Three Things (3/3)

Missed Call

Microsoft will shut down Skype, which it bought in 2011 for $8.5 billion in what at the time was the biggest acquisition in the tech titan’s history. The plan is to migrate Skype users to teams in advance of the official shut down in May of this year. Under Microsoft, Skype suffered missteps and missed opportunities – from clunky redesigns to strategic neglect – that allowed nimbler rivals (Zoom, WhatsApp, Facetime, etc.) to eclipse it.

Once the verb for internet calling, Microsoft’s decision to retire Skype reflects a strategic reality: the future of communication belongs to unified, AI-enhanced platforms, not legacy standalone apps. Skype walked so Zoom and Teams could run – but now Microsoft is fully backing Teams as its vehicle for modern communication. The Skype shutdown underscores Microsoft’s priority on enterprise-focused collaboration tools powered by AI, and a move away from its past consumer-first approach. In essence, Microsoft is trading nostalgia for a forward-looking bet that integrating voice, video, chat, and AI in one platform (Teams) is how it will stay relevant in the next era of communication.

Scoop, There It Is

Mixue Ice Cream and Tea has officially become the world’s biggest food-and-beverage chain by number of locations, topping McDonald’s and Starbucks. Mixue has rapidly grown to 45,300 locations worldwide, surpassing McDonald’s (43,000) and Starbucks (40,200) in store count​. This explosive expansion is built on a radically different model than those legacy chains – prioritizing rock-bottom prices and aggressive franchising over premium branding. Notably, Mixue’s annual sales (about $6.5 billion GMV) are still only a fraction of Starbucks’ ($55.5 billion)​ indicating that Mixue’s per-store revenue is much lower. Its strategy trades high unit sales for massive scale, targeting cost-conscious consumers that giants historically overlooked.

Mixue’s unprecedented scale gives it some advantages – bulk procurement power, brand visibility, and distribution efficiencies – but it also raises questions about long-term sustainability. On one hand, Mixue’s integration across the supply chain (from factories to warehouses to stores) lets it squeeze out costs and earn profit even on slim margins. On the other hand, Mixue has relatively weak pricing power compared to McDonald’s or Starbucks. The big food giants can raise prices gradually thanks to strong brands and customer loyalty for their unique offerings. Mixue’s appeal, by contrast, rests almost entirely on being the cheapest option for a sweet treat or drink. The company’s value prop is the value, so if (or when) they increase prices, will their brand loyalty be strong enough to weather the storm?

Race to the Bottom

Amazon has launched and is now expanding Amazon Haul, a new ultra-budget shopping section, as a direct counter to surging low-cost rivals like Temu and Shein. Haul is essentially Amazon’s answer to the question: how do you compete with apps selling $2 gadgets and $5 dresses to millions of inflation-weary consumers? The strategy behind Haul is to match Temu and Shein on price and selection for bargain hunters – leveraging Amazon’s platform and logistics strengths to undercut these upstarts on their own turf. Its rollout signals that Amazon is taking the threat from ultra-cheap e-commerce seriously and is willing to adapt its model to retain price-sensitive shoppers.

Amazon’s expansion of Haul is a strategic salvo against Temu and Shein, proving that the e-commerce giant will not surrender the ultra-budget segment. This move is disruptive because it blends Amazon’s strengths (trust, logistics, scale) with the viral discount model of its rivals, potentially outdoing them at their own game. It signals a future where ultra-cheap e-commerce is a mainstream battleground, not a niche – a future where Amazon aims to be the one-stop shop for both the fastest delivery and the lowest price. In short, Haul underscores that Amazon is determined to undercut and outlast its low-cost competitors, ensuring that even the most price-sensitive consumers remain in the Amazon fold as e-commerce evolves.

Disclosures:

As of writing, AMZN, META, and MSFT are holdings in Titan's Flagship strategy.