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.
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
Amazon launches Pivot a new training program to help employees in danger of being fired – Business Insider (Jan 19, 2017)
Amazon has gained a reputation over time for treating its employees poorly – the New York Times famously did an in-depth investigate piece on this topic as it relates to Amazon’s white collar employees, and it talked about Amazon’s Performance Improvement Plan for underperforming employees. This article talks about a new program intended to benefit those placed on a PIP by helping them develop their skills, and can be seen as an effort by Amazon to help those with poor evaluations rather than merely taking the first steps towards an eventual dismissal for cause. The PIP process was far from the only element of working in a white collar job at Amazon that the New York Times wrote about, and of course Amazon pushed back against some of the other allegations in the report. And then there are the working conditions in blue collar jobs at Amazon’s warehouses and fulfillment centers. So this is part of changing the narrative, but only really addresses one small piece of it.
Google Uses Its Search Engine to Hawk Its Products – WSJ (Jan 19, 2017)
This is a really fantastic bit of a analysis commissioned by the Wall Street Journal. It found that for 91% of searches relating to top consumer electronics categories, a Google or Nest product was in the top ad slot above the results, and in 43% it had the top two slots. This is Google competing with its own advertisers, and Google apparently was so taken aback by the analysis that it tweaked its strategy when the WSJ spoke to Google about it, and the numbers are now much lower. Google’s hardware push therefore not only puts it in conflict with its OEMs, but also with its biggest customers – advertisers. I’m intrigued to know how other big consumer electronics brands feel about this, but the challenge of course is that they have few alternatives – Google dominates search, and so it also has a dominant position in pitching its own products. There’s a close analogy here to Amazon’s hawking of its hardware on Amazon.com, but competitors know what they’re getting into there to a greater extent.
via Google Uses Its Search Engine to Hawk Its Products – WSJ
Minecraft Pocket Edition will no longer receive updates for Windows mobile devices | Windows Central (Jan 19, 2017)
It’s becoming ever clearer that Microsoft is going to go through yet another revamp of its smartphone OS strategy, on top of Windows Mobile and Windows Phone (you could argue Windows 10 Mobile as it currently stands is already a third, but it was very much an update to Windows Phone in reality). Other developers have been abandoning their Windows Phone apps for some time now, but for Microsoft itself to do it is the clearest sign yet that there’s no meaningful future for Windows on consumer mobile devices as it currently stands. The article holds out hope for the full Windows on ARM strategy Microsoft is working on, but it still seems very likely that this will end up being a marginal and enterprise-centric play rather than something that gets Microsoft back into the consumer smartphone market.
via Minecraft Pocket Edition will no longer receive updates for Windows mobile devices | Windows Central
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.
Most engineers are white — and so are the faces they use to train software – Recode (Jan 18, 2017)
A lot of the coverage of the lack of diversity in the tech industry focuses on employment and the lack of opportunities and barriers to entry for minorities and women. In other words, the focus is on the negative impact on those who would like to work in the industry. But this article highlights one of what I’d argue are many practical reasons why this lack of diversity is also bad from a product perspective – less diverse teams produce products which are poorer at meeting the needs of a diverse base of users. In this case, the specific issue is face recognition software and its inability to effectively recognize darker faces, in part because it tends to be trained on data sets of largely white faces and tested by mostly white engineers.
via Most engineers are white — and so are the faces they use to train software – Recode
Ad spend on Snapchat by clients hit $90 million in 2016: WPP CEO – CNBC (Jan 18, 2017)
One of the big challenges for Snap ahead of its IPO is ramping up advertiser spending from experimental to more serious levels, and WPP is one of the biggest funnels through which those ad dollars flow. $90 million is three times what WPP expected its clients to spend on Snapchat at the beginning of the year, but of course it’s a tiny fraction of what those clients spend on Facebook and Google. Getting advertisers to spend more means providing more of the tools and analytics other large online ad platforms provide, and Snap has been somewhat resistant to that approach, although it appears to recognize the need to evolve on this point going forward.
via Ad spend on Snapchat by clients hit $90 million in 2016: WPP CEO – CNBC
Alphabet’s Google Buys Mobile App Tool Fabric From Twitter – Bloomberg (Jan 18, 2017)
Twitter canceled its annual developer conference, Flight, back in October, and I posited at the time that this would send a strong message to developers working with Twitter, though I got pushback from some people at Twitter. Now, Twitter is selling its developer tools (collectively known as Fabric) to Google, rather validating my initial take on the Flight cancelation (no pun intended). This is certainly a result of Twitter’s narrower focus going forward on user-facing, live content including video, but it reinforces the sense that Twitter has really messed around with developers over its history. Developers will still be able to create and run apps for Twitter, but Fabric was a big part of Twitter’s developer toolset and a major focus of those Flight conferences in the past. Lots of those tools, though, had little to do with the core Twitter product, so there’s definitely some logic in selling it a company – Google – which is committed to providing a broad set of generic tools to developers.
via Alphabet’s Google Buys Mobile App Tool Fabric From Twitter – Bloomberg (more on Techmeme)
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
Target Announces November/December Comparable Store Sales Down 3% – Target (Jan 18, 2017)
This is Target’s preliminary press release for fourth quarter sales, which provides November/December comparable sales data in percentage growth terms, and the picture isn’t great. Comparable store sales were down 3% year on year for the last two months, and even though digital (online) sales were up 30%, that couldn’t make up the difference, and total transactions were flat while fourth quarter revenue will be down. The reason is that digital sales still make up only a tiny minority of Target’s overall sales – 5% in the 2015 holiday season, so a lower share than e-commerce’s overall share of US retail sales. That number will certainly be higher for 2016, but it highlights the challenge all big brick and mortar retailers have to face in Amazon: even if they’re able to match its strong growth in online sales, their physical retail operations still take an even bigger hit.
via Target 2016 Holiday Sales Press Release
Google expressed its displeasure to Huawei re allowing Amazon’s Alexa to be built into its U.S. flagship phone – Amir Efrati (Jan 17, 2017)
Amir is a reporter with The Information, and has done sterling work lately on Alphabet and Google. This little scoop was only released in a tweet rather than expanded on in an article, but it raises a couple of important issues that affect both Amazon and Google. Firstly, Amazon needs to get Alexa onto smartphones if it’s to achieve ubiquity for users, and Android is really the only option for integration. Secondly, Google will put increasing pressure on its OEMs not to install assistants that compete with the Google Assistant, but it hasn’t yet made that assistant broadly available for OEMs to use, while Alexa is freely available. There’s a three-way conflict brewing here between the two giants and Google’s OEM partners, and it probably won’t be pretty for any of them.
Google’s New Stab at Boosting Android Brand in U.S. — The Information (Jan 17, 2017)
Android One has always been an attempt by Google to try to squelch some of the uniqueness of various OEMs’ versions of Android, which is arguably inimical to their interests, given that such customizations are often the main way OEMs can differentiate when running the same underlying OS. I had assumed Google was slowly sunsetting the program given how little it’s talked about it recently, so it’s a bit of a surprise to see it now apparently coming to the US (the main focus so far has been emerging markets). Given the low price point, this can be seen as a combination of Nexus replacement and Google Pixel counterpart – a vanilla Android experience for low-end buyers, with the promise of regular quick updates to the OS. It’s also reminiscent of the strategy Motorola began to pursue towards the end of its time as a Google subsidiary. Of course, the big question is whether any smartphones coming out of this program will get carrier distribution – that makes or breaks phone launches in the US for the most part.
via Google’s New Stab at Boosting Android Brand in U.S. — The Information
Microsoft Veteran Will Help Run Chinese Search Giant Baidu – Bloomberg (Jan 17, 2017)
Qi Lu was very well respected at Microsoft and throughout the industry, and many were sad to see him step down from his role there due to health reasons a few months back. Now, he’s shown up at Baidu, the Chinese search engine, both to run much of the business but also apparently to spearhead a big push into AI. Given Google’s prominent role in pushing the boundaries of AI here in the US, it’s interesting to see its Chinese counterpart so far behind, and it makes sense that it wants to catch up. A single hire at the top (and one who will be very busy with other things) won’t get them there, but it can certainly demonstrate that Baidu is taking this initiative seriously, and help hire more of the best to assist in the work. The fact that he brings both significant US business and technology experience and Chinese nationality to bear on the role will also help bridge some of the gaps that might otherwise exist.
via Microsoft Veteran Will Help Run Chinese Search Giant Baidu – Bloomberg
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.
Can Snapchat’s Culture of Secrecy Survive an IPO? – Bloomberg (Jan 17, 2017)
It’s an interesting change to see a story like this written about a company other than Apple, which is usually the focus of articles about obsessive secrecy. Snap is of course a private company at this point, and so has had to share very little about its business with very few people, but that will all change with its IPO, so it’s going to have to get better at divulging at least some things to its investors. On the other hand, I always feel like the media likes stories about how secrecy makes things harder for companies – perhaps because it makes things harder for reporters – and yet there’s very little evidence to back up the claim. Some of the best companies are the best at keeping secrets about their products, precisely because they want to control the narrative when the products are ready for release, rather than have others write the narrative for them based on leaks and rumors.
via Can Snapchat’s Culture of Secrecy Survive an IPO? – Bloomberg
Roku Mobile App Relaunched With New Program Guide – Variety (Jan 17, 2017)
Discovery has been one of the biggest challenges in TV in the present era. There’s simply so much to watch, and so many ways to watch it, that the old interactive programming guide for live, linear programming simply doesn’t cut it anymore. Netflix has been a master of recommendations for ages now (and famously sponsored a big prize to improve its engine even further), but a variety of others have been working on this too, with Roku the latest. Interestingly, in contrast to Apple’s approach, this feature lives in the mobile app and not the main on-screen user interface, though I wouldn’t be surprised if it arrives there too sometime soon. Of course, the quality of the guide can only ever be as good as the partners that choose to participate – Netflix is a big holdout for the Apple TV app, and as far as I can tell it’s absent from the new Roku feature too.
via Roku Mobile App Relaunched With New Program Guide | Variety
Vine Is Dead: Twitter Pulls Plug on Short-Form Video Service – Variety (Jan 17, 2017)
This isn’t news per se – it was announced some time ago. But the shutdown is notable for coming in the midst of another big video push by Twitter, around live video. Vine was the hot thing back in 2012, but Twitter’s focus has become so much narrower in the past few months that it now doesn’t fit and must be discarded. That’s both sad and odd, because Vine had its legion of fans, it was particularly well suited to basketball highlights, and it made a few stars of its own. But neither those stars or Twitter made money directly from Vine, the experience was always very separate from the core Twitter app, and Twitter’s focus is now elsewhere. It remains to be seen, though, whether Twitter will actually be better served by offering the same live video available elsewhere rather than sticking with one of its most unique forms of content.
via Vine Is Dead: Twitter Pulls Plug on Short-Form Video Service | Variety
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.
Facebook looks like it’s going to stop paying publishers to make live videos – Recode (Jan 17, 2017)
Facebook has made a huge push around live video, and still is on the consumer side, but it looks like it’s backing down from paying professional video content creators to produce more of it for the site. That can be read in one of two ways, and this article doesn’t make clear which it is: either Facebook has the product where it wants it and so can afford to take its foot off the gas, or the push hasn’t been working and it’s pivoting to other things. My suspicion is that it’s the latter – we’ll continue to see prompts for users to share live video, but Facebook is giving up on professional live video. I think that’s sensible if it’s the case – Twitter’s strategy of simply licensing existing linear live video feeds seems to make a lot more sense here, even if the revenue opportunities are limited. Professional live video on Facebook just doesn’t seem to be taking off.
via Facebook looks like it’s going to stop paying publishers to make live videos – Recode