This Week in Tech 518
Mike Elgan: It's time for TWiT, This Week in Tech! Andy Ihnatko is here; Rene Ritchie is here as well. We've also got Jeff John Roberts of Fortune fame. We're going to be talking about Apple's control freakery, Google's spam filtering, Reddit's former CEO, and Amazon's best product ever. It's all coming up next on TWiT!
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Mike: This is TWiT: This Week in Tech, episode 518. Recorded Sunday, July 12, 2015.
Apple Samsung'd the BBC
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It's time for TWiT: This Week in Tech, the show where we talk about the tech news with some of the most brilliant and interesting minds in technology. We've got some great minds for you here today. My name is Mike Elgan. I'm TWiT's news director, and I'm subbing for Leo. Do we even know where Leo is? I think he's still in Europe.
Jason Howell: Floating around on a boat somewhere.
Mike: He's on a boat. We've got a great panel for you today. Some of my favorite people to interview and to have on as panelists and so on, starting with Andy Ihnatko, technology columnist for the Chicago Sun Times, host of MacBreak weekly and so much more. Welcome to you, Andy Ihnatko.
Andy Ihnatko: It is nice to be welcomed by you on this Sunday.
Mike: I really appreciate you coming on. And speaking of MacBreak weekly, we also have Rene Ritchie, editor in chief of iMore, co-host of MacBreak weekly and a whole bunch more. Welcome to you, Rene Ritchie.
Rene Ritchie: It feels like an invasion. This is really not what we intended. We're here as friendly ambassadors.
Mike: Exactly. We come from the world of Apple to spread... now we're going to find out what Rene Ritchie thinks of Android at some point during this show. That'll be really great. Also, one of my favorite interview guests for Tech News today, Jeff John Roberts, who writes about law culture and technology, (and politics) for Fortune. Welcome, Jeff.
Jeff John Roberts: Good to be here.
Mike: How did you land the law culture and technology beat at all the places you've written? Do you have a particular background in law, for example?
Jeff: Yeah, I'm a recovering lawyer. So when I wanted to make my way into journalism, I liked tech and I had the legal shtick, so this is where I landed.
Mike: You write with a conspicuous knowledge of the subject and I suspected as much. As you were saying.
Jeff: Yeah, I can't really. I don't have the same chops on Apple as your other guests, otherwise I'm going to sit back and hear who is better, Apple or Android.
Mike: Great. For those of you, and we have lots of folks in our audience who just don't want to hear that much about Apple, we're going to talk about Apple, we're going to start with Apple, but I promise this isn't going to be the Apple show. We're going to talk about a couple stories that Apple has been involved with, and we're going to move to other stories as well. Let's start with a really interesting bit of news that came out this week, which is that Apple plans to sell third party products in their stores, but only if they get to help design the boxes. In other words: they're going for uniformity in the appearance of Apple boxes, of third party products in accessories in their stores. Andy Ihnatko, is their control freakery finally gotten out of hand completely? What's going on here?
Andy: As usual, this is fodder for really great discussion the week of the announcement then a year later we realize we didn't notice anything. It's part of their made for iPhone program. If they want to get certified part of it is that they have to have input into packaging. That's extending to use in the stores. What it looks like, according to people who have had access to the new packaging, we're talking about Apple stuff. White boxes, simple typography, probably also a focus on recyclable materials. It's probably there to help out Apple to make sure they can rack things the way they like to. Have a nice clean and uncluttered appearance. Also, given that Apple mall stores are heavy on having human meat inside there, not much space for other products, it's good for them to say "Why don't we get you guys to create packaging we can efficiently store, efficiently stack, and efficiently display." I think Apple is now beyond the point of caring if people think that they’re control freaks or not. At some point they're going to say, "We love this new phone charger you've made, we're not wild about the seraphs on the logo of your company. We can hook you up with somebody."
Mike: Rene Ritchie, you know Apple as well as anybody. You know how they think about things. Apparently, they're going to be reducing the number of third party products that are available in stores. In addition to giving a helping hand with the designs and the packaging, they're also going to consolidating down and selling fewer things. Are they going to be strong-arming companies and tell them things like, "If you want to be one of those coveted companies in the Apple store, we need you to be exclusive in this way, and have your price this way." Are they going to be dictating terms for the companies that are lucky enough to be in Apple stores?
Rene: We've had this before with Target, Wal-Mart, and Best Buy who get exclusive versions of this or that release. It's not by any means rare in the retail world. I would argue that often Apple's incentives are different than other companies. What's really interesting, for example, Apple cares about the opening of the packaging experience. They want you to pick up a plug, pull the little plastic tab and the whole thing opens up in front of you, where other packaging you can get a jackhammer and barely make a dent in it and your frustration level soars. It's those things they really care about. As you mentioned, they're going to reduce the amount of products in there, so they want to make the ones they have in the store fit their principles, which is the recyclability and the minimalism. That sort of thing is absolutely controlling, but when you look at it, it's the sort of things that Apple doesn't control that often annoy us more, like AT&T signal quality, or FedEx's delivery schedule, or trying to open the iPhone case package that we bought at the Apple store. That isn't as easy to open. Yes, it's absolutely controlling, no it's not different than what any other major retailer does. It's just the things that Apple cares about because they have so much money and so much power. User experience is higher on their list than some other retailers or manufacturers because they can afford to have it higher on the list. It's a priority for them. It remains to be seen. I think it will be a consumer benefit and we'll have to see if the lack of... if it's too much of a burden for manufacturers or if the lack of variety is a detriment.
Mike: Speaking of Apple's money and power, apparently the FTC is exploring Apple rules for streaming music rivals in the Apple store. Apparently the 30% cut that they take for streaming music subscriptions, if you buy that from the app, in most cases you don't have to buy it from the App, they don't know you can go to the website, Spotify, or whatever and sign up, but if you sign up for a subscription in the app, Apple gets a chunk of that. That creates a problem for their competitors. Now that Apple has Apple Music, the competitors to Apple Music are at a disadvantage because they have to pay Apple. That means they can either raise their prices so they cost more than 9.99, more than Apple Music, or they can lose money or make less money. Jeff John Roberts, do you think that this investigation has merit? Is Apple going to be prevented from charging what they charge for streaming music, downloads, get that 30% cut?
Jeff: I really doubt it. I'm puzzled by this. I think the regulators might be on their high horse a little bit. To prove anti trust in America at least you have to show harm to consumers, not harm to competitors. While this does hurt Spotify and stuff, Apple's not the only game in town. You can also get Spotify through Google play and the website. The only other reason you can go after them is for deceptive or unfair trade practices. I don't see how this is that. Apple has always done this. Everyone knows it, news publishers and everyone else. This is how Apple has always operated. I'm a little puzzled....
Mike: We're having some audio problems on your audio, Jeff.
Rene: He's covering up the mic with his hands, possibly.
Mike: So, we'll figure that out.
Rene: People have been confused by this from the start and it seems blatantly unfair on the surface, but one of the things that I try to do is look at repercussions. When Apple moved the agency model and we started doing things like in app purchases and web subscription services, one of the problems with this is if there's no fee or a reduced fee, it incentives companies to move transactions out of the app store. For example, if Apple only took a cut of paid apps, then almost any app maker who could would switch to in app purchases because they would have to give no money to Apple. If they didn't take a cut of subscriptions, even if they were web-based, almost every merchant who could would switch to web based subscriptions. The actual money that Apple made from the App store would plummet, and Apple is a rich company, so maybe they don't need this money. When you think about the free to play games, for example, Candy Crush or Clash of Clans, Apple gets no money off of the purchase of those games because they're free. But those games make millions of dollars through in-app purchases. Netflix is a different model. To be clear, they don't make money off of actual physical goods. If you order something off Amazon, there's no price sharing. Its just digital goods. We're moving to a new age where there are so many subscription services and there are things that maybe, like we heard rumors in the TV industry, like you'll have to negotiate a different rate because there isn't a lot of room for multiple middle men. You could have Amazon in the middle or Apple in the middle, or Netflix in the middle. Having multiple of them, there starts being not enough money to go around.
Andy: Yeah, but this is another one of those consumer facing problems. There's so many apps, like the Comicsology app, like the Amazon app, that are so much harder to use on IOS than they are on Android, because on Android you can press a button and buy whatever you want within the app. The idea that every one of these businesses has enough profit in every purchase to be able to hand over 30% to Apple for reasons that are kind of dubious... it's hard to justify in the case of Cosmetology that Apple is helping Comicsology to sell comics, given that they have nothing to do with the experience. I really think this is something Apple is going to have to re-visit. I really think that the idea of taking 30% off every app and forcing app makers to drive consumers out of this really nice store experience and into a website, I think we're going to have to re-visit that. It really is making IOS devices much more difficult to use.
Mike: Again, this is still under the umbrella of Apple's wealth and power. I think the biggest example of that that I've ever seen was a story that hit the Wall Street Journal today. The story was that Apple's share of these Industry profits for the Smartphone have risen from 65% in the first quarter of last year to 92% for the first quarter of this year. Apple, one company, is making 92% of the industry's profits. This is incredible. How do they do it, Rene Ritchie?
Rene: They made a bigger screen phone. If you look at the 65%, it was because Apple only made phones that were 4 inches and under. All the remaining profits in the Industry was mostly made by Samsung who offered larger than 4 inch phones. That meant that the minute Apple made a larger than 4 inch phone, they were going to take profit away from Samsung. Might have been one percent, might have been significantly more. It turns out it's significantly more. Apple is selling a lot of premium phones. They also completely avoid the budget phone or the low-end phone market, which can break even, can be minimally profitable. When you look at most of Apple's competitors, even Samsung now, which we'll talk about later, they're not making any money. The combination of Apple exclusively focusing on the premium market and the intelligence of Tim Cook and the operation's team, frankly with their supply chain, makes those phones incredibly profitable for Apple.
Andy: There's also the fact that, although the iPhone is about 17% of the phone market, there's only one place you can get them. It's very easy to, if you're taking a percentage of every single phone made for a certain operating system, that also has a role to play. Also the fact that, as Rene said, they're not interested in making phones that aren't profitable, which is kind of sad. It means that at almost every Apple keynote: China China China, let's look at our China store, this will be available in China quickly. They're not going to talk about the countries in Africa, they're not going to talk about India, they're not going to talk about Pakistan, because those people aren't buying premium phones. It's great that they're so profitable. I don't begrudge them for that. To me, it's a trivia number. It doesn't have any bearing on what people should do with their phones.
Mike: Andy, do you think they're going to be able to maintain their China China China strategy? I think that China's Smartphone market is plateau-ing to a certain extent. We also know that Xiaomi and other Chinese companies are good at offering Chinese consumers what they want. It just seems like a big part of their more recent surge towards these kinds of numbers and other numbers. The fact that they're going to be reportedly building up to 90 million phones this year for their next iPhone device. Because they were struggling in China for a long time, they didn't have China mobile as a carrier, lots of people were bringing phones into China mobile, there were other problems as well in China, and finally, after really chipping away in China for years, they finally got it right. Now they're huge in China, they're building Apple stores as fast as they can in China. That's a change from not doing China right to now doing it right. Is it going to plateau, or do you think they can keep up this success rate in China?
Andy: I think that's largely how good is the Chinese financial situation right now? One of the things that makes them so attractive is a lot of people with a lot of money and a willingness to make sure other people know they have a lot of money. One way to express that is, "I've got this really exotic luxury premium brand phone." Xiaomi is doing incredible, there's also a pride thing going on. This is not the thing that came from over there. This is the thing that was produced over here to one extent or another. It will never be the sort of premium luxury Western good that Apple is. Before Apple... I'm wondering if their difficulty in getting into China is part of what has helped them out, because it did become this exotic brand. You had to know somebody to have an Apple phone before they started getting into China. That's one of the reasons that if you went to one of the Chinese counterfeit markets in a major Chinese city you would see booth after booth with Chinese knock off iPhones. Not just the ones that are perfect copies of the iPhone 3 and 4, and that sort of stuff. I'm talking about flip phones that have an illuminated Apple logo on the back. It's not about fooling people to think you have an iPhone, it's that I've got something with this beautiful luxury brand logo on it that I would like to associate myself with. I don't think they're going to find the bottom of that well any time soon, but I think that there's going to have to be a time where, for one of several reasons they're going to have to start making phones for people who do not have an unlimited supply of money to spend on luxury goods.
Rene: To Andy's point, when Tim Cook was talking about the amount of people switching from Android to iPhone, a lot of that was in China. I forget who posted the numbers, but when you saw how many people were planning on switching from iPhone to Android it was single digit, but from Android to iPhone was high double digits. That's what Apple was using was their build out strategy for China. There are a lot of people who may not make the iPhone their first phone, but they want to make it their next phone.
Mike: Great point. We've got a whole bunch of great stories coming up in just a second. First off, let's take a break, and let's talk about Back Up. One of the fundamental laws of reality for anyone who uses a computer is that you not only have to back up your data, but you have to back it up in the cloud. Lots of people, we've all heard the stories about someone who backed up locally on a harddrive. Everything got damaged or stolen or whatever, and they lost everything. I doubt that anybody watching this program has gotten through their life without losing some data in one way or another. Carbonite is the leading way and the best way and the easiest way to back up to the cloud. Here's why. You install it and it intelligently goes right to work backing up your files. You can go in and fine-tune it. It's very smart about identifying which are your data files and which files you don't need to back up, things that are associated with applications and so on. Then you basically go in there and tweak it. I don't want to back up this folder; I don't want to back up these two files in this folder. I do want to back up this other folder, and I even want to back up this application folder and everything in it. You can fine tune what gets backed up. Then it keeps you notified of what's going on with your backup. It will tell you, for example, that you haven't backed up in a while that there's some kind of glitch, if you want to pause the backup. It's on a little tiny icon at the top of your screen. You just tap on that, and say pause this for 24 hours. Instantly it pauses. You don't have that process running, even though it's such a light process, generally speaking. If you don't want to be using your Internet connection for backing up or whatever, you can do that. It's such a fantastic application. You have to use Carbonite. Here's the thing with losing data: You really regret it when you didn't back up correctly. You basically can never tell when something is going to happen where you're going to wish you had a backup. With Carbonite it's also very handy for you to retrieve files, because you can use the app that they offer, the mobile app, and just get access to all your files from anywhere through your mobile device. It's really great. Carbonite can protect your business, your home, no matter what you are doing with your data, you need to make sure you back up and join the 70,000 businesses that trust Carbonite. The 1.5 million customers who trust Carbonite for round the clock protection of their files. Visit Carbonite.com and get two bonus months free when you use the offer code TWiT. Carbonite.com, offer code: TWiT. I thank them for their support of TWiT. Google, speaking of stuff that happens in the background that's very sophisticated. Google announced this week that they are now hitting a 99.9% success rate in filtering spam. How do they do this? This is almost miraculous. For along time, I mentioned this on TNT this week, they caught most everything on their Spam filter, which has always had a good reputation, but they couldn't get the Dr. Oz spams, the ones that were telling me I was overweight and needed to change my diet and all that stuff. 3 or 4 months ago, they completely stopped. I haven't heard from Dr. Oz since then. What are they doing that is enabling them to have such a great success rate in catching spam? I'll open that up to the group.
Andy: I think they're certainly well motivated. You don't get to send ads to our users, only we get to send ads to our users. But this is another example of why Google is in a unique position to create services that work really well for its users by the virtue of how many users Google actually has and how much of their behavior they can actually observe. It's not only deep narrow thinking that they've got, the deep nets that they've started making a high marquis feature of every Google product. It's always been there, but they're always willing to say here's why we can get things working. We have a deep machine learning of the world around us. Also, they can look at the behavior of other users and how they are reacting from the mail that they're getting and use that experience to apply to others. So it's pretty much as simple as that. You're never the third person to get a piece of spam. You're the half a millionth person who has had that bounced off of your inbox.
Rene: Andy is exactly right. There are certain things that Google, as a company, based on the way they do technology and the way that they think about the Internet is uniquely positioned to solve. This is one of those problems. They have massive experience sifting through large amounts of Internet data. They have amazing algorithms, people who are programming those algorithms, and they have an incredibly large user pool, and they can watch those behaviors. They can use heuristics, but they can also know if Andy marked something as Spam, if Mike marked something as Spam, if I do, it's more than likely spam. I'm surprised they didn't get Dr. Oz faster; maybe they thought that was ham for a while. Maybe he unsubscribed long ago. Now, because there is so much data going through there, Google talks about machine learning and neural networks, this is exactly what that's designed to solve. I've used Gmail... I use Apple stuff, but almost all my services, mobile nations as a company is all built on Google. I've almost never seen spam in my account. It is close to miraculous.
Mike: The other thing, Jeff, that needs to be pointed out is that, Spam filtering is really just, we tend to think of it as a discrete function that e-mail, cloud services provide or applications can provide or so on, but in fact, this machine learning stuff is doing what Google does. It's algorithms, it's learning about you, and the thing that I find most miraculous about it, Jeff, is that you know that lots of users aren't using it right. Somebody might have subscribed to a newsletter, and it's just easy to mark it as spam when they're done. Google can figure out, it doesn't all of a sudden make this newsletter spam everywhere. It's really fantastic. Do you have any particular anxiety or do you feel fine about this kind of filtering that is making these decisions for you about what it's going to show you and what it doesn't show you?
Jeff: Not really, because Google is so fantastically good at it. I suppose there are complications of having them think for us or Google Now products, but I think as long as it's so incredibly good at doing it, the convenience outweighs any sinister motives in terms of my issues with Google. Its anti-spam effectiveness is pretty far down the list.
Mike: Google is always in the news. I loved covering Google because they generate so much news. I actually find, I don't know how you Apple specialists do it, Rene, because Apple basically announces a whole bunch of news all at once, and they are tight lipped the rest of the year whereas Google is throwing things out left and right, and much of it is news worthy. We've also been hearing a lot about Google Glass. I believe I'm the only Glasshole on this panel, is that correct? I like it. I believe in it. Are you an enthusiastic user, Andy, or do you have buyer's remorse?
Andy: I certainly don't have buyer's remorse. I've never been an enthusiastic user, because it's always had that fundamental problem where you're putting it away for too long. It will never get around this problem right here, which is going to be how people see you when you're running into places. That means that if I'm in a public place, or better yet a public (ish) space, I'm going to have to take these off and put them in my bag because even if I'm not doing something with them, I'm always worried that people will think I'm doing something with them. I'm a great admirer of the times where I do use it, I'm really happy that I have it. I'm also the beneficiary of Google glass, as is pretty much everybody who uses Android wear, because if you're using Google Glass for a year, you saw a lot of the thinking and a lot of the experience that Google picked up from watching how people were using glass reflected in how an Android wear watch works. I'm not in any way remorseful that I bought this. I do use it about a few times a month. There are some circumstances where I'm being a tourist where I'll take it with me, because it's the best way to record what I'm doing while I'm doing it.
Mike: Do you use it exclusively for photography and video?
Andy: No. What I loved about it was the ability to, the first experience I had with it in New York after I picked it up at Google in New York was still the landmark version of this experience. I'm taking a nice long walk in Central Park and one of the reasons I take a nice long walk, is once you spin your brain completely down without any distractions without anything, it starts to do a deep cook of different thoughts and questions you've had in your mind and ideas start coming. The ability to, while you're in the middle of your walk, you have a great idea, how far you want to take care of, simply saying, OK Glass, take a note. You speak the note, and then without stopping, without looking at anything, without looking at your wrist, you're on and happy. It was the first device that taught me how much a phone distracts you, how much it's helping you. Hey hey hey. Pay attention to me. I'll settle that down. I'm very happy that I have it.
Mike: The news that actually happened this week is a couple of things really. One is that the FTC, FCC, it's got to be, Google entered a new product that they were vague about, called the GG One that supports Wifi and Bluetooth. They were vague about its function. It's very likely to be the first commercial version of Google Glass. The second bit of news is that 9 to 5 Google is reporting that a Google Glass enterprise edition which has a larger prism, not a smaller one, and optional external battery pack. This would be for businesses to use, maybe delivery drivers, people who work for Amazon, whatever. That makes a lot of sense. Rene Ritchie, what are your thoughts on Google Glass? Also, we know of course, we heard the rumor that Apple would come out with an Apple watch for a long time, would Apple do another type of wearable? I don't see them ever doing a Google Glass type of product. Will they ever do a different wearable besides a wristwatch?
Rene: It's a fascinating thing. I really liked the news that Google Glass would be coming out with an enterprise edition. I'm going to completely rip off my colleague Georgia Dow on this. She did a great article comparing the wearable strategies of Google and Apple. Exactly what I talked about with Gmail where they are so smart algorithmically in terms of machine learning. Their technology is fantastic; their understanding of humanity is not always great. Psychologically the original Google glass, not a great product, even tech journalists. We are human beings too, walking around with a cyborg on our face; it's not a great experience. It intermediates the human process, which is incredibly based on face and eye recognition patterns and deeply ingrained psychology. It wasn't careful about how to address that problem, where Apple took their time, put it on their wrist; Rolex and other companies fought the battle for putting technology on their wrist decades ago. That was a slow process, but they won the wrist as well. It's sort of an incremental increase. The face will take longer. I think that there's a huge opportunity, like you said, for enterprise, for people who are working on things. People who are maybe fixing cables or server rooms who can have instructions and information presented to them. Sort of like Microsoft with the Hololens. There is this vast opportunity where you are working on a technical level and not a human level. I don't want to see my psychologist or my doctor wearing this while I'm talking to them. Maybe while they're operating on me it's fine, but when I'm talking to them I want that human interaction. When they're fixing my car or fixing my Internet connection, using all of this stuff is brilliant.
Jeff: Can I jump in for a second?
Mike: Go ahead.
Jeff: I just have got to be the skeptic here. I can only see Google Glass as a complete failure. I mean you haven't heard of it for months. Mike, you're a fan of it, but honestly in your heart of hearts, do you think this is going to catch on? It's cool that they can do it, but can you ever see mainstream adoption of it?
Mike: Not even close. But I can see everything except mainstream users use it. For example, you can use this kind of technology for scuba diving, or for all kinds of professionals. I also believe very much so, that notifications inside of eyeglasses, whether there's a camera or not, that's another issue. I do see notifications, if you can't tell that a pair of glasses has the ability to receive...
Rene: You're getting one right now, aren't you, Mike?
Mike: I am, thank you. There's a supreme irony though, about Google Glass itself, which actually occurred to me this week, and I had never thought of this. The irony is this: the people who hate Google Glass hate it because there is a camera on it, pointing everywhere. The people who love Google glass love it because of the camera. It does a million things besides the camera, but most users; it's just a camera on their face that's hands free.
Andy: If Google ever decided that we're going to break out all the Android from this, we're just going to make it a camera with Bluetooth LE connection to your phone, I think it would be a really popular product. Getting back to Rene's point, I would never have guessed that anybody with ten micrograms of self respect would use something that looks like a selfie stick in public. Yet, in a space of just a year, it's gone from something that I only see people using outside in Boston when they are clearly tourists. They look like they're from Asia, to everybody that now has them. When you offer somebody...
Rene: But it's not a selfie hate, Andy.
Andy: That would be even cooler. You've basically created a new product category. You are a brand influencer, Rene. You should cause this to come to market. I think if there were a way to get Google glass in the form of a hundred to hundred and fifty dollar gadget that didn't have a lot of the social baggage that we're attached to, I think it would do very well, because when I go through my Google photos stuff, some of the most compelling video that I shot is stuff I never would have shot in a million years. Again, I'm a tourist, I'm not at a private function or inside a restaurant, I'm just taking a walk through New York City on December 22 to see the lights at Rockefeller center, and because I've got Google Glass on, I do have a nice camera around my neck, but I want to be able to look at this beautiful display, and I might as well take a recording while I'm watching it. It's some of the most compelling stuff I have in my photo roll, and I'm glad I have it. They definitely have something there. It definitely bears mentioning that Google never sold this as a regular product. It was always "we are being explicit here. We don't know if we've got something here yet. The only way we can figure this out is if we actually make it and we ask the people that want to get it how are you using it, what are you liking about it, what are you not liking about it?" On that basis, it was a successful research project, especially as it fed into what Google wear eventually became. It was an experiment worth doing. It's not a 1500-dollar gadget for most people, or even weirdos like myself, but it's definitely worth doing.
Mike: I've had a lot of arguments with my fellow journalists in technology about Google Glass over the couple years, and it always went something like this: The complaint was always that you're like the borg. You have the ability to record and take pictures all the time. I don't know when I'm looking at you if you're taking my picture or taking my video. I always said, "No." This is the worst secret surveillance device in history. The whole thing lights up when you're recording video. That's not a bulletproof argument because in certain conditions you can't really tell that it's recording video. In most cases you absolutely can. If you are across the table from somebody talking, not only can you tell that the person is recording video, you can see the video. You can watch it. You can actually see what they see. You can see their notifications and stuff. I always made that point. But the same journalists who are so opposed to somebody recording strangers in public places seem to me to be among the most enthusiastic users of Meerkat and Periscope when these products came into the market. They were periskoping and Meerkatting everything in sight. I don't know how this is better than this.
Andy: On top of everything else, how many times have you been on the subway, and "Hi, I'm just listening to my music, this is the way I normally hold my phone when I'm listening to music. I'm certainly not taking your picture because you seem to have an interesting facial hair or anything like that." That's a lost argument as you say. There's a reason why I wanted to get a louder color. It should be very obvious that hey look. I'm wearing a device right now. I don't want to be doing something that's sneaky.
Rene: It's not the technology so much. To me, it's the psyche. I wear glasses and there was a social stigma attached to glasses for a long time. People would call you four eyes. It's one of those things that the faces are so important to us as human beings, that if my first experience with you is Mike Elgan's face is one thing, but if my first experience, even if I've known you and we've had dinner many times, if I see you and suddenly there's an unusual piece of technology on your face, that creates a barrier in our communication. It's always something I see. It's a distraction. It's something that gets in the way of a relationship, and that's something that very slowly through seating programs like the explorer program as a society we have to decide is acceptable. It's not so much a camera. People have had problems with cell phone cameras. They've banned them from locker rooms. There's selfie sticks, what Andy was showing. All those things are fine. There's a reason why in aliens there are face huggers and not wrist huggers. It's something very core to us as human beings. Those sorts of things matter to us.
Andy: The alien is not going to ram itself down your wrist. Now you're talking crazy talk, OK? It's interesting to also think that Rene and I wear different styles of glasses. I wear this style because I like it. It's been discontinued since I bought it, so now when I break these I have to buy them off of eBay, because that's how much I like these frames. It's a conscious choice that this is the sort of thing I want to wear. It's going to be interesting when you also add that this is a conscious choice that I think enough, this technology helps me out in so many different ways that I'm willing to have this little bar at the top there, and you're going to have to accept the fact that I've got this on my face. Your entire face is your user interface, including the fact that you might have facial hair, the fact that you comb your hair a certain way. The fact that I was self conscious enough about the Dr. Pepper T shirt I was wearing until an hour ago that I actually did find a clean dress shirt to put on, it really is all about your user interface. Everything you do is not necessarily good or bad, but it's part of a conscious choice that you choose to make.
Mike: There's another story around Google Glass. I was not even intending to talk much about Google Glass today, but this is actually an interesting topic, I think, and that element is that a lot of journalists immediately said it was dead. As soon as Google made the announcement that they're closing the explorer program and they’re sending it to the productizing process, the squirrels that run the thing that turn research projects into actual products, everybody said it was dead. The exact same announcement was made for project Tango, which was a project to do indoor mapping with a mobile device. Nobody said that was dead. They made the exact same announcement. And now of course Google is making the noise that it's really serious about shipping something around Google Glass. Is the echo chamber too overwhelming these days in the tech press where the tech press doesn't like something and they can basically spread this misconception? Google specifically said Google Glass is not dead, we are sending it to become a real product. Everybody said, "Oh it's dead! They're killing it, they're smothering it." Is the tech press too overwhelming? I'll start with you, Jeff. Do you see examples like this and other examples where the tech press spreads this idea that is mostly wishful thinking?
Jeff: I don't think so. I think people involved in tech like tech and know tech very well. I think they have a capacity to frequently overstate things. Who knows, maybe periscope and Meerkat will be fads too. I think when the tech press pronounces something over; I think they're right. I think that's unusual. This is an unusual panel too, because Google Glassholes are a minority within Tech. I think the fact that most tech people panned Google Glass and predicted its demise, I don’t' see a comeback outside of the enterprise applications you described.
Mike: Interesting. We're going to come back with some more interesting stories. We're going to be talking about encryption. The government doesn't like it. Companies like Apple and Google want to provide it. There's a conflict brewing there. First, let's talk about stamps.com, one of our sponsors today. stamps.com will actually save you tons of time, lots of money, and there's absolutely no reason not to use stamps.com. You can get your mailing and shipping done right from your house. You don't have to go to the post office and wait in line and do all the things lots of people do for some reason. The only reason I can think of that a small business owner would actually go to the post office is because they don't know about stamps.com. That's why I'm glad to tell you about it. This is a better way to do your mailing. You can buy or print official us postage for any letter or package right from your desk. Even special postage discounts that you can't get at the post office are available to you as a stamps.com customer. It's just a fraction of the cost of doing it the old fashioned way, the boring way, the time consuming way, the gas consuming way, of driving around, driving to the post office, and so on. You just don't want to have to go to the post office, and of course they will send you a scale for you to weigh it, and then you print the thing and the mail carrier will take those packages off your hands, right there at your house. It's a really really great way to interact with the post office. You know who goes to the post office and waits in long lines? Other people. Not you and me. We need to use stamps.com, because it's just such a great way to go. Right now, you can use our promo code TWiT for this special offer. It's a no-risk trial, plus 110 dollar bonus offer which includes a digital scale and up to 55 dollars free postage. Don't wait, go to stamps.com before you do anything else, click on the microphone at the top of the homepage, and type in TWiT! That's stamps.com, enter TWiT. We thank stamps.com for supporting The world's greatest technology show. All right. There's a big conflict brewing, and this scares the living daylights out of me because the FBI and the department of justice are starting to label companies like Apple and Google as threats to national security, threats to public safety, because these companies offer encryptment. Of course, a lot of these companies offer encrypted communication, but Apple and Google are two of the big ones. Apple and Google have every intention of continuing to provide encrypted communication. Where is, we'll start with you again, Jeff. We left off with you a minute ago; we'll start with you again. Where is this headed? Do you think the government could win this war and enable force Apple and Google to provide backdoors in their communications which law enforcement could use, and by the way, so could hackers? Where do you think this is headed?
Jeff: I think if that's going to happen, we won't find out about it. There might be backdoors already. The FBI, or the NSA forces that. That will definitely come with the strongest gaggle you've ever seen. For now, I think there's hope for encryption. I sort of used to feel ambivalent about it, but I don't like the idea that we're not allowed to communicate in encrypted fashion. What next? Are they going to ban locks? There's all sorts of things which people have used to promote privacy. In this case, I think Google and Apple are correct to stand their ground. I think more people are becoming aware that encryption is useful and necessary thing. I love what Apple did when Tim Cook updated the IOS system, make it encryption by default. I don't know how you guys feel about that, but I think the world is ready for encryption.
Mike: It's a big deal. I think that there's a fine line between a professional, let's say a professional law enforcement official who is advocating policies that enable them to do their job, and on the one hand, and also things that promote what they are supposed to be doing as their job on the other. That's convoluted. Let me explain that. Law enforcement, two things: fighting crime and preventing terrorist attacks. Encryption does those things too. The value of encryption promotes safety and public safety. It enables people to not get their stuff ripped off and have their identities stolen. It prevents hackers, industrial espionage from China and Russia and Eastern Europe and anywhere from coming in and stealing my company secrets. What is the answer as it regards to encryption for law and order? Is it to give the law enforcement officials the tools they need for themselves to catch criminals and terrorists? Or is it to give real encryption, no back doors to the public so they can protect themselves? The other thing that worries me, by the way, is law enforcement officials are speaking out about this in congress and elsewhere, they don't seem to be aware of the consensus among experts in technology, especially encryption experts who say, "Yeah, you put that back door in and somebody is going to exploit it." There is no such thing as a golden key that only the good guys can use and the bad guys can never use. Go ahead, Rene.
Rene: It's amazing, because it would make law enforcement's job much easier if everyone was required to provide fingerprints or DNA samples, but in many societies, we've decided that is far too great an infringement on privacy and we would rather law enforcement had to work harder, get warrants, and go through extra effort rather than surrendering that information. This seems like the technological continuation of that, where it would be much easier and there was no encryption on anything and all data just flowed completely freely and anybody could look at it including law enforcement. As a society, a lot of people seem to be deciding that is the same set of personal information that we have historically wanted to protect. That's not true in every country, and it's also not true that every country that has been above board and said to their people these are the laws we want to enact, these are the reasons why, and we want your support in enacting them. Some of them have done them secretly or behind closed doors, or in ways that's actually in conflict with the laws of the land. It seems like we're getting to a point where I don't know how to say this best, if you look at Twitter sometimes there's a lot of good info on people that laugh at what the government.. Or even pro-hacking companies consider information security. They're not considered to be particularly good at it. The methods they use aren't considered to be very good. The holes they leave are considered to be egregious, and like you said, easily exploitable. It seems like this is an area where you don't want people who don't understand the technology walking elephant like through the room tearing everything apart as they go.
Mike: Go ahead, Andy.
Andy: It's that, I've been talking to people in law enforcement at the local, state, sometimes the federal level off and on about subjects like these. The first time I was talking about this, I reached out to a comedian in the late 90's, early 2000's, and most of the people I talked to have shown the same attitude. They have a clear mandate, which is to preserve public safety. Their attitude is that if they don't exploit every tool that is legally at their disposal to pursue that mandate, they are being derelict in their duties, which is the reason why they'll do things like, "We're going to fly helicopters with infrared cameras to see where there are heat blooms in places where there should not be heat blooms." We don't believe we need a warrant to do that, because we're simply observing from a helicopter, just like we don't believe that it's going to be illegal for us to put a GPS tracker on someone's car, because all it's doing is what a member of law enforcement could do if they were following this person 24 hours a day, 7 days a week across all kinds of terrain without being seen. They look for guidance. Again, this is only according to the people I've been talking to, they look for guidance from the law. Once the law says you can't do that, they'll say, "OK. We won't do that anymore." They're certainly gong to lobby to be able to do what they think they need to do, but the best way for us to tell law enforcement to knock something off is for us to tell them to knock it off. It's not as though they are always in this position of always trying to upbraid more of our security and our freedoms, there was a really top secret, in the sense that we got details later from reporters in England in mid May I think in which the security people from Google and Apple and government agencies and all kinds of corporations and all kinds of citizen's groups got together to talk about these issues in a structured way. One of the things that came out of that, according to these reports, is that there was an acknowledgement that the Edward Snowden leaks, as bad as they were for the NSA and other agencies, it was a wake-up call to a lot of these agencies saying that we can't do our job if people think we're turning every phone and device into a bug. We need to be more open and more transparent, and more importantly, we need to make sure we don't lull ourselves into a just because we can do something means that we should do something and that we need to have the right to do something. There's grounds for optimism here. Although, once again, it's our responsibility to tell the people who keep us safe that here is what the parameters of your job are. Even if the lawmakers tried to slip something into a free lunch program for lower income school children, and by the way page 1008 of this bill is that every light bulb is now a wide surveillance network.
Mike: Think of the children! We need the surveillance network. Yeah, and of course I'm with you, Andy. I don't think there's room for panic, except for the point that Jeff made, which is that, yes. I think we can tell the FBI no. I think we can tell the department of justice no. I'm not sure we'll be given the choice or the chance to tell the NSA no. I hope that the Snowden revelations and all the fall out that's taken place since then has made the executive branch of government more skittish about allowing stuff like this. But again, I think Jeff has a great point that this may happen under gag orders and all the rest.
Andy: It's for sure that the public's reaction to the Snowden leaks weren't "Oh my god this horrible spy is undermining American security." Holy crap we had no idea the government was doing this to us. We have to make them stop. So that's where my good humor about this comes from.
Mike: Yeah. Absolutely. Well, Ellen Pao. She resigned this week, or was fired, or both. She was of course the interim CEO of Reddit. I think we've all heard the stories. She was at Kliner Perkins, she left, she sued them for sexual harassment and other things, she ended up being the interim CEO of Reddit, and she has not been popular with a lot of the Reddit moderators and interactive users. She inevitably left. What was the mistake? I think there was a mistake here made by Reddit. I'd like to open this up to the group. What do you guys think their mistake was in all of this?
Jeff: I'd like to jump on that in that you showed the New York Times headline. I was perplexed by that Times story. That headline screamed that this was a case of sexism and persecution. That story never reported why she was thrown out in the first place. I think an incredible amount of vitriol and sexism and racism poured out around her, but there was also the case that a lot of people were like, "Wait a minute. They put the wrong person in there to do this job." They tried to commercialize Reddit in a clumsy fashion. That was before delving into the deeper part of this. I was very puzzled and perplexed about how the New York Times framed that. It would have been fair to do some analysis after, but I'd like to dwell on why she was fired in the first place. Why did she resign, I should say.
Mike: The other inaccurate thing is that they point out that she fell victim to a crowd demanding they oust her. She was interim CEO. In order for her to remain in that job, they would have had to actually hire her. Usually interim CEOs are not the ones who get hired for the permanent position. I thought that was a little bit much too. Rene, you had a point?
Rene: Yeah. I was just going to say there's a lot of conflation in that story. Reddit is an interesting company in that they have a company and a community that are loosely coupled. There's no direct control over that community. That community is mostly run by volunteer moderators and by the community itself. There's this business on top of it that's trying to figure out how to make money on top of all this, but they, like several other companies in recent history, have shown very little understanding of the dynamics involved in a community. You often go back to the board. I think Chuck made a good point in the article. It's similar to HP where they hired Leo Apothacar almost without talking to him first. I'm sure they spoke to Ellen Pao, but it seems the way the business was run after having her as interim CEO had very little in terms of savvy, understanding, or strategic preparedness for running a community like Reddit. She engaged not with the community at all as far as has been reported. Mostly with other business units and with media and with stakeholders who were entirely divorced from a community site like Reddit. These things, Reddit is huge, but Digg used to be huge and slash. Used to be huge and communities are migratory, and they are almost this magical thing that bubbles up when you have the sufficient ingredients, and that's highly volatile. It did not look like a successful match was made here at all.
Andy: It was also curious, when you saw her official release on why she left, one of them being that the corporate owners were demanding that she create the user base by a certain percent and that goal was not met. In of itself, you're basically creating a situation where someone has to grow an online community that's sole strength is people being attracted to it not being pushed into it. I have to admit that this was a story where I kept trying to dig more and more and read more and more about it to understand exactly where the failure points were. The only thing that's easy to understand is once there was blood in the water, hey. Female CEO, let's go get her. Which I don't think is the tone of Reddit overall, but unfortunately there is that percentage that all you have to do is point someone towards that target and that target will then decide that this is not worth it. It becomes a challenge for that person to execute the duties of their job. It's a long list of sad tales that are around this story. Some of which are commercial, some of which are based on investors, some of which are about the nature of communities to simply form around whatever locust that community has decided is going to be the meeting point. Unfortunately there is sexism mixed in there too.
Mike: There certainly is. Of course one of the websites that have benefitted greatly from all the controversy around Reddit and also the banning of 8 subreddits recently, banning sub reddits that were threatening physical violence. They weren't shutting down offensive things. There are many offensive sub reddits still on Reddit. But, lots of people said OK. I don't want to be on a site where there's censorship, so I'm going to go Voat. Is that how you saw it? Have any of you tried this website, this Reddit alternative?
Jeff: I never heard of it until Addie at the Verge wrote a piece on it. She qualified and said there's not many people on it. If you want a forum to make fun of fat people or colored people or something, I guess that's where you can go. There's always going to be these dark corners of the Internet and I think it's getting its five minutes of fame, but I'm not sure it's going to catch on as a mainstream thing, although as someone just said, online communities are migratory and it'll be interesting to see a Digg style effect and everyone going somewhere else. I guess there's an opportunity now; if someone can get that critical mass to migrate it will be really interesting.
Rene: It’s also interesting to me that Victoria Taylor was one of the instigating events. Like there were other reasons but Victoria Taylor’s firing was one of the events for this and she’s also a female. The community has really rallied around her so there’s absolutely all forms of diversity problems in online communities. But to me, I don’t know how much the board uses Reddit. I don’t know how much Ellen Pao used Reddit. Maybe a lot, but based on the behavior it doesn’t seem like that much. And it’s hard to imagine a company where, you know, Steve Jobs doesn’t use the iPhone or Larry Page doesn’t use Google search. And unless you have people that are deeply enmeshed in the product that you’re making, there’s always going to be incredible room for things like this to happen. And I think that in order for there to be change it can’t just be an interim CEO, it has to be a board and a CEO who is deeply part of this community and understands it at a very deep level.
Andy: Yea, there’s a saying that’s usually used to complain about effective politicians. But it’s actually spot on for how best to lead a group like Reddit. The saying goes, “Oh, there go my people, I must find out where they’re going so I can lead them.” If you, you basically have to let people do what they’re going to want to do, and the shape that that group forms will tell you what kind of container you need to build for them to both help them make this place that they’ve discovered into something that’s even more attuned to their needs, and also of course, steer it towards a way that you can actually make money for yourself and for your investors. The problem is that a site like Reddit is going to be hitting its head against harder and harder walls as it goes because the reason why it got as big and as useful and as attractive as it was, was because it really was any topic, you can create a subreddit about it, you can create a discussion forum and you can attract like-minded people toward it without a whole lot of oversight. Which means that a lot of the most evil forums of communication where in some of these Reddit subgroups. I guess the point where you want to, you no longer have the ability to say, “You know what? I really have a problem with my company helping people discuss how we should shame a certain group of people into hating themselves and doing themselves harm.” I think that, I’m really cool with the Marvel Comics subreddit, the subreddit about Moto 360, great, love it, but let’s see if we cannot be responsible for hate groups and for people that are doing just really, really awful things. But then you don’t have the ability to really do that anymore because it’s just not the nature, it’s not the shape of the container that you have built, and by the time you want to start to inflict some order and control and improve your service that way, your changing it and sort of tearing it apart and basically you’re sending people out to find some other place to go. So I really don’t know what the answer to that is. I think that what most people want, the people who are most valuable as users want, is moderation. They want a certain amount of, they want to enter into a place where they know there is a certain degree of safety and security. And sites like Reddit are going to have a harder, harder, harder time creating that environment for those users.
Mike: And one of the places where they may have gone is over to the Verge. The Verge had a bad experience and on July 6th, Editor-in-chief Nilay Patel announced that they were shutting off comments on stories. They kept the forums open, but the comments on stories were being shut down temporarily while they regroup and they’re going to come back and be selectively on and so on. In any event, this reminds me of Popular Science, which shut down comments a few years ago. Lots of places have turned off comments because trolls and haters and racists and sexists and all kinds of people who are, say really horrible things, people making threats and so on, you know, ruin it for everybody. And what do you think about their decision? We’ll start with you, Jeff. What do you think about their decision to shut off comments? Was that the right response to a horrible week of trolling?
Jeff: I get it because as a journalist there’s two contradictory instructions. It’s like make it a good community, make people happy, make it nice. And then it’s also like engage people, engage your audience. But you start engaging, you can’t have those without the trolls. They’ll find you, they’ll get in there. And it becomes a question of resources. I mean suppose you can have ten people. How many are you going to allocate to taming the trolls? It might be one people, two people. At a certain point it gets expensive, it gets exasperating and exhausting and then it’s just easier to go, “Ok, enough of this. Let’s pull the plug.” And I think that’s probably what The Verge is doing right now.
Mike: Andy, what do you think? Is this, are we going to see even more of this coming out? Because again, every time you shut off an avenue for trolls, those remaining trolls will find another place which makes that other place worse, which causes a new crisis at that other place. What do you think, where do you think this is going in terms of a phenomenon online?
Andy: I think that we’re going to find that a lot of people who are responsible for creating contact are no longer going to want to be responsible for creating the forums to talk about that content. There are a lot of journalists that feel as though that is a critical part that makes online publications so important, that you not only do your reporting or do your editorial, but you also have a conversation with those people that are reading it. That’s great, and that’s a great principle but you have time to create new journalism or you have time to moderate this, what could be a very, very active and very, very contentious place. And like I was saying a minute ago, you don’t want to be responsible for creating a place where people can say, “Any fat chicks should just go kill themselves right now. I can’t stand those blanket-blanks who live in this part of the country, they are all f***** ugly and I think they should all shoot themselves right now.” You can’t delete those comments fast enough and you’re shocked that those things are up for even the 15 minutes while you were trying to copy edit and post something brand new. It’s such a simple solution to simply go into WordPress, flip one switch, and turn off comments. And now your life gets so much easier and so much better. And if somebody complains about it you can say, “Here is my Twitter handle. By all means direct comments to me on Twitter or here are any other places online you can create your own board for discussion or participate in here. I’m perfectly ok with people saying whatever they want to say wherever they want to say it, but I don’t have to turn, keep the lights on in a room where they get to say that sort of stuff. Before I turned off comments on my own blog, I used to have a saying that, “I love the first amendment, I love freedom of speech so much that I purchased exclusive rights to freedom of speech on Ihnatko.com. You are welcome to also purchase exclusive rights to freedom of speech on your own forum, because that’s God bless America.”
Mike: Yeah, exactly. And Rene Ritchie, is anonymity a problem here?
Rene: Yeah, so I’ll just preface this by saying that we have both forums and comments on iMore. We’ve got about 10 million monthly readers on iMore, about 37 million on Mobile Nations. And we believe deeply in the comments system because my bosses, they grew up making mobile communities. In fact our titles where originally community editors before we got all, you know, journalistic about it. And it was really an online community that’s grown up all the content that we made. So whenever anyone mentions we should turn off the comments, they all get almost like a visceral, defensive nature about it. And we have a lot of moderators and a lot of volunteers and a lot of paid employees who spend a lot of time sort of, policing’s the wrong word, but sort of making sure it’s a good experience. Because you could have a great article and someone lands on that article and you know, it’s beneficial for them to read it. But then you hit the comments and it’s a cesspool and it makes them actually not, makes the entire experience a negative for them. And we’re really conscious about this. But I think a large part of it is what you’ve said. There is that greater internet F-wad theory, that internet plus anonymity equals a troll or whatever you want to call them. But we’ve seen that when people have Facebook comments on which do theoretically link to real names, or Google + comments that do theoretically link to real names, it doesn’t really mitigate the behavior. People seem to believe that when they’re disconnected, when they’re through a monitor that humanity no longer exists. And when you do remind them of it, sometimes they’re contrite about it. Sometimes they’re not. But there’s always someone else who’s coming on who is angry or upset about something and spewing into the comments is a very easy thing to do. So I, every time I see Daring Fireball never had comments, I remembering Gdgt turned theirs off, The Verge is turning theirs off for a while now. I think about it, and part of me thinks it’s a great solution for every reason that Andy mentioned. And part of me just laments that there are so many wonderful aspects of the internet that we are increasingly turning off just because people routinely misuse them. And I don’t know if there’s an easy solution to that.
Andy: Yeah. I keep thinking about, I think in the past 10 years I can only think of one site that has a beautiful comment system where there were going to be at least a couple hundred comments on every single one, and almost every single one had something thoughtful and positive to say. And the author of the post was having an ongoing conversation that was also beautiful. And that is RogerEbert.com And that was Roger specifically investing so much of his heart and so much of his faith in that the people who are coming to him to read his stuff on his site are not going to be jerks. And I have close knowledge of how that process went. And there was very little moderation needed because for some reason you would see this, you would see the Sistine Chapel ceiling and you have the can of spray paint in your hand and you say, “I don’t think I, I can find another place to spray paint a penis than this wall. I’ll find someplace else where it wouldn’t seem to create so much damage I think.”
Rene: Asymco seems to be like that too.
Jeff: I’ll add one other site that I think does comments well. Ars Tehcnica, maybe because the topics are a little less satiric. I mean they write about fiber broadband and patents and things. But they have a lot of smart people and the authors participate and they seem to do ok. And one other place is Techdirt, and Mike Masnick is still a big proponent of having commentaries and still thinks it works. But otherwise I think overall it’s moving in the other direction and people are going the way of The Verge.
Mike: Yeah. Yeah, definitely. Well, we’re going to come back and talk about Facebook and some of the things that they are up to. They’re definitely out to get Google one way or another. And we’ll be talking about that. But first let’s talk about Audible.com. Now I have been an Audible user since the year 2000. And in fact, on one of the last shows where Regis and Kathy Lee shows in the year 2000 that Kathy Lee was still on the show, I actually came on that show and demonstrated Audible. Back then it was a physical device because this was before the big iPod revolution, before the smartphone revolution, before any of that, they actually had to make a player so you could listen to books. And since then they’ve gotten better and better and better. And one of the things that Audible has gotten so great at is the actors and the voice professionals who read many of these books or are still the authors sometimes read the books. And they are fantastic. Let me give you an example of something we, one of the most popular, especially on BitTorrent, TV shows of course is Game of Thrones. Ok, Games of Thrones is just like anything else that goes from a book to television. It loses a lot. The actual book is wonderful and Audible.com is a great, great way to consume that book. Can we listen to this and hear what it sounds like?
Game of Throne: The Song of Ice and Fire by George R.R. Martin read by Roy Dotrice.
Mike: Even his name sounds good when he reads it. That’s unbelievable. Now that is Roy Dotrice who is doing the voice acting there and it is great. Now if you’re one of these people who don’t like the Game of Thrones because it’s phony history, it’s not really Europe, it’s not really the Middle Ages, it’s kind of they’re drawing from those images and so on, if you want the real thing, try Richard III and the Ultimate Game for the Thrones by C. Derbyshire. And this is narrated by Daniel Penz. This is actually references the Game of Thrones because a lot of the kinds of machinations and cut throat contests or power during the reign of Richard III of course are just like, you know, a lot like the TV show. But this is the real deal. Let’s listen to a little bit of this.
Richard III and the Ultimate Game for the Thrones: I was the throne of England. The game was harsh and it was brutal. Rival families went to war leaving cousins dead on the battlefield. Brother fought brother as power corrupted and twisted men’s souls.
Mike: See, now that sounds like entertainment. But all that stuff really happened, so really good history. Now I know that if you listen to TWIT, you know, with your, probably with your smartphone, or you may watch it or whatever, you know the value of learning and getting content through the spoken word. Of course books are stories. Fiction books are stories. And for the vast majority of human history, stories were an oral medium. People told stories. And since Guttenberg and literacy, we now get our stories primarily through books. But ultimately human stories are supposed to be, or at least originally they were an oral medium, a story teller told you stories. Homer for example. We get Homer, you can read it now, but for centuries Homer was just something that somebody told you from memory. And this brings you back to that magical experience of being told a story by a great story teller. For those of you that need two audio books and to give Audible a try, today we are offering TWIT fans their platinum plan. This gives you two free audio books to try out and two book credits per month. It’s a great deal for people who enjoy listening to audio programming and with other plans you get a free subscription to the Wall Street Journal or the New York Times daily audible programs. You get to take your pick. And for more details and to get two free Audible books and their platinum offer, go to Audible.com/twit2. That’s Audible.com/twit and the number 2. You’ve got to try Audible.com if you haven’t yet. Well Facebook is up to something. They are obsessed with video these days and I suspect the main reason is that video advertising is very lucrative. They can make a lot of money off video advertising. But they are apparently talking to the music companies, which started a rumor that they were going to get into an Apple Music type of service. They said that they are not building a streaming service. Ok, so that doesn’t mean they are not getting into music, it doesn’t mean, it doesn’t mean a lot of things. What do you all suppose, Rene Ritchie let’s start with you. What do you think Facebook is up to here? Are they just trying to compete with YouTube or are they intending to compete with Apple Music or with iTunes? What is their game here? What are they probably going toward?
Rene: It’s amazing because historically a lot of people have likened, first Microsoft and then Google to semi-drunken giants. And they meant by that that you never knew where they were going to put their foot down next. It might be firmly on top of your business. Because they were large, they were well financed and they were hyper-competitive. And Facebook really is like that because you really can’t tell from one minute to the next what they’re going to do. Like Mark Zuckerberg really wants to make a phone and then he wants to make an operating system later. And then he doesn’t want to do it anymore. And then he wants to make maps. And there’s no maps. Now he wants to make music. And because you have such a character almost like Mark Zuckerberg, they really can spin on a whim and then choose where they want to go. And video has been really interesting because they had massive stats for videos. But those videos were self-playing videos that as long as you scrolled down your time-line you would see that video and is that stat real? If someone watched it for two seconds as it flew by? I don’t know, I don’t know how it was reported. And then recently we heard about all the free booting, where people would just rip videos from YouTube including famous people, put them up on Facebook and they’d become viral completely away from the content creators. So it is not at all hard to believe that they might want to get into some sort of more formal arrangement for these videos. Especially if they are forced to be as protective about content and content rights holders as YouTube has become. But again, I don’t know if a month from now they’ll decide that something else is the most important thing in the world, and I think that’s part of what makes them both scary and fascinating.
Mike: Fascinating to all of us and scary for anyone who tries to compete with them. Now there’s an interesting element to this. Of course they boosted video, I mentioned that they are obsessed with video. They’ve done it mainly by just tweaking their algorithm and making videos more likely to show up in people’s news feeds. And of course the majority of the stuff that people post, your family and friends post, if you leave all the defaults on you’re never going to see those in your news feed. They are available to you. Yes you can change the news feed, but that’s one of the ways they boosted videos is just by making videos show up in your news feed more.
Rene: Well made-up Facebook videos. And I think they down prioritized links to YouTube on competing services.
Mike: Yeah, yes. And they can just do that stuff, of course algorithms are secrets, they don’t have to explain what they’ve done they can just do these things. But Facebook actually did something great and welcome and also surprising, which is they added user controls to the news feed that enable anybody to get a lot more control over the news feed. Why do you suppose they are doing this, Andy Ihnatko? Are they just, you know, it seems uncharacteristic of Facebook to do something like this that seems to kind of harm their control of what people see in their news feeds. But it does in fact benefit users. Why do they do this?
Andy: Because the news feed is their one product. And you can’t put poison down your one well. And I think that it’s also sort of anticipates moves they made, it echoes moves they made over the past year and maybe anticipates moves they are about to make that they’re about to use that news feed for all kinds of new kinds of content, to new kinds of partner agreements and new kinds of discoverability. I believe Zuckerberg and Facebook when they say they have no immediate plans to create a streaming music service, but that doesn’t mean they’re not talking to labels about ways for them to insert, I wouldn’t say ads, but “discoverability” for heavily marketed new tracks and albums into other people’s news feeds. And so the realize that once that news feed becomes this unrelenting conveyor belt of crap interspersed with pictures of your mom’s new cat, that’s when people start leaving Facebook and start going to other services. So I think that they are going to need to give users more control over what appears in that news feed to make sure that that news feed continues to be a really good central landing point for all of their users to start using the internet. And that really is what Facebook is all about to the people who use it. It’s that centralized dashboard that will give them a collected sort of feed of all of the things that they’re interested in. Not just news stuff, but again their personal relationships, private conversations and stuff like that. So it makes sense for them to want to preserve the integrity of that for their users. It is one of those Apple moves where, “Let’s make a move where it’s very much for our users but also benefits us in the long run.”
Mike. Yeah, for sure. Well, I don’t know about you guys, but I hate it when a big company buys another big company that makes products that are beloved by some people, and then they shut it down or they wind it down or they hide it or they do something like that. Yahoo does this a lot, lots of companies do this. It looks like Microsoft is kind of sort of doing that with the phone business that they bought from Nokia. What is going on at Microsoft? Why are they sort of de-emphasizing their phone hardware business?
Jeff: Now hang on, Mike, you’re not saying you love Nokia, are you?
Mike: No, I’m not, but a lot of people do and a lot of Finnish people do, and you know, this is a company with great technology, they just happen to not be Apple or Google. And anybody in the smartphone business who isn’t Apple or Google is not going to have an easy time competing with Apple and Google. But Jeff, this is, people had a lot of high hopes. And everybody said, “Hey, if they would just come out with some innovative, high end flagship smart phone hardware, they could start to creep up and actually become a player.” But it looks like they are kind of backing off.
Jeff: Yeah, I mean they gave a good run at it and I’d like to hear from the other guys what they think. Did they even have a chance? Because some school of thoughts were like Ballmer had to do this. With mobile you can build it or you can acquire it. And acquire it was faster and they gave it a good shot. But it just didn’t work. Why was that? Could Microsoft had done it different? Was there any way Microsoft could have made a phone entry? Was it bad execution or was it something that just never should have been done in the first place?
Rene: I think they were criminally – wait, go ahead, Andy.
Andy: I just wonder if this isn’t a cookie that the wave towards other handset manufacturers. Because the more you look at what Microsoft has planned for 2015 and beyond, they are really going all in on this “There is no difference between all of our platforms. There is one thing called Windows and it runs on whatever screen you happen to have in front of you whether it is a phone, whether it is a desktop or anything in between.” To the extent where they are encouraging developers to write this one app that will rearticulate itself depending on what piece of hardware it finds itself on at one given time. And that could be a really incredible twist to computing. Apple famously has, you know, made the comments about “We’re not making toaster fridges and we’re making pickup trucks and we’re making cars and we’re making different things that are tailored for different experiences.” But if you’re looking at a user base that isn’t necessarily a huge fan of any one operating system, they just want a phone that does good things, and you say, “Well, here, try this. It costs $149 and basically all the software that you’re running on your laptop right now also runs on this and you never have to worry about where you data is or whether you can use it on this device.” That could be really, really compelling. And there might have been a time where they had to own a handset manufacturer to get anybody to make a Windows Phone hardware. Maybe it’s more valuable for them to say, “Look, we are not going, HTC, Samsung, all of you guys, LG, if you want to try to make, we are not going to be competing with you in the handset market. Please just make stuff that will support Windows.” And that could be a win-win for both companies.
Rene: I don’t think this is, personally I don’t think this is any surprise. I think Microsoft was one of those companies where their success hid massive problems within their organization. And we sort of see that now. They were almost, you know criminal is the wrong word, but they were blatantly, terribly bad about entering mobile. I was a big Windows Mobile user, I think the Trio Pro was the last Windows Mobile user I had. And I had—
Andy: Me too.
Rene: At one point I had Windows PCs, I had an Xbox, I had the Trio Pro, and none of these could talk to each other. There was no integration. Bill Gates made those famous speeches at CES about how wonderful it would be to put your phone down and it would take over your computer. It was fantasy. They were never able as a company to execute on any of those things. It took Apple and Google a while to do it themselves, but they did it before Microsoft. I could get fully functional office on my iPad before I could get it on any of Microsoft’s mobile products. And you could blame Steve Ballmer for this. I certainly would. I don’t think buying Nokia did them any benefit. They devalued that company extensively before they bought it. And it just looks like they were completely inept in embracing mobile. And I don’t think you can recover from that. I’m sure as a company, I’m sure they have tons of money. It’s not like HTC or like Palm was or like Blackberry was where they have no ancillary products to help see them through difficult times in mobile. But it’s hard to see any good resolution to this. When they did finally get their act together, it was years too late and it was with products that were just not compelling enough to take on companies that entered mobile way after they did. And if I sound hugely disappointed I am because I want to Apple because Microsoft just didn’t do anything. And I would not be at Apple today if they had their act together earlier. Now I feel so bad.
Andy: It’s also smart that, I hope that their plan was never to be a big success on the level of selling phones. Because that’s never going to happen. You can’t judge your, you can’t build your career saying, “I’m going to be the Beatles.” Because there is already the Beatles and there was a specific set of circumstances that allowed the Beatles to become the Beatles. What you have to do is figure out what your skills are or what your own re-elections are and play to those strengths. Microsoft, just like Rene said, they finally found their car keys about 4 years ago. I mean they’ve just been fumbling, they spent 10 years just patting down pockets and checking the jacket in the closet that they already checked 14 different times before coming out with any sort of a strategy for creating operating systems and software and services that were really, really relevant in a post iPhone world. They finally figured it out, they figured out that they needed to get rid of Ballmer for one thing, but after that I think that they’re on the right track now. The things that I’ve seen about Windows 10, I’ve been using Windows 10 for a while. I’ve think that they’ve got a lot going on that Apple is missing out on, believe it or not. But it’s all about if they can actually execute this great, great plan. It would be the first time they’ve actually done it, but again, and I think they found the car keys 3 or 4 years ago so now for the first time I don’t feel like an idiot for thinking Apple might, that, excuse me, that Microsoft might be finally able to do something smart with phones. And I hope that if they are getting rid of Nokia the same way that Google got rid of Motorola, or at least the phone arm of Motorola, I hope that it’s for the reason of trying to enhance more people to buy, to manufacture hardware that supports this new vision that they have.
Mike: Yea, I said a while, I think the real problem is that if you go down the laundry list of superhot mainstream platforms, there isn’t a lot there. You know, IDC just announced this week that the PC business has declined 11.8%. This is a continuation of a decline that’s been going on for a long time. But that’s a huge drop. Garner reported 9.5 but they’re actually counting high end tablets as PCs. You look at the tablet market. Everybody’s—even the iPad is not doing what people think it should be doing. In general, people buy one and that’s it. They don’t have to upgrade, they don’t feel any pressure to upgrade every two years or whatever. Even Apple in the smart watch business, we’re hearing reports that the Apple Watch is not selling as they had hoped. And the only category that’s just exploding and continues without a sign of abatement is the smart phone business. Now again, this isn’t necessarily, Microsoft doesn’t necessarily have to be in the handset hardware business, but they really need to be, they really should be in the hot business. Where else can, well, where else, where can Microsoft succeed? Is it in the future of Xbox? Is it the future of HoloLens? Is it the future of the Surface Hub device which by the way is a fantastic product, they’re just not going to sell a lot of them because it’s not a mainstream consumer product. Where is this going? Jeff, let’s go to you. What do you think Microsoft’s best bet is to become what they were historically, which was a behemoth that’s you know, sort of an industry leader driving a platform or two?
Jeff: Well, let’s start with one thing that’s really struck me which is Microsoft is interesting again. We didn’t talk about Microsoft the last couple of years, it was just sort of a joke over on the side that milk Windows and then it would sort of slowly go away. But it seems lately they’re making some bets. Will it work or not? I don’t know. But as Andy says, they found their keys and now let’s see what they do. As for a way out, I don’t know. Xbox always seems like a kind of, not a crown jewel, but it’s the one product I like, that everyone likes. I hate Windows. In my new job I have to use Outlook and it’s deplorable. So, but what they’re going to do next? I don’t know. My colleague Barb Darrow says they’re betting on cloud but is there room for them to get in there? I don’t know but let’s just start with the fact that Microsoft seems interesting and I’m not sure relevant. But they’re certainly there. Don’t count them out.
Rene: I have a hard time seeing it, and just to go back for a second. The Apple Watch is interesting to me because those numbers that were reported were not well reported. And Apple never announced figures for what they wanted but my understanding is when you look at the wearables market and you look at what the Apple Watch has sold, it’s done really well for that kind of technology. And it’d be interesting to see compared to other entry level products and other products that spike during a sales season and go down. But I think the same with the iPad. The iPad is not selling as well as it used to be. A lot of companies would give their eyeteeth for a business as profitable as that. And my guess is that Apple Watch is extremely profitable right now too. And that’s the problem with things like Microsoft and even things where you look at Android. Huge, huge platform but you go back to those profitability figures, and Apple’s getting 92% of that profit. And what can a company like Microsoft do to be profitable because as a people we’re increasingly saying that software and services have no value to us. We want them if they’re free and we’ll give very little else beyond that. So what position companies like HTC and companies like Motorola and companies like Nokia/Microsoft can do to survive and be viable products in their own right? It’s really difficult to see. And even if you think they’re talking bold bets with things like HoloLens or they’re going all to the cloud. Maybe that’s an IMB business eventually where they’re a huge company that nobody ever really thinks too much about because their infrastructure and backbone and adjure is feeding a cloud or something else like that. Really, really hard to see. I will weep if that happens because I want a highly competitive environment. I’m weeping right now for Blackberry. Maybe they were interesting when they announced the Passport but as time goes on you start to see what happens to these companies. The bold bets they make they don’t pay off anymore and they start to make sort of, like Andy said, they find their car keys but maybe at a time where we no longer use cars that much. So my greater concern for Microsoft is whether they are as a culture able to make great products again. Whether that product is cloud computing or that product is a phone because corporate culture really matters. We’re seeing that as one of the driving forces behind success these days and Satya Nadella is doing an amazing transformation. But is it enough fast enough? I don’t know.
Mike: Rene, do you have any predictions or advice for Blackberry?
Rene: So I mean I’m nobody. I can’t give them any advice or predictions at all. I’m more of a Canadian who lost Nortel and lost Corel and lost 3D Effects and lost a lot of other great Canadian companies.
Mike: But why was Corel such a big loss really?
Rene: I mean, very few countries have sort of the technology view. Very few countries made major mobile operating systems. You know, the U.S. has Android and iOS. But there’s not that many countries that do it. And as sort of a point of pride that Canada had first the J2ME that ran Blackberry and then QNX, and unfortunately it looks like Blackberry might take QNX down with them, yet to be determined. I don’t know. They’re going all in on Enterprise but they’re making a couple of new devices like the Classic and I forget what the other one that’s coming out, maybe they’re making an Android phone now. But like Microsoft, I don’t know if it’s too little too late. And unlike Samsung and unlike Microsoft they don’t have massive ancillary businesses to drop profits on to keep them going in the interim. So I’m not, I’m sadly not optimistic.
Andy: Well, I got to say that for profitability no one can touch Apple. They are fantastic at generating money. There is just no one that can touch them. But it has to be said that they’re able to do that because there is a company like Microsoft that is serving the needs of about 80, sorry, about close to 90% of all desktop users in the world. There are things that Apple is unwilling, or let’s also confront the idea that they are also may be unable to do, which is to sell computers to the entire world, not just the people with money. The entire market share of Mac OS and Windows… Mac OS and Linux combined is one half the market share of Windows XP. That’s how tiny the user base of Mac OS is. Same thing for the iPhone. Where they are, Apple is either unable to unwilling or maybe even again unable to create phones that the entire world can use. They are making, they are able to have the business they have because there are other people that have the responsibility for putting a computer, for putting a phone in the hands of everybody who needs or wants a phone. They just want the people that have money. So this is good for Apple because this is not just for, you know, money, money, money, we all like money. But that gives them the ability to experiment more, take bigger risks, have bigger failures that the can absorb by a cushion. But let’s not pretend that Microsoft is not providing a valuable service for the entire world with their product. Again, they are the gears and the grease that runs business, that runs worldwide computing. Again, Apple they don’t want that business or they don’t care about that business. So I just don’t like it when, I don’t think that Rene was taking the discussion in that direction, but whenever we talk about this in general, we have to say that, again, if Apple, if we were to have a magic want and make Microsoft disappear and now Apple is forced to compete where people come into the store and say that, “Well, I’ve got $500 to spend on a desktop. What can you sell me?” And what you can sell me is, “Here’s how much time we put calculating the proper chamfer angle of our $1,300 computer.” It’s like, they’re going to find that they’re going to have to start making less expensive computers and they’re going to have to start making computers that that user in Pakistan, and that user in India is going to make sense for them. And again, they have not demonstrated that they have the ability and the knowledge to actually build a computer like that. They show me an iPhone 6 and I’m dazzled, but I’m also dazzled by a Raspberry Pi. And I think they’re both on the exact same foot in terms of what’s really, really an impressive achievement in computer engeineering.
Rene: I think you’re absolutely right and I agree with you 100%. My only thing with where I was going with that is that some companies – I loved WebOS, I loved Palm, I love Nokia, people were streaming live from the N95 long before they were using Meerkat or Periscope or anything—but I think a lot of companies thought that after Apple and after Google they would be the defacto, basically it was their right to be the 3rd place participant in this category. And it turned out that Android was both 1st place and 3rd place. Whether that’s different carrier, different manufacturer, Android Open Source Project, Chinese Android, like whatever you want to label it, there was no divine right to 3rd place. And Microsoft, like Blackberry, Blackberry wasted a year on the playbook and didn’t make phones. Microsoft made the Surface and tried to advertise it against the iPad and then against, awkwardly against the Mac Book Air without changing the copy that said, “Hey, we’ve got USB ports.” And that sort of stuff is just not good for us as an industry. And I wish Microsoft was better at it because I don’t want the choice to be between two different Googles or you know, different versions of Android. I rather we have better, more robust competition.
Mike: And just a correction. Andy, you said that somebody walked into the Apple store and said they wanted to buy a $500 computer and implied that Apple doesn’t have that solution. Of course they do. Their cheapest wristwatch would be what they would sell you.
Rene: Mac Mini iPad.
Mike: Right, exactly. This is a far better use.
Andy: You’re going to have a hard time writing your term paper on Apple Watch. And the fact that it’s going to spend every keystroke 10 seconds communicating back to the phone and then getting the keystroke back again, that’s also going to… you’re going to have to get a late, take the letter grade down for being late with that.
Mike: Well we’ve got some more stories coming up in just a second. But first, let’s talk about mobile payments. Let’s talk about Braintree one of our sponsors today. If you’re a mobile app developer check out Braintree. Braintree’s the payment solution used by companies like Uber, Airbnb, Hotel Tonight, Living Social and Munchery. You have already used Braintree if you have used any of those services. Now developers must believe in their product, and Juan Benitez the CTO of Braintree talked to us recently about the feedback he gets from developers. Let’s check that out.
Juan Benitez: Now when we talk to iOS engineers they get really excited about how fast and easy it is to have Apple Pay through Braintree. Just a ton of feedback from Android developers saying, “Wow, great. Now I can get Android Pay.” Then you see people really kind of responding saying, “Wow, I can do more than one of these through one integration, one STK and one report too? Wow, that’s going to make my finance guys happy.”
Mike: Braintree has made the payment experiences in these apps seamless and magical. And now you can add a similar experience to your app with excellent customer service and simple integration. Braintree gets you ready to receive payments quickly. And Braintree’s continuous support plus fast payouts means you’ll be prepared as your company grows from your first dollar to your billionth dollar. There’s some optimism for you. Braintree is helping solve the problem of mobile cart abandonment also, huge problem if you’ve got, if you’ve got a shopping cart on mobile by offering best in class mobile check out experience. The reason people wander away is they get confused or it takes too long or it’s too involved. Not with Braintree. It’s so easy for them to get to the end and they will buy your product or service because Braintree makes it so fast and easy. So Braintree gives you a full stack payment solution, support for all payment types that your customer might want. You can accept PayPal, Apple Pay, Bitcoin, Venmo, credit cards and a lot more all by using a single, simple integration across all platforms with superior fraud protection, very important, superior customer service and very fast payouts. So learn more and for your first $50,000 in transaction fee free, go to Braintreepayments.com/twit. We thank them for their support of TWIT. Well, Jason, you’ve got some of what John C. Dvorak calls house ads. Let’s find out what happened here at TWIT in the past week.
Narrator: Previously, on TWIT.
Fr. Robert Ballecer, SJ: How did we stumble into this?
Narrator: Tech News Today.
Mike: Trading was temporarily stopped on the New York Stock Exchange floor today because of some technical issues. Also, United Airlines grounded all flights today for about two hours after experiencing what the company said was a network connectivity issue.
Kevin Tofel: From what we’re hearing from the NYSE, they’re not related at all. They’re not cyber-attacks. I did tell the NYSE to reboot that Raspberry Pi that they run everything on but they didn’t listen to me.
Narrator: iOS Today.
Megan Morrone: So you had this excellent idea for us to get our craft on, make some DIY iPhone and iPad cases. I think I did it. Ta-da.
Narrator: This Week in Google.
Mike: Google has this software that will make images and the end result is pure unfiltered LSD. This is closer to how the human actually works.
Jeff Jarvis: Jason, can you call the guys in the white coats for Mike? If this is how his brain works?
Narrator: TWIT. Some assembly required.
Mike: All right. Great material there. I don’t know what Padre and those guys were doing at the beginning. Wow. Great stuff. Well, gentleman, Jawbone is suing Fitbit. This is the 3rd lawsuit in a while. This one in particular is being filed with the International Trade Commission. What they’re trying to do is block Fitbit from importing fitness trackers or even the parts to those fitness trackers because what they’re claiming is that employees were poached. Jawbone employees were poached by Fitbit. Those employees stole proprietary company secrets and they brought them over to Fitbit and then Fitbit productized them. Jeff, is this, from what you understand does this case have merit? Does that whole argument have any merit? Do we have enough information to even know that?
Jeff: What this screams to me is that Jawbone is losing to Fitbit. You only start pulling these kinds of tactics up when you’re losing. The factors, the ITC and the patent lawsuit, those two always go together. If you’re suing in one, you can sue in the other automatically. So I would just read this whole story as simply being Jawbone’s loser in the business stuff. And so they’re pulling out the dirty IP tricks. That’s my take on it. I mean, you might think that else wise.
Mike: All right. Any thoughts, Andy?
Andy: No, I mean, exactly what Jeff said. I’m reading about this lawsuit and it doesn’t seem as though Fitbit is doing anything that other companies have not done without any attraction of lawsuits. I think the big problem is that they are making money and making products that people find relevant, whereas Jawbone is (laughing), Jawbone is the Christmas present that a kid opens, excited until he sees the logo is not the Fitbit logo. That is what Jawbone is right now.
Rene: The only thing I can add to this is that again, we look at companies often and we forget that they are made up of human beings. And human beings do not take losing very well. And it’s very easy, and sometimes there’s even merit in it, to believe a company has unfairly won a market or is winning, you know, for an unrighteous reason. And then the human response to that is, “Well, we’ll go ‘em.” And that often manifests in business as a lawsuit. So there could be people very well inside Jawbone that truly believe to the depth of their being that they have been badly done by and this is a recourse they’re doing. And whether or not that has any basis in reality is in up to anyone to choose.
Mike: Well shifting gears a little bit, it appears increasingly like the internet of things is becoming mainstream. On my in today, I was listening to Pandora. I don’t have the ad free version, I have the advertising version. There was an ad for IBM’s Internet of Things platform, which is kind of vague. But still, on Pandora. On the Green Day channel too. So it’s really, it’s becoming more mainstream and another example of that, probably even the best example, is that Target has opened a, let’s face it, it’s an Apple store essentially, where they have all kinds of Internet of Things devices displayed not in techy, geeky sort of like Radio Shack kind of way, but again, in a very consumer friendly, warm and fuzzy Apple Store kind of way where it’s like, “Look at all this fun stuff for the Internet of Things.” Is this a good strategy for Target? What do you suppose they hope to gain from this? I’ll throw that open to anybody who wants to jump on it.
Andy: It’s a tough thing to sell to people, isn’t it? I mean you have to, there are so many devices that are on sale in the past year and a half that simply did not exist two years ago. And we’re talking about smart watches, we’re talking about smart lightbulbs, we’re talking about thermostats, things like that, that people did not grow up around, that they don’t have an existing use force. So what they have to do, the stores that are a lot more aggressive or do a lot more handholding to say, “Here is why you would want to spend double the amount of money for and LED bulb than for the ones you get at Home Depot. Here’s why you want to create, you want to spend this astronomical amount of money for a Nest Thermostat. And here’s why this wristwatch that won’t even tell you the time until you actually do something to shake it and wake it up is much better than the watch that you have on right now that your grandfather gave you. And so you do need these active demo areas. And that’s particularly going to be true of Target. When people come into an Apple Store with a probably with a fundamental knowledge of technology or with a desire to know. People come into Target because they’ve run out of salad dressing. So to have this sort of better outreach to be a warm, friendly environment, clean with everything running and no fingerprints on them. That’s just smart for Target.
Rene: And to add to what Andy said, I agree with him completely and I’m saying that a lot because it is true. But I think that 50 years from now, 20 years from now all our stuff will just be smart. But we’re in the period of transition and turbulence. And to get from there to here, I’m sorry, from here to there people are going to have to go through a process. Now things like Target is an approach trying to ease us into that process because things are going to be more difficult and more confusing and more expensive over the short term but in a few years from now you’re just going to get things with chipsets and radios in it. It’s just going to be the way that things are. Sort of like how now we have things that have electricity in them where they may not used to have them. And Target is probably doing a smart thing because the worst thing that could happen is that some other company gets the early adopter wave where there’s a lot more money and a lot more interest to be made. So I think things like this are great. Whether Target is the best approach? Who knows? Amazon’s going to do something and again, 5 years from now we’ll all be using our Hue Lightbulbs or whatever lightbulbs we have.
Mike: You know, everybody talks about the internet of things. And you’re absolutely right. Everything’s going to have a chip, everything’s going to have a radio, everything will be potentially able to connect. But I feel like this is just a train coming down the track, a train wreck coming down the track really because I don’t see this segment of the industry doing anything to solve the problem of multiple incompatible platforms on multiple levels. And I don’t see any dominant players, I don’t see any sort of agreement, I don’t see enough of those sort of cabals that they form around standards and so on.
Rene: Brillo, Mike, brillo.
Mike: Right, exactly. So I mean, Rene, if you were to go back in time 15 years or 20 years or whatever, they would say, “Oh in the future you’ll have all these devices attached to your TV and only one remote control. Everybody will have one remote to control everything.” And of course, everybody’s got a whole pile of remotes. Because the TV industry has not figured out the relatively simple solution to the problem of multiple incompatible TV remotes. And people are confused. You know, you go into your average house where they have a TV and a couple of devices plugged in, and they pick up the remote to this, they figure it out. They’ve learned through trial and error that if you pick up this remote and push this button, and then you pick up the other remote to do the volume, and then you have to go… I mean, this is where TV remotes are at. And this is not an original thought, this is called the basket of remotes problem. How is this industry going to get the internet of things to actually be an internet of things?
Rene: Just to illustrate that point my mom has a Samsung TV and a Samsung cable box and one does not fit under the other. And with the cable box next to the TV the audio is out of sync but when it comes to the Apple TV it works fine. And she’s just a normal person and has no idea how to cope with any of these things much less the three controls that came with two devices because one has a flat surface and one has buttons. So I think that problem is absolutely right and I apologize who I cut off.
Mike: Yea, who’d you cut off? Was that you, Jeff?
Rene: Yea, Jeff, sorry.
Jeff: No, I think Mike that is really astute what you’re saying. That Target can build it but will they come? I think really with consumer stuff, people see their friends have it and they want it too. I’m not sure you can educate people into taking it up. Yea, the IOT’s coming and companies want people to adopt it but you have to use consumers as a use case. And as for the basket problem, I heard something insightful which is that it’s got to be something in your house already and there’s only three viable things. It’s security systems, it’s the cable company or it’s like the HVAC and the utilities in your house. And those are going to be the platforms and someone’s going to have to piggyback the standard and hook devices onto that. But simply coming in and expecting the consumer to adopt it if they can and get a connected lightbulb, I think at certain point putting the card before the horse. I think we need to establish a use case and some buzz and people will come. Simply putting it in Target is not going to work.
Rene: I think the smartphone or the mobile in general abstracts a lot of that away, though. And whether it’s Apple’s Home Kit or Brillo hopefully it will end up sort of being like Android Auto or Car Play or if there’s 3rd party vendors like QNX or something where it doesn’t really matter the person anymore. They just get into the car and if they have Android they have a great experience. And if they have iOS they have a great experience. As you start buying more of these things – right now I have Hue Lightbulbs and Sonos Speakers and a couple of other things and they’re not great because they’re not compatible. But they’re all just apps on my phone. All I really need is my phone or my tablet, now my watch a little bit to control them and as things like Android’s Home Automation takes off and Home Kit takes off, I’ll have things like Siri or Google Now and I’ll just say, “Hey Siri, crash the compound.” Or, “Google Now game time.” And a lot of it I think, I hope, will sort of take care of itself because these sorts of transitions are often matched by transitions in user interface that make things easier. And typically more mainstream than ever before. And hopefully we’re aligned enough that those interface improvements will hit at the same time as things become more connected and smarter in general.
Andy: You also have to sell it to the right people. I’ll never forget the time when at my mom and dad’s house I would come over and I would set up the Christmas decorations. And I remember the first time that I decided that, my folks they had like those little window candles in every single one of the street facing windows. And I remember the first time I bought a whole bunch of X10 controllers. And I showed my mom, “Now when you want to turn on the lights, all you have to do is push this one button that I left on the end table and the Christmas lights will come on and the window lights will come one.” And she’s like, “Oh my God, that’s so wonderful. That’s so time saving! Oh, how’d you do that?” And then I thought, “Ok, so now that the local anesthetic has taken effect, let’s see if she’ll go for the real ones.” “Now, mom, with this I can also plug in this other box that would turn them on and off automatically at the same time every day.” And that was going to cause a fire, she wanted nothing to do with it. So there are times when, there are people who love the demo, they would love to attend like the 1962 World’s Fair and see the push button house of tomorrow, but they don’t want to have the push button house of tomorrow. People don’t know that their Apple TV can actually learn how to use whatever remote you’re using for your other TV, but it’s simple and more direct to say, “Here is the thing that is shaped like an Apple TV remote. I know that this is the thing that controls Apple TV, here’s the thing that’s shaped like my cable box remote. I know that this is the thing that controls the cable box. So it’s not an easy problem to solve and I think that it won’t start to get solved until people a year from now, two years from now can be told that, “Oh, well, did you buy, do you have an Apple TV?” “Yea, I bought one last year.” “Well, that has everything you need to do this except for the lightbulb. So if you want to spend another $4.00 for this lightbulb it can do things like make sure that the front light is always on at sundown and always gets turned off at 11:00 P.M. Is that worth an extra 3 or 4 dollars to you?” And that’s when you get the extra 3 or 4 bucks from them.
Mike: And plus you’ll get a lot of fires. I’m with your mom on that one. So one last thing on this kind of sort of like the internet of things I guess. Things that are in your house. I got am Amazon Echo for Father’s Day. And I’ve also reviewed it so I was familiar with it well before I got it. But I love this thing. I think it’s a brilliant plan on the part of Amazon and for a number of reasons. One of which of course is that it’s a machine that facilitates buying things from Amazon. It’s also great because they got 3rd party integration. So for example, you can listen to, and I won’t say the whole comment because of those of you out there that have an Amazon Echo, I don’t want to have it change the channel on you or start talking. But basically you can listen to TWIT live on tune-in radio. Just by talking and saying, you know, give the command. The fact that it’s an appliance that is high quality, the speaker is very high quality, the microphone is really high quality. I have it in the kitchen and I can talk to it from the bedroom. And I can hear its response and everything. I mean it’s just great. Why didn’t Apple think of this? Why didn’t Google think of this? Why is Amazon the company that’s essentially building the virtual assistant appliance of the future? Anyone?
Andy: They have a crazy billionaire CEO. Which is always helpful.
Rene: Always helpful.
Andy: Sometimes. I mean the reason why the Amazon Fire Phone happened was because the crazy billionaire CEO was the person who was deciding that’s the product that they want to make. But it’s also the crazy billionaire CEO who also decided “I want to make spaceships.” And now he’s also making spaceships. I don’t know what Jeff Bezos area of involvement was in Alexa but I would not be surprised, Echo, but I would not be surprised if it was another “This sounds like an interesting idea. Let’s go make this.” And I’m with you 100%. I mean it’s clear that Google and Apple are missing a big trick here. The fact that you have a very powerful, omni-directional microphone that can be reached from several rooms, so that, I thought that it was a big convenience when I got the Moto 360 and when I got the Apple Watch to be able to like set a kitchen timer just by doing this and speaking some words. But the ability to simply as I’m closing to the door of the oven on the chicken that’s going to take about 25 minutes to cook, to simply say “Alexa, set a time for 20 minutes.” And I’m not even thinking about it, I’m not even looking at it, but 20 minutes later I’m going to get an alert. It is so, and it would be so simple if Apple just produced, even a $99 box exactly like this that was nothing but a really good microphone that gives us access to Siri from wherever the speaking voice works. That would so amplify the power of that feature immensely. It was a little bit like Google Glass. I had to actually have it in the house and be using it to realize that, “Oh, they’ve got something here. They’ve really got something here.”
Mike: My theory is that Apple is not ever going to get into this business. I think they will enable the Apple TV or the future of Apple TV to do this sort of functionality but the problem is a product like this is software upgradable. So once you buy an Amazon Echo, you never need to upgrade it. They will improve it in the cloud, the software, the algorithms, the servers. All that stuff is how you improve it. You won’t need a better speaker in the future. You won’t need a better microphone. Unless it breaks you only need to buy one. And that is not been Apple’s style of business. That’s one of the problems they’ve had with the iPad is that you really only need one and it’s going to be perfectly good for years.
Rene: The thing about, if I can defend Apple and Google for a minute here, is that they’re operating differently than Amazon. It’s sort of like why did Amazon have better screens in their tablets before Apple or Google? Well, you can have these better screens when you’re making 5. When you’re making 500 million it’s much harder to make those kinds of screens. And Amazon as a company is interesting to me because I’m outside the U.S. And Amazon is one of those companies where I think it’s incredibly U.S.-centric - the kind of coverage they get. It’s like I just looked at Amazon.ca and there’s no Echo there, there’s no MP3 here. Amazon Prime here is just about deliveries. The amount of services they offer outside the U.S. is incredibly, incredibly small and that allows them a huge amount of flexibility. If you’re making a phone for one country, if you’re making a device like this for one country, the needs you have to serve are much, much smaller. Now Google and Apple absolutely have these products. Apple is looking at this differently. They’re looking at it in an Apple way. Like you said, a next generation Apple TV that has Siri built in – maybe it’s not just a box that does it, but it’s a box that does it while it does HomeKit like for the internet of things, while it does television services. It by the way also has this functionality that you can access by Siri. And Google’s had many different home inititaves and likely will have more. And Google Now is a mainstay of their services. So it’s almost certain that eventually they’ll have the Google Now box. Whether it’s bundled in your TV or into your refrigerator or your dishwasher or who knows. But when you’re making that product that’s international that has to serve all sorts of different languages and interests and different services that are bundled into it, it is a much harder problem to solve. Now maybe the Apple TV should have shipped two years ago, but they’re waiting on content details or something else. And maybe Google’s trying several different thing to try and get it right. But we will absolutely see it. I just think that judging Apple or Google by the same sort of strategy that Amazon employs is only going to be relevant in the U.S. right now.
Andy: Well, ok. The thing is, Apple is capable of doing anything they want to do. There is no problem they cannot solve. There is no product that if they think it’s important for them to make they cannot ship. They’re making a $10,000 damn gadget watch. That’s, how—
Rene: Internationally, Andy. You can get it in China.
Andy: Well, they’re selling it to people in India. But I think it, I don’t think it’s a lack of creativity or anything like that. I do think that this feels like a small potatoes device for Apple. It’s the same reason why they haven’t done or improved upon their wireless keyboard since, really since version 1.0 with this thing. Despite the fact that the iPad is, the utility of the iPad opens up immensely once you pair it with a decent Bluetooth keyboard. I mean I would love to, if the rumors of Apple doing an iPad Pro come to fruition later this year I would love nothing more than for them to introduce the iPad Pro alongside “Oh, and by the way, we made a keyboard that we thing shows you exactly how much you can do with our $500 iPad Air 3 or iPad Pro or whatever you’re going to call it. I just think that the reason they’re not going to make a device like this is because they don’t, they’re not intrinsically an accessories sort of company. They are a 20 minutes in the keynote with a video of people talking about again, chamfering angles and material choices. You can’t really do “It’s got a microphone and oh, it’s got a wall adaptor so you can plug it into your wall.”
Mike: It’s made of aluminum, Andy. So is there anything else you guys want to talk about before we wrap this thing up? I’ll throw that open if anybody has anything.
Andy: Oh, not really.
Andy: Apple Music is still a near miss for me. I’m liking it more but it’s highs and lows for me. I did back up absolutely everything in my library, copied it to a hard drive then unplugged that hard drive before operating the new iTunes. And it seems to have been a really good transition for me so far. But it’s like, it really is like moving into a new house where immediately you’re “Oh my God, there’s so much light in the living room! We’re going to have coffee in the living room all the time now.” And then you realize “Oh, so I can’t run the shower and the dishwasher at the same time. That’s new, isn’t that?”
Mike: You know, since you brought up Apple Music I have to say that, and I’m sure that we’ve been in this conversation together at some point as Apple was rolling this thing out. But I had been very bullish on Connect, the Connect feature, and very down on BBC – BBC1, yea. On Beats 1. Beats 1 Music.
Andy: Very common mistake.
Mike: Yea. It’s not hard to do.
Andy: Samsung BBC. Let’s just go ahead and say that Apple has Samsung BBC1.
Mike: Exactly. We did eventually learn to stop saying iWatch so there’s hope. But of course now my opinion has been reversed and Connect just seems like a non-starter. And Beats 1 seems brilliant to me. Brilliant because essentially they have this global radio station and it’s a rare event in, it’s a rare medium where you can have this global shared experience, it’s not an event. So for example, yea, when there’s the World Cup or the Oscars or something like that, yea the whole world is going to kind of experiencing a single event, but this is the only medium that I’m aware of where a critical mass of people, lots and lots and lots of people, are all listening to the same thing more or less at the same time. That’s its main value to me plus, you know, the curation is very, very skillfully done. And it’s a fantastic marketing tool for Apple to drive people into the paid services around music and so on. And so I just think Beats 1 is absolutely brilliant. My question to you guys is, maybe you know, why are they selling ads on it and why aren’t they fully live 24/7? We were just, Andy was just saying that you know, Apple can do anything. They have very deep pockets. It seems like a super home run here would have been 24/7 live radio and no ads. Why didn’t they do that?
Andy: I think because every time they talked about competing music streaming services a lot of the deep cuts inside that interview, “That’s nice, but how are they making money?” As deep pocketed as they are they’re not going to simply run Apple Music as a conservancy. They have to make sure that it makes money each and every time. They have to have a sustainable model for everything. I don’t understand anything about the music business deeper than that but I suspect it’s really about, “We have to make this a self-supporting service. We can’t just simply be shoveling money into it year after year after year. Because that’s not a business. That’s just simply a vanity project. That is indeed running it like a hobby.”
Mike: That is Apple’s thing where they make money off of, they’re not into the Amazon model where you lose money over here so you can make it up elsewhere. They want to make money on every single point. The content, all of it. But still, there’s lots of money to be made in driving Beats 1 listeners which is free to the paid version of Apple Music. That’s got to be far more lucrative than the Bank of America ads.
Rene: I think it’s also like Apple doesn’t have profit and loss across divisions the ways some company does. And for example the chipsets. You never hear how much chipsets make at Apple, like the 8X or something. Because it’s not relevant. They don’t have to sell that chipset to anybody but Apple. So you could have a model inside Apple where they decide that this is such a core technology that they’re just going to pay for it and enjoy the benefits of that in other parts of the business. But I think it’s much more realistic than that. Apple, there’s not that many saying, “Whoa, maybe Apple can hire a bunch more DJs.” But at a certain point you want – this is like an artistic endeavor for them in some ways. And it sounds corny, but they really want people like Zane Lowe who are almost like appointment listening. You want these amazing DJs on there and you want to have few enough of them that people can identify. That they’re waiting. That they’re interested in what these people have to say. And if you have enough of them to scale 24/7 immediately that’s sort of diluted. It’s much better to sort of start small and introduce a couple big personalities, and then build out from there. The ads are sort of like the way a radio sort of run. I guess they can make it profitable so why not? But I think the idea of having a few people to start off with is the kind of patience and restraint that Apple because of their affluence can really afford to take. And that is start slowly and ramp it up from there. And we talked about this on MacBreak. I’m wondering if we’ll see Beats 2 Classic, Beats 3 Metal at some point if this model proves lucrative enough for them.
Mike: I think the model is to not do that. I think the brilliant thing about this model is that there is one. And if they spin it off into multiple channels to try to satisfy multiple markets I think they’ve lost what was great about it. Then they’re just doing internet radio like everybody else. But to have the one, single channel that every Apple enthusiast, you know, lots of people that want to be associated with the Apple brand like Zane Low, whatever, they’re all listening to the same thing. I think that’s the model. But that’s just my opinion. I don’t know what you guys think about it?
Rene: It’s too Mandarin!
Mike: It’s too Mandarin. All right, well, let’s wrap it up. Andy Ihnatko writes technology columns for the Chicago Sun Times and of course a host of MacBreak Weekly. He is the Zane Lowe of technology journalism. Thank you so much, Andy Ihnatko, for spending a big chunk of your Sunday illuminating us all with your wisdom and wit.
Andy: Thank you so much, Mike. And next up we’re going to have another version of happy.
Mike: Very well done, very well done.
Andy: That’s not the right accent, but, it’s Sunday.
Mike: We get the idea. Yes it is. And Rene Ritchie, editor-in-chief of iMore and host of MacBreak Weekly and other things. Rene Ritchie, what are you guys working on these days?
Rene: Actually we just recorded an episode of D-book in light of all the Safari’s and new IE things, we got Don Melton on, who founded WebKit and Safari at Apple and put him on with Jim Ray, formally of Mule Design but does a lot of fancy web stuff. So they could sort of hash out what this whole internet thing is all about. So that should be out this week.
Mike: I heard about the internet. That sounds great. And Jeff John Roberts, he writes about law, culture, technology and the intersection there of for Fortune. Formally of Gigaom. If you recognize his name you may recognize it from Gigaom. Jeff John Roberts, that you so much for joining us today and where can people find your work and what are you working on these days?
Jeff: Anything that starts with the letter p. Patents, privacy, piracy and you can find my writing and a great team of former Gigaom-ers at the tech portal of Fortune. So come see us. And thanks for having me, Mike. It was a pleasure.
Mike: Thank you so much for coming on. If you want to see more Jeff, you’ll see him on Tech News Today weekdays at 10 any time I can convince him to come on. So Leo and the gang do Tech, Leo and the gang do TWIT every Sunday at 3:00 P.M. Pacific. You can subscribe to TWIT and download past episodes by going to TWIT.tv/twit. I want to thank you all for joining us today. I want to thank our wonderful audience here today for coming in. Leo will be back next time. He will be wearing Lederhosen? Lederhosen, Lederhosen how do you say it? Lederhosen? He’s been in Germany. And so stick around for next week’s TWIT because again, Leo will be back. And with that I say, another TWIT is in the can!