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.
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
First Android Wear 2.0 devices revealed: Google and LG’s Watch Sport and Watch Style – VentureBeat (Jan 17, 2017)
Evan Blass is the Mark Gurman of the Android world – when he reports on a leak, it’s usually pretty reliable and often ends up being very accurate indeed. The watches described in this leak are in keeping with what we’ve already heard from Google itself and other sources, so that lends additional credibility. The context here is that Android Wear has never really taken off – as with VR, the biggest success among the Android vendors hs been Samsung’s, which hasn’t been based on Android at all, and Google needs to ensure that other Android OEMs without their own ecosystems can compete too. So far, that hasn’t worked, and some Android OEMs are giving up on Android Wear for now. However, Google clearly hasn’t given up, and appears to have convinced LG to join it in launching some new watches to showcase Android Wear 2.0. I’m skeptical that this will make any difference – what’s become clear since the Apple Watch launched is that we don’t yet have a great model for smartwatches other than as fitness and health tracking devices, and Android Wear doesn’t seem to have provided very appealing options in that category.
via First Android Wear 2.0 devices revealed: Google and LG’s Watch Sport and Watch Style – VentureBeat
Eyeballs Are No Longer Enough for Netflix – WSJ (Jan 17, 2017)
This piece is largely speculation – there’s no evidence presented that investors are impatient for Netflix to start churning out bigger profits or reducing its cash burn. Rather, those investors seem to understand that rapid international expansion at the expense of short-term profits is key to longer term success for Netflix, because it drives much faster overall growth and helps spread the cost of content over more users. Netflix’s domestic business is already very profitable on a contribution basis, while its international business is profitable on the same basis in some markets. Growing and getting past the early high investment in customer acquisition in other international markets should put Netflix in the black there too. Netflix definitely does need that growth – at the rate it’s increasing content spending, it has to grow revenues to stay ahead of costs – but on balance I’m fairly bullish about Netflix’s ability to make its strategy pay off.
via Eyeballs Are No Longer Enough for Netflix – WSJ
Google Assistant Will Soon Be Able To Pay For Things – Digital Trends (Jan 16, 2017)
One of the main motivations behind Amazon’s Echo and Alexa strategy has obviously been to drive e-commerce purchases through Amazon, and it looks like Google’s Assistant in its various guises may get the closest equivalent Google can offer – the ability to make purchases on third party sites and services. Payments integration is critical for reducing friction around online purchases, but of course it’s a double-edged sword too – making legitimate payments possible also enables illegitimate or accident purchases, as recent news stories surrounding Echo demonstrate. And of course security will be critical. With no equivalent to the secure enclaves and other technology used in smartphone payment systems, and given that Google Home doesn’t currently authenticate the user in any way, you have to wonder whether this will have to be a smartphone-only play.
via Google Assistant Will Soon Be Able To Pay For Things | Digital Trends
Pixel ‘demand is exceeding supply’ at Verizon stores: Wave7 – FierceWireless (Jan 16, 2017)
I’ve spoken to Jeff Moore, the head of Wave7 Research, multiple times, and he’s very good at what he does, so I trust these numbers in general terms. As usual with supply shortages, there’s the question of whether the crunch is coming on the demand or supply side – in this case, it seems likely that Google was simply very cautious in its planning here and has an unexpected hit on its hands with demand it now can’t quickly fulfill. I like Google’s new hardware – both the Pixel and Home are good devices that do their jobs well, and the Daydream is also a much more user friendly version of the mobile VR concept than the Samsung Gear VR, so I expect these products to do well, though the Pixel in particular will be hamstrung by not just these supply shortages but its lack of carrier distribution beyond Verizon. Look for signs of strong sales in Alphabet’s earnings soon too.
via Pixel ‘demand is exceeding supply’ at Verizon stores: Wave7 | FierceWireless
Amazon pours resources into voice assistant Alexa – Financial Times (Jan 16, 2017)
There are some very interesting estimates in here from Evercore about the financials associated with Amazon’s Echo and Alexa effort. The firm estimates that Amazon lost around $330m on the project in 2016, and that it will lose $600m in 2017, due to a combination of selling hardware at a loss and giving away developer access for free, despite the high cost of developing the underlying service. This hasn’t been talked about nearly as much as the consumer sales angle, but it’s worth noting – Amazon is treating Echo and Alexa as a loss leader, not a moneymaking enterprise in its own right. This is therefore not about selling Echo devices per se, but about using Alexa and Echo as a means to another end (or several) – more retail sales, a powerful consumer platform that can be used for a variety of other things Amazon wants to push, and so on.
via Amazon pours resources into voice assistant Alexa – Financial Times
Hands-on with Nintendo Switch: Jack of all trades, master of some | Ars Technica (Jan 14, 2017)
This early review pours some cold water on the enthusiasm that’s generally met the launch of the Switch. The lack of games, controllers which are awkward in some configurations and games, underpowered hardware for the console mode, and other issues are highlighted here. It feels as though Nintendo decided to get the Switch out the door as quickly as possible rather than waiting the usual long period from launch to release so as to allow more games to be ready – so far, the reaction I’m seeing to that paucity of games is pretty negative, so we’ll see how this works out for Nintendo over time. There seems to have been decent pre-order interest, but we’ll have to see how those early buyers actually like the devices when they get them.
via Hands-on with Nintendo Switch: Jack of all trades, master of some | Ars Technica
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
To take on Amazon, Walmart is streamlining its retail and web teams – Recode (Jan 13, 2017)
Every story about Walmart (or any other brick and mortar retailer) rejigging its e-commerce arm is bound to be seen in the context of Amazon’s dominance of the space, and Walmart has famously struggled in e-commerce despite its massive scale. At least two of these moves are about consolidating leadership of online and offline retail domains, which is a logical step (and one that Apple, for example, took a couple of years ago). Others reflect ongoing hiring from outside Walmart to strengthen its leadership team, and it looks like Jet is also being further integrated into the company, which was inevitable. Walmart won’t report its December quarter earnings until February 21st, but it will be well worth watching what impact, if any, Jet is said to have had on its performance.
via To take on Amazon, Walmart is streamlining its retail and web teams – Recode
Andy Rubin Nears His Comeback, Complete With an ‘Essential’ Phone – Bloomberg (Jan 13, 2017)
Andy Rubin, the creator of Android and its leader at Google for many years, is now apparently about to get back into the smartphone business, or more accurately into the ecosystem business, with a smartphone and potentially several other devices fleshing out the portfolio. On the one hand, this makes sense – few people want to buy just a phone anymore – they want to know that it comes with services and potentially other devices which will increase its value. On the other hand, creating such an ecosystem from scratch is incredibly tough and costly, as we’ve seen with LeEco recently too, so the prospects for success when trying to get there in one big leap are slim. The other big question about all of this, of course, is which operating system the Essential phone will run…
via Andy Rubin Nears His Comeback, Complete With an ‘Essential’ Phone – Bloomberg
Troubled LeEco lands 16.8 billion yuan lifeline after selling stakes in video, movie assets to Sunac China – South China Morning Post (Jan 13, 2017)
Despite its recent launch in the US and a strong presence at CES last week, most of the recent headlines about LeEco have been about its shaky finances rather than its products or services. It looks like it’s now solved at least its short term cash crunch by selling down some of its stakes in various subsidiaries, which should help fund its overseas expansion and particularly its aggressive entry to the US market. From my conversation with LeEco at CES, it appears the focus in the near term will be on expanding distribution channels and content relationships (with more of the latter to be announced very shortly), but until then the value proposition feels pretty thin, and without carrier partnerships all the retail distribution in the world won’t get it far in phones.
Microsoft acquires deep learning startup Maluuba – The Official Microsoft Blog (Jan 13, 2017)
Maluuba looks like an interesting company – unlike so many other AI acquisitions from the last few years, this one doesn’t appear to have a product: it’s mostly a research company that’s done a variety of partnerships to apply its expertise to various thorny problems. As such, it’s a great fit for Microsoft, which is itself looking to apply AI and machine learning across its suite of products, and of course its Cortana assistant. Apple has made lots of AI acquisitions in recent years, but it’s been hard to fathom where exactly in the products and services launched since those acquisitions have paid off – perhaps most of them have yet to make it into consumer products. But you would hope the fruits of this acquisition would be more obvious at Microsoft in the coming years.
Twitter’s marketing chief shows off vibrancy in her pitch – Mashable (Jan 13, 2017)
Twitter CMO Leslie Berland spoke at CES about what Twitter is doing to grow its business, and it gets at the root of Twitter’s current problems. The good news is that Twitter seems to have a decent understanding of why it’s stuck when it comes to user growth – people don’t know what Twitter is for, they think it’s a social network, and they think they have to tweet themselves to get value out of it. The problem is that Twitter hasn’t done very much yet to address these three issues effectively, and you could argue that’s Berland’s job now, to the extent that marketing includes product. But of course Twitter has famously had separate heads of product, and Jack Dorsey himself seems to want a strong role in that domain too, which may be part of the problem (that and the inability to retain those heads of product).
via Twitter’s marketing chief shows off vibrancy in her pitch – Mashable
Facebook’s Testing Discussion Topics in Groups – Social Media Today (Jan 13, 2017)
The Groups feature is one of those that flies somewhat under the radar at Facebook when it comes to media coverage – it doesn’t get talked about much, but it’s been mentioned in every Facebook earnings call over the past year, so it’s clear that Facebook itself sees it as important. This is a minor feature upgrade which appears to be undergoing testing at the moment, but it’s intended to enrich the Groups feature even further, with more enhancements supposedly coming in the near future.
via Facebook’s Testing Discussion Topics in Groups | Social Media Today
Google RAISR Intelligently Makes Low-Res Images High Quality – PCMag.com (Jan 13, 2017)
This is a great example of the practical benefits of machine learning, which is where the focus should be as companies tout their AI/ML credentials. On-stage demos of new capability at the research level are impressive but ultimately meaningless unless they lead to real-world benefits for end users such as this image processing technique which can reduce file sizes by 75%.
via Google RAISR Intelligently Makes Low-Res Images High Quality – PCMag.com
The Nintendo Switch will launch on March 3rd for $299 – The Verge (Jan 12, 2017)
The Nintendo Switch was unveiled a while back with a very effective promo video and a few other details, but price and some other details were not announced at that time. We now have price, specs, and a few other tidbits from Nintendo, and it looks like it’s going to be by far Nintendo’s most popular gaming device in quite some time. It has some weird quirks – relatively low resolution on the screen, very short controller cables, and so on – but most users will put up with those. This device is also another flavor of mobile gaming from Nintendo alongside its recent mobile app releases, so in some ways Nintendo is hedging its bets here, which is a smart move – its mobile apps have been popular, but it’s not clear yet that they’re the basis for a long-term sustainable business for Nintendo.
via The Nintendo Switch will launch on March 3rd for $299 – The Verge
Building the Supercharger Network for the Future – Tesla (Jan 12, 2017)
Tesla announced the outlines of this new approach several months ago, but has now fleshed out some of the details – it will begin charging for using more than 400kWh annually at its supercharging (rapid charging) stations for new cars sold from this month onward, but the rates will be very low – apparently just $120 to drive across the US from New York to Los Angeles. The motivation here is that this charging infrastructure remains absolutely critical to the owner experience for electric cars, and densifying the network is expensive. As such, Tesla wants to recoup some (though apparently not all) the costs from those who actually use it. One of the big challenges for the big auto manufacturers is not just matching the performance of Tesla’s cars but matching its charging infrastructure over time too, and some have partnered in Europe to accelerate this rollout.
via Building the Supercharger Network for the Future | Tesla
Inside Twitter, employees reckon with Trump – The Verge (Jan 12, 2017)
Twitter is probably the tech company that has the most complex relationship with Donald Trump as a candidate and now as president-elect. On the one hand, like many Silicon Valley people, Twitter employees seem largely to be horrified by Trump, but on the other he’s used their product more effectively than any candidate in history, and continues to use it regularly as he prepares to assume the office of the presidency. This piece does a nice job highlighting these conflicts, and the relative powerlessness of anyone at Twitter to resolve them.
via Inside Twitter, employees reckon with Trump – The Verge
Pandora Reducing Workforce by 7% – Variety (Jan 12, 2017)
Pandora is one of the longest-standing music streaming services in the US, and yet it is perennially challenged to make a decent profit. Today, it announced it’s cutting 7% of its US workforce to refocus its business, though it hasn’t said which bits are being cut and which are now considered core. My guess is that this is a reflection of the imminent launch of its subscription all-you-can-eat service and perhaps a de-emphasis on its traditional radio-style business, but more clarity will likely emerge soon. This is just another indicator of just how tough it can be to make money in streaming music, despite the boon paid music subscriptions have been to the music labels in the last couple of years.
via Pandora Reducing Workforce by 7% | Variety