economic backdrop has contributed to declining market share for foreign brands, including Apple.

In an effort to counter the trend, Apple launched a rare four-day promotion in China, offering discounts of up to 500 yuan ($68.50) on its flagship models. The move aims to spur sales as Apple faces increasing pressure from competitors.

Huawei’s Resurgence

Since re-entering the premium smartphone market in August 2023 with locally developed chipsets, Huawei has gained significant ground. In the third quarter of 2024, Huawei’s smartphone sales in China surged by 42% year-on-year, while Apple’s sales slipped by 0.3%, according to research firm IDC.

Apple briefly dropped out of China’s top five smartphone vendors during the second quarter of 2024 but regained its position in the third quarter. However, the company continues to lose ground to Huawei, which has emerged as a formidable competitor in the premium segment.

Broader Smartphone Market Trends

Shipments of all phones within China, including domestic brands, declined by 5.1% year-on-year in November, totaling 29.61 million handsets. The decline underscores broader challenges in the Chinese smartphone market, where domestic brands are better positioned to weather economic headwinds than their foreign counterparts.

Apple’s ability to maintain its market presence in China is crucial, as the country remains a key market for the company. However, the ongoing economic challenges and Huawei’s resurgence present significant hurdles that Apple must navigate to sustain growth in the region.