MacBreak Weekly 440 (Transcripts)

Leo Laporte: It's time for MacBreak Weekly, we're going to have a great show for you! Andy and Rene and Alex are here to talk about the Apple earnings, $18 billion! And all that money overseas, what could Apple do with it? We'll talk about that and a whole lot more, coming up next on MacBreak Weekly.

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Leo: This is MacBreak Weekly, episode 440. Recorded February 3^rd, 2015

Two Billion Dollar Gazebo

MacBreak Weekly is brought to you by Gazelle. The fast and simple way to sell your used gadgets. Find out what your used iPhone, iPad or other Apple product is worth at Gazelle.com. And by FreshBooks. The easy to use invoicing software designed to help small business owners save time billing and get paid faster. Join over 5 million users running their business with ease. Try it free at FreshBooks.com/macbreak. And by SquareSpace. Creating and editing your website is easier than ever with SquareSpace 7. It's so easy that Jeff Bridges created his website, dreamingwithjeff.com. Try it now, visit SquareSpace.com and enter the offer code MacBreak at checkout to get 10% off. It's time for MacBreak Weekly, the show that gives you all the latest news from Apple with Andy Ihnatko from the Chicago Sun Times, snowbound.

Andy Ihnatko: Hello.

Leo: You're not going to open that curtain?

Andy: Because I haven't... I've been so lazy I haven't like reset my office to the way it was before and now it is that kind of really awful weather where it is super super bright.

Leo: Oh my god, yeah.

Andy: The snow is out, it's the worst weather... the worst driving weather isn't necessarily when it's snowing because you know enough not to go out when it's snowing, it's weather like this where it's not a cloud in the sky and the snow was melting and turning the entire road into a reflective surface and it seems like everywhere you go you have to drive due west.

Leo: Yeah that's true. Well, stay warm. I don't know why we're talking about snow in Boston when we've got Rene Ritchie from Montreal where it's probably... look he's even wearing a took.

Rene Ritchie: We have no snow but it was -30 this morning and -30 last night and it's getting warmer but that's including wind chill but it's still not humanly pleasant so I turned off the heat so the fan noise wouldn't be loud and then I got really cold.

Leo: -30 Celsius is what?

Rene: It gets close to the same thing in the -30s.

Leo: When it gets to -40 it's the same. So it's bloody cold is what it is. Holy cow. Well alright, well stay inside.

Rene: Yeah we're doing that, again like Andy said everything is clear but it looks like the entire city has been encased in carbonite. It's a very strange feeling.

Leo: Of course Rene is with iMore.com, does the Great Debug podcast and so many other things. Great to have you both Andy and Rene will be joined in a bit, I think by Alex Lindsay who is rushing back from the Vatican as we speak.

Rene: Does he have a Swiss Guard escort?

Leo: He's like the linebacker that brings in the play from the offensive coordinator to the quarterback. He's got a message for us.

Andy: He's got a sheaf of diagrams and numbers. Now he's on his way to Saint Paul after this with a pickax.

Leo: Francis is doing the play calling.

Rene: He's cracked the code. I'm no good at medians.

Leo: Wow. We were off the air before Apple announced its earnings last week, which is probably a good thing because we probably would have had to parse them on the fly. Now we've had enough time to break out the calculator and find out how much per second is $18 billion profit in 3 months. I wonder if there's a Google search for that. The most money any company has ever made in the history of the world.

Rene: And again you can't drive your car with these, you can't heat your house with these. You can't eat these.

Leo: Yeah, that's normally the competition is all the natural gas, and oil companies.

Rene: Yeah.

Leo: $18 billion in profit but as we thought it might happen, the iPad sales continue to decline. I've got to point out they sold 21.4 million in Q1. Their fiscal quarter 1 is our holiday buying season.

Rene: That would be the outbreak star of any other company's lineup.

Leo: It's not bad, but it has declined. On the other hand, iPhone sales 74.5 million in 3 months.

Andy: Yeah.

Rene: My favorite line was Ben Thompson when he calculated that Apple lost more on currency fluctuations than Google made that quarter.

Leo: Yeah it was something like 4% because of currency fluctuations. Tim Cook kind of bemoaned the fact that they couldn't... these damn countries can't get their currency straight!

Rene: That was all the analysts wanted to. What are you hedging? How are you hedging? Are you changing your hedges? How often are you changing your hedges?

Leo: Although it cracks me up, here's a company that made more money than any other company in history in... well I don't know if you adjust for inflation maybe Julius Caesar made more or something. And then in cash has $142 billion in cash. But they... this is the definition to me of chutzpah, they decided to go to the bond market to borrow $30 billion. Please sir...

Rene: Well you need to because all that money is overseas.

Leo: It's in Ireland or somewhere, yeah.

Rene: And they bring it back they pay 35%.

Andy: Yeah it really is like Tony Montana where he's made all this money but he can't spend all of it because then it becomes traceable and he doesn't want that.

Leo: What country is it in?

Rene: A lot of it is in Ireland but it's basically everywhere outside the US. Anything that Apple makes in one of their subsidiaries that counts for money outside the US.

Leo: And like Google and other companies, a lot of companies do this, if you have enough money and you have a structure that you can arrange to have intellectual property rights reside in Ireland where the corporate tax rate is very low you do that. You transfer it over to the Irish subsidiary, could be a guy at a desk in Dublin.

Rene: It's interesting though for all these companies because if I'm in Canada, if I buy a computer does the US government get a share of that? If someone in London buys an Apple computer because Apple's headquartered in the US should the US government get a cut of that?

Leo: No.

Rene: We're moving faster, like the internet, we're moving faster than a lot of the laws.

Leo: Well but this isn't manipulation, this is saying... it's not $142 billion of cash earned in Ireland. These are payments that come from the US subsidiaries to the Irish rights holders and things like that. It's... come on. It's still a shell game.

Rene: I don't know if it comes out of the US but it's structured not to put anything into the US that doesn't absolutely have to go there.

Leo: And of course China was huge. Apple shipped more smartphones than any other company in China last quarter. So that money for instance probably flows to Ireland.

Rene: And so much for the theory that Apple has to go cheap to gain the Chinese market.

Leo: Yeah isn't that interesting. iPhones accounted for half of all US smartphone activations in the quarter so they have a 50%, they had a 50% market share in... our calendar 4^th quarter holiday buying season, their 1^st quarter. But interesting, I still think even though 21 million iPads sold, I still think it is interesting that it dropped so much. 21%. Is the iPad over?

Andy: I don't know, I think it has to do with the fact... you're looking at one phone that had the most dramatic update in years and years and years, I mean there's... it's really... folks like us try hard to explain well here's why the A7 processor is a big upgrade over the A6, here's why you want this mobility processor and here's why the more application RAM is going to do something, but nothing is going to have that sort of impact as it's a much bigger screen. You know how you've been... your wife or your husband or your kids have an Android phone with the big screen you've always wanted? Great, we now have it for you. As opposed to the iPad Air 2 which all they can say is it looks exactly like last year's model except for now we've added TouchID and we've made it faster in a way that maybe you're not going to be able to appreciate. So I don't know if I would go so far as to say the 9.7” iPad Air is stagnant at this point, but if this continues, if Apple does another upgrade... if Apple upgrades the iPad the same way that they upgraded the iPhone 6 and it still is... oh well there's more people buying that but not really dramatic, that will be really significant data point.

Rene: One thing that's interesting to me is that it's a very multifaceted question and the tablet market in general was down last quarter, nobody sold... for nobody was it a growth industry really so the question is with the bigger screen phones that puts pressure on the tablets from below with laptops that are lighter and longer lasting batteries that puts pressure tablets from above and we're at... there was a fascinating post I think Neil Sybert from Above Avalon did it where he was looking at the job that Steve Jobs originally outlined for the iPad where it's better at email it's better at web, it's better at music. It's better at all these things and how many of these things are really well served by large screen phones and how many are really well served by ultra-light long lasting laptops and that job, that sweet spot is sort of diminished. And we've also gotten to a point where the iPad Air 2 is ridiculous. The Apple A8X processor is ridiculous, it's close to a current desktop level processor but we don't really take advantage of that. The operating system, the apps. They don't really let us take all that power. The hardware now has surpassed the software and you can look at Microsoft doing the Windows 10 thing, you can look at what Google's doing with tablets but at some point Apple might also have to, whether it's with an iPad 12” or an iPad Pro or with a new version of iOS that's specifically tailored to tablets as Watch OS is targeted to watches, might have to do something to better take advantage of that hardware.

Andy: It's also possible that the reason why the 9.7” iPad was such a big hit was because there was nothing like it and consumers never had the ability... it took 2 or 3 years for consumers to have the ability to actually vote for what kind of size they want and now that they're in the position where a consumer can say instead of this big device right here, we can instead give you a phone that is just simply big enough that you are more comfortable reading books on it or if you really do want a tablet we'll give you something that you can actually stick in your back pocket. A lot of people are saying well I never actually really wanted a 9.7” tablet to begin with and it's also possible that this larger size is going to be orphaned which is why I'm really keen to follow up on rumors about the mythical iPad Pro. If Apple were to simply say okay instead of making this a smaller something, we'll make this a bigger something. Not just in size but in we are anticipating that maybe you will buy this instead of even a Macbook Air.

Leo: Hey Alex Lindsay joins us.

Alex Lindsay: Hey!

Leo: From Vatican city. No no, you're back home.

Alex: No I'm not in the Vatican now, I was shortly.

Leo: Are you in Rome?

Alex: I'm in Rome. Up on a hill above Rome right now.

Leo: Oh, wonderful. Great to have you.

Alex: Good to be here.

Leo: Thanks for joining us. We just started, we're talking Apple's quarterly results. From their first quarter. I should point out...

Alex: The real problem was that I think Apple just really has to figure out where they're going to cut staff and cut back on some of their stores...

Leo: (laughing)

Andy: Notice how Tim Cook ducked the licensing question yet again.

Leo: I think Apple should sell clones. Or somebody should.

Rene: The hilarious thing was the... I don't know if it was Verge, someone put up an article about the Surface sales and the Surface sales are in the millions and wow Surface sales are booming and then the iPad sales were only in the like 27 million or whatever it was, oh iPhone is busting. Even though it's significantly better than any other tablet.

Andy: That's still a significant data point. There's a phrase that I keep coming back to when I look at stuff like that is like you kind of get worried when a company finally finds the car keys. Where you make fun of something like Surface where justifiably that oh it's not really relevant and there is a much better value but there is still... Microsoft is still looking for the car keys and once they find those keys and jump in the car and they really... now they're finally going to start driving, that's when you start worrying. The fact that Surface 3 is so much of an improvement and the fact that people are not only aware of it but now they're thinking I'd actually want to own one of these things, that's going to be such an interesting data point as once again Apple tries to figure out what role in life does a 9.7” iPad play in a world where you can buy a really good i5 based Windows tablet for about the same amount of money assuming that you're buying one to get actual work done.

Rene: That was the amazing thing about the profits is you saw that with the Mac for years that they had single digit market share but they made a significant amount of profit share and that's always because they've catered to customers who really appreciate value where cost isn't the first feature on their list and then the iPhone you see how that scales when there actually is market share to go along with that profit share they make ungodly amounts of money and the iPad is somewhere in between where it still has super high margin, it's not as popular s the iPhone but it's more popular than the Mac and it makes tons and tons of money and I think that's part of the discussion that gets lost often is that Apple's model really does scale well, they're under no pressure for the iPad and Tim Cook kept saying over the... I forget the exact word, over the long spectrum of history he wants to keep investing in that technology, there's no profit in loss per division at Apple so it's not like oh the iPad is not keeping up with things or the Apple TV isn't, we're going to cut them. It's you know in 5 years, 10 years how does it add to the overall value of our ecosystem.

(Andy and Alex talk over each other)

Alex: Go ahead.

Andy: Go ahead Alex, I'm sorry. We've been talking for half an hour, go.

Alex: I just think it's interesting that we've talked about this before, that you really are in a situation where every single division that is really running at Apple theoretically is making money. They'd be good businesses on their own. Even the much derided final cut 10 would probably be a very successful company if it was on its own you know and so as far as what sales its gotten over the last year and so every single division is kind of to some degree hitting their mark. I do find that with the larger phone I find myself just very... I don't use my iPad that often. Is that how you guys feel about your iPad? Are you still... is it still part of that process? I just noticed that anecdotally I don't use it as often, I use my phone or I use my computer but I find that the iPad in general has... which is obviously something I was very excited about and still am to some degree but I find that in a lot of ways the interface itself, it's big enough that you want it to be more powerful and as Rene was talking about, that we're not taking full advantage of it. But I think that's partially the interface. There's a lot of things I feel like I would do. I'm thinking of getting a Microsoft Surface specifically because there's a lot of things that every time I see the commercial it's working.
Leo: It's working, hard to believe, wow.

Alex: That's what I want. I want to be able to do that. And I'm probably in the next week or two buying a Surface just so I can do those things when I need to rather than continually waiting for Apple to finally put touch on my laptop.

Andy: I'm in sort of a weird position because I have explicitly set aside this year some money to buy a new iPad because my iPad... the one that I actually own as opposed to the one that I borrow and have to send back after 30-60 days is a third generation iPad, like the first Retina model. And it was working just fine but I find myself thinking a lot of the things that you've been thinking, Alex. Which is that if I'm going to buy one to use the way that I used to use my iPad 3, I'm going to need something pretty powerful and if I'm going to be spending $800 for an iPad, what else could I buy for $800 and the Surface 3 is actually very very good. I don't think it's suitable for my needs right now but if Apple... excuse me, if Microsoft again finds the car keys on Windows 10 and finds a way to really make it relevant that could really change a great deal. And I also agree with you that ever since I bought my Macbook Pro 2013 last year, or the year before. The fact that it's not as light as an iPad, but it's light enough. The battery doesn't last as long as an iPad but it lasts long enough. And frankly using an iPad for content... for like as a laptop replacement is enough of a pain in the butt that I'm willing to sort of sacrifice those things and take a 13” notebook along with me. There's a lot of moving parts and this is going to be an interesting year for the future of the iPad I think.

Alex: And I think one of the things that I commonly think of when I'm in an airport, because one of the things that you see a lot of is you see a lot of kids using iPads and you see a lot of folks that are over 50 or 60 using iPads and sometimes I feel like I'm in the wrong generation for the iPad. The one that grew up on a computer. I find that there's a lot of things that I want to do, I probably use it a little harder, I want to type a little faster, I want to have certain things. I want to be able to cut and paste out of every application, if I see text I expect to be able to... unless it's an image, I expect to be able to cut and paste. I can't say how many times I go into an iPad app, they've decided for whatever reason, security or whatever that I'm not allowed to select the text. And that kind of becomes this thing like... okay now I can't use this anymore.

Andy: It becomes things like I just want to duck into one other app to get one other piece of information and go back again. And the fact that I have to do this, I have to do this a couple different times to do that, I mean I'm also preparing a review finally of the Nexus 9 tablet and Android tablets boy they just don't have a fraction of the nice software that's available on iOS. It's... they barely have competency whereas they have equivalency on the phone end of it, and yet you know what? If I want to use it as a notebook replacement, I can hook up a mouse to it. And the thing I didn't really realize until I started using it that way is wow that's one of the things about Android 5 that's really nice. It really is an okay desktop operating system and I can use keyboard commands to switch between apps and it's like... I still can't run two apps side by side but it's easy enough to switch between the two that I would never be tempted to switch to an Android tablet because again the tablet style apps just aren't there but it really did remind me of how easy it would be to just add a little bit of extra functionality to the iPad that would make it a much more credible choice to help it... to justify that $600-$800 price tag.

Alex: Well the thing is that with the Surface again, for me one of the things that I think about a lot is I want to have it all, I want to have a mouse I want to have a keyboard and I want to be able to touch the screen when I need to touch the screen. When I want to sign something or circle something, I don't want to have to pull out my Wacom tablet and do it... and one of the ways you can get kind of a preview of what that looks like is when you're using Duet. Duet is the little app that you can hook your iPad to and your iPad does become a touch screen for your OS and so you can sit there and if you have it open a lot of the times if I'm annotating stuff I'll have Duet open and I'll just sit there and circle things and talk about them. It's a second monitor but it's also a way for me to throw something over that I want to draw on and then throw it back you know, and it's just... that's I feel like at some point Apple's in no rush. The iPad and the computer are way behind, I get that. So it's not like there's any threat that Apple has to ever put touch screen into their computer but there's people like me who are about as died in the wool Mac user as you can get that are going out to buy a Surface because they're not solving the problem.

Andy: Yeah. Well we've made fun on this show... or okay maybe I've just made fun in this show of Apple TV but that's such a good... it's such a good demonstration of the power and the abilities that Apple has that yes it's kind of a duff sort of product, it's been so for the past year, year and a half but Apple does not need to rush out a replacement because they're seeing what sales are doing or not doing. They can really nurse this along for a couple years until the rest of the world... the rest of their product line sort of aligns itself to make it worth their while to make that really big update if they had done a major update last year it might not have been quite so clear what that hardware and software update would have needed to be whereas if they decide to do that this year or even next year, they'll know okay we've got the Apple Watch and we know how people are using the watch. We've got big screen iPhones, we know how that's working. We've got HomeKit products out there, we know how people are using those. Now we can finally build a new Apple TV that is absolutely perfect for 2016 as opposed to our best guess for what would have been appropriate for 2013 or 2014.

Leo: Interesting also to note that this is, besides you know everybody paid attention to the record iPhone sales, but Mac sales also at a record. And app store sales also at a record. So very good quarter. I've done a little calculations in my numbers spreadsheet. They sold 74.5 million iPhones in 3 months, the global birth rate is 4.1 babies per second.

Rene: (laughing)

Leo: I think they're going to run out of customers because they're selling 10 iPhones per second. So folks, bring the birth rate up or sales are going to slow here.

(all talking)

Leo: They're selling twice as many iPhones as there are babies being born.

Andy: They're going to start to lobby the Chinese government to waive like the one child program.

Leo: We need more babies!

Andy: There a lot of you, we need more of you buying iPhones.

Rene: Babies have 2 hands, that's 2 phones. Come on.

Andy: And two wrists and two legs.

Leo: Okay good point, you don't have to have just one. That's kind of amazing that they're selling more than twice as many iPhones per second as there are babies born and this is globally. This is in the world. This is everywhere. A profit of $18 billion, of course $6 billion a month, that's about $200 million a day. $8 million an hour, $138,000 a minute, $2314 a second. Just boom boom boom, profit.

Rene: Another 2000...

Leo: Another 2000, another 2000, another 2000...

Andy: I'm going to have to modify a joke I heard a couple years ago. When someone has that level of wealth, you know that part of their business has to involve overthrowing uncooperative governments from time to time. That's the amount of money this company is making now.

Leo: Let's assume that the $142 billion in cash is available, which it isn't. I mean that's why they have to... so bizarre... they have to borrow $30 billion. Is that bond issue...

Alex: Have we...? Have we talked, and I know I came in a little bit late, did we talk about the ramifications of the one time tax that may occur?

Rene: Yeah a little bit.

Leo: But are you saying this is a proposal in the US congress right now? That they should pay a... oh you're talking about repatriating the $142 billion.

Alex: Well Obama is talking about as of yesterday a one time tax on all foreign assets so all that money for all the companies, $2 trillion of which Apple has $178 billion that's sitting around and basically putting a one time tax of 19% and then they're talking about future taxes of 14% per year on foreign revenue. So that you can't fully avoid it, now the one thing that they are saying is that the 19% once it's been taxed you can bring all that money back without taxes and in some ways that becomes a break for Apple or anyone else.

Leo: Well it's normally what a 35%?

Alex: 35%. Yeah so it would be a discount, I think that with a republican congress... I think what may end up happening is a tax across everything of 10% or of 15% or something like that and then you can bring it back in which would be kind of a compromise in the middle of that but that could be a huge boon for companies, it's upsetting I think some of them obviously don't want to pay any taxes on it, want to leave it out there forever but for a company like Apple the prospect of paying let's say 15% or 10% or 12% on all of it and then bringing it all back in could be a you know, could be a real advantage over the 35% that they're paying now.

Rene: As a non-American though the idea of America taxing things that are outside of America is a little bit legally questionable.

Alex: Well I think it opens up a can of worms for basically every other country looking at it going well if it works for America we'll do it too.

Leo: Oh that's a scary thought, yeah.

Alex: But I think that right now as an American citizen you pay your taxes no matter where you are in the world. A lot of these companies, I think the future is not going to be that you can have all these tax breaks, you can kind of see things. Just like when businesses aren't working, taxes didn't work and then Uber came up and the idea of having tax free income at the level that its had, it's been a good advantage that a lot of companies have had but I think that we need to be realists about whether that's going to continue with the number of countries that are looking for places to find revenue. Whether we like it or not, I'm not saying that I necessarily agree with it or not but I think that whether we like that or not we're very probably going to see some way to tax companies no matter where they are.

Leo: You're talking about Obama's plan or the Boxer Rand-Paul plan? Because Barbara Boxer...

Alex: it's definitely not the Boxer Rand-Paul plan.

Leo: That's the Invest and Transportation Act, they're saying a tax holiday allowing companies to pay 6.5% on repatriated tax but that would go to the highway trust fund.

Alex: Well Obama's saying the same thing except he's saying we're going to take 19% no matter whether you repatriated it or not. So here's the deal, you're going to pay 19% and then after that you can bring it in. You can bring in anything that you pay taxes on you can bring back into the country with no more tax impacts. So it is in some ways a tax holiday but what it's not saying... when you say we're going to repatriate the taxes, that we're going to tax you 6% the companies bring in whatever they need and pay that 6%. So okay that's great, they'll bring in billions in because that is an opportunity for them. When you tax all of it, the concept is... when you say we're going to tax everything sitting out there, what it does is it takes away any inhibition for the companies to leave it out there. Because now they've already payed the taxes on it, they might as well bring it in and I think the goal is not only to generate a lot of revenue which it would, but also to bring in all the $2 trillion bringing a big healthy chunk of it back into the United States to be invested into local, more local business.

Rene: Those countries are charging, like Apple's paying taxes in the countries where that money is. Like they're paying Irish taxes, they're paying Canadian taxes, they're paying German taxes. So they'd be paying those taxes plus American taxes which is different if just America alone was taxing them. And then if Germany decides well...

Alex: Well I think right now the issue is that right now they're not paying any taxes.

Rene: In America. They're paying taxes in the other countries.

Alex: Well they're paying the local taxes on the local sales but all the profits that are going into... the problem that they're having right now of course is that they're not paying any taxes on... and I am like the last person to talk about this. The benefits of taxing. I'm not a big fan of them at all. But as you look at it I think that from a realist perspective, and I have because a bunch of stuff that I'm working on, had to study a lot of this over the last couple months and you just kind of see that the trajectory is is that they are going to... that countries are going to find a way to dig into that. You can't keep $2 trillion floating around forever without paying somebody for it. I think that's...

Leo: Apple sold 5.5 million Macs last quarter, enough to give 1 to every person in Ireland. How about that?

Alex: Every person where? In Iowa?

Andy: Do they really think that they're... do they really think they're capable of processing 5 million iCloud activations on the same day? I don't think so.

Leo: No, they can't do that. They could buy, I'm sorry I said 142, it's 178 billion in cash. They could buy IBM. Its current market cap is 152 billion. They could buy Ford, GM and Tesla and still have 41 billion left over. So Microsoft better find those car keys fast because...

Rene: They can buy all the things Leo.

Leo: They can buy everything. They could buy the music industry, they could probably buy most of the television industry.

Rene: And like Alex said or Andy said, they can start overthrowing unfriendly governments.

Leo: But they can't do it because it's in Ireland so they'd have to pay tax on it.

Rene: They could overthrow non-American companies.

Alex: If you look at Disney, we've talked about this before, Disney's market cap is $155 billion. So Apple could buy Disney with cash. And that... when you look at the marketing opportunities of having Marvel, Star Wars, and then all the Disney properties...

Leo: What do you do with all that cash? What's the point of all that cash?

Alex: Well it's to be able to do things like that.

Leo: Yeah but they've never done that.

Rene: They're spending $2 billion yesterday on data centers. People say they should buy Twitter, they should buy this, Tesla, but yesterday they dropped $2 billion on a data center. They could build 20 data centers if they want to be more competitive with Google and Amazon.

Andy: I think the most competitive thing they do with that money is to other companies will simply license technology they need, Apple will buy it outright. There is a statement, some interview with I wish I remember which executive it was, but it was someone pretty highly placed. It was talking about the development of the Nexus 6 phone saying that, fingerprint ID was one of the things on their wish list for the Nexus 6, there's actually a divot in the back of the phone that they were going to put it right there but as they were developing it they said well who has the best fingerprint scanners on the market, well it's this one company that has the ones that really work but Apple owns them outright now and so there's no way to get that and so that wasn't the only reason they didn't put it on there, but it's one of the reasons why they decided to leave it off. That's... it's, it really is just when you think about Apple's money you think about firepower. Again it's not, they don't have to buy what they need, they don't have to license what they need, they can own the technology that they're going to make a 10 pole feature which is not only great for them but it also means that if Microsoft's Surface tablet has to do something that's tricky, that Apple uses they're probably not going to be able to find a supplier for the part or a company that's capable of manufacturing the way that they need something to be manufactured at least at that scale.

Alex: I was talking to an electronics manufacturer who I will leave unnamed, I was complaining. It's what I do very well about the fact that they were 6 months late on shipping this great little box that they were building for stuff I need. And hence the complaint. And I asked them, what was the delay and they said the iPhone. Literally that Apple bought this one little surface mount chip and Apple bought all of them. They literally bought all of them for a year. And they were like, they had the whole design finished, everything was working. They literally can't get the chips to build... this one little chip that's built out of stuff that's very rare and there's only one company that makes them and you can't buy them.

Rene: Pom used to complain about that.

Alex: I'm sorry?

Rene: Pom used to complain about that all the time.

Alex: Yep. Yeah and I think that Apple continues to be able to do this where they can simply buy up the world's supply of X Y and Z in a way, and they can buy it, they can hedge against a lot of things, they can buy a lot of things that they may or may not use in the future because they have that kind of capital.

Andy: Yeah. I wonder if they ever do tactical buying. Where there's a component that they've already rejected but they know that someone else could make a lot of hay out of it so if they can simply disrupt other peoples access to it... I don't know, I'm just speculating. I'm sorry, I'm not even speculating... but I'm wondering it's just that when you have this much money and your job is to make a world as... do whatever you can to ensure the success of your product, if you have the ability to simply say that we don't feel as though... we're going to buy up every single pair of pants in the world and we're going to be the king of pants like the old Louie C.K. joke. Now if anybody wants pants they're going to have to come to me, the king of pants.

Alex: Well and one of the things... go ahead.

Andy: Oh I was just going to say like, it's... I don't even think that's necessarily an ethical thing for them to do. I'm just wondering. There are things you say you would never do because, oh for heaven’s sake, who is ever going to give me $10,000 to be a prostitute with one person for one time. But okay, here's $10 million, yes or no? There are things that companies are, oh we would never do that, it's a too complicated thing and we would much rather focus our attention on making our own products better. But okay, guess what? You have an amount of money in cash that can be expressed in terms of a fraction of a trillion dollars. Now are you saying that you would never do this?

Rene: Sapphire, Andy. They bought up all the sapphire.

Andy: Exactly.

Leo: I should point out that Apple's tax...

Andy: I can't get a fast new photograph needle for my Victrola, why Apple?

Leo: We're going to move on. I should point out that Apple's tax rate is 26.3% according to their quarterly report which is about half. A little more than half of what I pay in business taxes. Of course we're in a high tax state. Wait a minute, so is Apple. Never mind. And their revenue... gross margin... oh margin was between 38.5 and 39.5% which actually is not huge margin.

Rene: Jeff Williams got some nice credit after this quarter. He replaced Tim Cook effectively as VP of... vice president of operations and he's been under the radar for a long time.

Leo: He's done a good job.

Rene: Yeah a really good job. Having Tim Cook as CEO and Jeff Williams as SVP of operations has been incredibly profitable for Apple.

Leo: Well I want to show you a little way you can make a little money on the side. I'm not talking $172 billion but I have a feeling there's some money sitting in the drawers of your home that's just sitting there. Gathering dust. I'm talking about all those old gadgets. The iPhone, the Samsung, the Blackberry phone. The iPad. The tablets. You've got a Surface tablet a Samsung tablet a Google tablet. I've got somebody who will buy them from you, right now. Cash on the barrel head. It's called Gazelle. And one of the great things about Gazelle is you can get a quote right now and give yourself 30 days to decide. Those quotes are locked in for 30 days which is a great deal. Top dollar on a lot of products. Go get a quote, they pay the shipping once you decide to sell it. Press the checkout button, they'll send you a box with the prepaid shipping on it, then they'll also if you forget to wipe the data, wipe it for you and send you a check. PayPal or an Amazon gift card, they'll bump the value of the Amazon gift card by 5% so if you spend a lot of Amazon this is a good deal. Good money for your old stuff. Gazelle.com. They also sell. You might wonder what happens to this stuff well the very best stuff that's sold to Gazelle they turn around, they check it, they put it through a 30 point inspection, and then they sell it as certified pre-owned. They have two classes of condition. Certified like new which is good as new. Somebody bought something, never used it, sold it to Gazelle, they're selling it to you. And then certified good which is eh, some slight wear, gentle wear. But if you've lost your phone or broken it. Or if you need a tablet, you don't want to spend top dollar, this is a great place to get a great price. By or sell at Gazelle.com. What's your old iPhone worth? Find out. More than you think, probably. Why let it sit there and gather dust? It's worth money! Gazelle.com. Andy Ihnatko from the Chicago Sun Times. Nice to have you Andy. From the Chicago Sun Times.

Andy: The big one.

Leo: The big one. Also from the Vatican, Mr. Alex Lindsay. No he's not from the Vatican. He just came there. Here from there. And form iMore.com Mr. Rene Ritchie.

Andy: Alex your mic is off.

Leo: Yeah I like it though, sh.

Alex: Sorry about that.

Leo: That's good, that's good. One other thing we learned in that earnings call. The Apple Watch will ship in April. We had been saying, in fact even as late as last week that it probably would be the end of March. This is not that big of a difference. But at least we know.

Rene: We got the definition of early Leo. Early is January to April. Mid is May to August. And late is September to December.

Leo: They said early 2015. We have learned from 9-5 Mac, I think we talked about this last week, Mark Gurman says they're working on the battery life. Do you feel like it's pretty close to done? We were talking on TWiT and Nick Bilton said, because we mentioned there are a thousand prototypes in use right now at Apple and Nick Bilton says he knows some people who are wearing Apple Watches. You think it's pretty close to done Rene?

Rene: Done is a moving target.

Leo: Yeah.

Alex: And I think for a lot of manufacturers it would probably be done. I think that probably Apple is kind of trying to push it a little bit further.

Leo: They're still polishing the gold.

Alex: Yeah. The 18 carat gold evidently that needs safes.

Leo: Yeah they put safes in the stores, it's great.

Rene: It's a big moving target, a lot of people are wearing them. They're giving a lot of people the ability to test them. They have third party apps being tested on them because the SDK is out and developers are starting to be able to just target the device and that's going to have to ship with the device. So it's getting a lot of pieces that have to land exactly at the same time. And that, they're going to use as much time as they can for it. That's why Apple's usually loathe to give much advanced data on when they're going to ship or what they're going to do.

Leo: And we should point out it could be April 1^st or April 30^th.

Rene: And I'm happy for Apple. A lot of people, it's funny because the internet is really upset that Apple isn't taking more time and doing things more... making more stability and doing things better but at the same time they're really angry that Apple isn't shipping things faster and those are two very contrasting truths. Personally with photos for the Mac and with the Apple Watch if they said early 2015 I am happy for them to spend every hour of every minute of every day making that product as good as possible before it goes out the door in early 2015. I don't need that February 2^nd.

Andy: Yeah. I'm glad that they're not setting themselves... locking themselves into an arbitrary ship date that they don't know if they can meet or not. Because in the end, we're... we're very very much trained to expect that whatever the next thing is we can't have it fast enough when really if we get it in April as opposed to March, that's not going to change anybody's life whatsoever. I thought it was interesting that there are a couple of different people reporting having spotted somebody wearing an Apple Watch on San Francisco bay area commuter rail. Which would be interesting that if it's true that would be an interesting data point in that Apple is letting people off campus with these things. Which would indicate that they... it's outside of a controlled environment and also they have already had that lecture about now if you drink, here's the lock box you're going to put this watch in before you're allowed to drink.

Leo: Do you think they have a case? Like maybe they put it in a Moto 360 box.

Andy: There's no need to do that. This product is completely out in the open and as a matter of fact, I would not even be surprised if this were part of the promotional campaign saying well now that we know that it's going to be out in April we will allow our employees to be discreet but wear them outside in the hopes that maybe someone will see them and get a picture and say oh my god I saw an Apple Watch, you saw an Apple Watch what did it look like? It smelled like rosewater and it glowed like a rising sun!

Rene: I wonder how funny people at Apple find it when we talk about this kind of stuff. Because I know like for example when an invitation comes out and people started guessing the invitations the design team just cracks open alcohol and starts drinking because it's so funny. The Apple... they've been wearing the Apple Watch since almost literally after it was announced. As soon as it was publicly announced people who had carrier privileges started wearing them outside of Apple campus. If you have lived in Cupertino you have seen them for months, since October at the very least. It's nothing new, it's just at some point someone decided oh people might be wearing it outside. Let's go try and get some pictures. And personally these are Apple engineers on their own time and they're getting a lot of paparazzi-like treatment now which we can debate whether that's ethical or not because it's a watch. It doesn't really effect anybody's life. But this is nothing unusual. This is what they've been doing for months.

Leo: There it is.

Alex: And you pretty much have to do it. You have to be testing it.

Leo: (laughing)

Rene: I mean yay, good for you. You spotted an Apple Watch on the train. Two thumbs up. You could have done that in October.

Leo: Mark Gurman has tweeted this is how crazy it is. Here's the icon for the Apple Watch companion iPhone app. Ooh!

Rene: At least it's the one they're using now. There were icons in the iOS 8 beta that never shipped so.

Leo: 8.2 which is the iOS that will presumably have to ship concurrently with the Apple Watch so that you'll have watch compatibility is now in Beta 5 which I mean, pretty far along with 8.2. Beta 5 just came out. As did Xcode 6.2 beta 5 with Watch Kit. As did, interestingly, a new beta version of Apple TV software for the 3^rd gen Apple TV. So.

Rene: Yeah those are all in lock step.

Leo: They are? Why is that?

Rene: The Xcode is what they use to develop on the new beta so there's new features in the beta that they need to update Xcode to go along with that's fine and Apple TV, even though on the outside they give it some really OS name and number that's always behind iOS, inside it's running the same version of iOS. It gets updated when the phone does and when the iPad does.

Leo: Oh interesting.

Rene: I forgot to mention someone from Apple tweeted that there's a now playing glance on the Apple Watch that's been updated in the developer documentation.

Leo: And that would be for something that's music or something that's playing on your phone.

Rene: Yeah. So almost like the lock screen on the iPhone. You can look at that and quickly see. Yeah. Whatever it is.

Leo: Here's some more screens.

Rene: Someone was asking about Apple TV and Tim Cook mentioned that it controls the Apple TV during the introduction.

Leo: Yeah. That's neat. This is a screen also a tweet from Mark Gurman. But as you point out, this could be... this is a prototype. Could be different. Could be the same. I feel like we're getting close though. April is just around the corner.

Rene: And they've got to burn the firmware onto the watch at the factory at some point.

Leo: Yeah. You think somebody goes with a briefcase locked to his wrist and gets on a plane and flies to Shenjen China and says...

Rene: I think there are really solid deadlines for that kind of stuff and it has to be shipped and people take care of it.

Leo: Yeah. You could probably do it on the internet, but on a really secure... maybe use... probably use one drive.

Andy: Here's the Dropbox link.

Rene: Do you remember that story?

Leo: Yeah, Dropbox.

Rene: It was that great story I think it was about Return of the King when they had the final copy ready and the fiber didn't reach all the way to the production offices in New Zealand so they loaded it on an iPod classic and put it in the pocket and they were running it from the fiber optic line back to the production office and a guy started following him. He thought it was... he wasn't sure if they wanted the iPod or they knew what was on it, he just started running faster and faster.

Leo: You want to control your Tesla from your Apple Watch? There's an app for that.

Alex: I don't know what you control.

Leo: Well you don't drive it.

Andy: Temperature controls, a lot of people who have pets for instance they will like, they can leave the pet in the car because they can keep the car warm and keep an eye on the temperature.

Leo: Yeah, that's nice isn't it?

Andy: I have a friend who is... at times had been summoned from a restaurant by police because some do gooder was about to smash the windows. That poor dog! He's freezing to death inside that car!

Leo: No no, look at my wrist watch. I can tell you exactly how cold he is.

Andy: Also look at that dog. He is a Bernese mountain dog that could spend 3 days in the Swiss Alps, I don't think 33 degrees is going to bother him a lot.

Rene: Yeah my boss has a Tesla and he uses the app on all his phones to open the door when his kid just wants to run to the car and get something he forgot in it, or to monitor the charge level. It's all sort of useful.

Andy: Also this is exactly the sort of integration that a company like Tesla wants and a company like Apple wants. They want people who can afford to spend hundreds and hundreds and hundreds of dollars for a gadget like this to use it to control their gadget that costs 10s of thousands of dollars. Really makes both companies look really good.

Leo: We could even see a map and how fast you're going. Here's a guy going 120mph down University Avenue in Pau Alta, that seems a bad idea.

Rene: (laughing) It was strictly for watch testing.

Leo: Purely for testing.

Alex: Well and I think that the fact that, and again there was... during when they're talking about the number of sales and Android and everything else, one of the things... one of the stats that came out this week was the app store is making 70% more. Even though there's more apps on the Android store, the iOS app store is making more money and I think that that is going to make a big impact on... it makes an impact on Apple pay, it makes an impact on what kind of things get developed for the watch because people are going to pay for it. They're going to... it's going to be a market, I think especially for those who get out there in the first month or two. Who aren't part of 1.2 million, or 1.1 million apps. I think there's going to be a huge opportunity, it's a bit of a gold rush. So we're going to see a lot of innovation. And you know, most of it will probably be pretty bad in the first two or three months. But it's going to be pretty exciting, and I think that because people know that iOS users, especially folks that are going to be first adopters once they pay $350 for a watch, they're going to spend another $150, $200 on apps within the first couple weeks.

Rene: You can't charge for... just in case people are wondering, you can't charge for watch kit apps. Because right now they're only remote view as they extend from the iPhone apps. You have to charge for the iPhone app and then build that functionality in quote unquote “for free” for the watch.

Alex: Well but I think that there's going to be a lot of apps that are specific for the watch though that are being supported through the... I mean, yeah. I think that there's going to be new functionality that you're going to end up with on your phone that is going to be an opportunity to use on your watch. If that makes sense.

Andy: I definitely think they're going to be... the first thing people are going to do... they're going to enjoy the apps that they have installed already that express functionality to the watch, but they're also going to go and look for oh wow what other apps, what apps do I not own that are cool things to have for this watch?

Alex: Right. I speak from a certain amount of experience.

(laughing)

Leo: Alright let's... oh and you mention, I should probably fill in the details. You mentioned Rene, that Apple is spending $2 billion on a data center. The old sapphire, the old sapphire plant's been converted...

Andy: Down by the mine...

Leo: Remember that plant that...

Andy: Apple's trying to jump my claim!

Leo: GT was going to build to make sapphire and then they went bankrupt and Apple has the plant, used to make solar panels. They're going to turn it into a data center in Mesa, Arizona. Which good news for Mesa because it's going to put some...

Alex: You know you have a lot of money when you're like what are we going to do with that? We've got it sitting down there, we don't want to just let it go. It's got a lot of infrastructure. Let's just throw some more computers in there.

Leo: I suspect it has something to do with appeasing the city government of Mesa because there was some concern about loss of jobs. 150 full time Apple employees will be hired there and 300-500 construction and trade jobs during its construction. It will be powered by 100% renewable energy including a new local solar farm, so that's nice.

Rene: That's the kind of agility that all that money gives you.

Leo: Yeah. Although they're not, to be fair, going to spend the 2 billion right away. I imagine it will be spread out a bit.

Rene: Just like, for us it's like putting a gazebo on the house.

Leo: (laughing)

Rene: Project, you plan it out, you spend the money.

Leo: We're going to do a gazebo. 2 billion dollar gazebo.

Alex: If it takes more than about 6 weeks, they will have already made the money... or... two weeks, two or three weeks they will have already made that money back.

Leo: Sure. That's a good point. That's just a couple of weeks salary there.

Rene: It's amazing when you look at how much money they've spent on the stock repurchases and everything else, and you look at how much money they've made and the money hasn't changed. They spend all this money and they still have all this money.

Leo: It's kind of amazing isn't it? I can't imagine.

Alex: And again at the trajectory they've been on, who knows if they're going to continue the stock repurchase. There won't be any stock left after about 2022. Literally, there won't be any stock left if they keep on repurchasing this fast. They may end up with $150 billion in the bank without any...

Rene: Without Carl Icahn.

Leo: Without Carl Icahn, without having to pay a dividend.

Alex: Well I think that's... I think, I personally think the whole buy back thing and the dividends are a waste of money. I think Apple should continue to do innovative things with the money not just buy it back for investors. But if they're going to do it I think the buyback makes way more sense than dividends. The dividends just pouring money down the drain to investors, and when I say that, I'm just saying that the investors are getting something out of it, the stock is going up. You're invested in a company that at its size should be growing 1 or 2 percent a year and is growing a lot faster than that. So the investors are getting their value out of it from there. So I don't think that Apple owes them anything, but I think that if they're going to do it, they might as well do stock buy back because eventually, again, if they continue to go down that trajectory they'll buy themselves back.

Leo: What is the value of the outstanding Apple shares?

Alex: I did the math at some point.

Leo: Yeah it's a bit of a calculation.

Rene: It's only complicated because you can't use shareholder money to buy back shareholder money.

Leo: Right.

Rene: You have to use other sources of money to buy back shareholder money.

Leo: Interesting, how interesting.

Rene: Well because the money you have is shareholder money. So you can't technically buy your own shares with that money you've got to...

Andy: Apple shares outstanding of 5.825 billion.

Leo: That's all?

Andy: Shares.

Leo: Oh, billion shares. And it's $118 per share so... multiply.

Rene: (laughing)

Leo: Comes out to a little more than I've got.

Rene: You've got the number sheet open Leo.

Leo: Yeah I should use these numbers.

Andy: That could be the only way they've actually screwed themselves, where now they're so valuable even they can't afford to buy themselves out.

Leo: Yeah, yeah. So we're talking hundreds, what is it 700 billion? To buy all that stock back.

Rene: It was amazing, I tried to compare the Samsung earnings to the Apple earnings and the Samsung earnings were in trillions of....

Leo: Yen or whatever.

Rene: Won.

Leo: Won, yeah.

Rene: And yeah so I converted Apple and it was sort of breaking when I got to quadrillions of won.

Leo: (laughing)

Andy: The only conclusion when you do that math is I don't want to piss off either company.

(laughing)

Leo: They could own surface to air missiles. Our show today brought to you by our good friends at FreshBooks. If you are a small business and you're trying to do these kinds of calculations, FreshBooks is here for you. It's the cloud accounting solution designed from the ground up for entrepreneurs, freelancers, small businesses, its' what I used because I hate doing invoices and I was using Microsoft Word and Excel and numbers and that kind of thing, to put these invoices together. It was such a pain I wouldn't do it. FreshBooks saved my life. Forbes magazine calls FreshBooks incredibly user friendly, and there's a good reason. It is. I've been using it for years. If you're doing your own invoices, you want to try FreshBooks. It lets you first of all make a great professional looking invoice very easily and then what's great is you email them out, you can have them printed and mailed as well, FreshBooks will do that. But often times the email is fast. And because on the email there is a pay me button that accepts all the top credit cards and other online payment methods, you get paid faster. In fact on average, FreshBooks users get paid 5 days faster. They double their revenue in the first 24 months as well, I don't know if that's just because they're smart and using FreshBooks or what. You also spend less time on paperwork because FreshBooks takes time and hours, they're great free apps on Android and iOS that will let you keep track of your hours. Get them right into the invoices, you can even take pictures of receipts and get them into the expenses. So on average you'll save 2 days a month doing paperwork. 2 days you could put into doing stuff that makes you more money. I want you to try it. FreshBooks is fantastic, we've got 30 days free waiting for you at FreshBooks.com/macbreak. FreshBooks.com/macbreak. All I ask, all I ask is when you get to the how did you hear about us section, you put MacBreak Weekly in there so they know you heard it on this show. FreshBooks.com/macbreak for 30 days free. I'm telling you it is a lifesaver. Apple and Samsung are now in a dead heat globally. For smartphone. Is it globally or is that nationally for smartphone dominance.

Rene: Globally.

Leo: South Koreans won't say how many smartphones they sold in the December quarter, but they shipped 95 million. And that about 70%, high 70s were high end phones. That means their smartphone sales were somewhere around 71 and 75 million which is right in there with Apple which sold 74.5 million. And of course we saw that Apple had 50% of activations in the US. Means Samsung had something less than half.

Rene: It's really hard math because it's hard to decide what's sell through and what's sell in. Like what's actually sold to customers and what's stuffed into channels and Ben Bajarin of Tech.pinions did a really good... he has access, he's an analyst he has access to all sorts of device inventory and sell through data and he put together a nice chart that basically said for the first time they're neck and neck and what's hard to remember though is Apple has never been in the lead here. They were way behind Nokia when they started, Blackberry was way ahead then Samsung zoomed past all of them so Apple's traditionally not been the top player in phones. Steve Jobs famously said he wanted 1 or 2 percent of the market. So it's pretty interesting to see Apple's trajectory there.

Leo: And as far as apps, Apple's making more money but Google play selling more apps. Google play outpaced Apple's app store downloads by about 60% according to App Annie in 2014. But the app store... somehow made more than 70% more in revenue than Google Play.

Rene: Clash of Clans, it's how they can afford the Superbowl ads Leo.

Leo: Amazing. There were 2 apps in the Superbowl. There was the Gods of War app too with Kate Upton in a metal breastplate.

Rene: And Liam Neeson playing Clash of Clans.

Leo: Loved Liam Neeson in the Clash of Clans ad.

Rene: Great ad.

Leo: You know it's funny, you give me a choice between an attractive young woman and Liam Neeson, I'm going to take Liam Neeson every time.

Rene: He's got, like Alex Lindsay's got very particular skills.

Leo: I have very particular skills. Did you all see that ad? That was such a good ad. I'm sure everybody saw it but...

Andy: Let's rephrase the question. Which one would you rather have as an enemy? I'd much rather be on Liam Neeson's side.

Leo: Clash of Clans which I play, it's a fun game. We've got a TWiT clan on Clash of Clans. Is a game where you kind of attack. Oh, wait a minute. He lost. Do you want revenge?

(ad begins playing)

(Liam Neeson: I don't know you BigBuffetBoy85. But if you think you can humiliate me and take my gold... think again.)

Leo: I want to be BigBuffetBoy85!

(Liam Neeson: I'm coming for you with lots of barbarians and dragons. I can't wait to destroy your village while you beg for mercy. But you will get no mercy. I will have my revenge.)

(Liam Neeson: You will regret the day you crossed AngryNeeson52)

Leo: AngryNeeson52.

Rene: You've got to have an AngryNeeson52.

Andy: I love it when these really great actors, it's like they were handed this key. To a locked cabinet somewhere in the world that they put on their key ring and at some point they say you know what? I think now's the time I use this key to unlock that closet that's just filled with money for me to use this wonderful character that I've built over the past 30 years. I love that.

Leo: AngryNeeson52.

Rene: You remember William Shatner's I'm a shaman for... Warcraft. World of Warcraft.

Leo: Oh that's right.

Rene: I'm a shaman!

Leo: And then they had Mr. T was... did that too.

Rene: Yes. So great.

Leo: But that just shows you how much money, I mean really the news angle on that by the way... is there's a lot of money in apps if they bought a $4 million Superbowl ad and I'm sure Liam wasn't cheap either.

Andy: In. App. Purchase.

Leo: Yeah.

Andy: Let's say it again, in app purchase. That is... it generates a sickening amount of money.

Rene: I forgot who said it, someone was saying this on Twitter yesterday, that they will watch.... I think it was James Thompson that developer of Pcalc was watching kids play and they had 10 apps going at once because they didn't like having to wait and they couldn't pay for stuff, so they would have 10 games going at once and just switch between them as the timeout periods would expire.

Andy: But doesn't that freak you out a little bit? That really is... I mean that really is, at best obsessive behavior, at worst addictive behavior and I really think that there might be a time coming when everyone's going to take 3 steps back and say let's look at this dispassionately and say oh my god. This could be the tobacco ruling sort of thing. This could be like the corn syrup problems that people are attacking other industries for. I do think that app game developers might be facing a certain backlash like that in the next year or two where people realize that they are building machines to just keep people hooked onto a repetitive reward behavior.

Alex: You can say that about Facebook, you can say that about games. I mean I know that for me just checking all the things that I check, that I want to look at. I'm at a nice hotel and it's a Michelin 3 star restaurant downstairs and I asked for breakfast I asked for a certain table and they were like oh you want to have the good view. I was like no that's just where my cell coverage works. And so I think that a lot of us, our lives just become this... I noticed it when I said that, that our lives get very much wrapped around you know, our devices to a level that we've got to figure out.

Andy: I'll make this quick because otherwise this could turn into a 2 hour topic but I appreciate that but there's also... they really are, they use the same psychology they use to build slot machines. Where it's not just certain people are going to simply use their phones too much and be on Twitter and be on Facebook. They're creating a game experience to make sure that the point at which your decision making is at the most weak, I'm not talking about in general, I'm talking about at this moment here's where we hit them with another decision to keep playing the game. That's why I think that tobacco companies could not back away from these claims the way that like McDonald's or other manufacturers could where they can say we just make food that people like and people like sugar, they like salt, they like fat. The tobacco companies had to admit after being forced of evidence that no we are actually intentionally goosing up these numbers to make sure that people find it very very hard to stop using the product.

Leo: Look at this, this is from Think Gaming, I don't know them. It's a top grossing iOS games. This is for one day.

Rene: Yeah.

Leo: One day. Revenue on Clash of Clans, there were 194,000 new installs. $1.6 million for one day. Game of War which is the one that has Kate Upton, 1.1 million a day.

Andy: And 30% of that would be?

Leo: Oh yeah, Apple gets... that's right. In fact, add these up because this is one day. Candy Crush Saga almost a million, Candy Crush Soda Saga 390,000. Boom Beach 300,000. Big Fish Casino, quarter million. Hay Day 216,000. Madden.... this is all one day revenue. Look how well Xin Bu Luo Shou Wei Zhan -Shen Shou Jia Dao Di Ta Feng Ce Lue You Xi...

Rene: Look at the amount of money Apple pays the developers and figure out how much of that is likely going to this top list.

Leo: Yeah. Oh yeah almost all of it. Minecraft pocket edition only $61,000. But that's not in app purchases right? That's just you pay $7 up front. That is a great, great chart. Thank you Scooter X for passing that along.

Andy: It will cost $28,000 today.

Leo: There’s money in that purchase. Crossy Road, you can play without buying easy.

Andy: Kind of crazy actually that Crossy Road…

Leo: Who pays a buck for a…?

Andy: Exactly! $28,000 a day.

Leo: Kids.

Alex: In some ways, again like field runners is a good example. I think I’ve paid $3 for that. And since I’ve paid $50. You know, because I just buy more things. I just want to buy my little extra whatever. And they do it really well because it’s like 20,000 points that will take you six months to work through. So it’s not that big of a deal. But you look at it at the end and you go wow, I paid as much as a console game for this little game that I’m playing on my iPhone.

Rene: And to Andy’s point, it’s a whale system. There are certain people who just spend thousands and thousands of dollars on these apps every weekend. But at the same time, I don’t want to shuck my responsibility here, because we as a community said we’re not going to pay $10 for Super Monkey Ball. We’ll take the free game and then pay you $1,000 so that our Monkey Ball looks better than the other guys’ Monkey Ball or gets back on the race faster. So we said what we’re willing to pay for.

Andy: Apple has a responsibility. Because they’re the ones who said no we’re not going to let you release games so people can just try. You have to keep releasing things that are generating revenue that you get them to buy or get them to go away. Also, I’m sorry, I’ll let you go.

Alex: No, I just think with my kids I don’t buy them anything. They get the game. I’ll buy the game. Or download. I don’t really download a lot of free stuff mostly because I’m afraid it’s going to be some purchase hook. I usually want to see something be 99 cents or $1.99 or $4.99, whatever. And then I buy it. And I feel like I’m going to get at least some value. But when my kids get to the end where they want in-app purchases, I’m just like move on to another game.

Rene: We talked to a lot of developers and they said people won’t pay to get rid of ads. They put ads in they offered $1 and people will just put up with the ads. They’ll give you a level to download and offer you to buy five more levels. And you won’t buy them; you’ll just go to the next free game. Everyone is sort of struggling.

Andy: It’s a complicated issue and I’ve been looking at this and talking to people. I’ve been talking to a lot of behavior psychologists as a matter of fact about how this mechanism works. And a lot of the things that just put that bad taste in my mouth, it’s the same reason why you wonder why there are… you get the spam email that’s just so ridiculous that you wonder God what’s the point of sending out something that’s this stupid. And then you look into why this was put out and how it was put out that way; they’re not looking to convince most people that this is a legitimate thing. They’re seeking out the 4% or the 2% that are that gullible to identify those people so they can target them later. That’s what I feel like a lot of this in-app purchase thing is doing later. Most of us are able to spend a certain amount of money that we’re comfortable with and get our enjoyment out of the game and put it down. But I don’t know for sure; I would hate to think that as part of these companies’ business plan, it says there’s a PowerPoint slide somewhere that says that statistically speaking, 4% have addictive personalities that we can find. That doesn’t matter that we have 96 users out of 100 that are just going to give us a dollar or two. It’s just out there to find those 4% that are going to give us 75% of our revenue.

Leo: The Steve Jobs movie is in filming right now just down the road a piece in Cupertino. They were at the Flint Center where Jobs unveiled the Macintosh in 84 and did a number of other events. And as you may remember the Steve Jobs movie is centered around three or four Steve Jobs keynotes. These are extras lining up; over 2,000 people showed up to sit in the audience. I know somebody who did get in and they didn’t even film the Flint Center. They just filmed the first four or five rows and used movie magic to make it look like a lot of pictures. But we do have some pictures; here’s Michael Fassbender who is playing Steve Jobs.

Alex: I see that picture and I’m like I don’t know if I’m really going to buy that.

Leo: Seth Rogen is Woz, obviously.

Andy: Frosted tips?

Alex: I don’t know.

Andy: It looks like he has frosted hair.

Leo: He does. I don’t know. The hair is wrong, it’s just wrong. Michael Fassbender is gorgeous, frankly. And that’s the problem right there.

Rene: Always be Magneto to me.

Leo: Danny Boyle, the director, who’s a great director, really wanted him for this role. Sony apparently did not. Nor did Aaron Sorkin, the screenwriter. So they are right now, they’re going now over to the garage of Steve Jobs’ childhood home in Los Gatos. And they’ll be filming there. So these are first pictures now of Michael Fassbender as Steve Jobs and Seth Rogen as Wozniak. Kate Winslet will also be in the movie in a role, playing a person who had no historic importance. But at least we got Kate Winslet in the movie. She’ll be playing early employee Joanna Hoffman. Kathryn Waterson…

Andy: An early employee would be important.

Leo: They can be important.

Andy: There are people that are part of the methodology. Which actually brings up an interesting question. For a lot of people, being at Apple as one of the first 50 employees was certainly a highlight, one of the highlights for the highlight reel. But it wasn’t the sort of thing where it’s hey now there’s somebody playing me in a movie. And now there are words being put in my mouth that I never said and intentions that I maybe never really felt. But now how many people are going to think I’m the person who told Steve Jobs, you know what, this sort of thing is never going to work. We need to make sure this will work more like a mini computer than a personal computer, Steve!

Leo: I asked Woz what he thought about Seth Rogen playing him. And he’s very happy about that. It feels like Seth Rogen got picked because he has a beard.

Andy: Yea, well.

Rene: Michael Fassbender is male.

Andy: Is Woz a consultant on that movie? I seem to remember that…

Alex: He was in the Ashton Kutcher movie.

Leo: No he hated the Ashton Kutcher movie! I don’t know if Woz is a consultant on this.

Andy: I don’t believe that he could be insincere but if he is a consultant for that movie then that’s certainly beautiful.

Leo: Well I asked his wife, Janet.

Andy: No one thought Michael Keaton was going to be a great Batman but he was one of the two greats.

Leo: No kidding.

Andy: Don’t go from photos.

Leo: You can’t tell. We’ll have to see the movie. But they’re filming right now.

Andy: So long as Seth Rogen doesn’t laugh once during the movie, I’ll be fine.

Leo: You don’t like his laugh?

Andy: Uh-uh-uh…

Leo: Oh yea. I remember that now.

Andy: It’s only when he’s laughing all the time… it’s like I’ve got a 4.5-minute shock clock for that laugh. Okay, we’re at three minutes-50, it’s okay, I’m fine. After that it’s like okay I love this movie but I’ve got to change the channel. I’m just genetically non-predisposed to process that sound.

Leo: What do you think of this, Rene Ritchie? There’s a little bit less competition for you. Joystick and the unofficial Apple web blog, TAUW, absorbed Engadget. All three are owned by AOL. Joystick was a gaming site, a video game site founded in 2004. So was the unofficial Apple web blog, TAUW. I feel like TAUW is still a credible and useful blog.

Rene: Yea, I mean we never looked at the other Apple blogs as competition because they all had such different unique voices. And all their home pages looked pretty… the news would be similar but their home pages all looked really different. And I wrote a piece on Sunday about how I arrived at my first MacWorld in 2009 and didn’t know anybody and didn’t know what to do. Mike Rows from TAUW came up to me, and Dave Caolo and that whole team, we went to the movies together. And they totally distressed that entire event for me. They were all class-acts, generous people to a one. Serenity called it a fantastic piece about this yesterday where she was comparing Apple’s philosophy of no profit-and-loss per product with the AOL way and some of these other sites. Maybe IDG does the same thing where it’s not really how important… for them it’s important to raise revenue and all these things. But there’s also something to be said for the value that it gives your brand for the coverage that it gives your readers. That you can extract greater value than maybe the clicks that that particular website is getting. And as these companies sort of struggle with the modern internet and this is not like IDG. It was a print publication that was trying to become digital. Web Blogs Incorporated was a digital publication but still it’s very heartbreaking. It’s a loss for the entire community.

Leo: Their last day is today. You can go to tauw.com one last time and read Michael Jones’ story, the end of an era.

Rene: If you go to I think it’s applenews.today, a bunch of them are making their own site which is good news.

Leo: Oh so some of them are out of work?

Rene: I believe all of them. Some of them have other jobs. Like some of them have day jobs. That’s not the right slide; I’ll find the name. Appleworld.today.

Leo: Appleworld.today. Appleworld.today… it’s funny that you can do a dot-today. Whoops, not dot-todat. Sorry, I’m very bad at this.

Rene: They were super-talented people. I’m sure they will…

Leo: Anyway.

Andy: I’m at least looking forward to some of these people starting their own personal tech blogs. Because I think that’s some of the most valuable stuff being put out. Jason Snell, most famously decided okay, I don’t want to work for IDG anymore. I want to start my own thing and the power of one voice in which the entire publication reflects a specific point of view with no generalization and the ability to be passionate about that point of view; that’s so valuable and something that is so hard to convey. Not that this is a blog ruling event but one of the things I respect about iMore is that it’s a site that has enough funding to actually pay people. And have people that can do nothing but focus on coverage but also it still has that idea of… there is a piece that we would run that if this piece were simply cut and pasted under a Wired mask-head or Engadget mask-head, you would see that wait a minute, that’s more of an iMore piece. I can’t believe Wired is publishing this. So I’m hoping these people break out and find a way to find sponsorship and support to keep doing their own thing even if it’s on a reduced scale.

Rene: And it is, I double-checked, it’s www.appleworld.today. And I think Steven Sandy and a bunch of others are doing that.

Leo: Appleworld.today, www. We’ll take a break and come back with your picks ladies and gentlemen. First a word from Jeff Bridges, sleeping. Jeff just created his new site on Square Space. It’s called dreamingwithjeff.com. I guess he’s making albums to help you sleep. This is such an interesting site. This is done with Square Space. Look at the parallax view on this and stuff; the audio. And you probably saw it on the Square Space on the Super Bowl, but this is gorgeous. And this is done with Square Space. All go now to dreamingwithjeff.com. You can go flying with the dude from the Big Lebowski or Tron’ing with Kevin Flynn.

Alex: I think one of the things that’s great with Square Space is you do get this sort of whizzy-wig effect but you also can still inject custom code. So you can be building something and throwing it together on your own and when you decide you need a page that has something that doesn’t exist on Square Space-which becomes less and less-you can still hire somebody to hire something custom for that page.

Leo: I don’t know how custom this is but I’m pretty impressed by this. You can do in fact he even has I think a lot of this is pretty stock. He has a video of him building this thing. You start with 30 templates, 14 new designs, part of Square Space 7. Templates that are generic but also specifically for musicians, artists, architects, restaurants, weddings, ecommerce.

The world is filled with restless people…

Andy: I think you need to get this guy on Triangulation. I feel that strongly.

Leo: I’m going to talk to Square Space. Obviously they’ve got a relationship with Jeff. He’s great. And he’s done some really interesting web stuff. He’s very sophisticated actually. Here he is picking the template, he used the horizon template. It’s easy to make changes. You can edit right on the screen. No more toggling to preview mode. If you want to use Getty Images, it’s very easy. $10 each, they’ve got the stock images right there on the site. Social media is built-in: Facebook, Twitter, Instagram, Google Plus, YouTube, Pinterest, and more. And if you want help, I don’t know if Jeff called the help line but it’s there for him 24/7. Right from the Square Space offices in New York City. And at $8 a month, I think Jeff’s going to make a little money on this thing. Look at, he’s now… I think he actually did this. He’s using the ecommerce. I think he actually did this. If you watch this video which is on the Square Space site, squarespace.com, you can see him doing this stuff: editing it, creating it. It’s pretty cool. $8 a month, and when you sign up for a year, free domain name. Something like I don’t know, dreamingwithjeff.com. I’ll tell you another thing. I went there during the Super Bowl ad. I figured if anything is going to tax a Square Space site, it’s a hundred million people all going there at once. And it was beautiful. It did not slow down. This is a very rich media site. A lot of great content on it. Well-done. Squarespace.com. If you want to try it, it’s free. Just click the get started button; you don’t need a credit card. You can use it for two weeks and if you decide to buy, I’ll ask you to use the offer code MACBREAK. That will take 10% off and we’ll get a little credit from Square Space for helping them out. Squarespace.com, use the offer code MACBREAK when you buy for 10% off. Square Space: start here, go anywhere. Even sleeping, dreaming with Jeff. Let’s get our picks of the week! I think we can kick things off with Mr. Andy Ihnatko.

Andy: My pick is sling.com. No one has really the solution to internet television but this is a really good start to it.

Leo: You’re watching a dentist’s commercial?

Andy: That’s a commercial, okay? But if nothing else it shows you the power and importance of sling.com. Basically $20 a month and you get not just content from CNN, not just content from ESPN, not just content from TBS and stuff like that. You get their full live-stream, again including commercials too. It’s $20 a month. The existing package has about 12 channels to it. And again, pretty much…

Leo: Is this the one where they’re going to put ESPN on it?

Andy: They’ve got TBS, TNT, CNN, HGTV, DIY, Food Network. They’ve got…

Leo: Is this what they announced with Dish?

Andy: This is what they announced…

Leo: At CES.

Andy: It’s starting off with, and it’s invite-only, with not a really large slate of channels. But they’ve announced intention to expand this as they go. But ever since we lost that wonderful and I would say completely legal Ario service, we really still need the ability to be able to have access to cable channels, live programming. Especially for live events, news, sports, at a reasonable rate. And more than that, a platform so that… there is a Hulu-like service where they can continue to work to strike deals with new companies and bring more content to the platform as things go. I would be remiss if I didn’t say that the alternative to this is to spend a couple hundred bucks for an actual Sling box and plug it into your cable box. And have every single channel, all 400 that you subscribe to, streaming to your iPad, your I and Android device, and desktop and stuff like this. But again, it’s a good start. And for a lot of people who might see a channel in there that they watch all the time, this is another point in the ongoing game argument towards cutting cable. I’ll say that apart from the short list of channels, it’s HD, it’s stable, the interface is quite nice. It really is just good, perfect live TV. The disadvantage is that they, whatever weird deal they have to strike with networks to get live programming, things like pausing and rewinding are turned off for now. Hopefully those will come on in the coming months. But again, it’s definitely one to keep an eye on, definitely one to sign up for in case in the month or two or three until you actually manage to get a code to start using this, that you can actually start… it will be a package that you’ll really like. $20 a month, not that bad. I think it’s going to be really important to start to audit how much you’re spending every month for entertainment. And you might decide that well now that I used to be able to buy cable and have Netflix. Now I think that if I simply cancel everything except for Netflix and Hulu, everything will be fine with me. This is part of that alchemy as you try to figure out. If I have to spend $60 a month to bring entertainment into my house, how best can I spend that money?

Leo: How long do you think it will take to get an invite? Have they told you anything about that?

Andy: I don’t know. They have not given me any information about it. I’ve had it for about a week. I will say that I watch more cable news, not that you watch…

Leo: Yea, because that’s what you got, right?

Andy: Well yes. I like to watch Conan so it’s nice to be able to simply have that going. It’s as I said, I’m not recommending this as a oh my God you should dump everything and get this because it’s perfect; it’s another piece of a puzzle. We started the show talking about how there’s going to be a great upheaval coming in 10-inch tablets. We don’t know how that’s going to settle out. People are going to have to decide what they really want. Streaming services for live content is like that too. We don’t know yet whether the right answer is going to be a solution like this. Where Dish strikes individual deals to bring essentially cable service over the internet. Or if the right in the solution is going to be TBS has its own app and you have to launch this app to stream that. Comedy Central will have their own app. You’ll have to launch that to see this. But I’m glad to see more progress in this. I’m sorry to see Ario go but I want to see more services come up in its place. Because clearly the clock is running to solve the problem of how absolutely retched it is to have all of your service tied up in a 500-channel package that can’t leave your house.

Leo: Alex Lindsay, do you have a pick of the week?

Alex: I do. And I’m going to be, I’ve seen some online reviews of this app and they haven’t been good. But I’ve actually been playing with it here in Rome. My pick is going to be Hydra. Have you guys seen Hydra?

Leo: No, tell me about it.

Alex: So Hydra is an application on your iPhone and basically what you do is point it somewhere and you hit go and it takes 100 photos or sometimes 50 photos. And it builds a 32-megapixel image. So it basically increases the resolution you can get out of your iPhone. Now you can’t be running around and take pictures with your hand jiggling up and down and have it work. I have done handhelds with it. You do have to pay a lot of attention. The crosshair in the center, keep it as still as you can. If things are moving in front of you or there’s a lot of water, there will be some artifacting. I took some photos of Saint Peter’s Square from a castle nearby and set it down on a bar-and I’ll try to post it somewhere-but it was much better than what I got out of the iPhone. Even if you use the same resolution, you go back to eight megapixels, all the grain that I would have had that night, sharpness… everything was better. So it’s not the replacement for a good camera or a better camera than what you get with your iPhone. And I haven’t really liked all the other features but the high-resolution feature I felt was actually a really fun little thing to add. And I think that it was… and I’ve been getting a lot out of it. When you put it on a tripod and shoot something like a landscape or the Pantheon, it really is luscious like how much data you can get out of it. Especially if you’re going to be somewhere once or twice, it’s one of those things that you can get a little bit more if your phone is the only thing you had with you to take pictures. So I would definitely play with it. For $3.99 or whatever that price is, it’s definitely worth it.

Leo: It also has HDR video. Have you tried that?

Alex: I have not tried the HDR video. The only thing I got it for was the resolution. But the HDR video may be very good. So I played with… it didn’t make sense; they have one that’s zoom and zoom is just taking and doing what it was going to do with a 32-megapixel but just giving you a subset of that, which doesn’t make any sense to me. The low-light didn’t really work as well as I was hoping. Some of the pieces of it didn’t work as well. But for $2.99, if you know what you’re doing with the camera-if you’re putting it on a tripod or holding still or putting your hands down on something to rest them and shoot and be very careful and shoot something still, you are going to get a better photo of a scene.

Leo: Look at this, Jason. I just paid for and downloaded it and took a picture. So this is the high-res picture. And Alex, you were moving so it’s a little weird with you. But look at the chat room; I mean I’ve zoomed in quite a bit. Look how far away it is. And you can read it crystal clear.

Alex: And you can take the same photo with your photo; just pull it out and take a photo with the iPhone app and compare the two.

Leo: The detail is amazing.

Alex: You’re just going to find that it’s not the same resolution and it’s a much better experience.

Leo: For $2.99, $1.99, yea that’s great. That’s a 32-megapixel. It did about 50 images.

Alex: Right. I’m not sure exactly what it’s doing. When you’re hand-holding it, it seems to be about 50. When you put it on a tripod it seems to take advantage and knows I’m not moving at all.

Leo: Because many of us don’t have tripods for our phones. And then zoom would say use that same thing to be able to zoom in 2x. It’s still optical.

Alex: It makes no sense. Other than you save drive space or save memory by using zoom, it doesn’t make any sense at all.

Leo: Right. So high-res is the one you’re probably going to use.

Alex: Yea. High-res is the thing that I would… if you’re going to decide if it’s worth $2.99… all the other stuff to me was extra. So it was worth $2.99 just for the high-res and if you like the other stuff that’s great too.

Andy: Apps like this really make me salivate for the idea of an extensible camera app. If Apple decided to make this extensible, every one of those, you’d never take square-grate. Replace it with this super-duper third-party high definition mode. I so want that feature.

Leo: Wow. Look at that.

Alex: It makes me look at it and think about the Google project, the A-ARA project. To swap my phone camera out with something with more guts. You definitely see that I want a camera that can shoot 32-megapixel. That’s all I got to say.

Leo: Hydra, it’s in the app store. And it is $2.99.

Rene: The Hydra.

Alex: Every time I get a good image out of it, I find myself wanting to say hail Hydra!

Andy: One selfie and four more strike-up words in place!

Leo: And finally, Rene Ritchie, your pick of the week.

Rene: A while ago, back in December I think, Microsoft bought an iOS mail app called Accomply. And they have now re-launched it as Outlook for iOS. And again, this is not your father’s Microsoft. When everything would have to be born at Microsoft and just for Microsoft. This app has support. People have called it the best Gmail app for iOS. It has support for exchange mail, for Outlook mail, for Gmail. You can put almost any standard IMAP mail account you want to in there. I didn’t test POP accounts. But those are fairly standard as well. And it just does a lot of things really well. It’s simple, it’s elegant. It is, I dare say, if you’ve ever used Outlook on Windows XP or Windows 2000, this is not what you remember. This is a really elegant state-of-the-art mobile application. Microsoft has been making a ton of apps; I think Dan Frommer on Court said they have 100 apps out now on iOS and Android which is remarkable when you think about the history of the company. But they’re doing really great stuff. All the stuff we used to say Microsoft Labs is fantastic for, and we wished Microsoft itself would do it; they seem to be doing it now. I did have some problems with password recognition in some of the accounts. And if you have two-factor running, you’re going to want to run an app-specific password for it. But if Apple’s built-in mail client isn’t great for you or if you don’t want to use Inbox for some reason, if you don’t like the Gmail app, I would really strongly suggest that you at least give this a try. It’s very nice. And if you like Accomply, absolutely move to this. It’s got everything you loved and more stuff in it too.

Leo: Today as well was our app-cap for iPad today this week. iPad and iPhone. Although it looks a lot more like Accomply on the iPhone. It has that swiping and all that stuff.

Rene: They didn’t change too much. Which is nice! They didn’t change it just to change it.

Andy: They found the car keys.

Leo: Rene Ritchie is at imore.com. He also does a great podcast called Debug. It is a must-listen for anybody who’s an Apple fan. And he joins us each week. Thank you for being here, Rene in your tuck. Is it cold in there? Is that why you have a hat on?

Rene: It’s gotten warmer; it’s up to minus 20 now.

Leo: Yikes! From Roma, up on the Paletine Hill you’re on or the Palpatine Hill that you’re on? Up on Emperor Paletine Hill, Alex Lindsay of the Pixel Core. @alexlindsay on the Twitter. I know, I know, right?

Andy: Let’s rewind and let’s just say that he said he was coming from an unnamed castle. Whichever one… he can’t narrow it down for us which castle.

Leo: You can’t!

Alex: I can’t remember all the names! We had a little time to walk around on Saturday. I can’t remember all the places that I went. We just wondered around until my legs couldn’t go any longer. It was a great time.

Andy: Ten pontiffs, it was one of those that he was talking to.

Alex: But I’ll tell you in case you’re wondering, the pizza in Rome is good! I went to his place called Pizzarariam. Anthony Bourdain says it’s the best in Rome so of course I went. And you just get this tiny little postage stamp of a restaurant. You can’t really stand in it other than order and walk out. It’s one of the best meals I’ve ever had. For seven Euros. It’s just incredible. But anyway, it’s cool. My second time here in Rome and I’ve gotten a chance to actually see some of it. Find all the electronics stores, which I usually do.

Leo: Alex is the man in the high castle.

Alex: If people want to hear me complain about the taxi drivers, just follow me on Twitter.

Leo: I see on your Twitter that 25…

Alex: I don’t understand how this works. Because the black cars in Uber are cheaper than the taxi drivers.

Leo: Those nice, fancy cars are cheaper than the taxi.

Alex: They’re Mercedes! Like a jet-black perfectly polished Mercedes will show up and pick you up. Or you can get into a beat-up taxi where the guy kind of knows where he’s going and charges you twice as much. And if you put bags in his trunk, he charges you another 20 Euros for no apparent reason. We can’t figure out exactly what it is other than you’re an American and you’ll finally pay after you argue for a while.

Leo: Take a number.

Alex: There’s only 12 of them, I think. We only see 12 of them at a time. You do have to kind of time your Uberness. Because you will go up there and there won’t be any Ubers. And you’re back in a taxi which generates more complaints that I put on Twitter.

Leo: I think you put some Instagram pictures up too. I seem to remember.

Alex: I put a couple photos. Well I asked… I’ve gotten into this kind of habit on either Facebook or Twitter of posting images of wherever I’m at and then making people guess exactly where I’m at. And people are pretty good at it.

Leo: What’s your Instagram?

Alex: I don’t have Instagram.

Leo: Oh you don’t. Well I’m trying to think where I saw your pictures.

Alex: I think I posted on Facebook.

Leo: Oh Facebook! Last place I would have thought.

Alex: I think I posted it on either Twitter or Facebook.

Leo: Yea, it’s not on Twitter or Google Plus. It must be Facebook because you have a fun quiz. Where the hell am I?

Alex: You got to guess exactly where that is. And people got pretty darn close.

Leo: Because Alex isn’t sure himself I think.

Alex: Sometimes! I definitely wake up in the morning and I’m not totally certain.

Leo: The man in the high castle.

Alex: That’s the shot. That’s the Vatican by the way.

Leo: That’s the Saint Peter’s Bazile, right?

Rene: I made a mistake Leo. The Outlook is only good for exchange, Outlook, iCloud, Google, and Yahoo. Not all sorts of client apps.

Leo: Oh you can’t use other POP services or IMAP services. Okay, that’s good to know. Thank you, Alex! Mr. Andy Ihnatko, Chicago Sun Times. Congratulations on your Patriots winning it all in the Super Bowl.

Andy: I’m glad that when people are setting fires to cars down the street was because of the victory and not simple insurance fraud.

Leo: Well we thank you all for being here. We do MacBreak Weekly every Tuesday 11am Pacific, 2pm Eastern time, 1900 UTC on twit.tv. If you can watch live, we would love it if you do. If you can’t, on-demand audio and video is always available for all of our shows after the fact. Either on our website twit.tv/mbw or wherever you find your podcasts. That can be iTunes or the podcast app on your phone. Or use one of the great TWiT apps. We didn’t write them, I can’t take credit for them. But a lot of great developers like to write TWiT apps. So we’ve got them on iOS, Android, Windows Phone, even a nice app on Roku. So search for the TWiT app on your favorite platform and you can watch that way as well. Thanks for being here. We’ll see you next time. Now back to work because you know what? Break time is over!