Important Note
Tech Narratives was a subscription website, which offered expert commentary on the day's top tech news from Jan Dawson, along with various other features, for $10/month. As of Monday October 16, 2017, it will no longer be updated. An archive of past content will remain available for the time being. I've written more about this change in the post immediately below, and also here.
Snap’s revenue growth looks like it will come from more ads, not more users – Recode (Mar 13, 2017)
In a sense, there’s really nothing new here – the key quote comes from the S-1/A filing from a month ago. The article, though, argues that Snap will make money from higher ARPU over time rather than from user growth. While it clearly won’t be going for user growth in emerging markets for the reasons stated in its S-1/A, I don’t read that as not being focused on user growth – it clearly will be but that focus will be on mature markets, where it still has tons of headroom, at least in theory. It’s worth noting some other things here: Kurt talks about Facebook as the comparator, and it’s clearly the obvious one, but Twitter is another. And whereas Facebook has now reached a nearly $20 ARPU in the US quarterly, Twitter has stagnated at around $6-7 over the past year. Just because Facebook was able to keep growing ARPU seemingly indefinitely, that doesn’t mean Snapchat will be able to. And I’d argue that with such a simple, non-stream-based interface, Snap probably has far fewer places to put ads, meaning its ceiling is likely quite a bit lower than Facebook’s. It’s also worth remembering that Facebook’s ARPU numbers are at least a little misleading – the user number is only for the core Facebook app, whereas the revenue number includes Instagram, WhatsApp, and Messenger too. Lastly, part of rising ARPU at Facebook is price per ad, not just more ads shown, which is a reflection of new demand outstripping new supply, something else that’s not guaranteed with Snapchat. Overall, I’d be very wary of drawing too many conclusions about Snapchat’s potential from Facebook.
via Recode
Apple Comes Top in Laptop Magazine Service and Support Ratings (Mar 13, 2017)
Tim Cook is very fond of talking about Apple’s customer satisfaction ratings on earnings calls – he clearly believes these are both the best indicators of whether Apple is being successful and the best determinants of its future prospects. As such, reviews like this one, which focused on online and phone technical support and service for laptops across the top brands, are good news for Apple, given that it came top of the rankings. It’s also worth noting where others did and didn’t score well – Acer, Lenovo, and Microsoft took the next three spots, while Samsung came near the bottom.
via Laptop
Key Sensor for Self-Driving Cars is in Short Supply — The Information (Mar 13, 2017)
For all the hyberbolic references to monopolies that sometimes afflict the tech industry, here’s a case where one company really does have what appears to be a monopoly, and on a critical component for autonomous vehicles: LIDAR. LIDAR is the same visual radar technology at the heart of the Waymo-Uber lawsuit, because they’re two of only a very small number of companies currently attempting to make their own, while everyone else buys them from Velodyne at $30-40,000 a pop. The global market for LIDAR is currently in the thousands, and the company expects to ship around ten thousand this year, but it and others would obviously have to ramp to tens of millions a year to supply the global automotive industry in the longer term. And those prices will come down massively – Waymo has supposedly reduced the cost dramatically for its own units.
via The Information
Uber Gears Up to Block Bid to Form a Union in Seattle – WSJ (Mar 13, 2017)
As with Uber’s eventual exit from Austin over fingerprinting, it’s threatening to leave Seattle if its drivers there join a union, and is also actively trying to dissuade drivers from doing so in a range of podcasts and other messages arguing that unionization could be bad for them. Seattle is something like the 20th largest city in the US, and a disproportionately influential one given its status as a tech hub and bastion of somewhat left-wing values. So if Seattle went this way, other cities might follow, and Uber is therefore fighting unionization there tooth and nail. This is just one of several fronts on which Uber is fighting its drivers, from unionization to employment status and benefits to pricing. And although it argues it’s acting in drivers’ interests here, it’s clearly mostly acting in its own, possibly to their detriment.
via WSJ
Pandora Premium: the original music streaming giant is ready for prime time – The Verge (Mar 13, 2017)
I went to download the Pandora app so I could try out this new Premium service, but it’s not available yet, so the headline is inaccurate on that point at least. It also looks like there’s no desktop or even web app, which feels baffling given how many people probably listen to Pandora on a computer at the office. However, the app itself looks interesting – as befits Pandora’s heritage, it’s big on recommendations, though its characterization of everything else out there as “30 million songs behind a search box” feels entirely inaccurate, given how much effort Spotify and Apple Music put into recommendations. Pandora won’t succeed on the concept alone, but because (and if) it’s better at it. It’s always had a unique approach to that challenge, dissecting the music itself with its Music Genome Project rather than simply taking an Amazon-like “people who like this also like that” tack. But that means people actually have to experience it (or know someone who has) to know if it’s truly better, which means convincing them to give it a try will be the biggest challenge. For the 80 million regular users of the existing Pandora service that’ll be easy, but I’m not as sure about the rest of the world.
via The Verge
Intel in $15 Billion Deal for Self-Driving Tech Firm Mobileye – WSJ (Mar 13, 2017)
It’s striking to me that this piece never mentions Nvidia once, even though that chip company has been making much of the noise in the automotive space over the past year, especially when it comes to autonomous driving. That prominence is clearly a driver for this deal, with Intel signing some of its own deals but not getting nearly the buzz Nvidia has been. Mobileye, meanwhile, has been striking deals left and right with a variety of players (though it recently ended its relationship with Tesla). Just in the last three months, it’s announced partnerships with HERE and BMW over mapping, but it’s also in many of other car manufacturers’ existing cars and their autonomous plans. Given Intel’s ongoing struggles in the mobile space, its recent loss of the Microsoft server business to Qualcomm and the ARM architecture, and the ongoing stagnation in PCs, it needs some new drivers of growth, and in-car technology could provide that. Mobileye is also attractive as a business – it’s growing fast (almost 50% year on year in 2016) and profitable, with fairly high margins. So this isn’t an acquisition that will take years to contribute to Intel’s business, although its overall scale is still small. But it’s integration opportunity and the eventual opportunity to sell a joined up solution of chips and sensors which Intel will be focusing on here.
via WSJ
After escaping net neutrality probe, Verizon expands data cap exemptions – Ars Technica (Mar 11, 2017)
Given the new administration’s openness to zero rating and its stated intentions to pare back net neutrality regulations, it shouldn’t be at all surprising that Verizon is now exempting its Fios video traffic from data caps on Verizon Wireless smartphones. AT&T has used zero rating of its various TV services as a hook for customers for some time now, and although Verizon has done the same with its Go90 service, that has tiny user numbers and likely had very little impact on customer acquisition. Zero rating Fios creates a much bigger incentive – it has 4.7 million TV subscribers, of whom perhaps a third might be Verizon Wireless customers already. Video really feels like the big battleground in wireless at this point, with AT&T and Verizon now favoring their own video services, while T-Mobile uses its BingeOn program to zero rate all video. Sprint is the only provider without a meaningful equivalent at this point, and instead focuses on its overall unlimited data approach.
via Ars Technica
Alphabet Swaps Project Loon Leaders After Six-Month Stint for Latest CEO – Bloomberg (Mar 11, 2017)
Given the brevity of Moore’s tenure at Loon, it looks like things didn’t turn out so well, which is a bit surprising given he was thought to be the kind of business brain who would align well with Alphabet’s new, more focused strategy. It’s also a bit surprising because Loon had recently announced that it was making progress in streamlining its technology and therefore getting closer to the point where it might make money. In the end, Moore seems to be either another executive who didn’t jive with the way Alphabet is being run now, or perhaps merely had conflicts with other managers around him.
via Bloomberg
SoundCloud needs more money, or it may sell at a fire-sale price – Recode (Mar 11, 2017)
SoundCloud is beginning to look a lot like Twitter, another service which has lots of active users but which seems to be struggling to find a business model that can drive it toward profitability. In SoundCloud’s case, that has apparently meant it’s struggled to raise money over the past few months, and a possible acquisition by Spotify also seems to have fallen through. On paper, SoundCloud is in a hot area – music streaming – but of course even for the largest player in paid streaming (Spotify) it’s not yet profitable. Paid streaming has been great for the music labels, which have seen a turnaround in their fortunes over the last couple of years as a result of its growth, but not yet as good for the actual providers. SoundCloud is in an even worse position, being mostly a free provider, although it’s tried to turn up its paid services in the past year or so. I think the most likely outcome for SoundCloud at this point is an acquisition and absorption into something bigger, most likely Google.
via Recode
AT&T Discriminated Against Low-Income Neighborhoods, Study Finds – BuzzFeed (Mar 11, 2017)
Depending on your perspective, this is either the broadband industry’s dirty little secret, or a natural consequence of the investment characteristics of fiber broadband. What’s happening here is that broadband providers like AT&T tend to invest the most in broadband infrastructure in areas where they’re likeliest to see a return on that investment, in other words those areas where takeup is likely to be highest, which in turn are disproportionately going to be more affluent. In the past, some cities have required universal coverage as part of franchise agreements to avoid this kind of redlining, but that has changed in recent years, at least in part because of Google Fiber. Google’s big innovation in deploying fiber was to encourage municipalities to bend over backwards to get the service, which turned the usual model of cities extracting concessions from providers on its head. AT&T then said to the same cities that it was happy to deploy fiber on the same basis if it was offered the same inducements and benefits, thus enabling its rapid deployment of fiber-to-the-home infrastructure in recent years. This FTTN infrastructure predates that model, but we’re going to see a lot more of this redlining in the years to come, and cities only have themselves to blame if they allow companies to operate in this way. Meanwhile, this ability to redline is the single biggest driver of faster broadband deployment in the US today, even if access to that faster broadband remains very uneven.
via BuzzFeed
CIA Leak Reveals Gaps in Patchwork of Android Software – WSJ (Mar 11, 2017)
The CIA leak taught us nothing new about the slow rate of Android adoption, but it did perhaps serve as a reminder of its consequences for security. Android adoption is notoriously slow, and it’s something I’ve written about quite bit (see here for my most recent deep dive into the numbers). It takes roughly two years on average for a new version of Android to reach 50% adoption among the base, and no version ever gets above about 40% adoption before a new version begins eating into its share. Compare that to iOS, which typically gets to about 70% adoption within a few months of release, and whose two most recent versions usually account for over 90% of the total base. In the past, this was very problematic, because it meant security vulnerabilities weren’t patched and users were left open to hacks and malware. However, more recently Google and its partners have separated some of the security patches from major OS updates and fast tracked these through a separate update process with the carriers. It’s not a universal solution, but it has helped mitigate some of the security impacts that result from slow OS updates. However, Android in general continues to be far more vulnerable to malware than iOS both because of the slow update issue and because of its overall architecture.
via WSJ
Millennials buy more clothes on Amazon than any other website – Recode (Mar 11, 2017)
Groceries and clothing are two categories where I and others might once have assumed Amazon would never be a serious force, because they appear to lend themselves so poorly to online purchases. On the grocery side, Amazon still is a minor presence, but in clothing it’s now starting to make real inroads, especially among younger age groups. Of course, this data says nothing about total online purchases as a percentage of clothing purchases, and it’s likely that physical retail still dominates, but within e-commerce Amazon is now the biggest retailer among millennials, which is quite the achievement. It continues to feel like Amazon is methodically looking at those retail segments where it’s underrepresented and methodically breaking down the barriers to growth. And of course even in the groceries category it’s doing some interesting things.
via Millennials buy more clothes on Amazon than any other website – Recode
California DMV: Humans soon no longer required in self-driving cars – San Francisco Chronicle (Mar 10, 2017)
Michigan’s autonomous driving laws already allow testing of cars without drivers, and given that these two states are home to much of the testing going on, California clearly feels it needs to keep up. Those Michigan laws assume that carmakers are going to comply with all applicable regulations, and therefore require that any testing is done by or in partnership with those carmakers, while the proposed California law has no such restrictions (logical given the biggest local testers are tech companies and now legacy automakers). In both cases, the states are deferring somewhat to the National Highway Traffic Safety Administration to set the overall rules and to some extent approve cars for autonomous driving without a driver. This Chronicle piece quotes a spokesperson from Consumer Watchdog, which has been particularly harsh (perhaps deservedly so) on Uber/Otto, but also seems to be one of the main organizations demanding tougher regulation of autonomous driving in general in California. What’s interesting is that there are so few voices on the other side of this rapid push towards autonomous driving.
Hulu Live TV Service Won’t Have Viacom Networks – Variety (Mar 10, 2017)
As I mentioned in the context of the YouTube TV launch announcement a couple of weeks ago, every one of these streaming pay TV services has to make a set of sacrifices from the traditional TV lineup in order to hit the target $35-40 price point. In the case of Hulu’s service, it looks like Viacom’s channels will be among those sacrificed, which is in keeping with both the end of Hulu’s recent video on demand deal with Viacom and with Sony’s dropping of the Viacom channels a while ago, as well as their absence from YouTube’s service. DirecTV Now and Sling both continue to carry at least some Viacom channels, but those channels have become less and less popular over recent years as flagships MTV and Comedy Central have faded in cultural relevance. There’s something of a revival going on at MTV at the moment under Viacom’s new leadership, but these are still probably the easiest set of major channels for a new service to live without. Based on what I’ve seen so far of Hulu’s service, it looks like being one of the more compelling offerings to launch, particularly if it bundles in the traditional Hulu VoD service.
via Variety
‘Power Rangers’ Streaming Free on Twitch in 17-Day Marathon – Variety (Mar 10, 2017)
Another reminder that Amazon has a much broader future in mind for Twitch than just gaming videos – it’s paying out of pocket to stream the Power Rangers TV series in a free marathon over the course of 17 days. Its investments in TV content for Twitch have mostly been very small (and often somewhat obscure) in relation to its original content and other investments for Prime Video, but they seem to be building steam. And as this piece points out, Power Rangers is probably a better fit for the core Twitch audience than old Bob Ross or Julia Child shows.
via Variety
Alphabet’s Waymo filed an injunction against Uber for allegedly stealing intellectual property – Recode (Mar 10, 2017)
The fact that Waymo is suing Uber isn’t new, but this new step of filing for an injunction is, and that’s important because it could speed things up considerably. Judging the case in full could have taken months if not years, but a request for an injunction will involve convincing a judge in a much shorter space of time that there’s enough merit to the case for him or her to intervene in the near term. So we’ll know rather sooner how solid Waymo’s case here is, and will likely also get additional details from both sides about exactly what’s been going on. Importantly, we’ll get more from Uber than its brief initial statement about the accusations being baseless, which will be intriguing because from where I sit the forensic evidence looks fairly compelling. As I’ve said before, though, the toughest aspect of this for Waymo and its lawyers is proving that Levandowski actually used the files he downloaded rather than simply his memories of work he’d previously done.
via Recode
Apple’s Siri learns Shanghainese as voice assistants race to cover languages – Reuters (Mar 9, 2017)
One of the things that’s often missed by US writers covering Amazon’s Alexa and its competitors is how limited it still is in language and geographic terms. It only speaks English and German and the Echo range is only available in a handful of countries. Siri, meanwhile, just got its 21st country and 36th language, which reflects a long-time strength of Apple’s: broad global support. Apple News is a notable exception, which is only available in a few countries and one language, but almost all of Apple’s other products are available in a very long list of countries and territories, often longer than for other competing services. The article here is also interesting for the insights it provides into how each company goes about the process of localization, which is quite a bit more involved than you might surmise.
via Reuters
Google goes after Slack and splits Hangouts into Chat and Meet – TechCrunch (Mar 9, 2017)
More announcements today from Google’s big Cloud event, with today’s focus being more on the end user tools rather than the infrastructure ones covered yesterday. The big news is that Hangouts is getting a bit more sophisticated, with a more fleshed out version of the meetings app now called Hangouts Meet and becoming a bit more like WebEx, and a second feature set which basically mimics Slack under the Hangouts Chat banner. Google is definitely getting stronger in some of these areas on the enterprise, although it’s surprising to me that we haven’t seen some of this stuff much sooner – Google has been using a version of Hangouts internally for years for its meetings, and I would have thought we’d have seen these more optimized tools long before now. But it’s getting there, and it’s starting to feel like the enterprise side is a lot more logical in its structure and feature set than Google’s consumer messaging and communication apps.
via TechCrunch
Self-driving car numbers double on California roads – Financial Times (Mar 9, 2017)
California and Michigan have to be the two states where the most testing of autonomous vehicle technology is being done, with the former home to most of the tech companies in the space and the latter the home of several legacy automakers. The FT is here citing data from the California DMV, which you can see in its raw form here. What’s fascinating is the mix of companies here, as I’ve said before – there are several traditional carmakers (VW, Mercedes, Nissan, BMW, Honda, Ford, and Subaru), several big names from the tech world (Waymo, Tesla, Uber, Baidu, Faraday Future, and Cruise [now part of GM]), and a variety of other smaller companies. But Waymo has by far the largest number of cars and miles driven (and most accidents). But the California DMV is certainly the source of some of the most interesting data on self-driving testing anywhere in the world right now.
via Financial Times
This Insurance Startup Wants to Cover Tomorrow’s Self-Driving Cars – Backchannel (Mar 9, 2017)
Pay-as-you-drive insurance isn’t a brand new concept – indeed, I remember a colleague writing a report on this about five years ago when I was at Ovum. The basic concept is that the insurance company finds a way to measure actual driving behavior and then offers lower rates to those drivers who drive most safely. There are a number of pilots and active programs underway already, and this Tesla program just takes it a step further by focusing on drivers who turn on the Autopilot feature. Outside of this program, Root measures actual driving behavior through an app, but with Autopilot-enabled Teslas, there’s apparently no such hurdle to overcome. That’s great validation for Tesla (especially given the recent worries over its latest software), and also for autonomous driving technology as a whole – a key argument made by essentially all of its proponents is that it will be safer than human drivers. I’ll be curious to see if this program eventually gets expanded to cover other ADAS systems (since Autopilot is technically ADAS rather than autonomous technology), and whether Root’s data backs up Tesla’s claims about safety over time.
via Backchannel