This Week in Tech 498 (Transcript)
Leo Laporte: It's time for TWIT: This Week in Tech! We're going to take a look at the big controversy over Linovo's man in the middle attack, the Apple Watch: what's really going on there. There's another conspiracy to talk about and a whole lot more. A great panel ahead, so is TWIT. Stay right here.
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This is TWiT, This Week in Tech, episode 498, recorded February 22, 2015.
This Week in Tech is brought to you by shutterstock.com. With over 48 million high quality stock photos, illustrations, vectors, and video clips, Shutterstock helps you take your creative projects to the next level. For 20% off image subscription packages on your new account, go to shutterstock.com and use the offer code TWIT215. And 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 GoToMeeting: The powerfully simple way to meet with coworkers and clients from the convenience of your computer, Smartphone, or tablet. Share the same screen and see each other face to face with HD video conferencing. For a 30-day free trial, go visit gotomeeting.com today. And by Harry's: for guys who want a great shave experience for a fraction of what you're paying now, go to harrys.com and get $5 off your first purchase by entering the code TWIT5 when you check out. It's time for TWIT: This Week in Tech! Our pre-Oscar red carpet show. Ladies and gentlemen, Christina Warren is here from Mashable. Hi Christina.
Christina Warren: Hello.
Leo: Good to see you.
Christina: Good to see you.
Leo: I love that story you told yesterday about your husband sharing a viral video of you and you saying, yeah. We take that at the Mashable offices. I was there. That's a sign that your viral videos are working. They're fooling even your husband.
Christina: This is true. It's also a sign that Digg removes the YouTube branding that you put on.
Leo: Thanks Digg.
Christina: So if you put your own custom bug on those videos and it goes on digg.com, the bug is no longer there.
Leo: That's terrible. How do they do that?
Christina: I don't know. I guess there's something in the imbed code to get the overlays turned off, but he had no idea. It was really funny to me. Yeah, that's a Mashable video, Grant. Thanks a lot for sharing that with me. Appreciate it.
Leo: And thank you Digg for removing it. That's terrible. Also here from Business Insider, am I right? Did I get that wrong?
Lisa Eadicicco: You got it right.
Leo: Sometimes I don't know. Most of the time I don't know. Lisa Eadicicco, great to have you back!
Lisa: Thanks for having me.
Leo: She's on drums today. Thank you very much. Also here from Taiwan, Ben Thompson of Stratechery. He's going to play keyboards for us later. We've got a whole band here. Christina and I are going to fight over the cowbell.
Christina: You can have the cowbell. I'll take a tambourine or something.
Leo: Fair enough. Great to have you all here. We'll get you off in time for the—In Taiwan; they're not watching the Oscars though, right?
Ben Thompson: They're quite popular, actually. They'll be on TV.
Leo: Live? That'll be 8 in the morning!
Ben: They'll be on live. They'll be easier to watch than the Super bowl.
Leo: That's true. I'll get you out of here. I'm wondering—we were looking at the Oscar gift bags earlier. 170,000 dollars?
Christina: Yeah. But, if you take it then you have to write it off on your taxes. That became a rule about a decade ago. You used to not have to count that as income. It's about 50/50 the people who will take them and the people that won't, because they had so much to your income.
Leo: Some of the stuff is crappy. You remember, these stars are in the 50% tax bracket if they're in California, so they're going to be spending a lot of money on taxes on things like for instance, non-invasive LED light therapy stick for 10,000. Custom furniture for 25,000. 4,000 worth of lipo. But you're going to pay half of that. 1200 bicycle. A 12,000 glamping vacation. A train trip across the Rockies and an Italian vacation package? Free Audi rentals for a year with silver car. Of course the whole reason that people give this stuff to these stars is exactly what we're doing.
Christina: Yes. I was going to say, you're promoting these companies for the exact reason they do this. The same reason for the gift suites. So you're feeding into it, Leo. You're giving them the advertising they desperately want.
Leo: I saw the gift suites on Entourage. That's how I know about Hollywood. I watched Entourage. Everything I know about Law I got from the Good Wife, everything I know about Hollywood I got from Entourage. I'm a simple man. Gift Suite, you go in this room, and there's all this crap, and you can take anything you want. Is that what it is?
Christina: Basically. Usually in exchange for that you need to do a photo op. It's funny. The gift suite things—they'll take a photo of you in the Gift Suite and that will get sold around. Some celebrities are very careful not to be seen in the Gift suite because it damages their brand. Some celebrities don't care. Some celebrities—especially the reality people, they're all about it. You see the Jersey Shore people in that. They're like give it to me.
Leo: Sookie is going to be in the gift suite.
Christina: Snooki. Snooki is definitely in the gift suite, she does not care. She's like give it all to me.
Leo: Last year at the Oscars, Ellen Degeneres hosted, and it was a Samsung Oscar. Particularly, you cannot pay for advertisers, well, actually they did. The selfie. Which, apparently Ellen doesn't use a Samsung phone. She uses an iPhone because she tweeted about it later off her iPhone. The Ellen DeGeneres selfie blew up on Twitter, and she said let's make this the most tweeted Selfie in human history, and I think it was. I think it still is, even besting the Obama record, the president's twitter record. There you go. You got Bradley Cooper, you got Ellen, but I think Samsung, which paid for this selfie forgot that the selfie will not include a picture of the camera. Kind of a flaw in the selfie thing. Will Samsung be back this year? Or Apple? If I’m Apple in this thing, I would go we blew it. We should own the Oscars this year.
Christina: they always buy advertising time during the Oscars. If you recall, in 2010 when the iPad came out, it was Stephen Colbert who came out with the iPad in his hand.
Leo: Was he paid for that?
Christina: Yes. Apple definitely paid for that. Steve jobs was honored that year, he was on the red carpet. Apple usually buys advertising. Obviously they have a really strong relationship with ABC who airs the Oscars, but in terms of sponsoring something like that, I don't think Apple would be that overt. They like to be a little more subversive and behind the scenes. Doing in kind sponsorships for certain TV shows, certain movies. They definitely buy advertising for the Oscars and most major award shows.
Leo: Apple is going to pay for the Modern Family episode, right?
Christina: Without a doubt. I'm sure that was scripted into something with an arrangement that they made with—I can't remember what studio does modern family. It might be ABC who does that, in which case, it's even more synergy because again they share so many shareholders.
Leo: That's coming up this week. It's a half hour that will take place entirely inside a MacBook pro screen, including Facetime calls and other video. It's actually an intriguing idea. Apple paid for that, you think?
Christina: Absolutely. The same way they did when they had the Modern Family episode that aired the day the iPad came out. The whole episode was about getting him the iPad.
Ben: I think—I'm curious where you heard they're paid for, Christina.
Leo: Apple said for years that they won't pay for this stuff.
Christina: They absolutely do. You can tell at the end of shows. They used to do Parks and Rec, and Nokia did it, they did Smash. They do promotional consideration.
Leo: Promotional consideration paid for by Apple computer. They have to.
Ben: They provide the equipment for sure. That was definitely reported.
Christina: I don't know if they paid for the inclusion. They had the idea, they approached Apple, and Apple was like Oh, we'll give you this stuff.
Leo: The article I'm reading that came from Associated Press says apple did not pay for it. Levitan who is the creator of the show and the author of the episode said it was inspired by his own experience. It was captured entirely on iPhone 6 and iPads. Steve Levitan says the upcoming episode involved no product placement compensation to Apple. It came from an epiphany he had during an online experience involving one of his college age daughters. I had e-mails open, then my daughter showed up on Facetime. I could not only see her, but I could see me. There was something going on behind me, my wife or somebody. I realized on screen you could tell so much about my life. Which is by the way why we warned Ben Thompson that we could see his white board before we went on the air. It occurred to him that the format would be fitting for Modern Family. I remember—we've heard these things.
Ben: Apple gave all the equipment. It depends. If you look at the dollar value, they gave them tens of thousands of dollars’ worth of phones and stuff like that.
Christina: Totally. They agreed to let them do this without Apple being paid or without permission being needed. They cleared all the logo usage and provided them expertise with shooting stuff. They might not have pad per se, but they're certainly getting a humongous amount of advertisement out of it. There's a quid pro quo happening here, I'd say, on some level. Even if it's not a direct payment exchange it's ridiculous to think that there wasn't any sort of conversation had about this.
Leo: The AP says Apple was informed about the episode and "loved" the idea. Really? You loved it. Who'd of thunk?
Ben: Apple had a very well known executive that was focused on these placements. No direct payment, but certainly Apple has worked to cultivate relationships. I'm sure they're very free with equipment and expertise.
Leo: Samsung is willing to pay cash hard dollars. Makes it hard for Apple that they toe the line?
Ben: It makes it that much more effective.
Christina: Exactly. You can even look at—what was the movie? Sex tape, that came out last year. This was revealed in the Sony emails and the Sony executives wanted to make a script change because so much of the film had to do with iPads and Macs. They said can we replace the iPad stuff in the script with Sony products, and the writer said no. It needs to be Apple products. We use Macs, we thought about this, formed the idea from an iPad, Apple cleared it. Even though it was a movie made by Sony that Sony was putting money into, Sony couldn't get their own products placed in a movie that they distributed.
Leo: You did used to see a lot of VIOs in Sony pictures. You won't anymore because they killed the Vio. Somebody is saying that movie was Argo. Was it Argo that had all the picture of—
Christina: Argo had that too. This was a case of sex tapes.
Leo: I missed Sex Tape. I don't know how.
Christina: It was not a big hit at all.
Leo: I remember seeing the poster for that. So this, what cracks me up is sometimes you'll see a production where they obviously have Macs but they cover up the logo because Apple won't pay them money.
Christina: Apple won't pay them. That's what they do on 2 1/2 Men and those shows. Any of the CBS shows they have to cover up the logo. Chuck Laurie, who creates, he does Big Bang theory and 2 1/2 Men and Mike and Molly and a couple of the other ones, he always bitches in his credit notes. He does these blog post things at the end of his credit reels and he complains that Apple won't buy advertising or pay for sponsorship on their shows. I give them so much free press. Apple doesn't care. We're not going to pay you to show our logo.
Leo: Is it fair to say that Apple only pays with promotional consideration? They give product.
Christina: I think that's probably it. They used to do other things. Look. We don't know how deep this goes. I wouldn't be surprised if Apple didn't have an ad buy during this Modern Family episode. Maybe they wouldn't have an ad buy otherwise. You know what I mean? This is where it gets tricky. Apple can say, no, we didn't pay anything for this, but we bought a 30 second ad during this show that we usually don't buy 30 second ads during. Who knows? They can say whatever they want. I think it's probably going on behind the scenes. It certainly doesn't hurt the marketing, the sales team's relationship with Apple to have this happening on the creative side.
Leo: What were you going to say, Ben?
Ben: I was just going to agree. When it comes to these deals there's all kinds of levers that can be pulled, whether that be in kind advertising, it can be on any of the Network's properties or magazines. There's a lot of places where you can do deals that you're not paying for placement. You're not paying for Apps or whatever it might be. There's a wide ranging business agreement, is the term. Or something like that. That's certainly the case. The other thing I would add is the whole product placement thing is much more advanced and common in Asia. Particularly, one that's interesting to track is Samsung. Generally it has been the track and rise of Korean culture, particularly music and TV shows which are massively popular all over Asia in particular. You wonder, they're on free streaming networks and easily accessible. If you watch the shows, there is almost always Samsung products featured prominently. That's where a lot of money comes from, through product placement. It's not just phones, it's also make up products. It's chat apps.
Leo: So Line might have product placement stickers.
Ben: There's this really popular Korean TV show that I saw a few episodes of. About halfway through they started using Line to chat, which they hadn't at the beginning of the show and it got popular and they signed this deal and started using Line. It's very featured. Every time they started they didn't just go in the App, it was the screen at the beginning.
Leo: It's interesting. That's also a way to get into the American market. Line, which is very popular in Asia has not really penetrated America. Bleak in the chatroom is saying Line is all over America's Next Model. What a clever way to raise awareness of a product in the US.
Ben: That's definitely a common tactic over here. There was a — it's even little stuff too. In the show I was watching, it was hugely popular, like My Love from the Stars. It was actually pretty good, I have to admit. The main character used a make up product that was relatively new, and the product doubled its sales in China. It's super effective, and it's really common. I would expect that we'll see more of it in the US rather than less.
Leo: There's a long precedent for this. It was kind of a model when we started TWIT ten years ago. (Our tenth Anniversary is coming up in April.) I told this Anecdote and said we need to find advertisers like this. When MTV first started in the US, when was that? In the 80's?
Leo: You remember that, Christina, because you were four.
Christina: I wasn't alive.
Leo: Never mind. What was I thinking?
Christina: It was August something 81. I just know.
Leo: She wasn't alive, but she knows. Anyway. There was this candy that was Grandma's candy. Nobody ate it, called Mentos. They bought a huge campaign with the launch of MTV and advertised them for years. Remember Mentos the fresh maker. Which was the weirdest ad ever, but it made Mentos a hip candy in the US and it exploded their sales. There's a precedent for this. The other precedent I'm thinking about is KitKat. Remember when Android 4.4 came out? KitKat said no money exchanged hands with Hershey's. yeah right.
Christina: Except for the special advertising and packaging deals.
Leo: Yeah. We just gave that away. This is the Apple ad that's going to show tonight on the Oscars. it's kind of cool. Martin Scorsese is narrating this. Wait a minute. Let me turn on the audio so you can hear Marti. The guy with the busy eyebrows and the black glasses.
APPLE COMMERCIAL: You can't do your work according to other people's values. I'm not talking about following your dream either. I never liked the inspirational value of that phrase.
Leo: So these kids are making a movie with an iPad.
APPLE COMMERCIAL: ...trivializing the process...as well as the success which could be harder to get through. If you're dreaming you're sleeping. It's important and imperative to always be awake to your feelings, your possibilities, your ambitions.
Leo: Apple is a master of the soft sell aren't they?
APPLE COMMERCIAL: Every day is a re-dedication. Painters, dancers, actors, writers, film makers. It's the same for all of you. All of us.
Leo: So without saying in the copy one word about the iPad, this is a speech completely unrelated, but just showing these images and creating these emotional feelings. It's brilliant. That's nice. Now you don't have to watch the Oscars, everybody. What cracks me up is when you're watching a TV show and they have a computer with a Windows logo on it. That doesn't exist.
Christina: Exactly. What is this? Thanks Microsoft. You can't buy this. Whatever.
Leo: Well, we paid money. It's probably a Mac with a replacement top. Don't you think?
Christina: Probably. It's funny on certain shows where Microsoft and Nokia will pay for certain placement and they have those out there. There are still a couple of strappling Macs around too. The production is unwilling.
Leo: It's like the NFL where Microsoft paid tons of money this season to have everybody using Surface Pro and for the first six months the announcers were calling them iPads. They had to train the announcers.
Christina: They also had to train them how to use them because they were hiding their iPads behind the surfaces because they couldn't use the Surface.
Leo: That's the best advertising isn't it? Everybody uses it. Everybody in Hollywood uses it.
Christina: Also with Beats, the fact that they paid all this money to the NFL and none of the athletes wanted to wear the headphones, so they had to put tape over the Beats logos. I was talking to someone from Beats and she joked. We should sell our own tape to cover up the logos. That's actually a good idea.
Leo: Beats tape.
Christina: Sell Beats tape to cover up the logo on the network. That would be genius.
Leo: If you're an NFL player and you can't wear your Beats headphones, we've got special Beats tape just for you.
Christina: Just give it away. Put it on, and you see the taped up logo and everyone is like, "I know what you're wearing."
Leo: Beats tape man. We're going to take a break, we'll come back with more. Lisa Eadicicco—let me see the lower third. If I can read your name.
Lisa: You got it.
Leo: What does that mean in Italian?
Lisa: I don't know, to be honest.
Leo: I think it means eat a bean. I think it does.
Lisa: It could be. I wouldn't know.
Leo: Ask your mom. Businessinsider.com. Great to have you, I can see you're going to have to shout to get heard in this panel here. We're all big talkers. Christina Warren from mashable.com, from Stratechery, the best tech blog. Ben Thompson. You’ve got to subscribe to his newsletter. It really, so brilliant. We'll get to some of your brilliance. I was just telling them before the show, I just saw you in the New York Times, they kind of stuck a picture in there writing about Google's second act, and you wrote a great blog piece about how it's going to be tough for Google to continue. Am I paraphrasing that improperly?
Ben: I'm happy to clarify. I thought—it's one of those things you write, it's awesome it got picked up.
Leo: The headline becomes the story.
Ben: I don't think they're going anywhere, but Microsoft didn't go anywhere either. They actually kept increasing profits.
Leo: I want to talk about your article. Two great blog posts the last few days on Stratechery. Redmond and Reality, which we will talk about, and there's a lot to say there. With these fabulous hand done illustrations, and then Apple's new market. This is the only illustration that went viral on Twitter. There you go.
Ben: That would be over-stating it.
Leo: I wake up in the morning and read Stratechery, just as Ben wakes up in the morning and does TWIT. Of course there's a Podcast exponent there as well. We'll be back with all three in just a bit, but first a word from ShutterStock.com. We love our ShutterStock subscription. We bought the business subscription that's 25 images a day, everybody in the brick house has access to it. We use it in video, we use it in audio. ShutterStock has audio. We use it a lot on our blog. Nowadays, visual is everything. If you don't have a visual component to your blog post, you're missing out. ShutterStock is the place to get over 40,000,000 stock photos, vectors, videos, music tracks. Everything you need for your creative project. Now that I'm aware of ShutterStock, I see ShutterStock in film credits all the time, even major Hollywood pictures use ShutterStock footage. Why not? Why hire a helicopter to fly over Hong Kong when you can go to ShutterStock and get a beautiful HD video? Pop it in. ShutterStock has the best royalty free images for your website, publication, advertisement. 48 million—you have to go to the ShutterStock site every once in a while to see the numbers. 2.4 million royalty free video clips with 16,000 added this week alone. Let's see the image. 49 million, 469 million royalty free stock images, they added 384,000 this week alone. The key with ShutterStock is to understand the brilliant search on ShutterStock. Their search will allow you to browse your images not only by topic, but narrow it down by color, so it can match the palette of your blog, by people—how many people are in it, gender, emotions expressed, then once you find the image you want, you can share it or save it and share it with others that you're working with. Keep it for yourself for inspiration. Take a look at the iPad app. Man, it is something else. Now they have it on Android. I'm very happy to say, award winning. It's an international company, they have a customer service in more than a dozen countries, full time customer support throughout the week. I'm a big fan. If you're looking for royalty-free images, shutterstock.com, sign up for the free account. You don't need a credit card. Start the account, start using it, start searching. Use it for inspiration, for ideas. Save favorite images to a lightbox, but if you do decide to buy, all image subscription packages, you can get 20% off your first subscription. 20% off the image subscription packages when you use the offer code TWIT215. That's February 2015. What are those? Helicopters? Drones? Shutterstock.com, 20% off the image subscription package on new accounts, but you have to use the offer code TWIT215. There's the drones. Quadcopters. Are they big in Taiwan, Ben? Are people using Quadcopters in Taiwan?
Ben: I'm not sure. I've seen them around occasionally.
Leo: You would know. You would see them everywhere.
Ben: I would imagine it's a little trickier with the big buildings around. I wouldn't know. I'm a blogger, I sit at home in my pajamas.
Leo: You don't go outside.
Leo: I have to apologize. Last week, I indulged in Quadcopter fear mongering. Chris has told us that was wrong. You're 17 now. 18? You had a birthday. 17. You're a Quadcopter fanatic? Sort of? Then we have Father Robert, our local priest. We call him the Quadfather. He is like Mr. Drone. We have drones aplenty around here. A couple more Apple stories. I'm curious what you guys think of the Apple car story which some say is hard to believe. John Louie Casse wrote in his note on Monday he didn't believe it for a minute. Yet, when we talked about it on Tuesday on MacBreak weekly, the consensus from Renee Ritchie was that Apple is doing it. They've got at least 100 people working on it. Doesn't mean you'll see it any time soon. It might be five years. Apple is saying five years before they can sell an electric car. Maybe autonomous even. Part of the reason that people believe this is that they're hiring people in these fields. Ben, Is it reason that Apple is doing a car?
Ben: You hate to drop this line, but I think this is something Steve Jobs would not do. I don't think that necessarily makes it right or wrong.
Leo: We have to agree now. We are in a post-Jobs era at Apple. There's no question about it.
Ben: Absolutely. I was writing about this Monday in my update. While I was writing it, I started out with a standard line of mine, which is that Apple is a personal computer company. That's all they've ever made. You can trace going from the Mac to the iPhone or the iPad. These are all personal computers that are getting ever more personal, ever more—
Leo: Does a watch fit in that?
Ben: I think so. Right now the watch is an accessory, but in the long-run, I think the goal is that's the hub. The phone is clearly the hub. In the long run, it makes sense to have something on your person that is the hub. The thing is that that fit with—Jobs was passionate about the computer. His famous the bicycle of the mind thing, that the computer enables human creativity, it's this tool for people. I was writing this the same time that that fascinating New Yorker profile dropped, which beyond being super long and divulging a lot about Apple that we didn't know, but it was also a piece where Ive has become the public face of Apple over the last six to twelve months. What's interesting is you don't get the sense of passion for computing form Ives. You get a passion for design. Being very thoughtful about how you make things and how you create things. It sounds like a subtle difference, but Apple under Steve Jobs was about computers and great design. It's different to say you're about great design and computers. It matters which one is first. It matters in a way that before I would have dismissed this out of hand. Cars are becoming computers. The Industry is going through a fundamental shift, so if there was ever a time to enter an Industry, it's right now, because when Industries undergo fundamental shifts, the incumbents don't do very well. I suspect that in fifteen to twenty years, the who's who of the car market will be very different than who's who of the car market today. So it's a great time to get in, and there's no question that the electric car is basically a computer on wheels. There's lots of it that makes sense, but it's different than a personal computer that you live with, but if that's no longer the North star for Apple, and I think it's fair to say that it's not, instead it's designed in making great things that people appreciate. Then Apple you can see it making a car, and to me it goes back to what is the nature of the company? I think it's fair to say the nature of the company has changed. That's not a bad thing. It's not a good thing. It's an observation.
Leo: Christina, you say all smoke no fire.
Christina: No. I say there's too much smoke for there not to be fire. I'm saying that there are too many controlled leaks about this for this not to be something they're working on.
Leo: Andy implied this. He was reluctant to talk at all about this story. He implied this and he's right. The Wall Street journal, where this emerged, is Apple's journal of record. It's the place Apple goes to leak stuff.
Christina: The Wall Street Journal and Bloomburg both.
Leo: It's very clear these were Apple based leaks, isn't it?
Christina: To me there's no question.
Ben: Not just that but the fact that the financial times have a record as of late, they were actually before the journal. I don't know if they were —
Leo: These are manipulations, these are controlled leaks. Why is Apple leaking this story now?
Christina: A couple of things. The big question everyone is having with the advance of the Apple watch is what's next? I think they're getting ahead of that story. I think the secondary story—
Leo: Holy cow! They haven't even released the watch.
Christina: No, they haven't. But I think we're getting ahead of that.
Leo: What are you going to do next?
Christina: Well, that's exactly what's happened. That's getting ahead of that. I think the secondary thing is a lot of people are making big bets about auto. Tesla is in the news a lot. Google is owned this space, and they're really serious about doing this. They're really serious about getting something out, whether it's a car or working with somebody else, or whatever in five years. The sooner they tell this story the sooner the better it works in their favor. It probably doesn't hurt that it's going to put companies like Tesla under the gun a little bit because they're going to have to start to defend their business a little big because the mere width of Apple being involved puts pressure on them in a way that no other company would pressure —have any pressure on them. No other car maker, nobody would be that worried. You mentioned Apple, and suddenly, it's about Tesla. Are they going to be OK? I think this is a good strategic move.
Leo: I'm racking my brain, because I think it's clear that these are planted leaks. I'm racking my brain—
Lisa: Going back to earlier, what we were talking about Apple being a personal computing company, they always have been, if you think about the direction that cars, especially electric cars are going, like Ben said earlier, an electric car is a computer on wheels. How can computer be more personal than something you're sitting in or wearing? I definitely think that if Apple feels they can make the electric car better than Tesla and make a better experience, they'll totally go for it. It definitely seems strange, and especially strange that it's coming now. I guess somewhat sudden. You're right. We've been seeing all these seemingly controlled leaks in the Wall Street Journal, and they've always been extremely accurate in the past. I definitely think there's a chance that Apple is considering this or in the very early stages of it.
Ben: There's a more cynical take too.
Leo: I want to hear the more cynical take.
Ben: I think it has to be considered. Number one is this story started with a story in Bloomberg that Apple was snatching a bunch of Tesla's employees. It's very possible, I'm inclined to believe this, again, I'm open to the possibility, I'm instinctually suspicious of this—that this was a counter leak that ran amuck.
Leo: That's the kind of thing Steve Jobs would do. I'll show you Tesla!
Ben: That's a possibility. I think it started with Business Insider. Posted a story, business Insider reported on the Bloomberg story, and then someone wrote into Business Insider and said you should see what we're working on.
Leo: I'll tell you what's really going on.
Leo: I'm even more cynical. I'll tell you what's going on. Apple did not want to do a watch. Johnny Ive wanted to do a watch. It's all Johnny Ive loves, watches. Apple didn't want to do a watch. We saw a story which is preparing you for the truth, the story which was leaked to the Journal saying the Apple watch was going to be so much better, but we couldn't put the sensors in without killing the battery life and getting FDA approval, so we didn't. It's not that great. This article even said we were racking our brain: what could we do with a watch to make it compelling? The Apple watch is going to be a flop. Apple knows it's going to be a flop. They are preparing the world with something else to look at. What about a car? Here's a car!
Ben: That was number 2.
Leo: Jump in, Lisa.
Lisa: It's definitely going to be a first generation product for sure, which means it's not going to be as great as soom people expected it to be. Especially for the Smart watch category, I think people were looking to Apple to show what a good smart watch is and what it could be useful for. We've seen tons of—Samsung has launched six Smart Watches in a year? Almost every major tech company has one, but you don't see people wearing them that often. A lot of people say why should I pay 300 dollars for something that does exactly what my phone does on my wrist? It doesn't seem like something people want or need right now. There's also a lot of, in the way that SmartWatches are made, there's a lot of obstacles to overcome, battery life is one. Nobody has to charge a watch all the time. I think technically there are still barriers that even companies like Apple are going to have to overcome. That will definitely be obvious in a first generation product.
Leo: I'd never bet against Apple selling a lot of product, because there are so many Apple—what's the word? I don't want to insult anybody.
Lisa: You can.
Leo: Devotees, thank you. Who will buy anything that Apple poops. This will sell a lot of units, but I think fundamentally this is not the watch Apple hoped to make, it's not a watch anybody needs to buy, and except for Apple devotees, we're seeing the story that they're making five million watches which would be huge. That would be a big number of watches to sell. Now that we've seen that story from the Wall Street journal—was that also planted? How does that fit in this?
Christina: That's a weird one to me. I don't know. What’s your take on that, Ben? I still question the idea of leaking that figure.
Leo: Are they trying to gin up blinds? Trying to create pent up demand even though there is none?
Christina: To me that's an unfair expectation. 5 million is more than a Samsung or any of the Android wear have done today. You're saying that's going to be how many you make. If you don't do that many, does that mean that we look at the watch as a failure? I question why they would want that number to come out, but I'm curious to hear Ben's take. That doesn't feel like it came from Apple at all, that seems like a supply chain leak, but I really don't know.
Leo: Actually, that makes sense.
Ben: It probably was a supply chain leak. You can say that was also a potentially response to a preview article about the watch's functionality. The watch functionality article came out, and then a day later, how many Apples are going to produce—
Leo: They said they had hoped to do so much more but—
Ben: Exactly. My second cynical take was exactly what you said.
Leo: That's even more cynical. That's really cynical.
Ben: Except the car rumor is intended to overshadow the watch. My position on the watch, again, no one has used, I believe in broad strokes that a watch makes sense. I think that people in tech underestimate small conveniences, so given the fact that I think the watch makes sense; I think Apple deserves the benefit of the doubt, given the last fifteen years. I'm inclined to assume it's going to be what they intended. It's going to be successful until I'm proven otherwise. I'm open to being proven otherwise.
Leo: That's a safe bet. I've learned not to bet against Apple.
Christina: I think it's going to be a hit. I don't think it's going to be as big as the iPhone or the iPad, but I think it's going to be successful. I think the fact that they are approaching it the same way they would approach jewelry is a really smart move. To me, that's been an area where all the other smartwatches have failed.
Leo: We're all going to buy an Apple watch. Let's face it.
Christina: We are all going to. Of course we are. The thing is, the problem that the other Smartwatches have made is target it at the tech user and try to force other people in, and everybody is like this is ugly. You make something that's attractive, you make something that feels like a luxury item, you make something that's accessorizable and you can pull in a different class of user. At that point, I don't think having all those sensors matters. If it doesn't impact the battery, I think people will like it. You can always save more stuff for future iterations. That to me didn't strike me as being an Internal leak. it seemed like an opposite story. To me, it was almost like maybe at one point an early iteration on the drawing table said we would like to do all these things, but Apple realized correctly that this would be too much for a first gen product. Everybody who buys this thing is going to know. Either they're going to be a watch person who is buying it for the fashion aspect, or they're going to be a techie Apple person who realizes it's a first gen Apple product. You're better off waiting, but I don't care because it's a status symbol. Especially in Asia, I know Ben can talk to this more, especially in Asia, it's going to become a status symbol and a fashion accessory. They can sell millions of them potentially just on the cache alone.
Lisa: Apple is the only company that is marketing it as more of a watch than a piece of technology like Christina was saying. If you think about it, all the different models and types that they offer, stainless steel, sports, rose gold, all of these different editions. That's the kind of customization you would see if you were buying watches, meanwhile other competitors are offering 2 or 3 different colors but not different materials.
Leo: I'm more interested in the band than I am in the watch. I want to get that band. So you're right. It's a fashion product.
Ben: That's a good insight, Lisa. It seems so weird at the time, that Apple started out by talking about it. It's super precise. The nicer the watch the less precise it is, in my experience.
Leo: That's a good point. If you have to wind it, it's not precise.
Ben: It's a good point. It is absolutely being sold first and foremost as a watch. I don't have much to add.
Leo: Let's get all four of you—we're going to move on. We're done with Apple. I want to talk about the most infuriating story of the week in a second, but Christina Warren, how many watches will Apple sell in the first quarter?
Christina: First Quarter?
Leo: They made five million. Will they sell five million?
Christina: No. 2.5? Maybe?
Leo: Remembering that Pebble in its entire lifetime has sold a million. AndroidWear in all brands 720 thousand. 2 million. Lisa?
Lisa: I would agree with that? I was actually thinking 2 million as well.
Leo: In the first quarter.
Leo: All right. Ben?
Ben: If Apple is making five million, I'm going to guess five million. There's one thing that—
Leo: They know what they're doing.
Ben: Especially on the operations and supply side.
Leo: There's no precedent for it, but you're probably right.
Ben: I don't know. It's a product that has vexed me greatly. I've written multiple articles on both sides of the topic. I thought the introduction was poorly done, but at the same time, I think that there is something here. I'm fascinated to see how it goes. I don't have a good handle on it.
Leo: Chatroom, it's up to you now. I'll give you my answer after I hear from the chatroom. In the first three months: April, May, June, by the end of the second calendar quarter, which is Apple's third fiscal quarter, how many watches?
Ben: We're not going to know.
Leo: They won't break it out?
Ben: The watches in the other category with iPods.
Leo: You can't lose them when you're bad here. 2 million. 4 million. Knightstarandbleak 3.5 and 4.5 million. 5 million. 2 million. All over the place. I say they're going to sell fewer than one million. That's my prediction.
Christina: They'll sell a million the first week.
Leo: shut up. We're going to take a break. They'll sell that in the first two days. The weekend. You're probably right. They'll announce we sold one million Apple watches in the first weekend. Leo will have egg. I have yet to predict anything accurate about Apple in the last ten years. I just want you to know if I say a million, it's definitely more than that.
Ben: You've gone under every time, right?
Leo: I always go under. Who has the over? Ben? Ben's got the over.
Ben: For lack of anything else, I trust.
Leo: Fewer than a million in the first three months. That's my prediction, folks. Thank God we'll never actually know. Our show to you today, brought to you by Gazelle. If you've got an old Apple watch you want to get rid of, Gazelle is the place you'll go to get rid of it. Right now they buy iPhones, iPads, even broken iPhones and iPads and other Apple products. They'll buy Samsung phones. They'll even buy your old blackberry. They'll buy your surface pro tablet. They'll give you cash. If you've been taking your old gadgets when you get that new phone you'll throw the old one in a drawer or whatever, someday I'll give it to cousin Earnie. Meanwhile it's gathering dust. You wouldn't throw hundred dollar bills in that drawer, would you? Someday I'll give it to cousin Ernie. No. You would take that money. You would use it for something fun. You would buy your next phone. That's what Gazelle is all about. They will buy your old stuff and give you a great price. The best part is you get a quote from gazelle.com fast and easy and guaranteed for 30 days. You don't have to decide right now. Get the quote. Pile a bunch of stuff in. Once you decide to sell, they'll send you a box, prepaid, and they'll send you a check, PayPal credit, or of ran extra 5% get an Amazon gift card if you buy a lot of stuff on Amazon. gazelle.com. And now you may ask OK, so they buy all this old stuff. What do they do with it? The best of the stuff they sell back to you. If you need a new gadget, you can get Gazelle certified pre-owned gadgets. They have two qualities. Certified like new, which is basically something brand new which somebody opened and said I don't want it and sold to Gazelle, then certified good. That's where you can get the best price. They show some gentle signs of wear, but they work. It's probably in better shape than the iPhone you broke or lost. All devices—I wish they'd done this when my kids were losing iPhones every few months. All devices have been put through a rigorous 30 point inspection to ensure they're fully functional, certified pre-owned devices are backed by a 30-day risk free return policy. You're going to get a great price, a great product, and no risk. Gazelle: you've got to try it. To sell or to buy. gazelle. Just find out what your old iPhone is worth. You might be amazed. You've been throwing hundred dollar bills in that drawer. I'm glad Ben is here. He can represent the voice of China. Why are you laughing? The chair is empty. He must have known I was going to the Lenovo story. I'll tell the story and when Ben gets back—his three year old woke up I bet. He'll come back in a moment. Ben Thompson from Stratechery is not here. Good news, Lisa Eadicicco is here, she's from Business Insider, and of course, Christina Warren from Mashable. This infuriated me. Lenovo, they were caught in September and didn't do anything about it until January. Now they're saying "we messed up. We made a mistake. So sorry. Here's a fixit tool." what did they do? They put software, remember. There's a huge price pressure on PC manufacturers. They're margin on consumer grade PCs, the low end of the market, is practically nothing. You're buying an HP stream for 200 bucks, that bill of goods is probably 200 bucks. Companies make up the difference and make some profit by putting trial wear on your system. We've all seen how junked up Windows computers can get with Macafee antivirus, I've even had Windows PCs with two anti-viruses on them and all sorts of crap. But this takes the cake. Lenovo, we don't know when, but apparently started putting something called Super Fish on their consumer-grade lap tops. What does Super Fish do? First of all, what it does is incredibly annoying. It puts ads on sites your visiting that Lenovo makes money on. You go to visit TWIT, and you'll see ads that aren't on the TWIT page because Lenovo has put SuperFish on its laptop. That's bad enough. The thing that is really infuriating is that in order to do this, Super Fish creates a man in the middle attack. They break secure socket layers. They break SSL. So they intercept not only normal web traffic, but secure web traffic using a self-signed security certificate easily spoofed by attackers so it opens a massive security hole on your system, and if you think that you've been using your Lenovo Y50, which was one of the devices that this was on. If you think that your conversation with your bank was encrypted and safe or your conversation with Amazon your credit card information was safe, it wasn't. Lenovo put software on it that broke SSL. Lenovo said their benefit from this was minor, so that's stupider. They should have made millions. this is appalling. Security researchers have already demonstrated how attackers could use Super Fish to create an attack. Lenovo says they're not aware of any attacks targeting customers. Doesn't matter. In January they took down the server that was doing this intermediation, and they have posted on the Lenovo website information about which products are effected. It's not the business products. Think Pad, Think Center, Lenovo desktop, according to Lenovo aren't impacted. I'm not sure I would trust Lenovo at this point in anything. They give you removal tools, and if you follow the link on their site, a long list of infected notebooks e-series, flux series, m series, y series, yoga series, and z series. Many machines effected by this. A self-signed roots certificate breaks SSL. It is offensive in the highest degree, and it's appalling that any company would do this with full knowledge of what they were doing. I don't care if they've apologized and stopped it. They stopped it because they were caught. Ben, are you back yet?
Ben: I'm back.
Leo: Am I crazy? My take on this is never again will I buy a Lenovo product or will I recommend it. It hurts me because I've recommended Lenovo's Think Pads for a long time. I always thought they were great computers. This is appalling. What happened?
Ben: I'm a Lenovo fan as well. Someone said I can't speak for China because I'm in Taiwan.
Leo: Taiwan is not China. Leo will learn this one day.
Ben: Leo, you're going to get e-mails
Leo: I know it's a big thing. I was a Chinese studies major. I know why it's an issue. Never mind.
Ben: You nailed it right at the beginning, Leo. That was when you talked about the profit margin. You're exactly right. The average PC maker does not make a single cent on their PC. They make all their money on their software and stuff like that. That's why to get the—they cost more. They cost more because they need to make money somewhere. Indirectyl if anyone is to blame, Lenovo is to blame to be clear, but Microsoft shares blame here. The reason they share blame, the PC market is the way Micosoft drove it to look in that there's tons of people competing on price. They've been told to comodetize. All the value was pulled by Microsoft. Microsoft captures all the value, leaving the OM makers to scramble.
Leo: Microsoft didn't make them charge less for their computers.
Ben: No. They did though.
Leo: Technically we did. We demanded cheap computers.
Ben: Right. That's the second point. Even then, who really bears the blame is consumers. We buy based on price. If you look at it, yes, Lenovo was wrong. They deserve to be extortiated for it.
Leo: I couldn't be more upset about this.
Ben: At the same time, the market came to be that we depended on the good graces of these companies to not cross the line and go to the dark side when in reality all the incentives were for them to do just that. We should be outraged that this happened. I don't think we should be surprisd. Quite frankly, I don't think we should be surprised the same thing happens on Android. It's the exact same dynamic going on. Google is trying to extract all the value from the eco system, leaving all their OEMs to complete on price, and that's why there's lots of crap on there as well. Again, consumers, there's enough consumers that only buy based on price that this works. But there are consequences. It's the same thing with any ad based company that we all need to be cognizant of. The incentives are pointing in the wrong direction. Sure, it's fun to get stuff for free, but you're playing with fire. This is a very real example of the sort of fire that you're playing with.
Christina: I think it's fair to blame Microsoft for decisions they made ten and fifteen years ago that have driven the market to this place, but I do think it's worth noting that basically Microsoft has been in a position these last few years where they've known that the cess pool of adware really makes the Windows experience terrible. To a certain extent they've been barred from doing a lot about it. I'm not defending Microsoft at all, but their hands have been tied a little bit because of the various restrictions put in place by the EU and other things with their department of justice trial way back. They have trouble limiting the things OEMs can do without breaking, without people saying you're stifling what the manufacturuers can do to these machines. There's even a period of time that they do this at the Microsoft stores where they sell mahines that basically have windows on them.
Leo: Microsoft understood that people were getting a crap experience in Windows thanks to all these ad wear being installed by HP and others so they created this signature program. In fact, Lenovo does sell computers at the Microsoft store under the signature program, and it's playing Windows. You pay more for it.
Christina: Right. It's absolutely, Ben's point. He's right. This is the world we live in. It is what it is. I'm not ready at all to give Lenovo, or SuperFish, I think a lot of the blame has been put on Lenovo without talking about the company that is actually doing this and the fact that they wrote this program that would be on Windows that would break HTPS and that company has not said anything, will not talk, kicked one of our reporters out of their office on Friday who tried to talk to them, and I think it's worth looking into how many deals do they have with other OEMs? But it all opens up to me a broader question of Lenovo shouldn't be off the hook and shouldn't be that you don't pay for the consequences. The whole point is everybody is doping. Don't get caught, and if you get caught, you're going to do time for it.
Leo: That's why we should boycott Lenovo, we should put them out of business as a very strong message not to Lenovo. Too late. To every other manufacturer, that this is the price you pay. Sony got away with this. Putting a root kit on gaems for DRM.
Christina: It was music CDs. It was worse than a game. If you put it in your computer you put the root kit on.
Leo: They got away with it. We should not have let Sony get away with it, we should not now let Lenovo get away with it. By the way, the only statement that came to RS tech is Dan Gooden, the only statement from Super Fish, attributed to the CEO, Superfish, by the way, even though they have an office in Palo Alto is an Israeli company. The statement said that “Superfish is not a vulnerability.” It is. “There has been significant misinformation”, this is his statement, “circulating about Superfish software that was pre-installed on certain Lenovo laptops. The software shipped on a limited number of computers in 2014… heh, get this mealy mouthed adware “in an effort to…
Ben: Well I think, I think there is an issue and a point here Leo and the last time I was on we were talking about it. I think it was when David Cameron was asking, was calling, for a backdoor for law enforcement to use.
Ben: And I think.
Leo: This is a backdoor!
Ben: Well, a point that we made, a point we made on that podcast was there is a lack of understanding of what that implies.
Leo: Well, that’s what Superfish is saying. Let me finish this. “Despite the false and misleading statements” This is Superfish CEO. “Made by some media commentators” Me! “And some bloggers, the Superfish software he says does not prevent a security risk.” And this is what he interprets as a security risk. Hey! In no way does Superfish store personal data or share such data with anyone. Unfortunately, in this situation a vulnerability was introduced unintentionally by a third party” and now they are blaming someone else. “Both Lenovo and Superfish did both extensive testing of the solution but wasn’t identified.” This guy is now hiding behind some unnamed third party. We didn’t do this. We didn’t do this.
Lisa: I bet the worst part about all of this is that the people who actually own Lenovo computers who, you know, outside the tech world, who aren’t like us. Don’t even understand what’s going on. I mean how many people really even understand what encryption means or any of this. It’s like putting the consumer in a really super vulnerable position. Because when you think about the types of connections that are being broken, those are banking sites, those are shopping sites, and I mean it’s really terrible and it’s hard to understand why Lenovo would even let something like this happen. Like you mentioned, it’s not even like the really benefited that much from Superfish. I understand that the profits with PC’s are really small and that PC makers aren’t really making that much off of sales alone. But it’s not like they aren’t making that much money with Superfish on their computers.
Leo: That’s really pathetic, isn’t it?
Christina: it is.
Lisa: And the fact that they got caught hurts so much because people aren’t going to want Lenovo computers, so in the long run it’s a huge mistake.
Leo: Huge mistake. On Thursday Superfish officials stood by a statement issued by Lenovo. This is Thursday.
Leo: and I quote “we have thoroughly investigated this problem and have not found any evidence substantiating any security concerns.” Within hours Lenovo yanked that sentence.
Christina: yes they did.
Leo: and their CTO said “Whoops, we blew it. We’re sorry. It is a security problem. It is whenever you, this is a man in the middle attack.
Christina: it is, it is.
Leo: Perpetrated on every Lenovo user.
Lisa: and Lenovo makes great products too, that’s the sad thing, you know? Especially for business computers like the pad line and they have like the best computers for businesses out there and I’m pretty sure consumers are not going to want to buy their products anymore.
Leo: what about Motorola? Lenovo owns Motorola, does this mean?
Ben: I think there is an archaism razors explanation out there that I’m trying to get to and that is, I suspect, and this is why it matters. Like incentives don’t because if I say I’m going to go rob a bank I’m not really going to rob a bank. Of course I know robbing a bank is wrong, and I suspect that Lenovo’s CEO and CTO know that doing this is wrong. I don’t think they were sandbagging, I just actually suspect that they just did
Ben; they just did another preinstall deal and
Christina: that is exactly what it was.
Ben: they didn’t really appreciate what was happening, and that is why I drew the connection to the David Cameron podcast. Even among people who should know, there really isn’t an appreciation for what
Ben: What security means and how security can be compromised. This is just something that people don’t know about and I actually suspect that it was just another deal, someone made, maybe someone at Lenovo knew. I actually doubt that it was someone that high up. And as Lisa just said it doesn’t make any sense to do this. Its way to high risk. And for the cost, you know we have nationally acclaimed podcaster Lila Port calling for
Leo: now hold on, I did that on a radio show which is much more heard normal people, but wait a minute. Even if they didn’t know about the man in the middle, isn’t it wrong to put ads on a website that weren’t there originally to make some money? Isn’t that wrong?
Christina: it is, it is.
Leo: That’s what this stuff was supposed to do, it’s the legitimate use of it.
Christina: and their explanation was terrible. We interviewed their CTO on Friday and ill quote him from our reporter, our intern and he did a really great job. Really pressing the guy too, asking him, “Okay so realistically do you think there are people out there that would want Superfish on their computer?” and this is the jackass’s answer. “I think there are many customers out there that would be interested in having tools that help them shop, tools that help them do what they are doing but better. Whether that’s specific to one user or not that is a different story. They are still trying to play, their answer, their pad line is that we thought that people would love this product but the product is such complete B.S.
Leo: I’m just asking, do you want additional ads on a website? What do you think?
Lisa well you heard the PR response but honestly no one wants to see more ads, especially ads that aren’t supposed to be there in the first place. And I mean it seems really selfish on their part, they are not even considering the damage that has happened to us and it seems like they really don’t care based on their response so far.
Ben: No, here is the answer. The answer is, which he didn’t say because no one can say, and it’s that we put crap on there because people are cheapskates. That’s the issue here, this is the underlying issue on why it’s on there. Forget all the stuff that has happened in the meantime, the issue is that people go into Best Buy or wherever, and they buy the cheapest computer and guess what? You get what you for.
Leo: yeah but that is the same excuse made by ISP’s who do the same things.
Leo: Oh so you aren’t paying enough for internet access so I’m going to montane ads on websites you visit. It doesn’t make it okay.
Christina: no it doesn’t.
Ben: my point is that as an industry if you, this is why incentives matter. All the incentives in place for this to happen and it was inevitable for this to happen. It just happened to happen to Lenovo.
Leo: Microsoft Lobbied hard to get the manufactures to support the signature PC program to a resounding, (Snores) no interest.
Ben: no interest flows from consumers, consumers didn’t want to pay for it. My whole point is
Leo: So what you are saying is that they would be making computers that nobody wanted to buy?
Ben: It’s like people who are constantly complaining about airlines. Airlines suck because people don’t pay for differentiation. American Airlines tried to do a bigger seat that was advertised but no one wanted to pay for it. Continental advertised on better service, they went out of business… or they merged with United. The reality is that we have no one to blame but ourselves. And it’s very satisfying to get on our soap box and say “Gosh darn you Lenovo, you should have done a better job.” But the truth of the matter is that we brought this on ourselves and all this stuff is on us. Loss of privacy, on us because we don’t care and we are not willing to pay for it. And quite frankly if I sound upset it’s because I am because when you get to things like this, this is an issue where the majority rules. Something like Google. Google is a fantastic and amazing resource, Facebook is amazing, everyone is on Facebook. Like I don’t have a vote, if I want to use these services, and if I would be willing to pay for them I know that I could never do so. Because and this is why the vast majority of people don’t care and don’t want to pay. This is why it happened.
Leo: Somehow Apple is able to charge a lot more for their computers and sell them and because they charge so much they don’t need any shenanigans. How come?
Ben: Because they are the only ones who make OS10 and they have an exclusive.
Leo: They have an exclusive.
Christina: But here is my question, Ben. I can buy your argument a little bit and I understand that it is quite easy to go after Lenovo but I think we should because frankly to me the problem is so much that they did this but it’s just been the response after the fact, with an hour long interview with the CTO he was still trying to claim, oh just because you could theoretically take advantage of this doesn’t mean that anyone has really isn’t a security issue. They are trying to skirt the issue which to me is completely and utterly the wrong way to do it and it’s absolutely
Leo: It’s kind of like saying, hey I’m poor and I can’t get a hamburger so I’m going to stick you up
Leo: Give me that hamburger, and then saying it’s not his fault. He’s poor.
Christina: but my question is, I can understand a little bit if this was something that they were doing with this particular program. They weren’t investigating what they were doing even if it was some of their low end products. This is basically on all of their machines except on the think pad line. We are talking about Yoga2’s, we are not talking about cheap computers, we are talking about in some cases Ultrabook’s that sell for as much as MacBook’s so we are not talking about something, to me it seems clear that this is to blame for them to keep their prices low across the line. But beyond that even if you are to do these things don’t think there is a responsibility even if it’s by the companies involved to look into what they are doing and how is this stuff working on the operating systems they are installing them on. Even if you, let’s say even if they did want to install this that’s fine as long as it’s not going to break https, what scares me is that a company like Lenovo is doing any kind of diligence at all to make sure that the software is preinstalling and that it’s not breaking fundamental parts of security. And if Lenovo is doing it and doing good things then how can we trust no name OEM’s to be doing things ten times worse. And what does that mean for the average consumer who goes to the store and buys something and doesn’t have any sense of security to know what I am buying isn’t immediately going to be unsafe as soon as I plug it in.
Ben: I completely agree, and I said in the beginning but I think my veracity clouded that fact but Lenovo deserves the blame here. They screwed up, they screwed up royally. They should have hopped to it immediately, so I completely agree with you Christina. I’m more about making a broader point that we shouldn’t be surprised that this happened, one. And two, I think this is a great example, I suspect this is a great example of the general ignorance about security and to what security in tales. So if Lenovo’s CEO and CTO, if we get the method out and get them to say that the really didn’t appreciate what Superfish meant. Why on earth would we expect any of our politicians to understand the happens with a backdoor in the software.
Ben: So I think we are more on the same page I’m just pointing out a hostelry thing.
Leo: I got to say, if you are a technology company and you don’t understand why putting a security feature, you know doing a man in the middle ssl and putting a self-signed certificate on your computer is a bad thing, but maybe you shouldn’t be selling computers. Maybe you should be selling something else.
Lisa: The bottom line, whether or not you experience the worst it’s not because this bloatware or whatever that is on your computer with an expectation that it’s going to be safe. Like Christina was saying, regardless or not whether or not it’s Microsoft or Lenovo it’s the responsibility of the PC makers and the people behind the software to make sure things are safe because people really don’t know, it’s not like somebody went to a bad or sketchy website that they shouldn’t have been on, and they caught something. This is really something that came with the computers right out of the box. Consumers had no choice or no say in it whatsoever so absolutely they have a responsibility to make sure that things are going to be safe and the whole response of “ oh yeah someone could take advantage of it but maybe they haven’t and not treating it like a security flaw”, that’s just a terrible response to me. You are the one making the computer and putting the software on there, if someone does take advantage of it, it will be too late by that point. Why would you want to wait until something bad happens? Or even put your consumers at that risk to begin with.
Leo: Lenovo by the way is the number 1 PC manufacturer. So this is not some little speck. Do you think, let me ask you Ben. Do you think this is made, I know you are in Taiwan, do you think this is made worse by the fact that Lenovo is a Chinese company? I think there is some suspicion that maybe this is more than just a commercial entity breaking SSL.
Ben: No, it is a fascinating question. I think it was actually earlier in the week, on the flip side of the story, that the US government was breaking into products. That is a really interesting question and certainly one worth asking. I think, and I think that there is going to be a lot more questions on this line going in both directions. It is one of those things where both countries are super suspicious of each other and both are completely justified.
Leo: Well, Lenovo is a private entity though. It is not owned by the Chinese government or the Chinese military. Is it?
Ben: There are, I believe there are ties.
Leo: Oh boy!
Ben: It’s always hard to tell where one ends and the other begins but don’t quote me on that. But is… I mean who knows.
Leo: Lenovo was founded in Beijing in 1984 as Legend. You might remember Legend microcomputers it was incorporate in Hong Kong in 88. They acquired IBM’s personal computer business including the Think Pad in 2005. They acquired IBM’s intel based server business in 2014. They are the largest vendor of smart phones in mainland China. Remember they just Motorola from Google last year. I am looking at Wikipedia just to see who owns them but I think you make a good point. That it’s even. We don’t know.
Ben: I mean again it’s one of those things. I mean, just maybe, because of my contacts of where I am at. The reality is we might sound paranoid saying this on the flip side there were lots of people in China being paranoid about the US stuff.
Leo: Yeah, we are doing it.
Ben: Being infiltrated and it actually turned out according to the Snow documents that the people who are paranoid were right.
Leo: We learned that the NSA was intercepting hard drives in the mail.
Ben: Right, so.
Leo: And changing the firmware to turn the hard drive into a spy machine and then passing it along. Talk about the man- in- the- middle attack.
Ben: Yeah, I think it’s tragic in a way. I mean like, the reality is that I don’t think you can trust just about any computer or any device at this point to be profoundly frank and I think China is justified to be suspicious of US technology and the US is very justified to be suspicious of Chinese technology. It’s too bad because I think this suspicion hurts the US more than it hurts anyone else because most of the value in technology is still in the United States and these revelations and the fact that the US is getting into this stuff is going, has hurt business, is going to hurt business even more in the future and I think that’s to the longer treatment of the United State. I get why it happens. I think that we are paying a much greater cost than we that we might appreciate. We being the United States.
Leo: Yeah and of course every personal electronic device that you have, except for the Mac Pro, is made in China and even with the Mac Pro most of the components are made in China. So if you were worried about China forget it. That’s long over. I just have to say, I think that, regardless of the incentive that Lenovo had to do this. Cheating is still cheating. Doing this is still wrong. Whether they knew or not is not to the issue. I think that this is unacceptable and I will no longer recommend Lenovo products. That is all I can say. I have to think about Motorola, I really like Motorola products.
Ben: I agree. It’s unacceptable but I guess my point is I think it was inevitable.
Leo: Well I may, what we may learn, you seem to be learning that this is not the only product doing this. There is a product that’s been getting a lot of attention called Komodia And I think that we don’t know fully what’s going on with Komodia. Komodia is the third part I believe that Superfish was referring to. K-O-M-D-I-A it proudly markets HTTPS decrypting and interception software that’s used by more than 100 clients including Fortune 500 companies. So, what we may be finding is that you are right Ben that this is not only restricted to Lenovo this is very widespread.
Christina: No, I think that’s a guarantee that I think it will depend how deep it goes but I mean. To use my sports analogy that I said earlier. I think the fact of the matter is that even if everybody dopes the person who gets caught becomes the example.
Christina: And that’s just how it is with everything and I hope frankly that all of us as journalist take a harder line looking into this stuff and I hope that companies start to realize hey you know when we make these deals we need to do a good job actually investigating what this stuff does because it is no longer good enough to say well we thought this would be something customer would love if you are actually impacting aspects of the security pack.
Ben: Yeah and quite frankly the fact that you kind of made this point indirectly this hugely works in Apple’s favor. I mean there is no, there is no, you know every time when these stories come out and it’s not a Mac you see Tim Cook making this point. Much more explicit including you know a week ago at the December security summit. Like the fact that Apple doesn’t make money this way makes their incentives more consumer friendly in this regard. Yeah I get it that some people can’t afford and to have free stuff is great and that’s absolutely true but there’s still is this incentive challenge. You know as things do get more personal more real life is lived through computers. I don’t think there is any surprise that you see Apple pushing this angle more recently.
Leo: I think this is damaging to the reputation of personal computing in general. It will further undermine people’s trust of the web, of SSL, of computers and I worry very much about the millions of people who bought Lenovo computers who don’t listen to this show or my radio show who will never know that they are running computers that have been compromised. By the way and thanks to Mark Rodgers who is the Chief researcher over at CloudFlare and has done the research on the Komodia certificates. Komodia is in “Keep My Family Secure” parental control software, Qustodio’s parental control software, Webfilter from Kurupira, Staffcop easy hide IP classic, Lavasot ad-ware web companion something people install to fight ad-ware, hide-my-ip, the certificates are always weak; the private key is always bundled with them and the password is always “Komodia.” SSL interception has never been so easy. Hackers have at it. Terrible. So this is just the tip of the iceberg. We haven’t heard the end of this one. I guess buy a signature PC but you might want to check the firmware in your hard drive in case the NSA has it compromised.
Christina: There you go.
Leo: You know I feel as you almost can’t stop Government intrusion because they are just too good at this but at least we can have SSL work if our computer companies don’t break it. At least I should be able to talk to my bank! Or is it just, just forget it, just forget it. Alright, you know what? Academy Awards coming up, red carpet, they started the red carpet two hours ago. Did you know that?
Christina: They did.
Leo: The TV show starts at 2 o’clock pacific. Three and a half hours before the Oscars begin they’ve got. Well, Joan Rivers isn’t there so it’s not as much fun but they got the red carpet. It’s going to be a lovely evening. Let’s take a look. If you missed anything this week in TwiT just take a look at what you missed this week on TwiT.
Announcer: Previously, on TwiT.
Male: We brought in our very own Aman.
Announcer: Mac Break Weekly. Johhny Ive and the future of Apple, The Shape of Things to Come.
Andy Ihnatko: I found it interesting that apparently J.J. Abrams consulted with him on the design of the new light sabers in the new Star Wars movie. That to me is like 10 times cooler than designing a watch or designing a car.
Announcer: Tech News Today.
Mike Elgan: 50 thousand! That’s how many bitcoins the US Marshall service plans to auction on March 5th. The bitcoins were seized in the raid of the online black market site The Silk Road.
Female: I always ask for bitcoins from all my techy friends and I want to actually hold them but I never get them but maybe I will just get them from the government.
Male: That and whatever else they seize from Silk Road.
Announcer: Giz Wiz.
Male # 1: We are in survival gadget month. These gadgets they’ve been nice but they haven’t been stylish.
Male # 2: Now you have to be careful if you have a very hairy arm.
Announcer: TwiT. For help with the technology addiction problem call 1.800.TwiT.
Male #1: If you were a smoker. How exactly you would do that you know.
Leo: Oh come on admit it you know how you would do it! Let’s take a look at the week ahead. Mike Elgan, what’s coming up.
Mike: Coming up this week. Google’s new YouTube app for kids becomes available starting tomorrow. Pebble is expected to unveil Tuesday a new version of its Smart Watch. HP reports earnings on Tuesday as well and on Sunday, one week from today, two big events will take place in Mobile World Congress in Barcelona. HTC will roll out its One M9 smartphone and Samsung will unveil the Galaxy S6. That’s’ what’s coming up this week back to you Leo.
Leo: Phone goodness. We are actually going to. Mike will be on a place to Barcelona next weekend. We are sending Mike Elgan and team to Mobile World Congress. Miriam Schward from all about Android for direct coverage. That’s exciting. So not next weekend but the weekend after we are going to do our Mobile World Congress show right?
Mike: Yeah, the weekend after we are hoping to get Mike and Miriam on and then we also have Jerry Pournelle.
Leo: Maybe, we are going to have to figure that one out. I don’t know if Jerry is going to fit in with that group but we will figure it out.
Male: Jerry was booked before yes.
Leo: Good news by the way. I have been in contact with Jerry Pournelle. You know we love Jerry, great science fiction author, engineer, scientist, the creator of the Great Chaos Manor column at Byte Magazine which is the inspiration of everything we do at TwiT. He had a stroke in December. His son was reporting about that but he has recovered fully and he sent me an email I am ready to go. I want to get on TwiT. So, yay!
Male: He also actually offered for next week so we’ll see.
Leo: We’ll figure it out. As long as we are talking promos. On March 1st, a week from today, Doctor Donald Shell turns 91. He the inventor of the shell sort. For which we all, you know the shell sort. What would we do without shell sort? One of the great computer science algorithms of all time. He is still alive, he is turning 91. There is a Facebook page encouraging everyone to send him a birthday card. So we so often talk about the very public people in the technology industry but you know there is people behind the scenes like Donald Shell who made a huge difference so a little public service announcement. Happy Birthday, Donald Shell, next week he turns 91.
Our show today brought to you by GoToMeeting. The simple way. Boy, with the weather the way it is right now. I think, GoToMeeting must really enjoy the spike during winter. Bad weather, closed roads, people homesick. Getting your team together for a meeting can be a logistical nightmare but you still got to get stuff done. Just because there is 18
Feet of snow in Boston does not mean that you cannot get your job done. Well, thank goodness for GoToMeeting. You can join a meeting from anywhere from a computer, tablet, smartphone. You turn on your web cam, you can read the room with HD Video conferencing. I mean you really can see people’s faces, their posture, and their body language. You can share your screen, so makes it easy to demo new products, explain features, review documents, give you that beautiful PowerPoint presentation. GoToMeeting is as simple as clicking a link and you are in the meeting. Audio, video, everything, even if your team is stuck at home or snowed in. They can use Citrix GoToMeeting to meet with clients and co-workers online everywhere. We love it! Frankly, every meeting we hold now we want to use GoToMeeting so that people. You know, we can just turn on the cameras if we need to. It is the quickest most efficient way to collaborate and get your work done and now you can try it free for 30 days and you don’t need a credit card, you don’t need an offer code, just go to GoToMeeting.com and click the try it free button and you’ll have your first meeting up and running in minutes. Actually, just keep this in mind you know Monday when you’re at work and you say, “Oh let’s have a GoToMeeting.” GoToMeeting.com try it free for 30 days right now. GoToMeeting. I was just looking at the Microsoft signature addition page. Microsoft knew that this was an issue. Clean, fast, protected. I mean they even say words that imply and by the way no man-in-the-middle attack on these machines. No trial ware, no junk ware, its fast, always protected and Lenovo is available at the Microsoft store. The problem, the part of the problem with this is that you have to go to the Microsoft store to buy it. It’s not in any of the places people buy PC’s. Alright, just thought I’d take a look. We are talking in Tech with a great panel. Lisa Eadicicco from Business Insider, I am still practicing, great to have you.
Lisa: Thank you.
Leo: Thanks for being here with your drums which you still haven’t played for us but really is that Rock Band or are those really drums?
Lisa: No, they are real it’s a real electronic kit so I mean you guys wouldn’t really be able to hear anything anyway even if I play it.
Leo: That’s even better. It is kind of funny watching somebody play the drums. I went last night, I went out to see two bands, all women. Zepparella, which is a Led Zeppelin tribute band with a drummer that is amazing. She was incredible and then Hells Bells, an ACDC tribute band, it was awesome. Do you play in a band?
Lisa: No, I mean, I did in high school but it wasn’t anything serious.
Leo: Did you just get angry once in a while and you got to pound the skins.
Lisa: Yeah, that’s what it is.
Leo: I want to pick something upbeat here. Spies stole the keys to the encryption castle and hackers tied to the NSA hidden for 14 years. It’s just depressing. I am trying to find something. Sony! That’s not depressing. Christina Warren is also here from mashable.com. So the blowback from the Sony’s picture entertainment hack was it Amy Lucas?
Christina: Amy Pascal.
Leo: Pascal. Lost her job?
Leo: Poor woman. She is totally a fall guy.
Christina: Oh completely! I would be surprised if Michael Lynton who is the Studio Chief I am not sure if he is going to last or not. I mean he might end up getting canned they couldn’t can both of them right now. She is still technically with the studio. They gave her, her own shingle, kind of golden parachute where she gets a number of people under her, a few pictures a year.
Leo: It’s not her fault but then she sent the
Christina: No, it’s not.
Leo: She sent the emails saying Angelina Jolie was a hack. Probably wasn’t very good.
Ben: It is her fault. It is her fault, she was in charge.
Leo: Wait a minute, you are going to let Lenovo off the hook because we wanted cheap PC’s but you aren’t going to put Amy Pascal in jail.
Ben: No, I am not letting Lenovo off the hook. I am sorry I wasn’t clear about that. Lenovo deserves blame.
Leo: Some of the blame you are saying.
Ben: I am just saying there is a systematic issue here and quite frankly there is a systematic issue to when it comes to company security as well. The problem with security is that it’s’ very hard, it’s very expensive, and benefits. The benefits of a good security policy is that nothing happens. On the flip side though, the money you pay for security goes right to the bottom line as it decreases the bottom line.
Leo: You get nothing for it and that’s what you wanted.
Ben: Right, exactly. So the incentives for an Executive who needs to make a certain number is to deprioritize security. So really we should be glad that she is to be held to account.
Christina: Ironically, you are sort of right but the truth of the matter is that if Sony had a better year and if their films had done better than their jobs would have been secure. So I mean honestly, that is really what it comes down to and the fact of the matter is that Spider Man, Spider Man 2 was a flop so the studio lost lots of money quarter after quarter. Even after the debacle with The Interview that wasn’t looking like the hit that t needed to be. Her job was frankly already in jeopardy when it was going to come up for her renewal. I think in June they decided to can her early so she can take the fall. The big question will be does Michael Lynton, who is actually in charge, does he get fired or not. I think at this point the CEO of Sony is probably ready to get rid of everybody who is running things but as people in the chat said she took it quiet low. You know she’s an adult, this is Hollywood, this sort of thing happens.
Leo: She knew.
Christina: She knew and you know this is not the first time that the studio executives have had these sort of issues. You know, she held the post for a really long time. Yeah, she knew absolutely as soon as the Rudin emails were leaked she knew she was going to become the fall person.
Leo: So she didn’t write that Angelina Jolie was talentless? Rudin wrote that?
Christina: No, Rudin who works with them, but does not work for Sony is the one who wrote that and then she actually defended Angelina a little bit. She and Scott Rudin have had a long friendship and as I can attest going through all those emails it’s kind of.
Leo: It’s what you write, it’s what people write in their email.
Christina: Its things that people say but even that one to be fair. That one got back to Michael Lynton and even he emailed both of them and said I cannot believe you two would put this email. What is wrong with you? Even he, this is before the hack.
Leo: What is wrong with you?
Christina: Even Michael Lynton was like both of you should be ashamed that any of this was ever an email, ever because even he was this goes too far.
Leo: So Sony is having a lot of financial issues. I mean this is a company in trouble. They had last week their big corporate strategy meeting and some information has come out of that. They say that they want to and I think it’s a good goal. They want to increase their profit 25 times in 3 years. So I, that is a goal. I would like to do the same. Their strategy, well there are two things in the whole Sony world that are doing well. What do you think those two things are? You guys know.
Ben: PS4 and life insurance.
Leo: Yeah, insurance is what is keeping Sony afloat. They are big in Japan.
Christina: Insurance and credit cards, yes.
Leo: Camera sensors and PlayStation 4. In fact, here I have a Sony camera every one of our phones have Sony seniors. Including the Apple phones right? They all use Sony.
Leo: So they have grown there but smartphones. They are spinning off they already killed computing, right? Are they going to spin off Sony Pictures Entertainment?
Christina: Probably not.
Leo: They are going to keep entertainment. If they can just get passed Spiderman 2 they’ll be alright.
Christina: If they’ve got enough IP there the thing is the studio game is that you can be down one year and up the next. It’s a long play.
Leo: They have also spun off, I didn’t know they had a TV business. I guess, Sony Television.
Christina: Oh yeah they do. They used to be huge until Samsung spun off them last year and now they are going to be getting rid audio.
Leo: They’re going to get rid of music, or when they say audio, is that music or is that the two thousand dollar Walkman?
Christina: Both. The music services that actually is technically the label has been a part of another company.
Leo: But there is a streaming music business.
Christina: They did have one and they actually shut that down and replaced it with Spotify early this year, like in January.
Leo: I’m sorry, I’m not up with Sony apparently. They’ve shutting this stuff down for days, or years.
Christina: Well, to be fair, they’ve had four streaming music services over the last few years - none of them have worked. So that’s not your fault for not knowing about that.
Leo: They did forecast an operating profit for the financial year. That’s huge. The TV division, big money loser. Right?
Christina: Huge. I mean, they used to be really good at it and they make great TV’s but Samsung totally ate their lunch. They spun that off last year. So now it will be the audio division. But they already got rid of that.
Ben: The TV example is interesting per our prior conversation. There was a story either this week or last week where Samsung is inserting ads on their TV’s. And it’s the same dynamics. It’s very difficult to differentiate a TV. Which means it’s a race to the bottom. And once you get to the bottom, that’s when the bad stuff starts to happen.
Leo: That’s very frustrating. I bought a Panasonic Viera television for thousands of dollars and I go to the Hub, the Smart Apps, and I’ve got ads all over it. Not just static ads, video ads. It’s extremely annoying. I paid a lot of money for you, why are you giving me ads? You can turn some off, but you can’t turn them all off. Now, Sony has been getting a lot heat, was it Sony? No, Samsung.
Christina: It was Samsung for the spy TV. Right.
Leo: Samsung has been getting a lot of heat for the voice thing. Now, to me, I’m curious about what you guys think. Samsung published a disclaimer in their documentation which you get when you buy the TV. Saying, Hey you’ve got voice control, you should know that whenever you use it, the voice recording has to be sent to our servers for interpretation. Maybe a third party -Nuance, because Samsung, unlike Apple or Google, doesn’t have its own internal voice recognition system. Nuance is a big one used by a lot of companies. Including Samsung phones. So it will go to Nuance where it will be recognized and sent back. If you don’t like this, you should turn it off. To me, that seemed completely reasonable. Anybody who uses Siri or Google, Samsung S Voice, or Cortana should know that the phone isn’t doing the recognition. It’s always going to a server. So it seemed to me the people who are upset about that are just like, but of course and they disclosed it. And there’s a way to turn it off. Or am I wrong? Is this so terrible, horrible? Are they listening to us and spying on us?
Christina: You know what my concern is… it’s not so much that they’re doing the processing server site, because obviously I think that’s fine. And that’s how this all works. My bigger question is where are they storing this stuff, how long are they storing it, and what are the security measures behind wherever they are storing it. That’s my bigger question, No so much what are they doing with it? Because I don’t actually think they are competent enough to go through all of my voice transactions and doing anything with it.
Leo: Hell no.
Christina: Exactly. My bigger question is, is my voice some place tied to an identifier that is tied to my name or my address on a server some place.
Leo: Then just turn it off. Don’t use it. I turn it off anyway because it doesn’t work so good.
Christina: Sure, but eventually, it’s going to work really well.
Leo: Don’t you think Amazon Fire TV, Amazon Echo, connect to my playlist, Xbox, everything’s doing this.
Lisa: Well, I think Amazon also has when you log into Amazon on the website you can actually view your history of voice searches you’ve done and delete them right there if you don’t want them.
Leo: That’s nice.
Lisa: Yeah, that’s interesting.
Leo: Can the Google dashboard do that?
Lisa: I’m not sure.
Ben: There is a place, yes. There is a way to do it on Google as well to at least view them I don’t know about deleting them.
Leo: It seems to me that everything is listening to us. And isn’t that why we want them? I’ve played with the Amazon Echo and I was like, I love this thing.
Christina: Oh, the Echo is the most amazing thing I’ve bought all year. I love it.
Leo: Well, its listening to you, Christina.
Christina: Yes it is. But my question isn’t as much as if it is listening, its where are they securing what it’s capturing?
Leo: Well, what are they getting? Come on.
Christina: Well, right. But my point is more I want to make sure…
Leo: Honey, do you want Wheaties for breakfast or should I scramble you an egg?
Christina: Like I said, I more want to make sure whatever is being store is actually being secured and they’re deleting it after a certain period of time. I don’t actually think the companies have the time or the resources to go through everything I say or if they even care that much. I’m more concerned I guess, the only threat that I would see is if someone hacks into their S3 account or wherever they’re storing this stuff and accesses everything I’ve said, that might be problematic or at least creepy. But, otherwise, I mean, the Echo is the perfect example why that sort of tech works really well because when it works; which is most of the time, it’s almost instantaneous and it feels like the future.
Leo: I know. I love it! How many cups in a quart? [Imitating the Amazon Echo: Hi Leo] She’s got a great voice, too. She doesn’t sound like a computer.
Christina: No, she’s great.
Leo: She’s my close personal friend now.
Leo: My BFF. And I talk to my Xbox One all the time. I say: Xbox, play. Xbox, pause. Xbox, volume up. Xbox, volume down. It recognizes me. Now this should be creeping you out when I come in through door it says Hi Leo. It sees my face, it knows who I am. That doesn’t creep you out? I love it. Alright, any thoughts Lisa, or do you have anything listening to you?
Lisa: Not really, I don’t have an Xbox One, so I don’t have that. I do use…
Leo: How do you live?
Lisa and Christina: [Laughing]
Lisa: I do use Siri occasionally but I don’t know, I’m not really into voice search yet. But I feel like most of the time, if I want to look something up, I don’t mind typing it in. I do think Cortana is pretty interesting though. I remember I used it a while ago around the time it was initially launched. I’m sure it’s better now. But I kind of like in Cortana you can also, you know, you’re not forced to use your voice, you can type if you want to. Which I guess is really the same as Google now also. But, yeah, I don’t know. Other than setting reminders, maybe, or setting alarms, I don’t really use voice commands for too much.
Leo: Doesn’t, it just, I don’t know maybe I’m just unaware. It doesn’t bother me that Siri might have saved my utterances. I mean everything I type on the internet is saved somewhere I presume, right?
Christina: I mean, the government is listening anyway, right?
Leo: Yeah. Hey NSA, how ya doing’? Ben, you live in Taiwan. That’s not China. Are people listening to you?
Ben: Well, because I am not in the States, I am free game for the NSA.
Leo: Oh, that’s right, you’re not protected.
Ben: That’s one thing that’s always irked me about the whole debate. Like, everyone takes it for granted that if you’re not from the United States, you don’t deserve any protection. Or if you’re not in the United States, you don’t deserve protection.
Leo: You’re a foreigner so we don’t care. You’ve got no rights.
Ben: It’s not just a personal thing. It’s more a factor of living abroad and you know my wife is not an U.S. citizen. The whole you can differentiate how you should treat people based on where they were born I find to be a little problematic.
Leo: I don’t blame you. In fact, it’s something we don’t talk about a lot. But we do have a few international correspondents besides you, of course. Rene Ritchie was in Canada. And a third of our audience is outside the US. And I think all of them say, you guys keep saying, oh, it’s just to protect Americans. The rest of you, don’t worry. We’re doing a crap job protecting Americans too but we’re trying. We don’t care about you though. That’s because we’re the boss, you know that. We’re number one. Alright, I’m not worried about Echo, or anybody listening to me. If they want to save all that crap, they’re more than welcome to it. Did Samsung assert that we were going to save everything for later use?
Christina: No, but its unclear how much is saved and how often it’s listening in and things like that.
Leo: What’s it saving? It’s saving my searches, my commands, big deal.
Christina: The problem with the Samsung thing to be honest was really, to me, was a messaging problem. It’s that they’re lawyers wrote kind of the language and unfortunately it was a lot scarier than it was intended to be. Then people look into it and the conspirators come out and everybody gets creeped out. And I mean, they can only blame themselves, really.
Leo: Wait, wait. A conspirator?
Christina: Conspirators, yeah.
Leo: I like that.
Christina: It’s a great subReddit if you want to follow conspirators. It makes fun of all the conspiracy theorist people. It’s fantastic. It’s like one of my favorite reads.
Leo: What is it about… conspirators, I’m subscribing right now. What is it about conspiracies, especially in the tech sector, people just really love these. Don’t they?
Ben: Well, we were getting into it before like with all the Apple stuff. Like, oh, are they doing this leak for that, for that, and it’s very possible that just happened to all leak this week.
Leo: We are conspirators.
Christina: We are conspirators. But there’s a difference on how far down the rabbit hole you get.
Ben: Yeah, there’s a lot, I think Christina is referring that there’s a lot of research done about this and it does appeal… sorry about all the noise its Chinese New Year and there’s firecrackers going off constantly.
Leo: [speaking Mandarin] How do they say… They speak Mandarin in Taipei, right?
Leo: Gong hee fot choy is Cantanese, I think.
Ben: Yeah. Gong Xi Fa Cai which roughly translated is like Congratulations, Good Wishes.
Leo: Here’s some money in a red envelope just for you.
Ben: Yeah, no, exactly. Which is a common misconception people will think of it being, oh, you know, it’s a big gift giving season. So it’s like Christmas. It is, but the gifts are money. Which may translate into Apple products or whatever.
Leo: Is there a shortage of red envelopes right now? Because I’m told that there was like, because of the dock strikes in Los Angeles that the New Year will not be as successful this year in China and Taiwan?
Ben: No, I haven’t seen that.
Leo: I’m sure I read that in a respectable journal but I may be wrong.
Ben: Yeah, well now that I’m married and have kids, I’m on the wrong side of the red envelope. I have to give them.
Leo: How much do you give a three year old?
Ben: Uhh, I mean, there’s different lucky numbers of money so you do multiples of that.
Leo: Right, eight. Everything should be eight.
Ben: That’s a common one, but there are other ones as well. It’s like any other holiday where we receive stuff. It’s probably worth it for kids for sure.
Leo: I can’t understand how Sony couldn’t do well selling a two-thousand dollar Walkman. That just seems like such a natural. Did you review that when that came out? Anybody? Christina, did you review that two-thousand dollar Walkman?
Christina: Pono won’t send us one of their players.
Leo: I have a Pono!
Christina: Yeah, we had to buy one because Pono won’t send us one to review.
Leo: I got one. I buy everything. You know what I bought that I really like? And I’m going to review it next week on Before You Buy not this Tuesday but a week from Tuesday. Fiio, the company makes a high res player, like the Pono Player but it’s only a hundred bucks.
Christina: Oh, cool.
Christina: Did you hear about that Sony Micro SD Card that’s supposed to be high def audio that’s supposed to cost three times as much as a regular SD Card?
Leo: But it’s better quality.
Christina: No, I mean, they claim the digital audio sounds…
Leo: High fidelity.
Leo: Thank you, Sony. That’s no bologna.
Christina: That’s like gold plated printer cables. That’s the best thing ever. But they’re selling it only in Japan.
Leo: Of course.
Christina: It’s fantastic. You can have that and your two-thousand dollar Walkman.
Leo: This is a cool product. When you buy your Pono Player get this too. Because it’s a hundred bucks. Although, you have to add memory. So, if you put 28 gigs in, that’s two hundred bucks. Half the comparable of Pono Player. But it plays the same exact files. Up to a 192kH, 24 bits, and I’d love to hear a comparison of the two. This one, I think, I have both, and I like this one. But I can’t tell the difference. It all sounds the same to me but I just know it’s better. That’s the thing. So, uh, are you excited about the M9? We just saw the Mike Elgan talk about that leak. That just started to leak out. Now the new HTC, I’m excited. I think I’ll get that one. I liked the M8 and M7. And the previous HTC Ones. There it is. Looks exactly the same.
Leo: But it will have a SnapDragon8.10 which is the new 64bit armed chip from Qualcomm. Lots of rumors with the Snapdragon 8.10 overheats. We had an LG G…
Christina: The G Flex
Leo: The G Flex 2 here. Miriam Juara reviewed it. It did not get hot. And I’ve seen some other reviews that don’t say, even with benchmarking, it does not get particularly hot. So, I think that that was not the case.
Christina: Apparently Samsung was having issues with it I guess. That’s why it wasn’t in the S6.
Christina: But, yeah. That’s what basically Qualcomm said on their earnings column that they had one large customer reporting there were heat issues but none of their other customers had it. But that was the reason that Samsung ended up dropping it from the S6. Which is why Qualcomm ended up having to drop down their yearly projected earnings because of losing that.
Leo: This new M9 rumor will have the same 4MP camera but it will be on the front this tiame and on the back a 20MP camera and video shooter which will be nice. So this might be one to look at. And I’m looking at the S6, too. We’ll find out more about both in about a week.
Lisa: I’m honestly more excited about the S6…
Leo: Are you?
Lisa: Because it sounds like it’s going to, like, I love the One phones from HTC in the past couple of years they’ve definitely been among my favorite Android phones for sure.
Leo: They’re so gorgeous.
Lisa: But, I mean, I think Samsung kind of, I don’t think the S5 really went as well as they kind of expected it to. And I think they are kind of changing a lot to get people excited about they’re Galaxy phones again. Based on the rumors, I’ve been reading. It sounds like it’s going to be an awesome phone. It sounds like they’re going to go with metal instead of the glossy plastic that they used to use and that dimpled back that kind of looked a little bit like a band aid that they had for the S5. We’ve also been hearing rumors about it having an almost stock version of Android which would be great to do…
Leo: And, maybe Microsoft products instead of Samsung?
Lisa: Yeah! I mean, if all these things end up being true, I think it could be one of the best Android phones of this year. But we’ll have to wait and see.
Leo: Here’s everything you ever wanted about the S6. This is the Samsung Galaxy Unpacked 2015 Teaser video of the next Galaxy. All the details, all the specs, everything you wanted to know about the S6 in this video.
[S6 video audio: *Dramatic music playing in background* Spoken word: Beauty will be powerful. Borders will disappear.]
Leo: Borders will disappear?!
[S6 video audio: Reflections will be free…]
Leo: Reflections will be free?!
[S6 video audio: Colors will live.]
Leo: Colors will what? Limp? Live?
[S6 video audio: The future will be the present.]
Leo: The future will be the present.
Ben: *Laughing in the background*
Leo: Put that in a red envelope and smoke it. They also posted on Instagram this picture. Actually, it looks like it’s going to be all metal, right? Thin. And the tagline: it’s not just inspiration, it’s also craft. It’s got to be a language issue, right? This makes no sense at all. Okay, anyway, there you go. We’ll find out next week. One week from today. Jay Spin in our chatroom says after that video, I need a cigarette. Yeah. Is there a dark horse? I mean the two big phones we know. But is there a dark horse? Are we going to see a new Windows Phone? Are we going to see something from Xiaomi? Are we going to see something from…? Well I guess LG has the Flex now. Anything else that we’re going to see?
Christina: Well, I guess Motorola can come up with something.
Leo: Oh yea, we’re getting a box from Motorola.
Christina; Oh yea! We are, we’re getting a box on Wednesday, right?
Leo: Wednesday? What is that all about?
Christina: I don’t know. That was a weird email.
Leo: Yeah, I got the email, you got the email. We all got the email. I sent a response back saying thank you. Then it said the guy is out of town.
Christina: Yes, that was the funniest part was getting the auto-responder back. I was like, dude, what?
Leo: You got that, too?
Christina: Yes I did. Ha-ha
Leo: It’s like, yeah, okay. I’d like the box, send me the box. Then it says sorry I’m out of town. That’s kind of… okay. So, Lisa, you’re going to get that box too?
Leo: Ben, you’re not getting a box.
Lisa: I don’t know what it could be. It seems a bit soon to be a new phone. I don’t know. I guess we’ll have to wait and find out.
Leo: Whatever it is, it’s going to have Superfish on it, and that’s good news. It could be headphones, who knows what it will be. Could be a battery. You know, with Motorola it literally could be a battery. Could be something dopey.
Lisa: That’s true.
Christina: What was that thing, the hint? That thing that goes in your ear?
Leo: Yeah. I have the hint. It’s a her, minus Scarlett Johansen. It makes it a little less appealing I might add. But it does just sit in your ear just like that. Alright, well, on Wednesday I guess we’ll have an unboxing for whatever Motorola sent us. It’d be nice if it was like, food. Free food. Breakfast. Wouldn’t that be funny if they sent you breakfast? Because it’s coming between 8 and 9PM Pacific Time. What time is it coming on the East Coast?
Christina: It’s coming around the same time. I think it’s coming between 9 and…
Leo: It all has to be between the same times, coast to coast.
Christina: Yeah, exactly so I guess it’s coming between 11 and…
Lisa: Yeah, between 11 and 12 I think they said for the East Coast.
Leo: So they’re hoping that everyone, we will all do Live unboxings.
Christina: Which of course we will.
Leo: I’m going to stay home. It’s too early for me.
Christina: Which of course we will. We’re playing directly in their hands for doing this sort of stuff.
Leo: I know. It’s good. That’s good marketing.
Christina: It is. It works. I mean, I’m limiting it. But we’re going to be a part of it without a doubt. So it is what it is.
Leo: Pizza box says, and he might be right, it’s a continental breakfast plus a brochure.
Leo: It could be that new Motorola 360 some people have speculated a new Motorola, a new smartwatch.
Christina: That’s actually not a bad idea.
Leo: If you’re going to do it, now would be the time to do it. Before Apple steals all the new cycles.
Christina: Yeah, Pebbles announced something on Tuesday as well. So that would make sense.
Leo: Alright let’s take a quick break. Final words in just a bit. Great panel. Love having all you guys on here. Lisa Eadicicco from Business Insider. From Taipei, Taiwan, -not China, Ben Thompson from stratechery.com
Ben: Hey, don’t even… I’m telling you this, just don’t even bring it up, you don’t even know.
Leo: I know, I know!
Ben: You’re going to get Chinese people emailing you from China now. The tension definitely runs both directions. I have no say in the matter.
Leo: I know. But you speak Chinese! And it used to be part of China.
Ben: [Laughs nervously]
Leo: He’s not going to say anything. I’m trying to get him in trouble. That’s so mean. Alright, and uh…
Ben: At some point in the late 1800’s it was a part of China then Japan invaded it around 1898
Leo: Wasn’t it the… It was during the Chinese Revolution Guo Ming Dang moved to Taipei, right? Moved to Taiwan?
Ben: Right, as my history may have been confused. Right. After the World War, it was all much fractured and it was never really determined what really happened after Japan owned it. Culturally, historically, it is a part of China.
Leo: Ooh, careful.
Ben: No I’m just quoting cultural evidence. No it is cultural evidence in many respects. It’s actually very, one of the cool things about living here is because there wasn’t the Cultural Revolution which sadly destroyed a lot of the old bits of China. You get almost more of a traditional experience here in some respects that you might in some places in China. China is a big country. I mean, people forget it’s as big as the United States and everyone knows people in California are totally different from people in the South East, or the North East or the Midwest. And it’s the same thing with China.
Leo: So you live there because your wife is Chinese, yeah?
Ben: My wife is from Taiwan, I met her here. I came back here in 2003. So the family reason for sure. But I love it. I love living here. It’s a great place to live and it’s useful for what I do.
Leo: And I love your Instagram which is a lot about food. I feel that you’re eating well there. Are you @monkbent on Instagram as well if people want to follow you?
Ben: Yes, I am @monkbent everywhere.
Leo: Look at this, look at this. This is a grill of delicious meats. I’m telling you, it’s all food. This is all you ever do is like eat.
Ben: Yeah, that’s it. That’s Chinese New Year so lots of food. It’s ridiculous.
Leo: I’m so hungry. Oh, look at that. I don’t even know what that is and I want it. What is that?
Ben: It’s called a Chinese hamburger. The Chinese word is gua bao. Basically it’s a very spongy kind of bread with braised pork.
Leo: We get them here but they’re sealed up.
Ben: Yeah, but this is homemade, it’s super fresh, so it’s one of my favorites for sure.
Leo: Looks so good. Yeah, follow @monkbent on Instagram. If you can’t be in Taipei, you can at least live it. Look at the smog! Oh that’s Beijing.
Ben: Yeah. That was one of the worst days in like five years so I just so happened to be there. It was unbelievably brutal.
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Leo: I think we’re done. I’m just looking to see if there is anything else you guys thought was a big deal?
Leo: How about this one, TriviaCrack, which I’ve been playing with my mom…
Christina: Such a good game.
Leo: You play it, too?
Christina: I do, I do. I can’t help it.
Leo: It’s too successful. According to the Wall Street Journal, TriviaCrack has been downloaded 130 Million times. It’s free. There’s actually a free version and a paid version. Where they have in-app purchases and they do have advertisements. The most popular free app downloaded in Apple’s App Store for 66 straight days. I have to say, one of the things I don’t like about it is, and the questions are user submitted. So wildly, wildly ranging. There are some of them that are really hard, some are easy. The app’s founder is 29, Maximo Cavazzani. They get submitted 1 million new questions every day in the question factory. And only about 1500 are added to the game each day. But I have to say unlike other trivia games that I’ve played on Android of Iphone, I never get a question repeat. But the entrepreneur says it’s a problem to get a million submissions a day. It’s like building a house and a million people come to help you. We only need one house. And also, there’s a constant load of questions that are basically the same that are posed in different ways. How old is Justin Bieber? They get that question like, 200,000 times a day. You can stop submitting that one. I wouldn’t even know the answer to that. Now, it’s multiple choice so that’s one of the nice things you can always do well. I can’t believe the Wall Street Journal is doing an article on TriviaCrack. I can’t believe I’m mentioning it. You know, it’s fun. Anything else to say about it? No. It’s so successful, that’s a problem. They don’t say, which I would like to know about it, is how much money this guy has made from this.
Christina: I could only imagine. Because they have the paid version, they have the free version, they’ve got the ads, it’s a hit on both platforms. And I think that if you’re getting a million submissions a day, that’s showing super high engagement. So, yeah, the question probably isn’t how much is he making off of it. It’s what is he leaving on the table by not monetizing it as well as he could. .
Leo: Oh my god. You know, I’m only playing it because my mom insists. Speaking of monetization, I was very happy with… Now we love the Amazon Echo, but I invested $500 dollars in Jibo. Do you know about Jibo?
Leo: It’s like an Amazon Echo that looks at you. This was created by Cynthia Breazeal who is a very well-known robotics creator. This is not her first robot. And researcher. They did an Indiegogo, and raised a ton of money. And now they’ve raised another $25.3 Million dollars for the Jibo. I won’t get my Jibo, even though I subscribed to the Indiegogo until sometime late this year, or early next year. Cynthia Breazeal is the Chief Scientist and their new CEO is former President of Nuance, Steve Chambers. So, $25 Million for the robot. It looks at you too. See, your Echo just sits there. Jibo, it follows you as you walk around the room. Hey, speaking of following, Ben Thompson’s got a new friend. Aww, somebody’s sleepy. What’s your son’s name?
Leo: Aw, Hi Nigel. He woke up. Well, I think this is a good reason to stop. Although I do want a little Public Service Announcement from Snapchat.
Christina: Ah. Yes, I love this. I love this.
Leo: Please kids, No Nudes.
Ben: I’m sure that never happens on Snapchat.
Leo: Never! The Snapchat Safety Center was launched this week. Including a six-page parents’ guide page to Snapchat. Keep it legal. This is from the Snapchat community guide lines, don’t use Snapchat for any illegal shenanigans. Like that bong picture. And if you’re underage, keep your clothes on.
Christina: Good luck with that.
Lisa: And they just now say this after Snapchat has been out and widely used for how long?
Leo: They were evaluated at $19 Billion dollars maybe you should stop sending…
Christina: Now they’re trying to stop it from being used for sexting. But guess what, it’s still just used for sexting.
Leo: Oh, come on. I use it. Katy Couric uses it to do newscasts. She’s not naked.
Christina: No, and two people watch.
Leo: You’ve got to wonder how much Yahoo paid…
Christina: No, but you got to think about the one on one conversations, yes. I mean, of course. Its 13-17 year olds sending each other messages all day. What do you think the contents are?
Leo: What are you going to do?
Christina: Seriously, they disappear. That’s the whole thing. This is great.
Leo: Alright. That’s the Public Service Announcement from the folks at Snapchat. Put your clothes on, kids. Christina Warren, mashable.com – Thank you so much for being here. We really appreciate it every Friday on TNT, you wanna run and watch the Oscars. What are you looking for this year? Anything exciting?
Christina: Well, I mean it really comes down to Birdman and Boyhood. I’m going with Birdman. Because that’s what the PGH shows and I think that’s where they went towards the end. No, I mean it’s a good year for films.
Leo: You are a film girl after all on Twitter. So this is your thing.
Christina: I am a film girl.
Leo: Do you do a party with like a Bingo chart or quotes, if you do.
Christina: I’m usually in a pool. Some years we party more than others. I always Live Tweet the Oscars. I’ve been Live Tweeting it, this will be like my eighth year. I’ve been live blogging the Oscars. I think this will be like my eleventh or twelfth year doing that. So yeah, uh no, it’s always fun to partake in this. It’s my favorite night of the year. So yay! Oscar night!
Leo: It’s my favorite night of the year. I’m going to let you go to the red carpet. I think Birdman should win. And I think it will win.
Christina: Yeah I agree.
Leo: Although I watched Boyhood the other night and I was surprised. I really didn’t expect much because sometimes, Linkladder is boring and slow. But this was actually really good.
Christina: It was a great film. I mean both of them were. And I thought, uh, well, I mean there were a lot of great films this year. I’m still a little bummed that Gone Girl didn’t get nominated for more but I’m over that for now.
Leo: Do you think she’ll win for best actor?
Christina: No, no, no. Julianne Moore is going to win that. Even though I think Reese Witherspoon gave the best performance. No one asked my opinion, but no, yea, I think Julianne Moore is going to win.
Leo: Are you excited Lisa? The Oscars, You’ve got 15 minutes. Time to get a couple of bacon wrapped hot dogs sit down and enjoy.
Lisa: Yeah, I mean I enjoy. I always tune in. Unfortunately, this year I’m kind of out of the loop. I didn’t really get a chance to see many of the movies that are nominated but you know, I still like tuning in just to see. I feel like there’s always one movie that kind of sweeps every year. So I’m interested to see what that’s going to be this year.
Leo: Here’s a picture from the red carpet of Neil Patrick Harris who is the host with his husband. You know, it’s amazing how this country has changed. That that’s completely like, eh, no big deal. 5 years ago, it would be like *gasp* problem. Love it. Enjoy the Oscars and Nigel. There’s nothing like having your child sleep in your lap and I envy you. It’s so sweet. Oh, where did he go?
Ben: He’s awake now.
Leo: It’s great to have you all on. Ben is at stratechery.com that’s where is Podcast is and do subscribe to his newsletter. That’s how he keeps Skybau on the table and Nigel and red envelopes. Yes, great to have all of you. We do TWiT every Sunday, 6PM Eastern Time. 2300 UTC if you do watch live, you can chat with us. We love having the chatroom here. We appreciate your presence there. Or you can be in studio live. We have a nice studio audience today. Many of them have already left to go see the red carpet. But you can email tickets@TWiT.tv if you’d like to be here. Otherwise, OnDemand is always available. TWiT.tv is our website. Or wherever you get your podcast. Thanks for joining us, see ya next time. Oh, our 10th Anniversary coming up I’m getting a lot of great submissions of logos. I don’t want to show you, but we’ve asked the audience to submit TWiT 10 Year Anniversary logos and we’d like to use them on our website. We got some great submissions, well many more will come. I think what we’re going to do is once we get all of them, I’ll put them in a pile and we’ll have a vote. So keep those coming’ in. If you want the official TWiT logos with the official colors that I have in the Adobe Illustrator file, you can send it to LeoLaporte@Leo.com. Thanks to all the designers that have already submitted stuff. Really great stuff! Thanks for joining us! We’ll see you next time on another TWiT! Another TWiT is in the can.