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This Week in Tech 460
Mike Elgan: It’s time for TWIT, This Week In Tech. Leo’s out today, I'm Mike Elgan filling in for him. We have the Technologizer, Harry McCracken, he’s here. Along with CNET’s Lindsey Turrentine and Katie Benner from The Information. We talk about major moves by Apple including Beats, Healthbook, Smarthomes and what's going to happen at WWDC this week. Plus, Google’s crazy car and Microsoft’s crazy Smart Watch. It’s all coming up right now on TWIT.
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Mike: This Is TWIT, This Week In Tech episode 460, recorded June 1st 2014
Drones Delivering Diapers
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Harry McCracken: Thanks Mike, it’s great to be here.
Mike: Now before we introduce the other people in the show in want to ask you about the Technologizer because this site is now reborn. You've been famously with Time.com for quite a while, bringing a lot of street cred with that publication in my opinion and now you're branching back out on your own. You're re-energizing the Technologizer, tell us what you're going to do with that site.
Harry: Well I'm kind of going back to basics. I was that time for a little over 2 years and Technologizer was part of Time.com so it was a tiny island in an extremely large ocean of content. And I decided to leave Time recently and the cool thing was I was able to take Technologizer back with me and I put it back on Wordpress. One of the cool things with being a journalist today is you can work for a large media company and also reach a lot of people on your own. So I put together a new design. It’s not going to be completely different from what I did that time or what I did when Technologizer was a standalone brand but I'm going to try even less hard to kind of be a news destination. There are all kinds of sites such as CNET and The Verge and others who are better for news than I can ever be on my own. But then I came through an analysis, an insight and – so I call it slow cooked content. I'm not going to try to do 40 plus a day. I'm going to point people towards good posts elsewhere and I’ll do relatively little content but hopefully of high enough value that people will notice it.
Mike: And that's really one of the uber trends that's making Tech Journalism and Journalism in general so great these days because people like you are leaving the big mainstream publications and they're branching out into sort of these kind of start-up mode of operations, ranging in size from you know The Information, we’re going to talk about The Information in a sec, Technologizer and then doing the more in depth reporting and it’s getting to the point where I think Technology Journalism is actually becoming one of the best forms, the highest quality forms of Journalism. Also, there's a lot of garbage out there, let’s face it but there's such good Journalism these days. So I'm really excited about that. The truth is that people don't go to Time.com and say “I want to go to Time.com because they have the best technology coverage”, they go “I'm going to go read Harry McCracken”. The individual columnists and analysts are the brand these days. And so you know it’s great, you're going to bring your audience with you and I'm going to be looking forward to seeing what you do.
Harry: And an awfully high percentage of them, when they go to content it’s because their friends or people they trust told them about it on Twitter or Facebook or Google Plus. So although Time was a great place to be, I feel like the entire web is the front door to Technologizer if my content is good enough.
Mike: Absolutely and it will be I'm sure. I've been following you for a long time. You and I go way back to the PC Magazine Wars.
Harry: The old magazine days.
Mike: You and I were both competing against PC Mag, which was the 800 pound gorilla. But anyway, welcome and congratulation.
Harry: Thank you Mike.
Mike: All right, also joining us today is Lindsey Turrentine, Editor-In-Chief of CNET Reviews. Lindsey came all the way from slightly south.
Lindsey Turrentine: From Berkeley, yeah just a little ways.
Mike: Yeah, Berkeley. And so what have you been working on lately? You've been in the business for a while, and we've had you on Tech News Today a bunch of times and you are fantastic on that show.
Lindsey: Thank you, thank you.
Mike: You seem to know everything.
Lindsey: Well, that's my job. I have to know everything. We’re working on a lot of exciting things. Some of the most exciting things that we've done recently is launch CNET En Espanol close to a year ago. Getting close to a year ago and it’s growing and growing and now is the largest tech site in Spanish.
Mike: That's fantastic.
Lindsey: …in the US which is really exciting. It’s been a fun project and we're doing a lot of interesting stuff about the connected home. So we cover appliances already in a big way. We have this big facility in Kentucky where we do that and we're doing some really interesting stuff that we're going to be talking about soon.
Mike: Yeah, I bet in the sort of home automation world is really about to take off. And I think that's really going to be a launch into the stratosphere tomorrow. And we’ll talk about that later in the show.
Mike: But that's really exciting that you guys are all over that because that's really going to be a major, major thing that all of are going to be talking about over the next few years.
Lindsey: Yeah it’s a very exciting time.
Mike: All right, well welcome to TWIT.
Lindsey: Thank you.
Mike: And we also have Skyping in all the way from San Francisco, California, a few miles south Katie Benner who’s a reporter for The Information. Welcome Katie.
Katie Benner: Hey, thanks for having me.
Mike: Now you're with one of the entrepreneurial poster children of the new age of technology journalism, The Information launched by Jessica Lessin. How is that going for you guys, you seem to be cranking out some pretty awesome stories and sort of getting a lot of tension and generating a lot of scoops. What’s it like to work for one of these entrepreneurial tech journalism start-ups?
Katie: It’s really, really great. The pace is incredibly fast because not only are we reporting on news that's changing all the time and the tech industry, it’s so innovative and changing all the time. As anybody who has ever worked at a start-up can tell you the actual business itself seems to become a new company kind of every four weeks. You know you grow and you learn and you're always incorporating new information and new ideas about how to run your business so this is incredibly good. It’s a good bootcamp for anybody who really wants to understand how to make the media industry a better place and more profitable etcetera, etcetera. I'm writing exciting stories, we love it.
Mike: Yes you are and you personally have a background in Financial and Business Journalism, is that right?
Katie: That's right, so I was at Fortune Magazine for seven years covering Wall Street so it started out as kind of a you know fun beat – actually much like covering tech today is where it’s exciting and things are changing a lot and you just hear about new, new, new, growth , growth, growth. And then suddenly the financial crisis happened and it became this extraordinarily fascinating thing to look at. You know to re-examine all the assumptions, the people that had leading in 2008 and late 2007 and you know the things that people had missed because they were just awash in growth and optimism about what's happening on Wall Street. So this feels like a very interesting time to be covering tech. There are some similarities for sure.
Mike: Yeah, absolutely it is a fascinating time and I'm really enjoying what you guys are doing at The Information. Well, let’s launch into the show shall we. Let’s start with the wackiest story I think of the week, which is Google’s funky little clown car. Harry McCracken what do you think? Why did they actually trot out a car that has no steering wheel as a way to make people feel more comfortable about self-driving cars?
Harry: Well, I was kind of fascinated by it because a couple of weeks before that news came out they had their first bit of that for their earlier self-driving cars which were converted Lexus SUVs which had steering wheels and brakes and everything. And so I was up to date on what they were doing and then it turned out that actually no, they had concluded that was never really going to work as a model for this and they have been secretly building an entire car from scratch to be self-driving. Which I have to say, I haven't been in that yet but one of the things that was comforting about being in the Lexus was because there were two Google engineers in the front seat—
Mike: Licensed drivers, what a concept.
Harry: … yeah and they frequently explained to us that the whole was whenever the car came into danger or something where you kind of did not want your car making decisions, no problem there was somebody at the wheel who could take over in the blink of an eye and steer you through it.
Mike: And of course these cars are going to have – they're going to build a hundred prototypes they say and those prototypes will have steering wheels and brakes. You know the kinds of things that you want to be in a car. And the video I thought was kind of disingenuous in a way. It has a single button so in this particular prototype you push a button and it goes somewhere and you push a button if you want it to stop if a squirrel runs out the road or something like that. And it’s like “Wait a minute, how do you even tell it where to go?” I understand that you can do this in a parking lot but it just seems like they didn't really raise the basic issues of how this thing works. They just showed how cool it is for people getting excited driving in a parking lot. Lindsey Turrentine, what do you think? Was this – yeah, I mean they're obviously excited but—
Lindsey: Well, this is Google’s way right, to just start with an idea and kind of just throw it out there and say “Start thinking about this”, start to think about what this could be like and get people imaginations going and I think, you know Google is at it’s very basis all about the data. So they're seeing a future in which data drives your car, you tell it where you want to go and it just does all the thinking for you. I think that this is – there's a very long list of cultural problems that Google has to get over and they know that so they're trying to start early. But the thing that I've been thinking about a ton is that like – let’s say that this gets used in the small capacity right, and we start using these for essentially Uber.
Lindsey: You call one and it takes you across the city. Not on a 50 mile trip but just to the grocery store. But what happens if you do need to take over at some point and if this became a huge cultural norm, how do people get the hundreds of hours behind the wheel that they need to be able to take over safely when they have to?
Leo: Because I don't think we’re all going to be in self-driving cars in ten years. It’s going to take a lot longer than that.
Mike: Yeah, well I tend to think that this is going to be a gradual thing. We’re looking at super cruise control you know.
Lindsey: Yeah, exactly.
Mike: We've already got that to a certain extent. The high end cars, the rich people are much safer than poor people because they can buy one of these high end cars and if somebody slams on the brake in front of you, in fact Vic Gundotra of all people did a commercial for one of the big car companies. I don't know if you remember that, where he said “Oh, this car saved my life because I wasn't paying attention and the car in front of me slammed on the brakes and the car automatically slammed on the brakes”.
Lindsey: Yeah, for sure.
Mike: And so that kind of thing, that kind of thing is actually easy to do relative to the self-driving car thing because the self-driving car thing is all about maps and sophisticated maps. Yes, Google has completely mastered Mountain View, California.
Harry: Oh it’s great in Mountain View.
Harry: Petaluma, probably not so much.
Mike: Yeah and you know we’re talking about a couple of thousand you know miles of road that they've mapped, in fact there are millions of millions of millions of miles of roads yet to map. And of course lots of companies are working on this kind of technology. All the car companies are working on it. I personally think that this car has two purposes. The first is to show that you can't just slap electronics on the roof of a Lexus or a Prius. You need sensors down below. You need the whole car purpose built for self-driving if you really want to do it right. And the second thing is, I mean look at this thing, it has a face on it. I mean who can stay mad at this car? It’s like, you know they're trying to make it so warm and fuzzy that when they go to you know—
Lindsey: This is the not – it’s the opposite of you know the sort of muscle car experience that we all get advertised to all the time.
Lindsey: And I think this is what Google’s trying to go after, like “Hey this is not – we’re not trying to replace your amazing driving experience. This is functional, it’s something that'll make things easier for you and it’ll be fun. Like if you're not a person who loves driving or you're a person who need convenience and you want to just text in the car, you can do that safely because you're not driving.
Mike: Yeah, exactly and of course anything that the self-driving car does, you run over an old lady, you hit a dog, whatever it is that you do, whatever the car does, whatever it is, Google’s algorithms do frankly, you're going to be liable. When these things hit the road, you're not going to be able to sit there and drink Scotch and playing Backgammon and just like not even worrying about what's going on. You can be liable—
Lindsey: That's a bummer.
Mike: …I know, that's the bad news.
Katie: I think this is where the data comes in to play because I think that one thing that all the self-driving car people are thinking about Google especially and even some of the automakers is how do we make this the norm and I think the way they do it is by getting insurance companies on board. So the insurance companies are very, very concerned about data and if data can prove that it’s cheaper and safer for the insurance companies, they're going to encourage more and more and more automation in vehicles. And so we’ll be pushed along as a public to accept technology that we might not - that we might feel as kind of icky right now just because it will be cheaper. I saw a really fascinating speech given by Dan Geer who’s over at In-Q-Tel and he has done a lot you know he’s just sort of one of these guys who thinks about big tech problems. And he was like “There will probably be a day, someday not now but not too far away where none of us will really be able to afford to own and drive cars that don't have some level of extreme automation because the insurers will demand it.” And so Google wants to make this friendly car and it’s really cute and they want to convince us that we want to drive. And the scariness and that sort of weird sci-fi Orwellianess of a self-driving car we can get over it with the face. But in the background they're also you know thinking very hard about how to not just make us feel better about it but to force us to do another [?].
Mike: I personally want a self-driving car that has a sort of ventriloquist dummy looking Johnny Cab kind of face there that's like talking to me and being crazy. I think that would make it all worthwhile for me personally.
Lindsey: Yeah, would you like it to also speak out?
Katie: I want a sofa in my self-driving car.
Lindsey: A sofa, a dog bowl.
Mike: Sure, yeah absolutely.
Katie: Yeah, I was very disappointed to see that there wasn't more comfortable seating in this thing.
Mike: I know, put a bed in there or something. You know put a hammock or something in there, that would great.
Lindsey: You know the biggest practical thing that I keep thinking about the self-driving car is “Gosh, I work all the time, if I had a self-driving car I would ever have a chance not to work”. Like right now driving is when I just don't work.
Mike: In fact for you I think you should get a self-driving office because imagine if you – you know you could go to like, you could drive to the other side of the country to attend a trade show or something and slave away the entire way. Have a desk in there.
Mike: Yeah it’ll be fantastic.
Harry: It’s weird being in a place where in can’t do email and whatnot, which is what a car is for me.
Mike: Yeah, yeah exactly. Well remember when airplanes were like that. I used to love flying because it was like “Nobody can call me, nobody can reach me on you know email or whatever.” Those days are gone. Well Google’s up to a lot more than just self-driving cars. They have according to reports, rumors, whatever you want to call it they are working on Android TV to replace Google TV. Harry McCracken what's the different between Android TV and Google TV?
Harry: Well the rumors are a little fuzzy. I mean it sounds like Android TV, A, it plays up the Android brand which has a lot of momentum in and of its own. And B, gaming is a big part of itself. It’s a little reminiscent of what Amazon is doing with Fire TV, which is a TV box but one which was recently serious about gaming and I mean depending on how you count this, this is Google’s third maybe fourth attempt to come into the living room with a device because there was Google TV and there was Google TV 2.0 and there was the Nexus Q which was that magic 8 ball looking thing which I think they gave up on before they actually anybody paying for it.
Mike: Did anybody get that except Google IO attendees?
Harry: They gave it out at Google IO and then they sort of slowly decided that maybe it wasn't going to work out after all and gave up on it. Of course I mean really there are only, I mean depending how you count, there are I think either four companies that have succeeded at TV box. Those companies are Roku, Apple with the Apple TV, and probably Microsoft and Sony with the Xbox and the Playstation which are both used hugely for streaming video. Other than that, there have dozens if not hundreds of TV box, those which have come and gone over the years—
Lindsey: Comcast has been very successful.
Harry: Comcast yeah.
Lindsey: And it’s limited but it’s appealing.
Harry: I guess Comcast has been successful, I mean I think they've managed to sell a lot of them. I kind of curious many are actually in use because there were a lot of people who were like “This is incredibly cheap, I'm going to buy one.” And how many of them stayed in use, I'm not sure.
Mike: So it seems to me that one of the fascinating things about these reports that we’re hearing again, these are – all this information is not something that Google’s announced and is something that I think some of us are expecting at Google IO, which is not for some time. When is Google IO, June?
Harry: End of the month.
Mike: End of the month, that's right it’s June already. End of this month.
Mike: Almost a month. And one of the big differences between this and the Fire TV is the Fire TV is a product. You go to Amazon.com and you order one and they send you a box and it has gaming and it has apps and it has some other things that are associated with your Prime account. Whereas this is a platform for other people to build a box, for other people to build a TV with the stuff built-in but what they have in common is a strong emphasis on games. So does anybody think that Google is going to become a powerhouse in gaming?
Lindsey: I think that Google wants to set itself up to be a powerhouse in gaming if that opportunity arises and it wants to have an opening in anything. I also think that this is Google’s way of continuing – I mean I am pretty impressed that they keep trying this after the Google TV you know.
Lindsey: Fiasco, try and try again. But the different between the two, or at least the rumor difference is that Google TV tried to marry the traditional television and then the streaming television experiences and this is just the latter right. And so it’s really opening up a platform if you can get people in to watch streaming tv seamlessly. And then once those games start to come over the internet, become more powerful, there's already that sandbox for it.
Mike: Yeah, absolutely. And Google IO last year, you were there. I don't know if you went to Google IO last year but they were talking about you know, using Google Plus as the sort of communications medium for their coming game platform for Android. And I wonder how that's going to happen, you know whether it’s going to be Google Plus, whether it’s going to be Youtube.
Harry: Well the latest rumors are that maybe they're moving forward, they're going to be less aggressive about Google Plus being the platform for everything and maybe saying you know Google has all the services and we’re not going to, sorry Mike I know you like Google Plus—
Mike: I do.
Harry: …we’re not going to shove Google Plus into the face of the people who don't necessarily want it.
Mike: Yup, yeah I mean that's essentially my – I guess it’s somewhere between an assumption and sort of an analysis of the situation which is that Vic Gundotra really drove the Google Plusification of everything in the company. And from within Google, what that means is that no matter what division you are in, no matter what division you are in charge of Google Plus is more important than you. And you had to change your product for the objectives of Google Plus rather your own objectives. And so Youtube and so on. And I think there's got to be, and again I'm not a fly on the wall I don't know what's really going on at Google but that's got to be why Vic Gundotra left to a certain extent. He burned every bridge there was because he was the guy, you know forcing everybody to do stuff they didn't want to do. And so yeah, I think that that's the days of forced integration that's widespread and aggressive are definitely over. And it doesn't affect Google Plus at all, I mean as a social network, who cares. Those things were all for the theoretical benefit of other Google properties.
Harry: It might help Google Plus given that among people who don't love Google Plus it doesn't ever create reputation partially because people think of it as something being forced on them. If Google Plus succeeded because it was good, which it is in a lot of ways it might good for everybody.
Mike: Yeah absolutely, well Google is also having an interesting time in Europe these days because they often clash with the Europeans over a variety of things. Things like Street View, car and so on. The most recent clash is over the right to be forgotten. So some guy in Spain had some financial trouble some years ago. And then fast forward he cleaned up his financial act and he got to the point where he was you know, he was doing fine and he didn't have you know all these debt and so on. But when you searched for his name, you could find, you know he looked like a financial basket case and it harmed his reputation. So he took it to court and he won. And what that meant was that Google is now required to enable European users, because of one Spanish judge by the way, to enable European users to submit a proposal that they have their information, the link not the information, the link in Google, in Google search engine and every search engine to be removed. So this affects not only Google, Google lost the case, they were the, I guess the defendant to whatever you want to call it in a law suit. But they now have to comply, they have done so. So this happened some time ago and now they've actually put up their form saying if you want to remove your link, here's the form, fill it out and thousands of people have done that. Now this is a controversial thing, Katie Benner what do you think of all this? I know you have a point of view on this.
Katie: I think initially it feels like a very good idea because I think people are trying to find ways to take back control of their online identity. I mean it’s why things like Snapchat are successful, things that disappear so that we don't feel stuck with everything we do online. It gets into a very tough territory essentially, sort of censoring the web. So I think Google if they decide to take down a link, they're also going to note that a link is disappeared and how many links do they take down, what does that mean, who are they rewriting the history for, is it useful to have some of this information available, how do they decide. This is just such, such tricky territory so I think it will be – I think it will actually be a lot harder than people think for this to be successful.
Mike: Absolutely, I mean does anybody in this counsel of wisdom support the European decision, this idea of right to be forgotten? Is this something that has value that outweigh the complications?
Lindsey: I've been thinking about it a lot because I mean we all probably have links we’d like to take down and I don't think it’s a good idea. For one thing I think that there's an entire industry that will grow up around it, that will be, you know you'll find a consultant who knows the right language to use in the form and all of the right tactics to take to get certain things taken down regardless of whether it’s a good idea or it’s really something that is, you know a link that's no longer relevant. And it doesn't seem like there are very good guidelines yet about what makes a link something that deserves to be taken off of Google.
Mike: Yeah, that's one of the crazy things about this, is the European regulators have constantly told Google “Google we don't trust you, we don't trust you with your Street View car. We don't trust you with your, you know with you listing your competitors on your search engine. We think you're favoring yourselves.” They go on and on about how they don't trust Google and then in this ruling they say “But you know what, you're in charge of deciding what's a good link, what's a bad link, what's a relevant link, what's an irrelevant link. That's all up to you Google, good luck”
Lindsey: Yeah that seems crazy, I mean it seems like if that's going to happen and maybe there's a future in which there's a way that we get certain things taken down so that you know public interest in something that is not true doesn't drive untruths to the top.
Lindsey: But there needs to be legislation around that, it can't be up to Google.
Mike: Right, and to me the—
Katie: And also – I was going to say there are also companies already that exist that do reputation scrubbing online and of course I mean what the EU is saying that you shouldn't have be like a really wealthy person who can hire reputation.com or one of these services. But this is something that already exists.
Mike: Yeah absolutely but one of the things that's really – the worst thing about this and let me frame this in a way that sort of reveals it for what it really is, what they're asking Google to do, so there's a beautiful situation that exists, we have an internet right? It exists, we have search engines to help you find the things that are on the internet. So what this ruling does, is it say “Okay Google, we want you to lie. We want you to have your search engine not reflect the actual internet but to reflect whatever’s left over after everybody who has the resources, the time or whatever to scrub it” and by the way this is only for Europe. So to me, Europe is going to have an increasingly inaccurate search engine. And Europeans who are savvy are going to find ways around it. They're just going to use the American version of Google or some other version of Google. And in fact this is what people in China already do, this is what you do when you have a censored internet. You find – you use tools, various tools which are freely available to get around what's there and then the you know, again it’s another digital divide isn't it? Because the tech savvy people, the knowledgeable people, the educated people are going to get the real internet and then the average person is going to get a censored version of the internet. It’s an awful state of affairs and I think Europe needs to revisit this and not just allow one Spanish judge to essentially wreck the internet for an entire continent.
Katie: Well keep in mind this is Europe.
Harry: And who decides what needs to be scrubbed?
Katie: You know, this is very European, this is the same – the EU that regulate the way a tomato can look before it goes to the market. I mean there is such an amazingly rule bound kind of hide bound place. So it’s not entirely surprising.
Harry: And Mike you're right, they sort of have been you know at war with Google for many years over all kinds of stuff. I mean, it may not entirely be a coincidence that Google is this large company had imported in the US which has so much impact in Europe and there have been all these attempts to curate the European Google, none of which have really taken off.
Mike: That's right and they take a different tact and a tact that doesn't really work. For example there was some years ago, French government has these cultural sort of divisions or whatever you want to call them and they were freaking out that Google was digitizing all the books and sort of kind of becoming this powerhouse in the future of digital books, and so they wanted to do their own. And it flopped and that kind of stuff is hard to do by committee. You need billionaires to do that kind of thing. You need billionaires with Google Glass and VBrooms and private jets to do these things. You can't just do it by fiat. Well we’re going to talk about Apple, it’s going to be a huge week for Apple and there's lots of fact and also not so facts, not so big a facts rumors if you might call them about what Apple is going to be announcing WWDC tomorrow. But first I want to tell you about Stamps.com. Stamps.com is one of our sponsors today and you know who goes to the post office and waits in line at the post office, other people if you have stamps.com. Going to the post office, slogging away through traffic at the end of your work day and then getting in line with a whole bunch of people just to send something or to send a package or whatever is just a terrible idea because stamps.com will let you do all the post office stuff at your house. You can, especially if you have a small business, you want to do whatever it takes to make your business run efficiently and if you want to be efficient waiting in line at the post office is not the way to be efficient. It eats up valuable time you could be spending on growing your business. So you need to go to stamps.com. You can buy and print official US postage for any letter, any package and using what you already have, your own computer, your own printer and then you just hand it to your mailman. It’s that easy to do. Join the 500,000 small businesses that use stamps.com and never have to go to the post office again. There are no long term leases, no hidden fees, no expensive inks, nothing fancy. Stamps.com can give a small business a more professional look. So right now use the promo code TWIT for our special offer, a no risk trial. That's a $110 bonus offer that includes a digital scale and $55 free postage. So don't wait, go to stamps.com, before you do anything else click the microphone at the top, type in TWIT. That's stamps.com and type in TWIT and you will thank stamps.com. It’s a fantastic service. Well Apple is in the news. They of course are doing WWDC and I think Chad don't we have an early look at, you know people are wondering where are they going to watch or not, we've got this early look at a promotional video. Roll it chad.
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Mike: This might not be official.
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Cookie: The design that went into the iPhone—
Mike: Suddenly he Johnny Iovine.
Cookie: …is unparalled. It’s hard to believe that we can even fit a battery into this thing but we did, and it will last you one entire hour, stand-by. You have never looked so attractive to the opposite sex. Yeah, it’s that good. You can even use it when it’s plugged in. You can charge it, listen to music and sync in with your iMac all at the same time.
Susie: Gaming has never been more fun. Play your favorite games from your iPhone or iPad right on your iWatch. Every existing game is compatible? We've even added support for your made for iPhone controllers. Never be away from Minecraft again.
Jim: But there is one more thing, the iWatch comes in with a built-in GPS aware pedometer. We take privacy seriously and that's why we've granted a live stream of your location to the NSA. Stop complaining, you love the attention.
Harry: That's only slightly more silly then a lot of actual smart watches which exist today.
Mike: That's right, that's right and speaking of which, everybody expects Apple to launch an iWatch of some kind. A band, something, they're going to do it tomorrow Lindsey Turrentine.
Lindsey: No, no they're not.
Mike: Are they even going to mention it?
Lindsey: I don't know, I mean I think they're going to talk a lot about IOS 8.
Mike: Yeah, I've seen the posters.
Lindsey: And I would assume contains some hints or some direction or there's going to be something that we can sort of see in that experience and some of the other apps and software that Apple will be talking about. They're going to be – the rumor is that Apple will be launching a healthbook app that brings all of your sensor based health kind of data into a single app.
Mike: Be like Passbook maybe.
Lindsey: Yes, very much like Passbook but for whatever you're tracking on your smart watch. So I would assume that there would be some hints in there and I know that the developers conference program has a lot of the program – the later program, the law of the sessions, the names are still blacked out. So there will be something but I don't think there's going to be hardware tomorrow. I really don't, I think they're really focused on developers this year.
Mike: Okay, Harry what do think? What are they going to talk about tomorrow?
Harry: I think that a new version of OS10 and a new version of IOS are a given and that's a lot to chew on right there. It sounds like Healthbook is real. Mark Gurman who writes for 9to5mac is one of the few Apple reporters, if he reports a rumor, you can't have one hundred percent confidence he’s right but he probably right and he’s read an awful lot about this stuff. It would expect some hardware but probably not anything revolutionary. You know there might be new Macbooks. It would be nice to have a new Macbook Air with a retina screen someday. That would be nice but people always think that Apple rolls out huge world changing hardware devices at WWDC and they forget that the original iPod was not at WWDC, the original iMac wasn't, the iPhone was not, the iPad was not. It’s like the second or third device in that category they announced at WWDC and I would expect something along those lines tomorrow.
Lindsey: They don't want to steal attention from the major hardware rollout and they don't want to mess up their supply chain either, right? So unless they're ready to sort of hit the ground and start selling something immediately, they're really unlikely to do it.
Harry: Which they usually don't do in the summer anyway, I mean they did it with the iPhone for a while but the iPhone slept into the fall. And this is an event for software developers and if you are a software developer and you write for Apple stuff, there's nothing you care more about than the next version of IOS or the next version of OS10.
Mike: That's right.
Harry: You don't care all that much usually about the specific hardware that it’s running on unless it’s something like a retina display or an iPhone with a larger screen. Those kind of things do affect you and you care about them.
Mike: Yeah, one of the interesting things about the coming spaceship campus that they're building. I think it’s the current deadline on that, and of course they're already tearing up the ground and laying the foundation for that and so on in Cupertino, is that they have an underground bunker where they're going to do all their announcements. And so we know they're going to launch you know IOS 8 because we've seen the posters already, you know the, what's the name of the conference facility in San Francisco where they do this?
Harry: Moscone West.
Mike: Moscone West, you could just walk in there, you know they can't like kick the public out of those but the underground bunker is going to allow them to summon journalists within short notice, 2 or 3 days maybe and then they'll be able to go on any schedule they like. They don't have to book it and you know, Moscone you have to book probably what a year or two in advance and so on.
Harry: People will that there is a mysterious event happening at Moscone West in a given week in June.
Mike: That’s right.
Harry: And even if it doesn't say Apple, people often can figure it out.
Mike: It’s literally impossible to keep that kind of information secret and they—
Lindsey: Apple already does that actually at their campus. When they have a smaller event for journalists they'll just bring people in. They have a facility.
Mike: Yeah little theatre kind of thing. So that'll be interesting. One of the – you mentioned Mark Gurman, Mark Gurman broke the story this week that Apple’s discussing iPhone service payments. Now he doesn't believe this is going to be a topic of a discussion at WWDC but talking about a payment service. What they're doing is they're talking to retailers about having a way to use your iPhone as a credit card. Now, Katie Benner this is kind of a no brainer for me. I've been writing about this for a long time, that you know when are they going to do this. Thank you have phones that have finger print readers on them. They have Ibeek, which is an indoor location system that's perfect for indoor retail. They themselves have innovated indoor retail stuff at their Apple stores where instead of going to a cash register, they don't have cash registers they have people with blue t-shirts. And so you just walk up to the blue t-shirt and you buy whatever you want, you walk out and they email you your receipt or whatever. That's how Apple wants to remake I think the world of retail and they have everything they need to do it and the one thing that they have that nobody else has is 800 million credit cards. They have 800 million iTunes accounts that have active credit cards associated with them which makes them, to me that makes them the number one company that has the potential to dominate this kind of retail. Katy Benner what do you think – this is going to happen when they actually roll out some kind of mobile wallet system?
Katie: I mean I have no idea what would happen but I think it solves such a big problem for the retailers that I don't think it would be very hard for a company like Apple if they chose the right retail partners to make this happen because at the end of the day, we have these phones that we could go online but we’re not necessarily shopping or buying online. There have been a lot of studies on this. Nobody wants to input all that information into all of those tiny fields. And so if you can make shopping as easy as it is to you know with your thumbprint buy an app from the App Store. That would be great and if you think about the Apple demographic, it tends to be pretty well healed so if they were working with you know the Neiman Marcuses of the world or you know name your retailer who really wants to have, to move goods online that stores just simply do not. Right now we don't do a lot of mobile shopping, it would be a perfect solution.
Mike: Yeah we had Mark Gurman on Tech News Today this week and talking about the story and he was pointing out and emphasized and also emphasized it in his article that it’s actually a really big problem because each of these retailers has its own backend system. And the Apple system would have to be compatible with those system so they have to go on a chain by chain basis. So as he point out, they're going to go for the big high end chains, you know the Neiman Marcuses and so on. And they're not going to go for the Targets and they're not going to go for mom and pop shops either. So they're going to have to start it with the big chains, establish what would amount to a standard and hope presumably that the rest of the world sort of retrofits what they've got to support Apple when – and if this works but it’s a fascinating story to a certain extent but it’s also kind of boring story because this is inevitable. Apple, I believe is going to do that and if this whole system, and if they didn't do it they would be morons because it’s so lucrative you know, there's so much money involved.
Lindsey: Well they need to do it soon because they still dominate market share you know for any single device anyway.
Lindsey: But that has the potential to wane a little bit right, as these become commodities and a lot of people switch to Android and there's so much choice out there that if Apple doesn't figure it out right now and get it out there with the next iPhone, I think that then it’s in trouble. So now is the time.
Mike: Yeah, absolutely.
Harry: I think it’s been smart they've waited. Apple often does well because it swoops into a category after other people have failed. And like Google Wallet has not really gone much of anywhere, Square had a really cool app which I think they've actually discontinued just because it’s hard to get traction with these things partially because credit cards are actually a really well done way to make payments easy and—
Mike: Well, these people are comfortable with them right?
Harry: Credit cards set the bar high and it’s not easy for a phone to be better than a credit card, it’s actually quite difficult.
Mike: Yeah it truly is and I think that one of the things that to your point Lindsey, that Apple is going to do this sort of deal with the fact that hardware tends to become commoditized and the competition is very intense and markets are very price sensitive, is this purchase of Beats. Now, right off the bat, is this a brilliant move or an idiotic move? What do you think?
Lindsey: I think a lot of people think it makes no sense at all. I actually think that it’s kind of a no brainer because what Apple does is it moves through these sort of pipelines of it’ll launch a very glossy high end product for the well healed as Katie said. And then over time, starts to do it in more colors, starts to do it smaller capacities, you saw this happen with the iPod right. There was this huge, beautiful, expensive, fancy brick that then got smaller and turned into the Nano and a lot cheaper. So Apple is approaching that with the iPhone and is now has multiple models and may have even more in the future and it’s becoming a commodity product that is easily paired with headphones. And it makes sense to put it together with a brand that is really widely loved with a lot of shoppers. Even if we all kind of know or those of us who read about it and we test all these headphones, Beats headphones are not, they're just not the best for quality, they're not but they're the best for brand and Apple loves that.
Mike: Yeah and you wrote about this – yeah go ahead Katie.
Katie: Oh I was going to say, Jessica Lessin my editor as The Information, she wrote a great piece also saying that one of the things that Apple has to do because of the commoditization effect on the phones is that they have to keep things new and cool and make people want to come. And so by bringing Jimmy Iovine on board, they have somebody who could do sort of amazing deals with the record labels. And who knows, I mean that could be – who know what form it could take. It could be free music or could be the right to share music or something else we don't know in terms of in the entertainment space. But he is a very good deal maker. He’s worked with Eddie Cue for like ten years, you know they've known one another for a long time. He could be a good cultural fit there and that would actually bring to Apple sort of an intellectual property and a steady stream of great entertainment that a lot of other brands don't have.
Mike: As Eminem would say, you forgot about Dre. Is he a good cultural fit with Apple? I won’t make you answer that.
Mike: So you know here's my view of it, from where I sit which is far away from Hollywood as far as away as I can get, there seems to be that the music business has had two big shifts in this business in the last fifteen years or something like that. The first is the iTunes and the iPod but the iTunes model of selling songs individually, digitally and this has a positive benefit for the music industry and what they considered a negative benefit. The positive benefit is people are actually paying for music instead of stealing it, which is super easy to do. And the negative business is that people are not buying albums. I mean I remember when you’d go to a record store and you'd buy an $18 CD. And you only wanted the one song but $18 was the price to get that song. And that was a model that the music industry really seemed to love. So Steve Job’s iTunes model was a nuclear bomb in the music business where everybody used to get rich selling song. The second one was called the 360 deal. This is something that hit around 2007 or so, which is that everybody realized because of digitization, music is worth less because there's no scarcity with music. You have a digital, you can download it a billion times and it’s the same file. It’s very difficult to impose scarcity for the purpose of imposing revenue associated with that. So they came up with these 360 deals. Instead of going to a superstar, a musician and saying “Okay, here's the record contract, we’re going to make this much money. We’re going to make platinum records and you get this percentage of the music sales”, they instead go “Okay, here's the deal, you're going to promote this, and you're going to sell this and you're going to have a cold brand with that, and you're going to have this concert thing and that's the deal. Forget about the music—
Lindsey: It’s all about the t-shirts at the end of the day.
Mike: That's right so – that's right and so the poster child for this concept of the 360 deal who’s probably done better than anybody is Lady Gaga. And her original business manager actually said that music sells everything except music. In other words, music is a great marketing vehicle and so let’s use that and that's the new model. And Jimmy Iovine has been personally involved in that whole recreation. So the two people most associated, maybe the three people, most associated with transforming and evolving the music business are Steve Jobs and Jimmy Iovine. And to a certain extent Lady Gaga and her business manager and so on. So I think that to a certain extent, iTunes music is the real prize here and although it doesn't exist now in terms of having the 360 deal stuff, they have been working on getting Beats music to the point where that's the 360 deal service. In other words, while everybody else is trying to sell subscriptions to streaming music, I think that Beats music has been working on a system where that’s the place where musicians and artists can sell everything except the music. You give the music away even to a certain extent but then you know you sell – and of course Beats has been at the center of this. If you look at what Lady Gaga has been making money on, it’s been headphones. And concert tickets and all these things that have nothing to do with music. So I really think that's what it’s all about. They bought somebody who’s like the Johnny Ive of music business right. A special person who’s super knowledgeable and irreplaceable and if he doesn't come with Apple he’s going to work for somebody else. Probably Google or somebody like that so I think that has a lot to do with this whole thing. So you know Katie Benner, I don't know what the future of music is going to be but it’s going to involve very cheap music and very expensive headphones.
Mike: You know.
Katie: I agree.
Mike: And if you look at how they've selling Beats, it’s been like you know there's a Lady Gaga version of Beats and these this and that and the other and I think that's really the future of what Apple’s going to do. And Apple want to be at the forefront of that so we’ll see how that goes.
Harry: Well I mean, no matter what you think of the quality of Beats products, it’s one of the few consumer electronics brand that's been created in the last 10 or 20 years that matters. And it went from not existing to dominating that category amazingly quickly. And it sort of feels now that like Beats has been around forever even though I think it’s about 6 years old.
Mike: That's right.
Harry: Almost nobody’s done that in a long time.
Mike: That's right and the conventional wisdom is that you can make Beats for 15 to 17 dollars, sell them for 200 and they own 65% of the so called high end headphones market. I mean what's not to love?
Lindsey: My kids, they don't really know of any other headphones. I mean, they just go straight to it and that's what you have.
Mike: And why? Because it’s associated with celebrity and they really want the music and you know, music fans really want to be into the bands and the singers and the artists and so on. And there's a hardware component to that apparently.
Lindsey: Well there's a design component to it too. I mean, I think it’s worth not forgetting that Apple more than any other electronics manufacturer cares about the design ethos. All their products and Beats is just like that. I'm not saying they have exactly the same design or the same approach, but a lot of the money that you're paying for is for industrial design and for the colors and the shape and the fact that you want to be seen in the airport wearing these.
Harry: Although oddly enough, I mean all of the Beats products to date have designed by this guy, he used to be Johnny Ive’s boss at Apple. And already they've said that that company ammunition group will not be designing Beats products moving forward and it will be intriguing to see who does design them and whether the look and feel changes at all.
Mike: Yeah, they need help on multiple fronts. One is the design and Apple can help with that. And another one is they need help with Beats music because signing up for Beats music is really clunky and really horrible. I tried to over the last couple of days and I tried to get in on this AT&T deals so you could get like the family deal that's five people for fifteen dollars. It’s a great deal but trying to actually make it happen is very, very difficult and so Apple might be able to help them with that. Well, another area where Apple is hoping to sort of create new business is around home automation. And home automation is super, super exciting. We talked about what you're doing with home automation at CNET. And what Apple is doing according to the reports is really not that earth shattering is it? I mean already, if you go to Kickstarter, you look around at what's really happening in home automation, Apple’s kind of already at the forefront to the extent that people create apps that run on IOS first, Android second. And so they're already kind of an accidental leader and they're trying to get in front of the parade a little bit so – but still I think—
Lindsey: What's going on here?
Mike: Well Apple is prepping a platform which is supposed to come out at WWDC tomorrow and they're talking about some APIs and it just sort of a light way getting in front of the parade that already exists for home automation and giving home automation creators a simpler way to embrace Apple’s coming platform for home automation.
Lindsey: Yeah, I mean I think there's a huge opportunity and one of the things that every time somebody from CNET’s on a panel about home automation, one of the things that we end up talking about is the fact that there are so many opportunities out there but you don't want to have a separate app for vacuum and for your light bulb and then another app for your thermostat and an app for your Smart Lock.
Mike: Which is exactly where you are today!
Lindsey: Which is exactly where you are today if you're even ready to sort of invest your time and money in a pretty young category. And so what Apple wants to do I think is just create sort of a Passbook kind of style, let’s wrap it all up into a simple interface. I think as an aside it’s the interesting would sort of create this there's an app for everything you know. Millions of apps out there is now in a position to be like “Well, you don't really need – let’s, maybe you don't need so many apps. Let’s try to kind of get them corralled into a manageable space.” But the other thing that Apple has going for it here is that it has a little bit of a head start with some of this home automation because of its low powered Bluetooth in every single phone. Not all Android phones have that or other phones. And so Apple’s already in early with some of the Smart Locks. And if they can sort of keep all of the third party developers and manufacturers thinking of Apple first, that's another reason to buy into Apple ecosystem because it’s just going to be in a tiny package and so you're a person who’s going to go out and buy a thermostat and buy Smart Lights and buy a vacuum that you control with your phone, then that's sort of an easy choice.
Mike: Yeah and Apple was the first to support Bluetooth low energy, Bluetooth smart. It’s got multiple, Bluetooth 4.0, it’s got a bunch of names but Apple is the first to put that in a phone, the iPhone 4s. And since then every phone, tablet, laptop has supported Bluetooth low energy. Now just about everybody does. The other thing that they have Harry McCracken is really I think an underappreciated resource is iBeacon because if you remember Bill Gates built a revolutionary house years ago and the way his house worked was you would put on this little badge, it says welcome to Bill Gates’ house you get a badge or this little pin or whatever it was. It was a little, I guess it was RFID or something like that. It was some kind of radio thing. And as you walked through the house, or so I've heard he hasn't invited me yet for some reason, you can say “Oh I like Dr. Dre music” and everywhere you go in the house Dr. Dre music would follow you and the lighting preferences would follow you all around. That's totally great with iBeacon, that's how you want home automation to work. You want to walk up to the thing and have the porch light go on and the door to unlock and you know have it know where you are.
Harry: iBeacon has very quietly been very important in retail and things like stadiums. That's how a store or a stadium knows where you are and it’s able to push stuff to your phone in a way that you know actually does maintain your privacy because they only do it if you already have a relationship with them and give them permission. And I think there are potentially a lot parallels to what Apple might do in the home because iBeacon is mainly the fact that all the Apple devices support Bluetooth L8. And Apple worked on standards and stuff so that other companies can sell the Beacon equipment in stores and be confident that it will work with Apple devices. So Apple doesn't necessarily have to build enormous amounts of stuff on its own. Maybe all it does is it makes its devices the best platforms for other companies to build home automation on which they already sort of are already even without Apple having too much yet.
Mike: And I think that iBeacon is a seriously underappreciated or misunderstood or you know – it’s kind of below the radar. People don't understand how it works. For example, people don't seem to know that Android supports Androids. So if you're an Android phone – and Beacon’s really no big deal, it’s also seen as sort of an NSA spy thing that sort of reaches into your phone, it doesn't do anything of the kind. iBeacons are, to the best of my knowledge, incapable of receiving information. thank you simply broadcast here’s where I am and then you—
Harry: I'm here, I'm here, I'm here.
Mike: That's right and then the app is the thing that goes out to the internet if the app has developed that capability. The app is the thing that knows you know the “Oh you're Beacon xyz, Beacon xyz is in this particular location”, the Beacon doesn't even know where it is. It just knows who it is to a certain extent. So it’s a really fascinating technology and one of the things that's most fascinating about it is that it’s cheap. You can put Beacons all over the place. Small business can put ten Beacons in it would cost them a hundred bucks or something like that. You know so it’s a pretty exciting technology and I think it’s really underappreciated for home automation and a no brainer. I'm also curious about when the Googles and the Apples and the Amazon are going to build home automation into their TV set boxes. Seems like an obvious place for them.
Lindsey: So if I think, and this is just pure speculation, but if Apple is actually developing a television, wouldn't it make sense for them to start with one that's sort of small and beautiful in a way that a Mac Pro’s screen is, where you've got the retina. And then all of this home automation technology built right in to that interface, into that television so the first places that you would think of putting that is in your kitchen or some place that you would – or you would already go to sort of check in and see what's up, who came in the back door, when and are my back porch lights still on and all of that sort of built-in to a sort of a smaller screen that's really beautiful and something that you want to be part of the décor of your home. It might make a ton of sense.
Mike: Yeah, absolutely. Well in just a sec were going to look at the latest outrage by the NSA and what they're harvesting now. That's going to be exciting. Can't wait to talk about that one. But first, I want to tell you about Audible.com. Now Leo Laporte always says that he has been an audio listener for a long, long time. I think I was an Audible.com customer before he was. I think I signed up in the year 2000, believe it or not. When Audible was actually a hardware – you were in high school Lindsey.
Lindsey: Thank you, thank you for that.
Mike: It was a hardware device that you would buy. It was this weird tear drop shaped thing. And I remember actually demoed it to Regis and Kathie Lee back in the year 2000. And ever since then I've been an Audible.com listener and it’s a fantastic service obviously. Audible has 150,000 titles to choose from. It’s the world’s largest selection of premium audiobooks and spoken word content and to me it’s a no brainer. Stories are an oral medium until very recently. And to be read to by a professional actor, to me is just a source of joy and wonder and enables me to do the dishes and still learn something. And I really love it. Now, we have a special offer for This Week In Tech. We’re offering a platinum plan for Audible.com. This gives you 2 free audiobooks right out of the gate and 2 book credits that month. That means basically you can, on average you can download 2 books under this plan. And it’s a great deal for people who really get a lot out of these books. You could get a free subscription to the Wall Street Journal or the New York Times Daily audio programs. Take your pick and if you want to get more details about the platinum plan, go to audible.com/twit2. That's audible.com twit and the number 2. And you know, there's a couple of new books that just hit in the last couple of days that I wanted to bring our attention to here. The first is Our Final Invention: Artificial Intelligence and the End of the Human Era by James Barrat. Now Leo Laporte interviewed James Barrat on the most recent episode of Triangulation. And this piqued my interest in this book. This sound like a fantastic book and I haven't downloaded it yet or listened to it yet but this sounds like a really, really fantastic book. And Chad, can you play the sample there so we can take a listen.
Being suspicious of AI was painful for two reasons. Learning about its promise had planted a seed in my mind that I wanted to cultivate, not question. And second, I did not doubt AIs existence or power. What was skeptical about was advanced AI safety.
Mike: Yeah, that sounds pretty awesome. I for one welcome our new artificial intelligence overlords. And I can’t wait to listen to this book. So let’s look at another book that, to me, is a source of fascination and I’m going to get this on . It is called The Man Who Knew Too Much: Alan Turing and the Invention of the Computer. By David Leavitt. This, of course, the life of alan Turing is one of fascination for multiple reasons. He was just a genius as a child, who also, in some way not so bright as a child. He is one of these idiot savant children who grew up to become an amazing code breaker and of course he was a homosexual who was persecuted for that. It is a fascinating story and I hope they do a movie, but in the meantime The Man Who Knew Too Much is an awesome book. And so these are the kinds of things you get at and I recommend that everybody sign up if you don’t already have a subscription. For 14 years I’ve had and that is why I am such a towering genius now. That is why I have fun doing the dishes at least!