Company / division: Apple
Alexa and Google Assistant have a problem: People aren’t sticking with voice apps they try – Recode (Jan 23, 2017)
Call this a rare bit of cold water poured on the hot topic of voice assistants and especially Amazon’s Alexa. The data here suggests that the third party “Skills” available through Alexa have essentially zero staying power, with most abandoned very quickly after the first use. I suspect that’s partly down to the awkward syntax you have to use to invoke Skills on Alexa, and partly down to the fact that most of the Skills are novelties at best, with many providing very little utility at all – the number of Skills available is one that Amazon likes to tout and reporters dutifully report, but is largely meaningless while this is the case. In addition, none of this really says anything about the usefulness or sticking power of the built-in functions, and that would be a great subject for a survey. I would guess that people stick with the core functions a lot more than these Skills, or return their devices because they’re not using them – the latter was my own eventual outcome when testing the Echo.
via Alexa and Google Assistant have a problem: People aren’t sticking with voice apps they try – Recode
Super Mario Run will be available on Android in March – The Verge (Jan 23, 2017)
Super Mario Run was an iPhone exclusive when it first launched, and as such was featured in Apple’s Fall 2016 keynote. However, that exclusive won’t last forever, and it appears that the game will be coming to Android in March, despite the criticism of the business model and other features of the game. What’s not clear is whether the business model will be the same – while getting people to pay for iPhone games is hard, getting Android users to pay up is much harder still, so I wonder whether the additional investment will be worth it if Nintendo sticks with the $10 unlock model. More broadly, there will be additional games for both iOS and Android later this year, so Nintendo is clearly still committed to its smartphone game strategy. However, we still haven’t seen the symbolically important release by Nintendo of any of its highly popular original games for smartphones, something almost every observer seems to think it should do, but which it chooses for some reason to resist for now. It’s also worth noting that Super Mario Run (though not the next game) is another example of iOS first, Android later – a trend that continues to be one of the biggest hits against Google’s Play Store and Android in general.
via Super Mario Run will be available on Android in March – The Verge
Qualcomm Comments on Apple Complaint – Qualcomm (Jan 21, 2017)
This is Qualcomm’s official statement on Apple’s lawsuit filed yesterday in San Diego, and it predictably pushes back on the key points in Apple’s filing. It argues that Apple has been the instigator of the various investigations of alleged anticompetitive behavior by Qualcomm in various jurisdictions, and that Apple has been misleading in its statements to the various authorities involved. Unlike some patent disputes, many of which are ultimately settled out of court, this one looks set to go the distance, given the sheer acrimony involved and the fact that this goes beyond a mere dispute over royalties. Combined with the FTC and Korean case, Qualcomm has plenty on its hands here.
via Qualcomm Comments on Apple Complaint | Qualcomm
Two Sonos Updates – The Verge / Variety (Jan 20, 2017)
Sonos recently got a new CEO, and he’s been communicating with both staff and reporters. The Verge has a mostly intact copy of his internal email to staff, while Variety has an interview with the main himself. The letter to staff is less revealing, though it suggests some broad strokes of the company’s strategy, while the Variety interview adds more unique insight, such as Sonos’s plans to incorporate Amazon’s Alexa into its speakers, a possible IPO, and plans for more of a retail presence. Sonos is in a fascinating space – it was arguably the big standalone home speaker player before Amazon came along with the Echo, and still has the advantage when it comes to whole home audio. But Echo and Google Home offer a big feature Sonos doesn’t, and I think Spence is smart to plan to incorporate both Alexa and potentially other voice assistants. Sonos would still make a fascinating buy for Apple, which already has its products in most of its stores, but both the Echo/Home and Sonos markets could be threatened by an organic entry by Apple into this combined market too.
via The Verge (CEO letter) and Variety (CEO interview)
Apple Sues Qualcomm Over Patent Royalties in Antitrust Case – Bloomberg (Jan 20, 2017)
First we had the FTC taking action against Qualcomm, and now Apple is joining the fray, and I’d argue that’s not at all coincidental. Apple would obviously dearly love to pay Qualcomm less money for licensing and chips, and the FTC has given it the perfect ammunition by highlighting alleged wrongdoing on Qualcomm’s part. Intriguingly, it appears that Qualcomm has been withholding rebates due to Apple in retaliation for Apple assisting the South Korean authorities with their recent investigations into anticompetitive practices by Qualcomm. But Apple is also going a lot further, by making some of the same arguments put forth in the FTC case about overcharging for essential FRAND patents. This is going to get ugly. I’m seeing – both in this Bloomberg piece and elsewhere – suggestions that this lawsuit stems from high pressure Apple feels around iPhone growth and margins, but that’s nonsense – Apple will always try to get the best margins possible, and when it’s given a way to apply pressure to a supplier, it’ll do so. The FTC action provided just such a way, so that’s the proximate cause here, not any sort of crunch on the Apple side.
via Apple Sues Qualcomm Over Patent Royalties in Antitrust Case – Bloomberg
NHTSA Finds No Fault in Tesla Autopilot With Regard to May 2016 Fatal Crash – NHTSA (Jan 19, 2017)
This is NHTSA’s report on the Tesla Autopilot crash in May 2016, which was investigating whether the Autopilot system was at fault. The headline from Tesla’s perspective is that the Autopilot system wasn’t at fault, because it (a) operated as expected, and (b) wasn’t intended to be able to avoid such cross-traffic collisions. That’s good for Tesla, because it exonerates its system, and also because NHTSA determined that its Autosteer system increases safety by 40%. Incidentally, the report also classifies Autopilot as a Level 2 system, whereas I’ve seen some people incorrectly refer to its as Level 3. The key here is that Level 3 systems allow the driver to stop paying attention, whereas Level 2 systems require full driver attention at all times. The problem in this crash was that the driver treated the system as a Level 3 system (which the term Autopilot somewhat implies), and paid insufficient attention to notice the truck crossing the car’s path. Tesla’s system may not have been at fault, but there’s a reasonable argument to be made that it’s not doing enough to train drivers not to treat its Level 2 system as something more – though NHTSA didn’t address that point in its report.
via NHTSA Finds No Fault in Tesla Autopilot With Regard to May 2016 Fatal Crash – NHTSA (PDF) – see also news coverage of the report on Techmeme
Twitter users are diverse but not its staff – USA Today (Jan 19, 2017)
Lots of the coverage of Twitter’s new diversity report (and accompanying blog post) today was positive – the company has made real progress over the past year in increasing its diversity and achieving its own goals, though it also fell short in some areas. However, Jessica Guynn at USA Today has been one of the most active reporters on the diversity beat and doesn’t think the gains are good enough – for one thing, Twitter didn’t share last year’s equivalent report, so it’s impossible to know exactly what gains have been made over the past year alone (the last report released publicly was the 2014 one). But the overall numbers for some minority groups are still very small relative to their share of the US population overall. Kudos to Twitter for increasing its diversity, but kudos to Guynn too, for holding not just Twitter’s but all tech companies’ feet to the fire on this issue.
via Twitter users are diverse but not its staff – USA Today
Google’s Big Marketing Push Pays Off for its Pixel Phone Over Holiday – Bloomberg (Jan 19, 2017)
This piece is an interesting counterpart to a couple of others I’ve recently linked to – another quoting Wave7 estimates for Pixel sales, and this WSJ analysis from earlier today on how hard Alphabet has been pushing sales of its hardware on Google search, given what this piece says about heavy TV advertising by both Google and Verizon around the Pixel. It’s also worth reading this Verge piece, which takes a much harsher stance on what these sales numbers and the supply shortages mean, though it focuses almost exclusively on the 128GB model. The point is, Pixels are in short supply, and there’s an estimate in this Bloomberg piece of around half a million sales, so this is a very different supply shortage from Apple struggling to meet demand for over 70 million phones per quarter – in other words, this isn’t about hitting up against theoretical maximum capacity for building phones, but about very conservative planning on Google’s part. Half a million isn’t bad, but it’s fairly clear sales could have been a lot higher with better supply. Presumably Google will learn from this experience as it looks to update the Pixel, possibly later this year.
via Google’s Big Marketing Push Pays Off for its Pixel Phone Over Holiday – Bloomberg
Apple delivers best experience in every category, research says – CNET (Jan 19, 2017)
For all the recent brouhaha about Apple’s commitment to pro users, and allegations that the company has somehow lost its knack for creating innovative, compelling products that “just work”, it’s always good to see something of a reality check. The survey covered in this opinion piece (results in PDF here and a somewhat vague explanation of the survey here) has Apple placing top in every category in which it competes: smartphones, laptops, tablets, and online music services. This is the kind of stuff Tim Cook loves to cite on earnings calls, because it’s the best possible validation that Apple is doing its job well. For all the criticisms from specific groups, whether that’s creative professionals or their would-be spokespeople in the media, it’s this kind of broad-based success among regular people that Apple has always been committed to, and which I suspect is its north star today. This sort of brand engagement and loyalty is the key driver of sales, profits, and growth, and I would expect Apple to continue to try to create products that generate this kind of broad-based brand value and loyalty.
via Apple delivers best experience in every category, research says – CNET
Netflix reports $2.35B in Q4 revenue, up from $1.67B in Q4 2015 – Techmeme (Jan 18, 2017)
Normally I’d link to a company’s own report on its earnings, but since Netflix’s earnings material is all in non-web file formats like PDFs and Excel spreadsheets, I’m linking instead to the Techmeme cluster of articles on the earnings report. Broadly speaking, this is a great set of results for Netflix – subscriber growth both domestically and internationally was higher than it forecast, with domestic growth bouncing back nicely now after a couple of tough quarters in which price increases were a drag on net adds. The international business is nearing profitability, though Netflix will invest to keep it just in the red in 2017, and margins expanded nicely domestically thanks to those price increases. With short-term growth concerns somewhat alleviated, the main focus returns to Netflix’s content spending and whether it’s sustainable. It had a non-GAAP free cash flow loss of $639m in Q4 and $1.7bn in 2016 as a whole, both massively up from the year before as it invests in original content, which has to be paid for upfront. Over time, that much higher investment will flow through into the P&L too, and continued strong growth is critical for staying ahead of those costs.
via Techmeme
You may also be interested in the Netflix Q4 2016 deck in the Jackdaw Research Quarterly Decks Service.
GarageBand and Logic Pro X Music Apps Get Major Updates – Apple Press Release (Jan 18, 2017)
One of the criticisms of Apple which has become loudest lately is that it is increasingly ignoring the professional creatives who use Macs to do their work, and I’ve seen this not just in relation to Apple’s Mac lineup but also a supposed neglect of Apple’s pro apps. However, at the MacBook Pro launch event a couple of months ago, Apple provided a big update to Final Cut Pro, which I’m told by video pros is a big deal, and now we’re seeing a big update to another of Apple’s big creative apps, Logic Pro. While I think some of the Mac criticism is reasonable (though I still think we’ll see an update on the desktops soon), this stuff about the pro apps clearly isn’t true – Apple is still investing in a big way here.
via Apple – GarageBand and Logic Pro X Music Apps Get Major Updates
Apple iPhone 8 rumors: Features may include facial recognition, laser sensor – Business Insider (Jan 18, 2017)
Cowen doesn’t have the same track record in predicting future iPhones as KGI, which has by far the best, so we should take all this with a pinch of salt. But it’s in keeping with the broad sense that Apple is very interested in augmented reality, and would need to put more sensors and other technology into its products to enable AR functions. I’m still intrigued by the idea of further splitting the iPhone line – there are already three sizes, and this research note posits a fourth, larger one, with exclusive access to an OLED screen and embedded fingerprint sensor. There’s some logic to that, because all the supply chain chatter suggests Apple would have a very hard time finding enough OLED technology to power all of the next generation of iPhones, so making it exclusive to the highest end device would limit demand to a smaller number. Even so, that device is likely to be in high demand, as was the 7 Plus with Jet Black finish, another phone with supply constraints.
via Apple iPhone 8 rumors: Features may include facial recognition, laser sensor – Business Insider
FTC Charges Qualcomm With Monopolizing Key Semiconductor Device Used in Cell Phones – Federal Trade Commission (Jan 17, 2017)
The link below is to the FTC’s official statement on this action. This isn’t the first time Qualcomm has been accused by authorities of anticompetitive practices, but it’s been possible to dismiss the Chinese action as the action of a country trying to keep a foreign competitor in check. That obviously isn’t the case here, with the FTC taking aim at a home-grown company. The allegations are serious – that Qualcomm illegally ties licensing and chip purchases, that it refuses to license so-called FRAND patents on reasonable terms to competitors, and that it forced Apple into an exclusive arrangement that squeezed out competitors. This won’t be easily dismissed, and the stock price took a quick tumble by about 4% late in the session, though it’s relatively stable after hours so far. Qualcomm has dominated portions of its key markets, but if some of the strategies it’s used to achieve that dominance are undone by regulators, things might open up in interesting ways to competitors.
Chris Lattner Says Opportunity to Work on Tesla’s Ambitious Self-Driving Efforts Was ‘Irresistible’ – Mac Rumors (Jan 17, 2017)
Chris Lattner is the Apple engineer and creator of the Swift programming language who recently left the company to go work at Tesla. His departure was seen as a sign of unhappiness at Apple and therefore played into the overall narrative about Apple’s troubles. However, Chris Lattner has now spoken about his actual reasons for wanting to move to a new role, and as I suspected it was more about wanting a new challenge than any negative feelings towards Apple per se. Given how excited Lattner appears to be about autonomous driving in particular, we might speculate that Apple’s more exploratory investment in that area was less attractive than Tesla’s current rollout of the technology. And it’s also possible that Apple was keener to hire someone with more specific expertise and history in that area than Lattner offered – Apple tends to hire what it considers the best possible person for a new role rather than moving someone internally.
App downloads up 15 percent in 2016, revenue up 40 percent thanks to China – TechCrunch (Jan 17, 2017)
Two things are worth noting about all the data presented here: firstly, apps are still growing massively, putting the lie to the idea that native mobile apps are somehow dead, to be replaced by some combination of better web apps, bots, or something else. The number of apps being downloaded is growing rapidly each year rather than stagnating or slowing down. The second point is that there continues to be a massive disparity between usage and spending when it comes to Android and iOS. See the first and fourth charts in this article – the first shows massively more Android apps downloaded than iOS apps, while the fourth shows double the spending on those iOS apps relative to Android. It continues to be far more profitable for developers to make apps for iOS, even with a smaller user base and far fewer apps downloaded. That, in turn, seems likely to reinforce the pattern that the vasty majority of big new apps get launched on iOS first, and Android second (if ever). That continues to be one of Apple’s big ecosystem advantages.
via App downloads up 15 percent in 2016, revenue up 40 percent thanks to China | TechCrunch
Amazon Echo vs. Google Home vs. Microsoft Cortana vs. Apple Siri – Business Insider (Jan 14, 2017)
We’re going to see a lot more of this kind of thing in the coming months, accelerated by Alexa’s amazing performance at CES this year. But as I’ve argued previously, Amazon is only “ahead” in voice if you look at the category very narrowly – Echo is one endpoint for Alexa, and really the only one Amazon has with any meaningful numbers behind it, while Siri, Google’s various assistants, and Cortana each have many more users by virtue of much larger installed bases of devices. Amazon is only ahead if you narrow the market to home-based voice speakers, though it definitely is there. The big question remains whether Amazon can get into devices that leave the home in meaningful numbers, and whether the experience will be any good on smaller devices like phones. Meanwhile, it continues to be much easier for the major competitors to add a home speaker to their device portfolios (as Google has already done) than for Amazon to get out of the home.
via Amazon Echo vs. Google Home vs. Microsoft Cortana vs. Apple Siri – Business Insider
China Orders Registration of App Stores – NYTimes (Jan 14, 2017)
In and of itself, this new move by the Chinese government can be seen as relatively innocuous – the regulation is vague, and ostensibly motivated by policing the plethora of alternative app stores that exists in a market where the official Google Play store is unavailable. However, in the context of the recent request to remove the NY Times app from the App Store in China, this definitely has more sinister undertones. Having policed the web for years, China now appears to be trying to find ways to police the app stores as well, as a way to block access to content critical of the regime. This could end up getting very ugly for Apple in particular if it carries on.
via China Orders Registration of App Stores – NYTimes.com
Apple in 2016: The Six Colors report card – Six Colors (Jan 12, 2017)
This Six Colors survey of Apple observers is an interesting exercise, because although this is a crowd that’s mostly made up of Apple fans, most are unafraid of speaking their minds and being critical where warranted (a complete listing along with a link to their verbatim comments is at the bottom of the post). The Mac was the area where Apple was hardest hit in this report card, understandably given the mounting frustration over the lack of new desktops, but I found the criticism on the Apple TV side less warranted – it got decent software upgrades, and the few gaps in video content have been filled, though admittedly it’s ever clearer that it won’t be an important gaming platform. It’s well worth reading the whole thing, because it’s a mostly honest evaluation of the tough year Apple had in 2016, with quite a bit of detail from some of the people who follow the company most closely. The big question for Apple is how it balances the need to please this vocal but arguably unrepresentative audience with its massive base of mainstream users – in 2016 it clearly served the latter more than the former, and got hit hard for it.
via Apple in 2016: The Six Colors report card – Six Colors
Hacker Steals 900 GB of Cellebrite Data – Motherboard (Jan 12, 2017)
Cellebrite was in the news about nine months ago because Bloomberg reported it was the security firm the FBI used to hack the San Bernardino shooter’s iPhone after Apple refused to help, though the Washington Post contradicted those reports. Whether or not its technology was used in that particular case, that’s exactly the sort of work Cellebrite regularly does for US and other government agencies, and it appears that it has itself now been hacked. It’s not clear that the hack goes beyond some user data, though there’s a vague reference to technical data in the article, but this sort of thing reinforces the sense that no hacks of encryption or other security technologies, even for apparently noble reasons, can ever be deemed 100% safe from being hacked themselves. That, of course, was one of several arguments Apple made in the FBI case.
via Hacker Steals 900 GB of Cellebrite Data | Motherboard
Silicon Valley Takes a Right Turn – The New York Times (Jan 12, 2017)
The headline is an exaggeration – two of the four big companies mentioned are based in Washington, not California, and it’s their corporate PACs which have begun to favor Republican candidates, while their employees remain very firmly left-leaning. But the article does do a great job talking through some of the changes in recent years as big tech companies have shifted their donations towards Republicans while a Democratic president was in office. The data doesn’t go back far enough to indicate whether this is just a cyclical thing, but there’s some evidence the donations were motivated by hopes for more lenient regulatory and taxation policy under a Republican administration. Now that we’re heading into Republican control of both Congress and the presidency, we’ll see how that pans out in practice.
via Silicon Valley Takes a Right Turn – The New York Times