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Though the NetEase tie-up is the main “new news” here, the broader story is that there are still important barriers to Google getting back into China (just as there are for Facebook), the thorniest of which is whether Google sacrifices its stance on censorship in order to re-enter the market. That was the primary reason it left back in 2010, and yet the Chinese government’s approach hasn’t really changed in the interim. Unlike Facebook, which is prevented by the government from operating in China at all, Google chose to leave China of its own volition, and the main barrier to re-entry would be deciding to go back in despite the moral quandaries inherent in such a choice. This is where Apple’s history in China is interesting – as first and foremost a hardware company, it has been able to run the core part of its business just as it does elsewhere, with any censorship applying to narrow slices of its overall business, such as individual apps in the App Store or the iBooks store as a whole. For Google and Facebook, however, access to information is their central value proposition, and so sacrificing the completeness of that offering to censorship is a much bigger concession.
via The Information
Motorola Shares Results from Moto Mod Developer Events (Feb 6, 2017)
While LG is stepping away from its modular approach, Lenovo/Motorola seems to be doubling down on its Moto Mods strategy, holding developer events to invite third parties to come up with clever ideas for add-ons to its Moto Z range. Either Motorola is seeing more traction around the concept than LG did, or it’s simply out of other ideas for how to differentiate its phones in the market. I’ve seen little evidence that the Mods (or Moto Z) are selling particularly well, so I’m skeptical that it’s the former. But it’s interesting to see Motorola take the crowdsourcing approach here, both with these developer events and its Indiegogo campaign, which runs through March.
Amazon is fond of making announcements around cool but generally far-off concepts around the end-of-year holidays as a way of giving its brand a boost just when people are thinking about buying lots of stuff online. The timing here may be a coincidence, but it certainly won’t hurt Uber to have some flying car stories out there at a time when its brand has taken something of a knock in the US from the immigration brouhaha. Flying cars are probably the only thing Uber is working on that’s even further out than its autonomous cars in terms of timelines – hiring a NASA engineer to head the project is a great PR move, but there’s no chance we’re seeing anything like this in any American cities anytime soon. Take all the regulatory hurdles associated with autonomous cars and then put them in the sky and you have some idea of what these VTOL (vertical take off and landing) vehicles would have to overcome to go into production, even with human drivers/pilots. And as with autonomous driving, Uber’s cavalier attitude towards regulation doesn’t give me lots of confidence that they’re the ones I want pioneering this technology.
Google and Facebook to help French newsrooms combat ‘fake news’ ahead of presidential election – VentureBeat (Feb 6, 2017)
If only these companies had made such a concerted effort to combat fake news in the US a year ago rather than only really springing into action in the very late stages of last year’s presidential campaign (and in Facebook’s case, mostly after it was over). It appears both companies are taking their duty to put accuracy above ad revenue a bit more seriously in France than they did in the US, a sign of increased realism about the power that each company has in shaping the news people see.
More evidence that Snapchat is TV for millennials? (As Ben Thompson, Kerry Flynn at Mashable, and today Christopher Mims at the WSJ this morning have each suggested.) Perhaps more interestingly, though Snapchat has been described as trying to win over TV advertising dollars, this is actually a promotion of sorts for a traditional TV show itself, with shorter-form, vertically-oriented videos on Snapchat as a sort of taster. There will actually be ads within this video as well, so this isn’t advertising per se, though its goal is clearly to drive viewership on BBC America here in the US. As with its Google relationship, Snap’s relationship with TV is likely to be complicated, as it both seeks to steal ad dollars from TV while also taking ad dollars (and content) from the TV industry. At any rate, if you haven’t seen Planet Earth II yet, I highly recommend tuning in when it airs – it’s fantastic.
Last week, Recode reported that several big tech companies were drafting a letter to the Trump administration on immigration, though I still can’t find confirmation that this letter has actually been sent. However, those tech companies and many others have now filed an official friend of the court brief in the lawsuit being brought against the administration by the states of Minnesota and Washington. This steps things up a notch, formally putting the 97 companies behind the brief on the other side of a court case from the administration. As with the early condemnations of the executive orders just over a week ago, Amazon is notable by its absence, as is Tesla (whose CEO Elon Musk has continued to sit on the advisory council Uber CEO Travis Kalanick vacated last week). Tesla’s absence is consistent with Musk’s overall stated strategy of trying to bring change from within, but Amazon’s absence may simply be due to the fact that it weighed in on the case separately earlier in the process (though Microsoft has participated at both stages).
Update: this tweet explains that Amazon was asked not to sign the amicus brief because it was a witness in the original case.
Apple now offers Final Cut, Logic, and other pro apps for $199 through education bundle – 9to5Mac (Feb 4, 2017)
Apple has always been strong in the education market – a much higher percentage of schools than homes use Macs as their primary computers, and hardware discounts have been part of that strategy for a long time. But recently Google has made significant inroads in education with a combination of Google Apps and Chromebooks, and of course a big part of the appeal is that the software is free or very cheap. By contrast, both Apple’s hardware (whether iPads or Macs) is expensive, even with discounts, and its pro creative software runs to several hundred dollars each for the core apps. This new bundle addresses that by bringing the price down quite a bit (given that the bar a customer has to clear to qualify for the bundle is pretty low, it can’t be priced too aggressively or it’ll undercut sales much more broadly), making it more affordable for schools. Many schools, of course, won’t require anything beyond iMovie or GarageBand for movie and audio editing respectively, but for those teaching higher-order creative tasks, this will help bring down the costs of those programs.
Another chapter in the bizarre saga of Google’s various voice and assistant technologies. Now was Google’s proactive non-voice assistant play for years, while Google Voice Search handled the voice aspects. With the launch of the Google Assistant, it was logical to assume that it would displace this combination, and yet its still not clear whether that will actually happen. Google is discontinuing the Google Now Launcher as part of the GMS bundle OEMs use to pre-package various Google apps and services, but isn’t replacing it with an Assistant-based launcher, and gives OEMs the option of not replacing it with anything within their own launchers. So, Now dies as part of GMS (and in the Google Play Store) but there’s no official communication still about when Assistant might be made available broadly to OEMs. Google’s decision to make the Assistant exclusive to the Pixel at launch was a massive strategic shift, and has arguably cost them significantly in the voice platform race against Amazon, and it continues to provide very little clarity on its future as part of Android for OEMs.
via Android Police
With Chrome 57, Progressive Web Apps will appear in Android’s app drawer, settings, more – 9to5Google (Feb 4, 2017)
I saw the headline here and almost literally yawned – it doesn’t sound all that interesting on the face of it. But read the article and you’ll find that this is an important step in making Google’s Progressive Web Apps first class citizens within Android – a position they haven’t enjoyed until now. Progressive Web Apps behave like apps in many other respects, but didn’t appear in the app drawer or other locations within Android which display a grid or listing of all installed apps. Google is committed to its several web+app models such as Instant Apps and Progressive Web Apps, and this is another sign that it’s taking that effort seriously and removing friction and barriers to adoption. Though the piece acts as though Google’s motivation here is simply making apps easier to use, the other big motivator is obviously that Google’s financial interests are better served by app models that tie back to the web than by purely native apps.
Court Rules Google Has to Hand Over Data in Contradiction to Recent Microsoft Ruling – The Register (Feb 4, 2017)
The recent ruling in the ongoing case involving Microsoft and customer data stored outside the US had at least temporarily provided some reassurance that the big tech companies’ stance on this issue would be upheld in court. However, a new court in a different part of the US has now ruled the other way, though its rationale for ruling differently is that Google manages its data and data centers differently from Microsoft. This is a blow to the big tech companies who’ve fought to keep their overseas data centers (and the data held there on non-US customers) off limits for US law enforcement, but the Microsoft case was likely to go to the Supreme Court anyway. Hopefully, the court will rule in such a way that provides clarity not just in the Microsoft case but more broadly on this question.
This is interesting additional detail around the Snap IPO filing I covered yesterday (and which I wrote about in depth at Beyond Devices today). Snap recently signed a 5-year deal with Google to use its cloud services to the tune of at least $400m per year, and the companies have worked together on some stuff in the past two, including some projects that never made it to production. But Google was also listed among the handful of competitors Snap specifically cited in its S-1, so this relationship is, as Facebook might say, complicated. That’s particularly the case around search, which is one of the areas where Snap was partnering with Google but eventually pulled out and decided to build its own platform instead.
AT&T and Verizon just got a free pass from the FCC to divide up the internet – The Verge (Feb 3, 2017)
The Verge is what I call a strict net neutrality advocate – the only conception of net neutrality it considers acceptable is one under which there is no prioritization and no differential charging of broadband traffic for any reason. As such, it has taken a hard line on programs like T-Mobile’s Music Freedom and BingeOn programs, and especially on programs such as AT&T’s zero-rating of DirecTV traffic and Verizon’s zero-rating of its Go90 video service. The FCC began looking into these approaches towards the end of last year, but hadn’t reached any final conclusions, and new FCC chair Ajit Pai has now closed the investigations without taking any action except to void the preliminary conclusions that were reached. The FCC’s own NN order from 2015 explicitly contemplated but didn’t ban zero-rating and sponsored data, saying only that it would address these as and when they breached other standards such as “no-unreasonable interference/disadvantage”. It was under that broad remit that the FCC was investigating the carriers in late 2016, but Pai always opposed these investigations and has now closed them down. As I wrote a couple of weeks ago, how you feel about this depends on how strict you feel the definition of net neutrality should be – if, like the Verge, you’re a strict NNer, then you’re outraged, especially because this might be the beginning of a broader dismantling of net neutrality. If you take a narrower view of what NN should mean, this is not a problem per se.
via The Verge
I first commented on this story when Mark Bergen reported that a deal was in the works a few weeks back, and what I said then was that this was yet another example of the sharper focus Alphabet has had under Ruth Porat. It’s a great example of selling off a business that has very little direct ties to the rest of Alphabet and where the underlying mapping imagery can more easily be bought from a third party – there’s no reason for Alphabet to own satellites itself for mapping.
The topic of fake news and the related topic of filter bubbles has been one BuzzFeed has been particularly strong on in recent months (abuse on Twitter is another). This analysis is fascinating, and shows how even the experience of watching video on Facebook can be colored by the outlets a user chooses to follow. This isn’t quite the same as Facebook’s algorithms showing users different things – in this experiment, the user consciously chose to watch either a Fox News or Fusion live video stream. But it’s a great illustration of how users on Facebook can have completely different experiences even when engaging with the same underlying content.
LG has redesigned its 5K Mac monitor so it can handle being placed near a router – Recode (Feb 3, 2017)
This has been a bizarre story – LG somehow produced a monitor for its partnership with Apple whose performance was seriously affected by close proximity to a router, something I’m guessing isn’t uncommon in home offices around the world. This is an unfortunate side effect of Apple’s decision to cede its first party monitor role to a partner – it no longer has control over quality and performance in quite the same way. Buyers and potential buyers had already been complaining that the monitor doesn’t look nearly as nice as Apple’s own, but that there should be serious performance issues too makes it worse, especially given the high prices (before discounts) of these monitors.
Uber has been by far the tech company hardest hit by the combination of its overall relationship with Trump and its response to the immigration actions last week, in some cases perhaps unfairly. But it was Travis Kalanick’s position on one of Trump’s advisory councils, and his apparent complete willingness to be close to the administration, which set the context for all that followed. Without his perceived indifference to what many others in the tech industry have seen as a deeply flawed administration, I suspect Uber’s actions over the past week wouldn’t have been seen in the same light, and as such his position on the advisory council was at least as much to blame as specific actions taken since last Friday. His departure from the council comes fairly late in the game, and so it’s not clear what difference it will make now – the narrative is fairly set at this point. But Uber has apparently lost 200,000 customers over this issue, and it’s a no-brainer that Kalanick would step down rather than continue hurting his business over this issue. It’s notable that Elon Musk remains on the council, and Tesla has also lost some Model 3 preorders over this, but he today defended his decision and stated his intention to continue to try to influence the situation from the inside rather than the sidelines. The fault lines in all this are fascinating to watch – we’re going to see lots more movement from tech companies as they seek to strike the right balance between constructive criticism and outright opposition to the administration and its policies.
via New York Times
The long-awaited Snap S-1 was released this afternoon just as Amazon and GoPro were reporting earnings, so it’s been busy. I tweeted some of the most interesting tidbits I saw at first glance earlier, but will do a deep dive for a blog post at some point in the next 24 hours too. Some highlights: the company is growing very rapidly in revenue terms, as it ramps ARPU fast, but still makes 88% of its revenue from North America, even though a majority of users are overseas. User growth has been decent, ending 2016 with 160 million daily active user (its only user base measure), but has slowed in recent months, which Snap blames on both a poor Android update and competitive moves (such as Instagram Stories, though it’s not mentioned by name). It loses money in massive amounts – there’s no clear path to profitability here any time soon, even with rapid growth, as cost of revenues alone outweigh revenues. Engagement is mentioned 103 times in the filing, as was widely anticipated, but the only measure mentioned beyond DAUs is time spent, and it’s not provided on a consistent basis. That’s a worrying sign at a time when Snap needs to be demonstrating that its users are not just using the app daily but spending more time in it. Other tidbits: Apple is mentioned in a list of competitors, and Google is Snap’s cloud provider, with a massive commitment to future spending with the company. This blog post goes into a lot more depth on the filing.
Amazon Reports Fourth Quarter 2016 Financial Results (Feb 2, 2017)
Amazon had a somewhat disappointing quarter relative to analyst estimates, as growth slowed in its core e-commerce business. Unit shipment growth, which had been above 25% for the last five quarters, dropped suddenly to 24%, which impacted overall growth rates, as those dropped for the second quarter in a row. The International business had significant losses for the second straight quarter as Amazon invests more heavily overseas in fulfillment, market entry, and extending services like Prime video globally. AWS grew at a healthy clip, though margins are flattening at around 26% lately. As usual, executives on the earnings call were not helpful in understanding or predicting the big swings in both growth rates and investment levels, though guidance for Q1 looks fairly light. The official explanations are the anniversary of a leap year in 2015, which added 150 basis points to growth, and currency headwinds, which are being mentioned more frequently again on earnings calls lately. But it looks as though Amazon may be expecting slightly slower growth in Q1 too. Dropping back down to the high teens and low twenties growth rates Amazon saw in 2014 and 2015 wouldn’t be the end of the world, but it would be a rather different trajectory from the one it’s been on for the past year and a half, and investors would react accordingly.
GoPro actually released some slightly better results for Q4, following a really tough first three quarters of the year, with the first year on year growth since Q3 2015. But revenue was still down on Q4 2014, which remains its best ever quarter, it lost money for the fifth straight quarter, and ASPs are still below previous levels. This is a slight recovery, and it obviously wasn’t helped by the problems with the Karma, but there’s not much evidence yet that GoPro can get back on the trajectory it was on before things started to go wrong after the aborted Session launch. Having cut its headcount by almost 300, it’s lowered its costs a little, but will need to get serious revenue growth going again if it’s to get back to serious profitability.
Given that Apple argued precisely that security backdoors almost always make their way into the hands of evildoers, this news is great validation of Apple’s refusal to cooperate with the FBI early last year, even if it’s a private firm rather than the government that’s been hacked in this case. Indeed, that seems to have been the hacker’s motivation in this case. It’s also worrying from an Apple perspective that a provider like Cellebrite should have had such lax security that a hacker could breach its systems and access these tools, assuming the claims being made here are in fact legitimate.