MacBreak Weekly 426 (Transcript)

Leo Laporte: It's time for MacBreak Weekly. Andy, Rene and Alex are here. We're going to talk about the new 5k Mac, what happened with Apple Pay we've got some great picks of the week. It's all coming up next on MacBreak Weekly.

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Leo: This is Macbreak Weekly Episode 426, recorded October 28^th, 2014.

Skvishy

Leo: MacBreak Weekly is brought to you by SquareSpace, the all in one platform that makes it fast and easy to create your own professional website or online portfolio. For a free two week trial and 10% off, go to SquareSpace.com and use the offer code MacBreak. And by Personal Capital. With Personal Capital you'll finally have your whole financial life in one place, and get a clear view of everything you own. Best of all, it's free. Just sign up, go to Personal Capital.com/macbreak. It's time for MacBreak Weekly, the show where we cover the latest Macintosh news and we've got a great big panel here, joining us all the way from Pittsburgh, PA, Mr. Alex Lindsay.

Alex Lindsay: It's a panel of panels.

Leo: It is. Well, we'll introduce our fourth member in just a second but also next to you is, and you can just turn to your left and see him, is Rene Ritchie. (laughs) Oh it's a Brady Bunch moment.. of iMore.com, oh don't kiss him. Don't kiss him. Hi Rene. Now if you reach a hand out Alex and it appears in Rene's shot then I'll be impressed. And all the way over on the other side, poor Andy Inhatko is off in the left field there. I apologize Andy.

Andy Inhatko: It's okay, I'm right next to the 5k display which is the focus of everybody's attention.

Leo: It is actually, your buddy.

Andy: It's like sitting next to Paul Lind in Hollywood squares. You know you're not the star but the camera's going to be on you.

Leo: We set the icons to a giant size, we were like looking at hidden Easter eggs in the icons but.. this is it. This is the 5k Retina Plus. It is Retina right?

Rene Ritchie: Yeah.

Leo: Almost 200 pixels per inch but not like 500 pixels per inch.

Rene: 16 or something?

Leo: Yeah 14 megapixels and to put this into perspective, Jason Snell was here yesterday and did something that I think kind of demonstrates it. Let me hide our, hide the … how do I do that, I don't even know. I want to hide the dock. I'm using this weird Apple magic mouse which I find far from magic. Alright now we'll open this here.

Andy: Look how tiny the dock is. It's like they're so far away.

Leo: We're running it in high DPI mode. But let me show this image that Jason Snell created for us. This is, I mean this is gorgeous. Of course at home you're probably not going to be wow'd by it because even if you're watching our HD video it's only 720p but you here in the studio audience I think are falling into that mountain landscape. And lo, what is that in the lower left hand corner, postage stamp size? That's the original Macintosh screen from 1984. Compared to our nice, in fact we could get all three of you guys into here easily. All the monitors could be in there. It really is dramatic. Rene you said you have one for review?

Rene: Yeah, I actually bought one. I could not contain myself. I looked at it at the event and it was just so very pretty Leo.

Leo: It's stunning.

Rene: It's ridiculous, it arrived last Friday, I've been using it since then and it looks like an iPhone display, like an iPad display, looks like living paper or living, I don't know, living magazines.

Leo: It's immersive isn't it?

Rene: Yeah and because they laminate the panels now it's not even.. there used to be a window in between you and the pixels so it would look like you were looking through the glass and now it's just in the glass. I want to live in there.

Leo: Yeah that's a good point, as much as the resolution makes a difference, because you know, in fact even when I'm on the side like this it looks great.

Rene: Yeah because it illuminates the gaps so there's less glare, less reflection inside the panel itself.

Leo: Right. It is, they're using high DPI mode, right?

Rene: You can put it, the Retina mode is exactly for act 2X, so twice the horizontal twice the vertical pixels. You can put it in native mode which means that you get every single one of those pixels if you want to. But it's just, they're doing a lot of trickery to get this done because the current Thunderbolt II with display port 1.2 does not support this, so they're using their own TCON controller, their own timing controller to get all this to work, and so far it's flawless for me. I've got the upgraded GPU because I didn't want to take any risk of a Retina tax and the animations are smooth, it's, I haven't seen a hint of sheering, a hint of slow down. It's just been really good.

Leo: That's kind of what happens on my 5k display. Let's say go to the Apple website here and it's when you start scrolling that, well that's not a good place because we can't scroll here.

Rene: Some of the 4k monitors they, I forget what it's called, that technology that..

Leo: MLS or something?

Rene: Yeah, so each half is rendered separately then combined together and sometimes they can't keep up with themselves.

Leo: This has no, I mean this is.. I like you did not want to risk a lower, slower speed so we did also max this one out. It's the top of the line i7, enhanced GPU and all that stuff. Let's go to The Verge. I always use The Verge as my scrolling test.

Rene: Even if you do mission control or something like that, it's so much more responsive than I thought it would be.

Leo: Absolutely no lag. If you play a game you're not going to be playing at this native resolution. What is the native, it's 2880 this way right? And then it's..

Rene: Yeah, 1550 times..

Leo: Times two.

Rene: 5220.. it's a number too big for my poor brain to calculate, Leo. This is so many pixels.

Leo: Let me just, out of curiosity I wonder what will happen if I do this.

Rene: A lot of people ask about the refresh rate and I've had no problem with the refresh rate at all.

Leo: It's not 60?

Rene: I believe it is 60 but they're technically combining two different types together so you never know what the end result will be but I've seen no slowdown, no shadowing, no, nothing.

Leo: Gaming would be where you would care about that. Let's, so right now, I think everybody understands this. It took me a while to rock it, we're running it at the same resolution in effect that a normal Macintosh would be. 2660X1440. But..

Rene: You're using 4 pixels for every point right now.

Leo: Yeah that's what Apple calls it, points, and so that's why the text looks so amazing. But let's go to native, 1:1. No scaling at all on this thing. You know, it's not.. stuff is a little smaller, but not horrible. The menus are more legible than I thought they would be. They must be doing something else with these.

Rene: Well you're getting 1:1 pixel to point there, so there's just so many more pixels on the..

Leo: Right.

Rene: You're getting more stuff on the screen instead of higher resolution stuff.

Leo: Right.

Andy: Is there any trade-off whatsoever in the experience? Outside of the money that's not on your desk?

Leo: You know, $2500..

Rene: You want us to say something?

Leo: Well that's a good point because you, Rene, and I bought like, ours was more like $4,000.

Rene: Yeah, plus taxes plus.. yeah.

Leo: So $2500 is the i5 base model, and you know it's funny, nobody's reviewing, Apple's not even sending those out for review.

Rene: I think Christina Warren did on Mashable as a baseline yeah.

Leo: What did she say, did she notice anything?

Rene: She again is all about the display, if you've been waiting for Retina on desktop then this is the machine you've been waiting for. Everything else is sort of secondary.

Leo: I guess the real question, and this is one that we talked about last week that Mark.. I'm going to go back to best for display which is a scaled resolution. Is, is this better than the Mac Pro? Should you trade in your Mac Pro for this?

Rene: Again, if you're doing massive amounts of open CL if you're doing a lot of parallel computing, if you're doing anything that can really use those 4, 6, 8 or more cores then you want the Mac Pro, but if you want 5k, the current Mac Pro will never be able to drive an Apple 5k display. Then you want the iMac.

Andy: It never makes any sense to buy the cheapest BMW, if that's your budget, buy the best Toyota. That's just basic consumer common sense I think.

Leo: You're future proofing it.

Andy: There's always going to be trade-offs on the bottom of the line whereas when you buy the best that someone makes, even if it doesn't do quite as much as the other one does, so long as your needs are within that gap, it's like you would much rather have something that is the finest thing this company can do.

Alex: And you may make decisions about like for instance whether you're going to get the largest SSD that might be available or the most RAM but a lot of these are not super upgradeable so it's the other thing to think about, I know with the Mac Mini you definitely want to get 16 gigs when you get it, you don't want to get 8 and think you're going to do something with it later.

Rene: This one is upgradeable, the iMac is the only one that's still easily upgradeable.

Leo: RAM upgradeable is the only thing..

Rene: Yeah.

Andy: The point being, if you've got $2500, even $3000 to spend on an iMac, maybe you'd better off buying a conventional iMac but putting in all the memory you can afford, putting in all the storage you can afford given that it can't be upgraded and any accessories you're going to need with it rather than the bare bones 5k iMac.

Leo: Wow this is just gorgeous.

Andy: He said because he doesn't own one and probably will never own one for another year or two and is patently jealous.

Leo: Well, I've seen some people say why not wait a year and it will be even better, right?

Andy: Yeah and I always believe that any time any company, Apple included, does something that's absolutely brand new, whether it's a new case design, whether it's a new technology, it's never a good idea to jump on board, to be in the first group of owners unless you really have a compelling need to have it right now, because the second generation is always going to be better and usually not by just oh well we decided to change the grade of the interconnectors between two components, no they find a better way to put it together, a better way to get more performance out of it. And they found some weak points that would not have been discovered if they hadn't put about half a million of them in the hands of other people.

Leo: We should get, I want to get some red footage. Some 5k red footage Alex.

Rene: Oh, yeah.

Leo: I think you can't really play it back, that's part of the problem.

Rene: Or even the 4k, you can do the 4k and you have room left over for the palettes on the side which is really cool.

Leo: Wow.

Andy: Do you think that was part of the decision to 5k instead of 4k? That that way you can have live editing of 4k and still have room alongside it to make it a floating window and put other things on the sides of it?

Alex: I think it's actually a good argument for it. I think the viewability of 5k is, I don't know how other people are going to use it but it's going to be a huge deal for final cut users because you are able to actually work, and not just final cut but anybody working with 4k footage, for any reason will be able to add interface around that 4k experience so it definitely seems like Apple is going to continue to push that far off course, the big question is now that they've figured out how to make this 5k thing whether we'll see it on monitors that stand alone from the Mac Pro.

Leo: They can't right? Because the Mac Pro doesn't have the bandwidth to do it.

Rene: Currently my understanding is that this is again fusing two display port 1.2s together and to do it over one cable they'll need Thunderbolt III which has, I forget, the newer version of display port and that comes in Skylake and they haven't even shipped Broadwell yet, so we're waiting until next year I think at the earliest. Intel keeps saying that the Broadwell delays have not affected the Skylake delays but we'll have to see.

Leo: Tom Lowe over at Timescapes which is a beautiful 4k movie gave me a download, let's see if I can get it on here. It's on my other machine but it would be nice to put that, it's only 4k so.. one of the problems you have with this is it spoils you, right? You feel that way Rene now that you're a little bit spoiled?

Rene: Yeah I'm looking at the previous generation Thunderbolt display right now because this is on a Mac Pro so this is what it's driving and you can see it, it's almost like when you go back from a Mac Pro to a Macbook Air and you can see the pixels again and I'm not going to say it's like sandpaper on your Retina, it's not exactly that but it looks fuzzier, it doesn't look.. it's almost like you've seen the world and then someone closes a window on you.

Leo: Alright, here's a challenge for the Mac braniacs. How can I get a link on this machine over to that machine?

Andy: Airdrop?

Leo: Can I use Airdrop or..? Or maybe I download it on this machine and Airdrop it over there? It's so big though.

Rene: Do you have them logged into the same account, Leo? Because then you could just use iCloud, the iCloud bookmarks, iCloud tabs.

Leo: Well see this isn't really logged into anything, I didn't want to spend a lot of time putting in earlier. Before our before you buy review I'll get that downloaded onto there. So Rene, did you get one? No, Andy you haven't played with it yet so you're not, your eyes are not yet spoiled.

Andy: I did go to the Apple store to check one out, so I have laid eyes on it, I don't have one in the office yet, no.

Leo: And Alex did you buy 50 for Pixel Corps?

Alex: Just two.

Leo: Oh, just two.

Alex: Just two. Well here's the worst part is that we got... well it's a long story, but yeah we have two of them. Coming anyway.

Leo: Have they come?

Alex: Not yet, not yet. We're actually in the process of figuring out how to manage, we had gotten two of the other ones of course right before they came out.

Leo: Oh no.

Alex: Trying to sort that out.

Leo: You're kidding me.

Alex: And a whole bunch of Mac Minis of course, you know. I finally gave up. I just stretched it out as long as I could and finally gave up and bought like 8 of them and of course now I've got 8 of the last generation.

Rene: You didn't get a new four core Mac Mini so it's not terrible.

Alex: No, and we got a couple Mac Pros for a project recently so I'm hoping that if that updates as well, then I will have completely missed the boat.

Andy: Has it occurred to you to buy four of these things then pile them together to make a 20k display?

Alex: Ohhh.

Leo: It just did, I think it just did.

Alex: Awesome!

Leo: (laughing)

Alex: The problem is with patching those together is the bezel, just getting completely rid of that bezel. Even a small one you notice.

Leo: I know, it's too bad about the bezel actually.

Andy: I bet if you grout the gap with money that would work.

(laughing)

Alex: You could build very specialized LCDs that just go down between the two bezels and map it together and use a special very expensive mapping software that would allow you to.. it's actually a pretty interesting process when you, as an aside with those LED walls, we just saw a bunch of them at Dreamforce, it was a bunch of 1 by 1 blocks and they have a computer that figures out how many blocks by how many blocks.

Leo: Oh how interesting.

Alex: And they make these just massive screens and when they first turn them on they're all different, so they're all, all of them are different brightnesses and everything else and then they have go through there and sync all of the little blocks up together to make them look like one big screen. Anyway, not MacBreak but it's very interesting. I find it interesting.

Leo: Rene our recommendation is wait by.

Rene: It's one of those things where a lot of people have been waiting for Retina on the desktop and if you're one of those people, it's like buying a Ferrari, you've been saving your pennies and you've been expecting it for so long, you're going to go out and do it. If you are not a photographer, not a videographer, not someone who really depends on high density panels, then you can wait for the second generation. You can get a non-Retina iMac and you'll be absolutely fine. Right now it's a want to have not a need to have.

Leo: I want to have it, I really do.

Rene: I want to have it too.

Leo: I want to have it.

Rene: And I'm actually curious if Alex has taken a look at the new Mac Minis yet.

Alex: We're getting a couple of them so I will have more opinions about them. I think that the only thing I saw in the stats is that they still are not having a truly dedicated graphics processor, so for a lot of the uses that we have we're not sure if it's going to work so we're going to test it, so we really need a real GPU in there not some kind of souped up Intel and from what we looked at, we think the only way to get those is still with the integrated Intel stuff and so what we find is when that happens you end up with, there's a lot of pressure being put on the CPU and we're seeing frame rate issues specifically with video conferencing. So that's what we were hoping to use it for but I think we may end up still using Macbook Pros and Mac Pros for a lot of that stuff.

Leo: Really? You would think that you wouldn't need that much of a high end thing for video conferencing.

Alex: You know, it's really, for standard video conferencing I don't think it's a big deal at all, but when you're trying to get 720p at 30 frames per second..

Leo: Really it's that hard?

Alex: It turns out that it's harder than it feels like it should be, but we just noticed that we're still having frame rate issues.

Leo: 8bit Steve in our chatroom says “Are you disappointed by the soldered on RAM?”

Alex: Well, not overly.

Leo: You would just max it out, right?

Alex: We buy to max every single time. We would never buy an 8 meg computer.

Leo: You need understand that Alex is not what we call an upgrader.

Alex: (laughing)

Rene: He just wants it to work, he doesn't want to have to quit making it work.

Alex: Because a lot of times, I mean we do buy everything, almost everything is bought at almost the highest level. Usually we skimp a couple little places where we think we can get away with it or where there's a big price jump but a lot of times we're buying everything almost at its max all the time but then we keep them forever. I mean, we have computers that are five years old, six years old that are still in production because they have enough to keep going. Now they might be managing a file server or something but we don't really get rid of them very often. We typically just run them into the ground.

Leo: Yeah, and you don't break out the spudgers and open them up and put in more RAM.

Alex: No, no we don't. Because as soon as we start digging into the computer we have confidence issues in the long term viability.

Leo: Confidence issues!

Alex: Well I mean for us it's, if your computer isn't working for most people it's like “Well we'll take it to the shop, it'll be inconvenient.” We do live events so if the computer isn't working it's a big deal. So most of our machines, if anything goes wrong with them they go back to the shop or whatever because we're afraid to put them into action after they had been tooled with at all.

Leo: Well let's take a break, we have a lot of Mac news. I thought it would be fun to take a little look at this sucker.

Rene: It's gorgeous.

Leo: Unfortunately you've got to go to the Apple store and play with it to see it. But be warned it may set a standard that you now feel that you have.

Alex: I'm trying to stay out of the Apple store. I don't even want to walk by. I figure I'll have to go like this, until I actually have one I just have to kind of walk by, walk by.

Leo: Might rub off on you.

Rene: It's a tangent, Leo but I've been reviewing the iPad Air 2 and I ran the GFX bench test, the Manhattan test which tests open EL, sorry Open GL ES3 on it and on the previous generation, the A7 machines I was getting 9 frames per second, I was getting 23.9 frames per second, totally smooth video on the new iPad, it's just amazing what those chips are doing now.

Leo: Those, everybody is saying, all the benchmarks we're starting to see are really a lot faster.

Rene: Triple core CPU amazing GPU.

Leo: And more RAM, double the RAM. 2 gigs of RAM.

Rene: Double the RAM.

Andy: I would almost call it a suspiciously powerful upgrade, as though they know something that they're going to be doing in a few months that's going to require something that's not just a little faster, but it is just an entire generation faster. I think that this is Apple's indication that yeah we're going to give you side by side multitasking some time before the life cycle of this device is over.

Leo: Hmm, interesting.

Rene: Yeah because iOS is really a low overhead, it's how they've gotten away with 1GB of RAM for so long so if they're doubling the RAM there, there's going to be something that needs it that's more than just your basic iOS.

Leo: And didn't we see code that implied that they would have something, some sort of multitasking feature that they just didn't deliver in 8?

Rene: Yeah, Steve (indistinguishable) Smith tweeted it, he found it in the firmware bundle that had I think one third, one half and two third size.

Leo: Oh that's how we know, okay. Well let's take a break, when we come back Apple's 2014 annual report, I'd like you guys to give me the deep dive and the lowdown and the 30,000 ft version. Can you work on that? Big drop in music sales for iTunes confirmed now by Apple, and Tim Cook explains why the classic is dead. Pretty good reason as it turns out. But first, a word from our friends at SquareSpace oh that is the place to make your next website, both the best hosting and the best content management system combined together, tightly integrated, gives them capabilities that no other web host can offer you. First of all, SquareSpace starts with these incredible templates. SquareSpace 7 templates just came out, they're all mobile responsive. Nice thing about having them do the software and the hosting is they can spend, and it's their business so they do all the time, keeping up with web standards and let's face it, fashions. You don't want your site to look like it came from 1972, your site will always look modern and up to date. If you're a photographer the full bleed templates on SquareSpace are stunning. Just gorgeous, actually for anybody that's kind of the new thing now is get lots of beautiful images, pick one of the 25 templates. Actually you can do this for free right now, go to SquareSpace.com, click the get started button, you'll be able to play with all 25 templates, you can even, and you don't need to give them a credit card to do this, import your content in from your existing site, they have API support for most of the major blog platforms. So you'll see within minutes exactly what your site would look like on SquareSpace, how responsive it would be. Ask your colleagues, your clients to try it out. They've got lots of great tools too, their iPad apps, for instance the portfolio app for photographers pulls the images from your SquareSpace site which is already a portfolio but arranges it so it's perfect for displaying to clients and saying, you know the bride and the groom, I guess the groom counts too. Here are the pictures from the wedding, pick the ones you like. That kind of thing. Their metric app lets you keep track of site stats like page views, unique visitors, social media followers, they have a logo designer on their website. If you're a small company, I mean it just gets better and better. And this is the amazing thing, I tell you about all this stuff, e-commerce and every template so you can have a school fund drive even at the lowest level, non-profits, take donations, cash, wedding registries. The big time e-commerce has lots of great features, package calculation, shipping tools, merchant accounts, all the stuff you need. And all of this starts at $8 a month! That includes a free domain name when you sign up for a year, $8 a month! Code behind the scenes is gorgeous too, and should you need help, they've never outsourced it. The help comes from their own employees in their offices in New York City. 24/7 they've got live chat and email support, you can support yourself too or learn because they have a beautiful customer help portal with articles and workshops, video workshops and a whole lot more. SquareSpace.com, the best hosting, the best software to make the best site for you. Try it free for two weeks, you don't need a credit card just click the get started button, if you should decide to buy, all I ask, use our offer code MacBreak to save 10% off your newest account. Then they'll know “Oh, another great customer.” We've sent a lot of people to SquareSpace, use the offer code MacBreak for 10% off. Leo Laporte, sitting here with our good buddies the lovely and talented Andy Inhatko from the Chicago Sun Times, with his R2-D2, his cube, you're starting to pile stuff on the cube. Is that going to be a tower?

Andy: Well actually, every time that I have a need for like an old computer to reference or photograph I'll work at it here on this thing when I show it off and then I just get it out of the way here, and I'm getting sort of a Jenga effect.

Leo: I like it, yeah.

Andy: Which I think is, I'm starting to like. We'll see how long it goes before. If I come back one week and you see there's nothing piled on there, you'll know what happened.

Leo: I want you to drill a hole through the middle of it all and put the lamp through in there.

Andy: You'll know that I'm in the market for a Tierra City model 100, an e-mate for a thinkpad and for a new message pad 2100.

Leo: Right, right. Also here Rene Ritchie from iMore.com, great to have you. Great articles this week on iMore which I will be referring to soon.

Rene: Thank you.

Leo: And from Pittsburgh, PA and the Pixel Corps, it's Mr. Alex.

Alex: You see I've really gone with the less is more kind of..

Leo: Well it's interesting.

Alex: (laughing) I just moved in, I'm still working on it. There's going to be nice pictures of Pittsburgh soon.

Leo: It's a little drywall heavy.

Alex: That's right, you know. Yeah. I'm working on it. I go the bandwidth worked out so that's the first part, and then I kind of got the camera thing worked out, and a little bit of lighting.

Leo: You know actually would help a lot there is maybe four or five 5k iMacs.

Alex: Ohhh. I can just put them all behind me. You wouldn't even see the seam right here, I'd just put one on each side.

Leo: Anything you want.

Andy: If you've got a lot of space, I want to encourage you to do like The Merv Griffin Show set, like 1976. If you can have a permanent set like shag carpeting the back wall.

Leo: Oh that would be nice.

Andy: And just the words “Alex Alex Alex Alex” in light bulbs behind you.

Leo: And that's somewhere you would want to live.

Alex: I've got to work on that. I'm really caught on the shag carpeting. That would be good on the walls. Mmm.

Leo: So the chatroom is telling me that Jaws is at Recode right now. Greg Joswiack says that “The problem with 8.0.1 was not the code, but the way it was distributed.”

Rene: Yeah.

Leo: Tell me about that.

Rene: Yeah we talked about that, I think right after it happened. It was the delta update for the iPhone 6 and 6+ that caused the problem. The actual binary itself was fine but when the delta file went out that's what caused, yeah.

Leo: So if you had downloaded the full version and installed it, no problem.

Rene: Yeah absolutely. It was just something in the process that generated the differential file that went wonky.

Leo: That actually is good to know, that explains how this could happen without anybody knowing it was going to happen.

Rene: Yeah because they were all, internally Apple they have a whole different way of installing iOS internally and then people who are testing the full binary it's different and, it should never have happened, absolutely should never have happened.

Leo: Next time they'll test it all. Delta's tough. I've always said it's difficult, it's really difficult to test all the possible combinations out there, and delta made it even more complicated.

Rene: And it sounds like they know what happened, they've taken steps to make sure that won't happen again at least.

Leo: Today Apple filed its, you know we had the quarterly results last week, the fourth quarter, and but now the official fiscal year 2014 10k is out. That's their annual report. It's some interesting details, a lot more employees. 12,300 new employees to bring the total to 92,600 full time employees at Apple. They'll cross 100,000 probably this year right?

Rene: Yeah, although that includes retail which is also significant.

Leo: Oh retail grew 3,400 of that total. In fact retail, they didn't break out the retail at the quarterly call but they did break it out in their annual report. The store count increased 21. Average revenue per store up slightly, to $50.6 million per store. That means you add 21 stores, you're adding a billion dollars or so. I don't know, I can't do the math. $100 million. No, a billion dollars. Jeez Louise to the revenue. Apple's R&D is up and that's good because a lot of analysts said “Oh you know, Apple's not spending a typical percentage of its revenue or income or profit on R&D.” 4.5 billion last year, 6 billion this year. So that should be encouraging. It's the highest level relative to revenue since 2007, and of course you  know what happened in 2007, that was the year of the iPhone. So that's good right? We want to see them investing in R&D and new stuff, not resting on their laurels.

Rene: I forget the graph that came out, it was the worst idea who posted it. Where it showed you Nokia and Microsoft and a lot of other companies R&D budgets compared to Apple. It wasn't that they weren't doing R&D, it's that they were focusing on, they said no to a lot of products much earlier on in the cycle than their competitors did which saved them a lot of money.

Leo: Right. That was, it was Asimco who brought that up and said “This is worrisome.” Well you need not worry. Real estate holdings increased, they now lease 19.7 million square feet of building space. And they're building a spaceship so.. most of that building space in the US. They're expanding their office space and customer support call center which is in Austin, TX. And of course the new campus which will have 3.6 million square feet. Capital expenditures.. will be going up to $13 billion in 2015, 11 in 2014, billion with a b. $600 million of that towards retail. Anything else, iTunes, oh well and this is the bad news. We had suspected it was a problem. In iTunes revenue, actually the iTunes store itself, this is not just music remember. This is apps, generated a total $10.2 billion in net sales and $9.3 billion last year. But they did acknowledge that that was mostly from app sales and digital sales in decline, in fact partly offset the growth in the app sales. Third party estimates as much as a 13% decline this year alone in iTunes music sales. And iTunes, we should point out is the biggest retailer of music. Right? So if iTunes is losing..

Rene: Of single sales, yeah. Not on streaming or..

Leo: Right. And that's what's happening right? Spotify, Ardio, Beats. And now the Beats acquisition makes a little more sense. Apple has these metrics, they know what's happening. And say crud, or a word like that.

Alex: I think it's becoming clearer and clearer that they didn't buy them for the headphones.

Leo: No they did not. Although what are they going to do with Beats? Some say they will drop the Beats label and the name, and incorporate it into iTunes, and that would be very Appley, but golly if you buy Beats, isn't it the name?

Rene: The headphones name is important, I don't know if the name is important on the streaming music.

Alex: The streaming I don't think ever really took off. They have all the agreements in place, I'm assuming they can change the name and keep those agreements. I think that's what Apple really, Apple was not getting the agreements that they wanted so if they have those agreements in place and they're able to move it while Beats might not have been successful obviously Apple has a lot of wherewithal as far as pushing them forward from that perspective so I think there's a lot of opportunity there for them.

Leo: I actually don't know if they mentioned Beats in their..

Rene: It's accretive Leo. It's accretive.

Leo: Accretive? Is that a person from Crete?

Rene: No I think Tim Cook said that their deal was accretive, they actually made money when they made the deal, when they bought Beats.

Leo: “In July 2014 the company acquired Beats Music,” I'm reading from the 10k, “..which is a subscription music service.” And that's all they say. Let me see if they mention it again. “Beats headphones speakers and audio software..” company issues.. oh this is interesting. “Connection with its acquisition of Beats the company issued 5.1 million shares of common stock to certain former equity holders of Beats.” So I thought it was a cash deal, but apparently there was some stock involved. Company completed Beats in...  “Under good will and other intangible assets” Beats Music. There you go. So one of the things is coming down the pike that may not make Beats as attractive as it was. First of all, Apple and others, Spotify I think is doing this, with family plans, $5 a month now is going to be the new benchmark right, for family plans. That's what Spotify is going to charge. Not ten. So that cuts in half the revenue. The other thing that's coming down the pike is there are two companies now that are promising to offer audio file quality streaming. I don't know how important that will be. There's a big one internationally, it's Deezer. We don't have that in the States. Do you have that in Canada?

Rene: No. But they just bought somebody.

Leo: They bought Stitcher. Which is a podcast streaming outfit. We're very big on Stitcher. So I think that's probably good for us because it means if Deezer does take off, that you'll be listening to music but you'll also be listening to text to audio speech. What are we? We're speech. What is it we do? Podcast in your stream. Deezer elite is the one, and it's $15 a month. Eventually it will be $20. But it's now, so it's streaming FLAC. Sixteen, forty four.. CD quality FLAC. And then there's another one that just announced. With a name I'd never heard of that's going to do also CD quality streaming. The problem with CD quality streaming is those files are at least four times bigger than the mp3s or AAC files you've been getting, which means it will take four times longer to buffer. So don't expect the music to start playing right away. I think a tricky business to want to be in right now, the music business.

Andy: Especially with so many people getting into it right now. It was a lot better when there was only Beta max and VHS. Conceivably this time next year there could be four major players in the space and you really have to choose, and they're going to become more competitive about which catalogs that they get, and they're going to try to leverage one against the other, it could be a big mess for users in about a year from now.

Leo: Well and it's a terrible thing, as we said before, for musicians.

Andy: Yeah absolutely.

Alex: I think it's a terrible thing in.. as we look at the current number of people using it, it really becomes totally ubiquitous, it's unclear as to whether it would be as terrible for the users, it would be a lot more money, the pot would be a lot bigger for them to share. But I think that either way, that most of the artists that have really looked at the future are focusing on all the other things to make money from. Live performances and so on and so forth.

Leo: Here's another thing you can't get in Canada. It's called Tidal. And it.. (laughs) ..sorry..

Rene: So many things.

Leo: There's so many things. Can you get Teslas though? You can get Teslas right?

Rene: Yeah they started.

Leo: So that's good. Tidal launched in the US and the UK, it is a CD lossless, also FLAC or ALAC, Apple lossless. 44 kilohertz, 16 bit. It's $20 a month as well, so there's a couple of benchmarks. There's the family plans which for Beats was $3 a month when AT&T was offering it, which they aren't any more. $5 for the family plan for Spotify and then $20 if you want it lossless. I think if you care enough about audio to be a CD buyer then this makes sense. It's two CD's or less.

Alex: It is I think the big question is how many people are out there that are interested in it. You have to really look at, it may sound like a really good thing but you've got to make sure your headphones are good enough, or your speakers are good enough to really be able to tell the difference. And I think that 99% at this point, there's a lot of us that were audiophiles back in the day but I think at this point 99.9% of the people that are consuming this would have a hard time hearing the difference.

Leo: Tim Cook tells Recode why the iPod classic was killed. And he says, what were the words he said? It was something like..

Rene: You can't get the parts anywhere on the planet any more.

Leo: Yeah but he said “I'm not a hatchet man, I don't go around go around saying 'what can we kill today?'” He just couldn't get the parts.

Rene: Little old miracle drive..

Leo: Is it that little drive? That was like the IBM drive, right? The little spinning..?

Rene: Yeah.

Andy: Toshiba.

Leo: Toshiba bought it or made it? Yeah. 160 gigs right?

Alex: It's a great little, I still have one running.

Leo: I bought one last year for my car because I knew that eventually they'd kill it.

Alex: And I've got one of those skins for it and it looks really cool and it pretty much just has..

Leo: I just leave it in the glove compartment.

Alex: Yeah. My wife has it hooked up to some kind of playback thing that she listens to.

Leo: I didn't realize, oh wait a minute this is the thirteenth, it says short of its thirteenth birthday it's the thirteenth anniversary of the iPod itself, not the classic. The original iPod.

Rene: Although the classic is probably  the closest to the traditional iPod that they have left.

Alex: I still miss the mechanical wheel. I wish I hadn't lost mine.

Leo: I have one Alex, next time you come here I'll give you my.. the original. A thousand songs in your pocket. But it takes Firewire to charge it.

Alex: I know.

Andy: Yep.

Alex: There's something about feeling that..

Leo: Oh you've got one! Andy has one!

Andy: There you go. See, Mr. Fancy Pants 5k display, you don't have this little marvel do you? Matter of fact I'm going to put it on the Jenga pile right now.

Alex: Ohhh.

Leo: Ohhh. Now that's a challenge.

Alex: Don't let it drop.

Andy: There you go.

Rene: Take it from the bottom and you put it on top.

Andy: Because if that falls down I've got another one right here!

Leo: What? What the hell are you doing? What are you up to?

Andy: I'm going through old boxes and I'm trying to finally close down storage units I've had for a couple of years to just get rid of things and realized that well perhaps if I actually spent a couple of days going through this I wouldn't be spending $43 a month just to keep.. I use one of my storage units kind of like the Mac trash can where I can throw something away but still pull it out later on. I think it's time for me to empty trash and reclaim that $43 a month.

Leo: Time to visit Gazelle.

Andy: Exactly.

Rene: Andy's a millionaire now.

Andy: Yeah, exactly. I'm rich! I'm a millionaire in like really really old time-y phones.

Leo: What the hell? Oh my.. what do you just have that all to hand? What do you have a box there of stuff?

Andy: Well I just literally do have a laundry hamper that I take to the storage unit of things that are cool enough that I really want to not throw them away and the things I do want to throw away will stay there and at some point I will call some nice men with a truck to say “Yeah, unit number 117, here are the keys, take whatever you want, throw out the rest. Here's a small check.”

Leo: You don't want to leave it for your kids Andy, I'm just saying.

Andy: If I ever have kids, I don't want them to.. I don't ever want them to say “I'm going to fight much harder over who has to clean out dad's storage units than we did after who gets to take care of dad after he gets too sick to take care of himself.”

Leo: Right.  You don't want your offspring cursing your name upon your death.

Andy: Yeah. You find out who your friends are. I spent like 10 years helping friends and family members move and when I had to move it was like “Oh, good luck. Let me buy you a pizza for that.”

Leo: Pizza doesn't make it after 30 Andy, I've got to tell you. You've got to pay in dollars.

Andy: Jerks. It's like, points programs on an airline. You have to spend them early or else you lose them. I didn't know that, I didn't read the fine print when I helped someone carry a marble coffee table up a flight of stairs.

Leo: Oh.. we got one of them. Hey, I've been seeing stories and maybe somebody can confirm this, that there actually is an NFC chip in the new iPads, in the Airs. Air 2.

Rene: Yes and no. There is an NFC chip but as far as we understand, it's only used for the secure element, for the credit card transactions and there's no NFC antenna. Which means that that NFC is not going anywhere any time soon.

Leo: So it was some sort of unit that included the NFC and the secure element that they put in the iPhone but if you don't put an antenna on it, what good is it right?

Rene: If FM radio had been part of the chipset for a long time they would never have used it.

Leo: I see, alright.

Alex: It would be pretty bulky. You have to admit, tapping an iPad would be much bulkier than like.. (makes smashing motion.)

Andy: It would give you an opportunity to show of your brand new gold iPad Air 2.

Leo: Oooh.

Alex: I got a crowd actually today when I went to Walgreen's and, Walgreen's by the way, I went to Walgreen's. There was a CVS and I drove past it.

Leo: Not CVS. You drove past CVS.

Alex: I drove past CVS a block and a half, two blocks to Walgreen's because I could use my Apple pay. And it was actually the first time I think that they had seen it used. And so there was like a little crowd.

Leo: A crowd? A hush fell on the crowd.. as he pulled out his iPhone.

Alex: They were like “Okay go ahead and do it.” and then I tapped it. And then it asked me for my PIN. It was like okay.

Leo: Oh you had to have a PIN, you didn't have the..

Alex: So if you connect it, it turns out, if you connect.. and I have to figure out, if you connect an ATM card you tap it on there and then it asks for your PIN anyways.

Leo: That's not nearly as impressive.

Alex; You can hit credit, you can just hit credit and it goes away. It's quick and if I hook it to a regular credit card I'm sure there's some way I can define it as well.

Rene: Yeah you can set your default.

Leo: I set up my Apple wallet but I still haven't used it.

Alex: No, it was great. It was.. like you expect it to be more complicated and then you click on it and you're like oh okay. Well that's good.

Andy: Not just that but all NFC, I wrote a second piece about NFC yesterday, just went into a Panera to do it because there's free refills and I can just get a table. And then I wrapped up my business at around 5:30, I was like okay. It's time for dinner I should probably go home and heat up a can of.. well actually, wouldn't it be fun to pay with NFC again? I think I'll have dinner here again, yay!

Leo: So it does sell stuff.

Andy: So it got an extra $5 and 50 cents out of me for a bowl of French onion soup. Very tasty bowl of French onion soup there, Panera.

Rene: In app purchase is just so easy, like one click is just, it's almost like..

Leo: Oh it's like one click, it is.

Alex: And I think that one of the things to remember is that not only is it easy, that's kind of a.. but it also shortens lines. So if you think of more and more people using it in places like San Francisco where you're probably going to see a big impact on it, is you know when you see those long lines in CVS or Rite Aid that aren't using it, you can remember that your line probably might eventually become shorter in places like Walgreen's because you will be able to just sit there and tap it quickly.

Leo: It would be great!

Rene: It's also more accessible. Steve Aquino today, great article about how it's so hard for someone with visual impairments or physical impairments to use a credit card, to swipe it, to enter a PIN number. With Apple Pay they tap it and use the touch ID and now that's been taken away from them, they can no longer.. they had a brief couple of days they could use those stores and now it's gone.

Leo: That's an interesting.. that's a real.. I mean you could maybe sue under the NDA and say look you've reduced accessibility here. ADA not NDA.

Alex: What Walgreen's should really think about is just to push the thing, they should build Apple pay lines.

Leo: Ohhh. Look how empty that Apple pay line is.

Alex: Exactly, it's because it's like TSA  pre. It's not just that there's less people, but it's that it's so much faster, it keeps the line through it.

Andy: Not just that but I think Apple and Google should team together to co-promote NFC payments because they've got a window of several months before currency becomes an actual real thing to demonstrate to everybody here's how easy our system works and here's how much you can trust us with your information and here's the liability. And so that have all those three points, how easy is this to use, how reliable is it, and how safe and secure is the information when that's on everybody's mind when they think of paying for something with a phone so the first time someone asks “Oh so there's no way that like this consortium of retailers can get access to information that's on my phone,” it's possible. You agree to that. “I agree to what?” You agreed to all of that and sharing information with other retailers and tracking your GPS. It's fine, it's going to work fine!

Rene: Your health information, your social security number, your bank number.

Leo: Your social? Is it not just the last four? Somebody said it's the whole social.

Rene: So currency, Nick (indistinguishable) did a great article on this but if you look in the agreement they've got provisions for your health information, they want your serial number, your bank information. They want a lot of your personal data, and you go to their website and it's appalling because it says “You are secured with a four digit PIN code, and a QR code and we don't store our information on a device where it's insecure, we store it on our cloud where it's absolutely secure.”

Leo: Oh, yeah!

Andy: Where anybody can get at it.

Rene: And he spent about two minutes, well maybe not, he did it live on Twitter which was amazing, he spent about 30 minutes looking at it and the amount of unprotected information coming off that currency app was absolutely appalling.

Leo: Let me give you the background on this story because I think some people are going “What's going on here?” Of course Apple, I think you all know announced Apple Pay and released it a week ago, with the 8.1 update and you can use it and your iPhone 6, 6+ actually 5s right? No, because you have to have NFC. 6 and 6+ to pay at tap and pay terminals in many stores. CVS and Rite Aid are two drug stores in the United States that had this tap and pay, worked with Apple Pay even though they didn't advertise it. It worked because it's a standard as well as Google Wallet, and sometime last week turned it off entirely. They said “Well we're not going to do it anymore. Because we're contractually obligated to support CurrentC,” which is a part of something called MCX. Turns out this MCX was created by Walmart and has, a couple dozen companies, big ones too. Names you would know, as signatories and the idea of this is that Walmart and these other companies did not want to give a piece of the action to the credit card companies. That was what it was really about originally. We don't want to give MasterCard and Visa a few percent. So it doesn't take credit cards. It takes debit cards or pre-paid cards from the store. It doesn't work very well, you can download it now on iOS, in order to use it, and it's not even out yet, it won't be out till next year. When it's out at Rite Aid and CVS and these other stores, you'll have to have the app on your.. is it one app, CurrentC? It is, it's not per store. It's one app.

Rene: One app for iOS one app for Android and exactly..

Leo: Let me finish the description. So you'll launch CurrentC on your phone, the terminal will not, there's no tapping. The terminal will show a QR code, which you then have to scan with your phone and then, do you enter a PIN at that point? Did Nick explain how that?

Rene: It's invitation only right now, so it's hard to tell exactly how it's going to work.

Leo: Okay. But somehow probably what will happen is the phone has to be online, it will then signal via the internet to the currency servers okay, here's a transaction, this is the transaction ID I got from the terminal and I approve it, and it will go through. But as you point out, in that process no credit cards were used, but all of your information was handed over. It's pretty much a loyalty card system, right?

Rene: Yeah and they're pulling your device ID, they're inserting a unique identifier that persists over multiple installs, they're trying to get your MAC address, the C stands for creepy as far as I can tell with CurrentC.

Leo: It's a non-starter I think for anybody that's paying attention.

Alex: Well I think Apple has a real opportunity to make sure the people are paying attention, I think that both Apple and Google know exactly what Andy was underlining, they have the opportunity to really talk about who are you, and I think Apple has a better case probably than Google in a lot of ways, that you know, we're not in the business of selling your information. We're in the business of selling you hardware. We're here to make a service that obviously makes it as easy as possible for you to do what you want to do.

Leo: You know Alex, I don't think that's true. Walmart says that they have the consumer's best interests in mind.

Alex: Of course.

Leo: That's what they say, it says it right here!

Alex: The one thing that Apple I think does have to think about, and I think there's an opportunity there is to have their partners eventually be able to say if I'm a consumer and if I choose to add a loyalty program on top of my Apple pay for Starbuck's or for whatever so that I can get my free whatever every ten, if I choose to add that, piece by piece I think that could make a lot of sense and that could dull a lot of the arguments on these cases, I mean their argument is they don't want to give up control, they definitely don't want Apple to have control of that process. So I think that that's not going to help them but I think that there are opportunities for retailers to, there are valid opportunities that you can't do right now with Apple Pay, that they're talking about which is being able to extend loyalty benefits and that a lot of companies and a lot of people take advantage of. I think that's not in Apple pay but it definitely could be added.

Leo: Here's what Walmart's statement is. They sent a statement to business insider. I love this. “There are certainly a lot of compelling technologies being developed, which is great for the mobile commerce industry as a whole. Ultimately what matters is that consumers have a payment option that is widely accepted, secure, and developed with their best interests in mind.” MCX, that's the merchant's exchange that Walmart created, using CurrentC. “MCX member merchants already collectively serve a majority of Americans every day. MCX's members believe merchants are in the best position to provide a mobile solution because of their deep insights into their customers shopping and buying experiences.” Yeah. We know more about you than Apple does, so use our system.

Rene: Their words are not matching their actions. And earlier they didn't just disable Apple Pay or Google Wallet, they turned off NFC. Instead of going to Starbuck's and them not wanting you to buy Starbuck's cards online, so turning off Wi-Fi. It's an entire technology that they've banned.

Leo: And maybe this was a more revealing statement from former Walmart CEO Lee Scott when he was asked by an analyst why MCX could succeed. The former Walmart CEO said “I don't know that it will, and I don't care. As long as Visa suffers.”

Rene: Yeah.

Leo: So okay I can tell you right now, it's not going to succeed. I think nobody wants this.

Alex: Yeah and I think that for any of these if they really think that they have a superior product that their consumers would prefer, just let them both play.

Leo: Let the market decide.

Alex: But the bottom line is that people aren't going to want to give them that information, a lot of them aren't. Definitely iPhone users are probably going to be more likely to be disinterested in that process.

Leo: It is a little scary if you go to the MCX site, MCX.com. The retailers, the companies that are involved in this is, I mean it's Shell, it's Walmart, it's Bestbuy, it's K-Mart, Kohl's, Lowe's, you know, Sears. It is some of the biggest retailers, Shell. Southwest Airlines.

Alex; The rumor is that as they signed on, the rumor that I've heard is that there's a three year exclusivity and some of them may have signed on within the last year. So the ones that, and there's some kind of..

Leo: Boy are they sorry.

Rene: It hasn't even launched yet.

Alex: In the first year there seems to be some kind of there's a rumor that there's a clause that lets them get out of it in the first year, so for the ones that just signed in they may choose to peel out for the ones that signed it a ways back, they may be having theirs come up in the next year or two.

Leo: Do you think consumers are savvy and I mean look, everybody on this panel and everybody probably who watches this show or listens to it is savvy enough to know the difference. But do you think the average Joe going into CVS?

Alex: I think the average Joe going to CVS isn't going to use this anyway. (laughing)

Leo: Right. You just use cash or credit card. Those aren't going away.

Alex: Yeah.

(everyone talking at once, indistinguishable)

Rene: Target is on the list there for Currentc but they're actually using Apple Pay on the online apps where they're not prohibited by doing it for their contract. They are deploying Apple Pay.

Leo: I think this is probably a case of these guys misjudging the market, it has been you know, it's been a couple of years. Nobody knew Apple Pay was going to happen.

Rene: What a dumb deal to sign though.

Andy: But also yeah, I mean as I wrote in a column this morning they've forgotten that almost every time an industry has tried to burn down and remake a consumer experience in a shape that is most convenient for retailers it's always failed. I had to think about Sony's first cut at selling digital music, where they built this horrendous format and this horrendous app that if you bought a Sony digital music player and you installed the software to make it work, the first thing it would do is scan your entire hard drive, look for music files, convert them all into a locked up DRM format, even stuff you'd recorded yourself, even stuff you'd ripped yourself, it would not let you have a copy working on your computer and on the mobile device until you signed it in and signed it out, you couldn't share it with anybody. If the app screwed up that was your fault, you couldn't get access to anything and Sony figured well what are you going to do? You're going to have buy another copy of this if you want a copy of this for your car and people responded by saying actually we could just steal music using these tools that are very easy to use. And there are so many other cases exactly like that, every time they say this is an opportunity for us to build a new payment system so that it's completely in our favor and the customers never do anything that is inconvenient for us the retailer they will be right in our hands, we will get as much information about the consumer experience as possible and always make sure as soon, every moment that phone is in their pockets and turned on it's an opportunity for us to sell sell sell sell and what happens is that you create a retail experience that is bad bad bad and people don't use it. That's why this is such a great opportunity for Google and Apple to say all you do is you tap the phone and it works, and you will not.. if your car breaks down and you use the system to pay for a tow, you will not get an offer to buy new shoes and a hotel room someplace else, it will not be sharing your information with other people and you will not be telling “Hey I notice you know 13 other people who have eaten at Applebee's in the past three weeks so I'm going to add something to your calendar to tell you that maybe you should meet at Applebee's next time, we'll give you a 10% discount.

Leo: Horrible. But I think people who have NFC and have set wallets up are pretty sophisticated, they're not your average..

Andy: But I'm saying, one of the things is that generations are getting older and the people who are most apt to be attracted to this system and be most savvy about it are the people who are now getting real jobs with six figure incomes, and the people who don't, who as Alex says, would not be inclined to use a phone to pay for anything to begin with, they don't matter in terms of this transaction but all the people that are realizing that it's much easier and much more secure to pay for something with a phone are going to gravitate towards the ones that are the easiest to use.

Alex: Well yeah and I think that a lot, with a lot of these folks you have to look at a commodotized market. Drug store, I don't really, I used to up until recently, very recently, used to just search for drug store. Now I search for Walgreen's just because it makes me angry that they won't let me do it.

Leo: Well there is going to be a little bit of a backlash yeah.

Alex: The thing is, the bottom line is my shaving cream is at all of those locations at roughly the same price. So if I'm going to start to choose and you look at like for instance Arco is a good example of a gas station I won't go to, not because because they have worse or better gas but because the purchasing process is so painful at an Arco station that I won't go and this has nothing to do with NFC but if Chevron, which I think Chevron is one of the ones supporting Apple Pay, I believe. But you know, I'm going to start aiming at those ones because you know, I'm one of those people that..

Leo: That's a good point, I would not go to Shell I'd go to Chevron. As long as it's relatively convenient to go to either.

Rene: So the one thing that concerns me is..

Alex: I mean obviously if I'm running out of gas...

Andy: It's not a protest either. I mean, I can't tell you how many places where there's a Walgreen's right across the street from a CVS, where there's a Burger King right across the street from McDonald's and gas stations tend to congregate near each other, I'm not waving the red flag of revolution saying “I'm striking a blow for consumer freedom!” it's like oh if I actually drive another 20 yards down the road I can have a much.. an experience that I'm going to be much more comfortable with I may as well drive another 20 yards.

Rene: I did that today because in Canada all of our credit cards and Interac bank cards have NFC already, I go to the places that I know take NFC and that's what horrified me about them turning off NFC because I don't need Apple Pay, I could go to any of those locations and pay with my credit card today and now I can no longer do that. They've taken functionality and ease of payment away from me, they made the buying process worse for me as a consumer. And their contract says that they can't use other mobile apps, my credit card is not another mobile app and they've turned that off as well, and that I think is getting under..

Leo: Really? You can't even swipe and sign?

Rene: I can swipe and sign but my credit card is set up to do NFC transactions and now I have to go and swipe and sign like a monster.

Leo: Right. Like an American, for crying out loud!

Rene: Well yeah but I mean, they're taking away a secure process for me that is easier, more efficient, that is better in almost every single way just to stop one small app transaction that they agreed to which I think makes it more egregious.

Leo: Well, get ready because Apple Pay it looks like may go to China as well. Tim Cook went to China, the CEO of Apple. We thought it was originally because the great firewall of China was intercepting iCloud logins and apparently storing those credentials for later use. But, and then surprisingly Tim Cook showed up in China the next day meeting with vice premier Ma Kai. But they had not only talked about telecommunications, it seems like they talked a lot about Apple's future in China. Remember when we, Andy you were here when we were watching the iPad event and Tim Cook spent at least five minutes in front of a giant China flag? There's clearly an important business partner for China. Apparently, they're in talks with Alibaba, which is like the Amazon of China. They have a payment system called Ali Pay in China and are apparently in talks with Apple to bring Apple Pay to China through Ali Pay. There's Jack Ma, the CEO of Alibaba. I think this was at the Re/Code Mobile Conference, he said he's very interested in a possible Apple partnership, he's no fool. Smart guy. So Apple you know- Momentum is in Apple's favor.

Alex: Well they signed up a million in 72 hours and-

Leo: Right, that's what they said huh. A million credit cards in the first three days.

Rene: Even without Walmart and Target, they have like 60% I think, of retailers coverage. Just using existing NFC implementations because it's the standard.

Leo: Awesome.

Alex: Yeah, and I think that especially, for the large retailers like Walmart they can make a lot of decisions and push to their own user base but if you're a smaller retailer like a hotel or whatever, there's a lot of smaller businesses that would really benefit from saying, hey- You know, have a little sign out front that says we take Apple Pay. I think it would be advantageous to a lot of small retailers as well.

Leo: I just, parenthetically, I did download Time Scape, this is not a 4K, it's a 1660 which is kind of a weird format but it was designed for the MacBook Retina and dang, it looks good. It's very immersive on the 5K display. I can only imagine what the 4K would look like....

Rene: Well the Retina MacBook Pro isn't pixel-double because they couldn't get pixel-double on it. So it's pixel-doubled internally and then scaled down to fit the display.

Leo: Oh, interesting.

Rene: This one is pixel-doubled.

Leo: So we should emphasize that the high DPI, the whole thing and the way it works is on text it will only use four pixels per point but whenever you're in a photo or a movie that actually has that kind of resolution, it will actually display natively 1:1. I don't know what this is doing because it's filling the screen. I don't know what Quicktime is doing with this, must be scaling it.

Rene: Yep.

Andy: Look at all of those blown pixels that's disappointing.

Leo: What?

Andy: I'm joking, I'm trying to make you feel bad about-

Leo: That's stars, man. That's stars.

Andy: Sorry, I'm watching this on crappy display.

Leo: I know, it gets better for you I swear.

Andy: Like a damn American.

Leo: Like an American. You don't want to know how good this is, you don't wanna.

Rene: Not because it's easy, because it's hard.

Leo: For Tim Cook's revelations they asked about- I guess Tim was at Wall Street Journal's  D-Conference, which is very confusing now. The D- Conference, it's Re/Code.

Rene: Notice they don't even live in the same house anymore, Leo.

Leo: They don't, Walt has moved out. He's spread his wings and flown. Tim, when asked about the Apple watch said, well it's hard to say how much battery life it's going to get because everyone uses it differently. He's still hedging his bets a little bit. He implied- He said, we expect that people will charge it nightly. I don't know what that really means.

Andy: That doesn't really answer the question.

Leo: Does that mean twice a day? I mean, yeah we'll do it at night-

Andy: That is at least the bare minimum of what you can expect from a wearable. So long as the manufacturer's not expecting you to carry a charger or find an outlet sometime around 10 PM and so long as they're also cognizent of the fact that a lot of people get dressed and leave for work around 6:30 in the morning and maybe have dinner after work and don't come back until 10:30 or 11, that's okay. This has not been off of my wrist since I first put it on about a month ago and you're just in the habit of taking it off and putting it on the nightstand, where there's a wireless charger on the nightstand, pick it up, it's charged again, that's not a main point.

Leo: Yeah, see I like that. Pebble watch people go, I had to go two weeks or whatever. Justin, you and I are wearing the Moto 360 and yeah, we charge it every night, but I charge my phone every night.

Justin: A lot of times it's just depending on how you use the device.

Leo: And a day and a half is not good because-

Justin: Because then you end up charging it in the middle of the next day.

Leo: Exactly.

Justin: Just charge it when you sleep

Leo: Charge it when you sleep.

Rene: Dodo are making some beautiful charging stands already for the Apple watch.

Leo: Really?

Rene: Yeah.

Leo: Does it have wireless charging or is it plug-in?

Rene: Yes, it's a mag-safe wireless combination. So it magnetically attaches and then it charges.

Leo: Yeah, even kind of with chi charging you kind of want it to get pulled magnetically into place you know.

Andy: I disagree, I think what makes the Moto 360 stand work is that it is as close to the experience of simply taking off my watch and putting it on the nightstand is possible. I don't have to reach over to the nightstand, get out a cable, make sure that it connects to it, then take it with its cable and put it right back on the thing to make sure that the cable doesn't pull the watch off the nightstand and it's just a simple plastic little cup that holds the thing.

Leo: It also turns it into a little mini clock.

Rene: Right, it's incentive is that it turns it into a great bedside clock. So you have even more reason to charge it every single night because you want your clock there while you sleep.

Andy: I think that a charging stand is going to be- Even if it has to be third party is going to be desirable. -Because you have this flat laying thing

Leo: Alright. I'm mad AT&T- Thank you very much. Has decided to thwart the very elegant and beautiful plan Apple had. When you buy an iPad that has LTE built into it, the SIM that comes with it is not dedicated to any carrier and on the screen you can sign up with AT&T, T-Mobile, or Sprint- Verizon is not participating. -And use their service. The way I think Apple intended it and the way it works at T-Mobile or Sprint is next month you can change carrier and the month after that. AT&T, and they actually mentioned it on the screen, which is good I guess, locks it to AT&T the minute you sign up for AT&T service. Now of course you could get a new SIM from Apple.

Rene: How much does a new SIM cost? Apple usually just gives them to you...

Leo: Yeah, it shouldn't be anything.

Alex: Everything I've read has said something along the line of, if you purchase a new one... I'm like how much is it, I didn't know they were selling them.

Andy: I was trying to figure this out too because I'm interested to see how they manage to isolate the carrier lock to the SIM and not the device.

Leo: The very fact that there is even a dialogue box that pops up to say, we're going to lock this tells me Apple planned for this right?

Rene: They've probably had to deal with it.

Andy: It's almost like battery shaming. If there's no bigger way to make AT&T look like a bunch of jerks than, oh AT&T unlike with Sprint and T-Mobile, you will not be able to change back for arbitrary reasons that have nothing to do with anything that Apple has put into the limitations of this product.

Leo: John Ledger, the CEO of T-Mobile had a lot of fun with this. Of course, because T-Mobile does not lock it down. And I think he went on a 20 Tweet spree-

Rene: Amazing.

Leo: But it's just marketing. You know you're going to have to get a new SIM, at least you can put a new SIM in there. It's not a big deal, the next time you're at an Apple store get 3 or 4.

Rene: It's just annoying, it's one more annoyance. It's just better having one less-

Leo: It's AT&T it's like, guys you know what's clear? They don't care what we think. It doesn't matter.

Alex: This also relates back to the whole Apple Pay thing. It's just that they're thinking about what they want and not what the consumer wants at all.

Leo: Yeah, it's a very clear message that yes, you don't matter. As a customer you're secondary to profit and that's sad.

Rene: Some people in the chatroom are saying $5 but it might vary depending on whether they want to be nice to you at an individual store.

Alex: So that means that if you're traveling you go overseas, you now can't because you're locked to AT&T so-

Leo: Right because you're locked. And as of now, it's only in the UK, it's EE but I presume other carriers will line up. But yeah, if you go to London, you have to get another SIM before you go.

Rene: They shouldn't fear you leaving them. They should look at it as an opportunity to bring you to them because they're so awesome.

Leo: Keep them by being customer-centric. Not by a chastity belt.

Alex: And I have to admit that- My new iPhone, I finally got it. I was way behind you guys. I like the big one, but it took me a little while to like it. But I hated it for the first week and a half.

Leo: So did you get both to see what you wanted?

Alex: No I just had been looking at other people's 6 and I got the 6+ and I have to admit that I spent the first week and a half going, this was the dumbest thing I've ever done this is way too big and now I pick up somebody else's 6 and I'm like, oh this is really small, I don't know what to do with it now. Yeah, so the regular one, the 5s when I go to mess with one I'm like, how am I supposed to look at this? It's so small, I need bifocals. So I've got T-Mobile specifically because of wi-fi calling and I wanted it to be unlocked. The problem is that T-Mobile's coverage doesn't seem to be as good and when it is good it's because not a lot of people are on it. What I have found to be a good match is that you get a Verizon mi-fi with the XLTE and then you have your T-Mobile phone and the T-Mobile phone generally works really well but if you ever need any kind of match-up those work really well together in case you're wondering. So Verizon's not participating but in some ways you can have them participate just by-

Leo: I think the FCC meant they could not lock their SIM slot on the Verizon iPhone. That's what I have for my iPhone 6 and I used it in England. It was great, I put in a T-Mobile SIM because they have free international, 2g, and I used it great. 2g isn't great, but it worked. Sorry Rene, I didn't mean to bonk you. Let's take a break, when we come back we're going to go to the picks of the week so before we go were there any other stories you wanted to bring up? I don't want to leave anything out. Give you guys a chance to bring up any hot button topics.

Andy: Nope, filled with white-hot jealousy about your 5K display but I'm dealing.

Leo: The Time Scape looks so good on this. I want to get the 4K version now.

Rene:  You can plug the 4K display into the 5K iMac, Leo. Then you could have 9K.

Leo: Can you?

Rene: Yep.

Leo: For the Thunderbolt?

Rene: Yeah.

Leo: Well I have the 4K display. Golly, I'm getting closer and closer to just trading in the Mac Pro. What could I get for the base model Mac Pro?

Rene: John Syracuse has a standing offer for $5 to anyone-

Leo: Thanks John, great deal. I use all of the carriers, and T-Mobile in Petaluma is great.

Alex: It is, it's not as good in Pittsburgh. When it is good though, it's super incredible. It's like 25 megs up and down, it's just not great everywhere.

Leo: This is the international Note 4 so it can't get LTE here in the states, but HSPA+ - Which is the best it could do on T-Mobile is still 20 megabits so I'm happy. I don't care. How fast do you need to go? Our show today brought to you by Personal Capital, what a great idea...? I know you're young. You're never going to have to retire. Death is a distant, distant foe. Except that it's not, take it from an old man. You get here faster than you think. Plan for your future, kids. Start thinking about your retirement and the best way to do it is to do it with full knowledge of what you're up to with Personal Capital. Personal Capital was created because- Well there are a couple of things really getting in the way of you doing your retirement right. One is; it's just hard to try to keep track of investments, checking accounts, savings, assets. So what Personal Capital does is it collates that all into a single dashboard on your computer, on your iPad, on your phone that you can just see how everything's doing. They even have a Google Android Wearer app so that you can see it on your watch, which is pretty wild. Then the next thing is they will tell you how, if you're making any errors such as, if you're not balancing your 401K right for your age, if you're overpaying in fees, how to reduce those fees, get tailored advice, they've got calculators, all the stuff you need and it's free. So you can be frugal and still use Personal Capital. I want you to visit personalcapital.com/macbreak it'll just take you a few minutes to sign up but the benefits will last you a lifetime. I've been very happy just knowing- Awareness, mindfulness about what you're doing is a huge step forward. The investment check-up, really useful. Personalcapital.com/macbreak, there's no reason not to do it, it's free, sign up today. You're going to get great value out of it - personalcapital.com/macbreak. My pick is the 5K iMac, yours?

Rene: I second that.

Leo: Oh man, I am kind of sad I bought the Mac Pro now... I mean, I spent a lot because I got a Mac Pro and a 3K display- And that little big disc, the terabyte SSD. -Probably close to... I don't even want to think about it.

Rene: You did it for the listeners, Leo, the viewers.

Leo: Yeah, but now I want to buy the 5K for the viewers.

Rene: The viewers deserve it, Leo.

Leo: The viewers deserve it, that's right. Andy Ihnatko, your pick of the week sir?

Andy: Mine is a pretty obvious pick from last week. It's Pixelmator for iPad.

Leo: Oh yeah, you liked it?

Andy: We were talking earlier about, gee I wonder why there's such a huge processing bump - app bump, in the new iPad style and I think it's really to enable this new high-quality set of apps. The temptation is to call it like Photoshop for the iPad, it isn't.

Leo: Does it do layers?

Andy: It does layers, it actually imports Photoshop. It doesn't do things like 16-bit editing but it can do some really sophisticated things. Like if I decide this image is a little bit too busy with this picture in it, there are these effects where you can adjust-

Leo: Look at that!

Andy: I can just erase this, wait, and watch the progress bar. This will take about 10 seconds and eventually... 3, 2, 1, boom. And the picture is gone.

Leo: Wow.

Andy: And so it has these really cool image editing effects, but that's just for like editing photos but you can also do lots of cool stuff just having to do with like creating art and preparing stuff for- See now I'm going to replace that picture with a photo that I took because I should have an image in the Chicago Art Institute. And there we go there. So you really can do a lot of really cool stuff with it and you really can go above and beyond other image editing apps that I've ever seen for the iPad, which tend to be, hey look how good we are at doing brushes and look how good we are at pushing sliders around to change photos. This can be a really good art program for drawing free-hand art, this could be really good for annotating and fixing photos, like adding caption text and arrows and diagrams if you're going to be putting it into a presentation on the iPad later on, it's good for finished photo editing and it also has a lot of nice support for future stuff. It has built-in support for Bluetooth styluses and I'm sorry I cannot give you a more complete demo because I haven't used it enough that I can easily- Look, and now Bozak has got a cloud around him.

Leo: And this is your picture, this isn't some can demo that Pixelmator came with...?

Andy: No, this is a picture I took a while back.

Leo: That's amazing. That's not amazing, but-

Andy: Look, I am Banksy, this picture is now worth 1/2 a million dollars! So I'm not giving a great upside-down demonstration right now but for $5 you will have one app that will be your really great photo editor, it will be your really great image processor... I was giving a presentation at a comic con a couple of months ago and I needed to prepare a title slide but I did not have certain information until I actually arrived there, and so I had to do this sort of half-hearted- I took a screenshot of an image I wanted to use and then put it into key note just so I could add some text to it so I could have the date I wanted on it and I didn't want to bring my laptop with me just so I could add some text to a slide and make it look good. But this would have been the perfect solution because this really is the answer to almost ever image problem on the iPad. The only bad thing I could say about it, other than the fact that it doesn't do 16-bit editing- Which would have been really killer, because that's where a lot of the potential for enhancing a photo really is because it's got more headroom. -I'm actually going to complain a little bit that it costs $5. I'm all for pricing allowing more people to get access to an app but this is way, way too little money for an app of this sort of power and I really would've liked if it had been $10 or even $20 because I fear we are teaching people that they should not expect to pay any decent amount of money for actual apps anymore, and so I think that when a beautiful app like this costs $5, it becomes that much more difficult for another developer to charge what their app is worth.

Leo: Very good, Pixelmator. Alex Lindsay, your pick.

Alex: So I make a lot of labels, in case you're wondering I've been making labels since I was like 10. Remember the little rotary thing that you would like turn it-

Leo: The Dyno Labeler, yeah.

Alex: So I started back then, with that making labels for my grandfather and I finally found, maybe not the Holy Grail, but what I've been waiting for... We have lots of labelers downstairs and every house I go to I'm always labeling things to make sure I know what's going on. I just got this Epson- This is the LW600P and what this does that I like-

Leo: Oooh. It looks like a hard drive, it doesn't look like a labeler.

Alex: And what's cool about this, if you look at it, it doesn't have any keys on it. How would that work, if it doesn't have any keys on it. It does take batteries, by the way, if you pop this little bottom out it's battery-operated so you can take it on the road but it doesn't have any keys on it. Now, you can of course, hook it up to your computer. There's a little driver and an app that lets you print stuff out and you can print your QR code but more importantly, you have this.

Leo: Oh, you can do it with your phone?

Alex: So what happens here is with this, it's Bluetooth-enabled so you can just pair up your iPhone or iPad or whatever, to the labeler and then you've got this original label. I just started working on one so I can say what text. The reason this one is so small is because I was printing these tiny little cable labels. Labels are to humans, as is pee is to dogs. So I just pee on everything, but anyways, this is my way of peeing on my cables, I just wrap them with my name on them and this is how I pee on my phone. You know, just print these out. And the big thing is that it's always been this big clunky thing that you can't figure out and it's got all these keys and everything else. Anyways, the fact that I can now do it with my iPhone and can just very quickly pop things in that I want to label.

Leo: Can you put images on it?

Alex: They're very simple images, the resolution is pretty rudimentary so it's back to like Mac 32x32, it's maybe not quite that low but it's pretty low resolution. You can put little images on it, you can put QR codes on it, serial numbers, barcodes and a lot of that stuff is already built in. So it's just so much easier after all of these years of going back and forth- And I still will miss the little circular dial, I will admit. But this is so fast and of course, the cartridges are easy to get and there are a lot of people that make them but this has been the easiest one to actually use rather than- It's just a quantum leap forward as far as speed goes. Honestly I spend a lot more time typing on my iPhone than typing on a label maker but anyway, I'm pretty happy with it. And again, this is the LW600P Epson.

Leo: $107 on Amazon.

Alex: And that's where I bought it.

Leo: I am so close to clicking that. It's pretty cool.

Alex: I just got it recently and wanted to play with it for a while. The little label ones are a little wonky and you have to think outside of the box in order to get it to print on the top a little bit, it doesn't do that automatically.

Leo: Is that the cable wrap?

Alex: Yeah, this is the cable wrap and so you can put that around a cable now.

Leo: That's cool, I would actually love to label my cables.

Alex: And the thing is that, for big shows we'll actually label them or for kits that you're using all of the time. The big thing is just labeling all of your power supplies and there should be a law by the way about if it's coming from a lilyput or AJA- AJA is really good about it but there are these other people who send these generic wall warts and you can't remember what they are so the first thing we do, of course is we label the power to make sure we know where that actually belongs. But once you start labeling things it does become like an addiction. I have admitted that I have a problem but I'm not willing to give it up yet.

Andy: I have a box of silver pens that I keep on hand specifically so that I can label every single wawart because it's like my life changed for the better years ago when I realized that okay, if it's more wattage, that's okay. If it's more voltage, that's not okay. These things are like molded in shallow plastic with no paint on them and you're like crawling behind the TV hutch trying to find out which one is for the Roku and which is like the 17 volt one that needs to go to something else. That's a bad mistake to make.

Alex: Once you start labeling, it completely changes your life.

Andy: That sounds like something a responsible grownup would do. Someone who can connect consequences with actions. I could pretend to be one of those people.

Leo: Crazy. Mr. Rene Ritchie, your pick of the week?

Rene: I just want to second Andy's-

Leo: Pixelmator.

Rene: Well yeah absolutely but the iPad Air 2 by itself is just phenomenal. The display looks like the iMac display and you couldn't think that it would be better than an iPad Air but it really is because it's laminated now and has a new anti-glare coating that really works. It's got a new gold option so you can completely bling it out.

Leo: So if you have an iPad Air, should you get one?

Rene: No, I mean if you really want gold and you didn't get 64, 128 gigabytes and you're really upset about that, they're $100 cheaper than they were last year or if you're into really high end graphics, the AAX chip is really good. But it's like the iMac, you're shopping for a Ferrari if you already have the iPad Air.

Leo: Okay. On the other hand if you have a 3 or a 2-

Rene: Yes.

Andy: To clarify, you're almost always going to get a no answer from me if I should upgrade from something I have that's 1 year old unless the thing is an unexploded air bag that's going to go off because of a manufacturer defect, hold on to it at least another year.

Rene: Actually you could hold onto it for a couple of years. But my picks of the week, one is BB Edit 11 from Barebones Software. I love BB Edit, I write in it every day. Almost every article I do on iMore is written in BB Edit. This is the version that is no longer on the Mac App store, they're doing a little gymnastics to help people who bought the Mac App store version cross over but it's just- I believe it started 100 years ago and Rich has just been updating it every year since then and it's got new text and text highlighting, it's got new text extraction, it's got a bevy of really good features and I'm not too proud to admit that I use maybe 1% of them but I just love that I can write in plain text and then just convert it into anything. And my review for iOS 8 was 2100 words and Google Docs just couldn't handle it, it just kept freezing. Whereas, BB Edit handled it like a champ, it had no problem whatsoever and it has never once lost my work. If anything goes wrong, it comes right back where I left off and that to me, is just invaluable. To be able to do it that quickly, not lose time, and to be safe in what I'm doing makes it absolutely worth the price and speaking of paying for good software, I would buy it twice if I could because I use it all day every day.

Andy: BB Edit is only slightly younger than ASCII. That's about as far as you can go.

Leo: Should point out that Rich, this is how he makes a living, he never offers a free upgrade so if you bought ten the upgrade is $30 and if you have never bought before, the upgrade is $50. If you have a Mac App store version it's $30 as well.

Andy: But it's also one of the consistently worked on and maintained apps I think you could possibly find.

Leo: I think it's worth it.

Andy: Rarely a month goes by that I don't get some sort of indication that a DOT upgrade is coming. And never to fix a catastrophic problem but to fix something that is amazingly subtle that only someone who relies on BB Edit to work around 20 hours/day for 7 days/week for months would ever, ever uncover and yet it's important enough that Barebones felt the need to fix it. If you're just like Rene and me and you just want a text editor that writes text it's great. If you're writing code, it's great. It'll do highlight marking for all of your context, you can change color schemes now for how things work. And Rich, who is a very good friend of mine gave me a demonstration of it last week in the context of a PR thing, as opposed to a context of a just hanging out thing and boy, when you see how a blade can be used by a chef who is also a master knife smith, you have appreciation for what this knife can do. Because he was doing things, now here's like 20 year’s worth of BB Edit feature requests and all of them that just mentioned Touch ID. Well I just do this search and I'm like, okay you just did what would have taken me like three days of manual labor and about 14 key strikes. Even if you have never touched that power yourself, it's so wonderful to know that this power is lurking in that app and to know that all you do use for is to write 2000 word columns because one time a year you will think, gee I really do need to do this transmodification on this file, what a pain in the butt this is going to be, until you realize, wait... Doesn't BB Edit have amazing features for doing anything you can do with text and as a noob will take you two hours to learn the one simple search and replace string that will do it for you but that two hours will pay off in 10 minutes of effort doing something that would take you three days. Highest recommendation.

Leo: And we love Rich and just want to support him.

Rene: I had one more, Leo. So I just wanted to say Vickey Murley who was on the original Safari team, the original iPhone team and was Apple's Web Technology Evangelist for many years, she put out her 2nd book which is, CSS Animation and it's terrific. A lot of the CSS stuff is based on Apple's technology, like the animation stuff, the transition stuff and if you've always been curious about how to do CSS animation, her book is a great  starting point. It's available for iPad and iMac, it's at cssanimationbook.com and it's really good.

Leo: By the way, thanks to Jeff Needles, we got the 2560 resolution of Time Scape now. It looked great either way and it's still not the full resolution of this display. That's the really amazing thing. My app, I'm telling you guys you've got good picks but you don't have Taco Bell. Taco Bell, today shipped an app that makes it possible to order from Taco Bell directly from your iPhone, they have an Android version as well, it looks up your local Taco Bell- What are you laughing at?

Andy: I was just thinking about the most appropriate app possible for an app that people actually use on the toilet, that's all I'm saying.

Leo: I can have My Bell and in the future, your most ordered items will appear here, engine starters... I have got breakfast, combo meals.

Rene: Do they deliver or do you have to go pick it up?

Leo: It would be nice if they would just show up at your door but you have to go and get it unfortunately. But it's just down the street so it's good news. I just couldn't resist. Ladies and gentlemen, we are now at the end of our program for the day and I do thank you so much, this has been Andy Ihnatko, he is from the Chicago Sun Times pretty much every week. Rene Ritchie is also a good person to visit at imore.com. We also thank you Alex Lindsay for taking time out of your busy schedule.

Alex: It's always my pleasure.

Leo: We do MacBreak Weekly every Tuesday 11 am Pacific 2 pm Eastern time, 1800 UTC on twit.tv please stop by and say hi. You can watch us live here or come to the studio. But you can also watch on demand audio and video after the fact at twit.tv/mbw but also on all of the different podcast apps for all of the platforms. Thanks for joining us, get back to work! Break time is over!