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.
Dropcam’s Greg Duffy Joins Apple — The Information (Jan 25, 2017)
Amid the recent drumbeat of departures from Apple (I’ve covered Chris Lattner, but there was also Matt Casebolt who also went to Tesla, Yoky Matsuoka who went back to Nest after just a few months at Apple, Musa Tariq who went to Ford for a big step up in responsibility, and others), this is one going the other way. Greg Duffy was an executive at Dropcam before its acquisition by Google, and is now heading to Apple. This week’s Beyond Devices Podcast (which I host with Aaron Miller) covers this recent spate of departures from Apple and whether it signifies anything. This hire is a good reminder that at a company with 116,000 employees as of the most recent 10-K, there will always be people coming and going, and we shouldn’t read too much into individual moves unless there’s clear evidence that the reasons behind the departures are significant for the company.
via The Information (more on Techmeme)
Apple sues Qualcomm in Beijing seeking 1 billion yuan – Reuters (Jan 25, 2017)
The Apple-Qualcomm saga continues. Qualcomm was investigated by the Chinese authorities a couple of years back and although that investigation ended in 2015, Apple appears to be using it in much the same way as it is using the FTC’s action against Qualcomm in the US, as a basis for its own legal action. It’s still almost impossible for any outsider to know how much merit there is on each side of this argument, let alone how individual court systems might ultimately rule, but this fight just keeps getting uglier.
via Reuters
Facebook is testing News Feed-style ads inside Messenger – Recode (Jan 25, 2017)
It looks like Facebook has finally caved and started testing what are effectively banner ads within Messenger on a limited scale. The closest parallel is the right rail ads on Facebook’s desktop site, because almost all the other ads Facebook shows across both the core product and Instagram are essentially native – that is, they borrow the format of the content itself, and Facebook has never done plain old banner ads on mobile at all. This is just a test, but it’s certainly starting to feel like Facebook is pushing up against the limits of what consumers will bear when it comes to ad load. Though it’s been warning that ad load was going to near saturation in 2017, it doesn’t seem to have quite given up on finding yet more places to show ads, and this feels like one of the least inspired efforts we’ve seen from Facebook so far. I’m very curious to see if the test ends up making it into the finished product, but ads in communication services are notoriously tough – they get in the way of the user, and feel far more invasive than in other settings, especially on mobile. I’d hope that Facebook would think long and hard before pulling the trigger on releasing this to its broader base.
via Recode
Lyft to launch in 100 new US cities, including 40 on Thursday – Business Insider (Jan 25, 2017)
Lyft is perennially in second place in the US ride sharing market, in terms of cities served, rides taken, and any other metric you might care to check. But it’s also been losing far less money at its smaller scale, and has looked like hitting profitability rather sooner than Uber. However, a massive expansion like this is likely to set that effort back somewhat, given that the main reason for the losses is customer acquisition costs, which are always highest in a brand new market. I’ve yet so see any commentary on that point from any of the coverage on this news today, but it should be a major focus here for anyone watching the company.
via Business Insider
Can Huawei Catch Apple and Samsung? – Fortune (Jan 25, 2017)
This piece somewhat acts as if Huawei came out of nowhere into the number 3 spot behind Samsung and Apple in the global smartphone market, and while it’s risen rapidly to the top in individual markets, its global rise has been happening for much longer. It’s been the number three for the last six quarters (likely seven once Q4 2016 is reported on), and has been in the top ten since at least 2011. It may well have crept up on US observers, many of whom don’t tend to focus on emerging markets as much as the US and Western Europe, but this story has been underway for quite some time. Huawei is the big global success story among the ranks of Chinese smartphone vendors, most of whom have done well in China and some emerging markets but less well elsewhere. But Huawei still hasn’t cracked the US, where the carriers I’ve spoken to seem to be reluctant to put a relatively unknown Chinese brand on shelves next to premium products from Apple and Samsung. I don’t think Huawei needs to succeed in the US to be successful, and perhaps not even to catch Apple in raw market share terms, but it’s obviously never going to match Apple in terms of profits.
via Fortune
SpaceX, Uber Reach New Heights In Lobbying Spending – BuzzFeed (Jan 25, 2017)
These numbers get crunched every year, and are always an insight into the sometimes complex relationship between tech companies and the US government, as well as the very different strategies pursued by the various companies – Apple spends far less than some of its peers (less even than Facebook, which is a fraction of its size), while Google is always a big spender. The other thing I’m always struck by is the relatively tiny size of the spending – even Google’s $15.4m lobbying spending is minuscule in the context of its overall business – Apple’s spend was a fraction of a hundredth of a percent of its revenue for the year. It’s also interesting to see which issues the companies lobbied on: Apple lobbied mostly on technical issues directly related to its business, while Google lobbied more broadly on trade and immigration policy as well as several technical topics. All this will obviously potentially get a lot more complicated under the new administration, which has so far had a much more adversarial tone towards big tech companies than its predecessor.
via BuzzFeed
Amazon Expands Into Ocean Freight – WSJ (Jan 25, 2017)
Amazon seems to be treating building its own shipping infrastructure as a major strategic goal at present, from running its own planes to shipping its own sea freight. That’s partly about leverage over the traditional companies it has historically outsourced these jobs to, and partly about flexibility and control over the infrastructure it needs to get the job done. The further Amazon goes down this route, the harder it becomes for anyone to compete on a level playing field – Amazon’s logistics and distribution infrastructure is reaching a point where it’s becoming a massive competitive advantage.
via WSJ
Facebook testing Snapchat clone called Facebook Stories – Business Insider (Jan 25, 2017)
Instagram Stories seem to have worked out really well for Instagram, increasing engagement and gaining rapid adoption, while Snapchat’s growth seems to have leveled off a little lately. It now appears Facebook plans to bring stories into the core Facebook experience too, which makes lots of sense: for all Instagram’s popularity, Facebook’s user base is several times as large, and so Facebook can easily extend the feature to many more people in this way. The attraction of the Stories format (and Snapchat’s ephemeral approach in general) has always been that users didn’t have to work so hard to post the perfect picture to live forever on the site. Snapchat users gravitate towards the throwaway nature of sharing on the platform, and Instagram’s Stories feature has been a nice antidote to the false perfection that’s characterized a lot of sharing among teens in particular there. Facebook should benefit in the same way from this feature, especially since organic sharing is said to have fallen recently. Live Video was supposed to be part of the solution here, per Mark Zuckerberg, but it hasn’t quite worked out that way.
via Business Insider
Google’s 2016 Bad Ads Report: 1.7 billion ads removed, including fake news ads – Search Engine Land (Jan 25, 2017)
The quality of online advertising continues to be one of the big challenges for any company making a business out of selling ads. Between scams, predatory practices, and more recently fake news (and fake news sites), there are lots of ways online advertising can be abused, and Google reports each year on how it’s clamped down on some of this behavior (the report itself is here). Fake news doesn’t actually get a mention in the report directly – the closest link is sites pretending to be news sites for clicks, and then attempting to sell something such as weight loss products. But we do know that Google also shut down advertising on some fake news sites that were using its ad products in 2017. Draining scammers and predators of funds from Google goes a long way to breaking their business model, so we need to see more of this kind of thing.
Snapchat Is in Talks for Big Ad Deals Ahead of IPO – WSJ (Jan 25, 2017)
Another day, another story about Snap trying to grow its ad revenue, this time focusing on getting up front commitments from major ad agencies’ ad buying arms. Given how nascent Snap’s ad business is, convincing potential investors that it has a predictable run rate for ad spend is critical to a successful IPO, so getting some promises from major buyers to increase spending in 2017 would be a useful first step. But of course that increased spend will only come if the ROI is there, which has been the other piece of this puzzle for Snap over recent months, trying to demonstrate that advertising on Snapchat can be more than just speculative.
via WSJ
LG posts $224 million loss as ‘weak’ selling G5 smartphone drags it down once again – TechCrunch (Jan 25, 2017)
LG’s smartphone business has been struggling for at least 18 months now – it briefly went into the black in late 2014 and early 2015, but with that exception has been struggling for even longer, posting losses for the last six straight quarters and eleven of the last twenty. Shipments are falling on an annualized basis – they were 55 million in 2016, compared with 59.7 million in 2015 – but the company is also spending more on marketing and its flagship phone isn’t making the waves past versions did. The modular G5 wasn’t well received and LG will abandon that approach in favor of the smaller-bezeled strategy others are pursuing too ahead of an anticipated launch of a similar phone from Apple in the fall. LG’s troubles just reinforce both the overall challenges of doing business in a maturing smartphone market and trying to compete using Android against many others using the same operating system.
via TechCrunch (slide deck with full results available from this page on LG’s website)
Elon Musk: Surprise winner under Trump – CNBC (Jan 24, 2017)
Although the tech sector has generally recoiled in horror at the prospect of Donald Trump’s presidency, and cooperated only under duress with the incoming administration, Elon Musk of Tesla seems to be something of an exception. His history with Peter Thiel, Trump’s right hand man on tech issues, is a major enabler, but it seems to go beyond that. It would be fascinating if Musk rather than Thiel himself ended up becoming the bridge between the administration and the tech industry. Cooperating closely with the administration is still likely to be a double-edged sword – on the one hand, it may curry favor, but on the other it may anger Tesla customers who view Trump with distaste. It will be fascinating to watch how this plays out.
via CNBC
Statement from Chairman Elliot F. Kaye: Samsung Galaxy Note7 Recall – CPSC.gov (Jan 24, 2017)
While Samsung was rightly hammered over its early handling of the Note7 battery issues, since it decided to kick into full gear and issue a full recall, its performance has been far better. This official statement from the chairman of the CPSC, the US body responsible for recalls, praises Samsung and the US wireless carriers for their response and their success rate in getting devices recalled – 97% of devices have now been returned. Taken together with Sunday’s announcement of the conclusion of the investigation, which was thorough even if it didn’t go far enough on the culture side, this seems like a decent conclusion to the saga. It’s worth noting that most of the statement is devoted to complaining about the CPSC’s small budget and lack of resources to do its own in-depth investigations.
via CPSC.gov
Apple opens Siri to third-party developers on Apple Watch – Business Insider (Jan 24, 2017)
Apple opened up Siri access to certain categories of developers last year as part of iOS 10, but Siri on the Apple Watch has remained a first-party-only affair. That will change with iOS 10.3, which is rolling out to developers today and offers developers in a subset of four domains the ability to integrate their Apple Watch apps into Siri on the Watch. Apple’s focus in the last year or so has been about putting Siri on essentially every device it sells – a counter to Amazon Echo and Google Home’s single device approach – and making Siri smarter by allowing it to control more third party functionality, albeit in a much more tightly controlled way than Alexa’s Skills approach or even Google’s recent opening up of the Assistant with Actions on Google. These two fronts – third party integrations and the range of devices supported – will be critical as these various companies compete in the voice assistant space, and this small step is part of that much bigger picture.
via Business Insider
Microsoft victory in overseas email seizure case is upheld – Reuters (Jan 24, 2017)
This was one of those rare cases where many of the big tech companies banded together to support one of their number on an issue of concern to all of them. The case concerns data held by Microsoft in a data center in Ireland but requested by US authorities investigating a crime (there’s a good summary of the case here). Microsoft and its pals have argued that this data should not be subject to US law enforcement requests because it resides outside the US, even though Microsoft is a US-headquartered company. Were the government’s argument to be upheld, data held anywhere by a US-based company could be obtained by the authorities in the US, regardless of whether the user has any ties to the US, which could dramatically impact tech companies’ ability to operate in overseas jurisdictions. That’s precisely why Microsoft has had the support of Apple, Amazon, and others, because the effects of upholding the government’s arguments here would be significant. This is a victory not just for Microsoft but the sector as a whole, and I would hope that the Supreme Court either refuses to hear the case or upholds the current verdict.
via Reuters
The Qualcomm ‘Tax’ Rebellion – Bloomberg Gadfly (Jan 24, 2017)
This is a great explanation of exactly what’s going on in the lawsuit between Apple and Qualcomm and the various investigations of Qualcomm by competition authorities in several jurisdictions. At root is the fact that Qualcomm charges a licensing fee based on the total cost of devices, not just on the parts Qualcomm makes, a model that’s increasingly out of whack with where the value is in smartphones. It really is starting to feel like the industry has reached a tipping point at which it will no longer put up with this licensing model, and if things don’t go Qualcomm’s way, that will be extremely damaging to its business. Meanwhile, it keeps selling chips to Apple to use in phones, because to stop would be incredibly damaging too.
via Bloomberg Gadfly
Google Privacy-Policy Change Faces New Scrutiny in EU – WSJ (Jan 24, 2017)
Europe continues to be the locus of a lot of regulatory effort aimed at paring back perceived privacy invasions by big US online advertising companies, notably Facebook and Google. In this case, Oracle is part of a coalition that seeks controls on Google’s tracking of user data, and the focus of the current complaint is the change Google made to its terms and conditions last June, pursuant to which it now combines data on its users across its various services and DoubleClick. No action has been taken yet by European regulators, so this is only a complaint by one of Google’s biggest foes at this point, but this area has proven a thorny one for Facebook already, and could yet become one for Google too.
via WSJ
Target plans to introduce its own smartphone payment service in stores later this year – Recode (Jan 24, 2017)
The fragmentation of mobile payments continues – following in the footsteps of other big retailers, Target is going to roll out yet another proprietary mobile payment system in its stores, rather than merely supporting the two or three store-agnostic mobile payments systems that already have decent traction. The motivations are obvious – control the user experience, capture the data, and drive loyalty – but the user benefits are always minimal, and uptake has generally been minimal too. We’re still at an early stage in mobile payments with no obvious winners yet, but it’s already fairly clear that this kind of store-specific approach isn’t going to be part of the eventual solution.
via Recode
DCN report shows publisher revenue from Google, Facebook, Snapchat – Business Insider (Jan 24, 2017)
This article (and the report it’s based on) frustratingly focuses on average numbers across a range of very different publishers, rather than providing something more detailed, which limits the usefulness of the data, but there’s some interesting stuff in here regardless. For one, this reinforces the sense that publishers are between a rock and a hard place when it comes to supporting the major new content platforms – on the one hand, they feel they can’t afford to be absent, and on the other systems like Facebook Instant Articles and Google’s AMP don’t seem to allow them to monetize as they do on their own sites. One surprising finding is how strongly Snapchat shows here relative to its overall share of ad revenue. The picture is muddied by the fact that the report covers both video and news content, and so YouTube makes a very strong showing overall too. The key takeaway for me is that these companies continue to tread a difficult and dangerous path as they work with these platforms, ceding a lot of control to them and potentially seeing less revenue as a result.
Update: the actual report is now available here in full.
via Business Insider
‘Manchester by the Sea’ Nomination Makes Oscar History for Amazon – Variety (Jan 24, 2017)
Amazon has become the first streaming service to have a movie it owns nominated for best picture at the Oscars. This follows years of Netflix and Amazon content receiving nominations for TV awards, and Netflix has previously earned nominations in other categories. The catch here is that Amazon released Manchester by the Sea in theaters, so it feels much more like a traditional release than most of Netflix’s movies (The Little Prince, a Netflix-owned movie that didn’t debut in theaters, was not nominated in the best animated feature category despite being well received). So although there’s some symbolism here, it’s mitigated a little by the fact that the movie still received a traditional theatrical distribution (and did well there). It is ever clearer, however, that Amazon and Netflix (and potentially others) will continue to grow as a force in movie acquisition – the Sundance Film Festival is underway at the moment and we’re likely to see several more big buys there as the streaming companies beef up their libraries with exclusive content.
via Variety