Start up: Apple and Samsung split $300bn, Shazam v music biz, Lookout: Android malware!, sapphire tales and more


Defective sapphire boules from GTAT’s furnaces – from pictures sent by Apple to GTAT creditors. Source: Wall Street Journal.

A selection of 10 links for you. Dogs must be carried on escalator.

The $300bn smartphone industry >> Counterpoint Technology

Neil Shah:

Apple alone will contribute to roughly a third of the smartphone industry revenues in 2014, As Apple will cross the $100bn mark in iPhone hardware revenues this year – the first time in history for any mobile phone manufacturer.

To put into some more context the scale and value Apple or Samsung brings to the industry:
In Q3 2014, the Apple iPhone 5S alone generated more revenues than all the mobile phone hardware revenues generated by LG + Xiaomi + Sony + Huawei combined.

Launched in Sep 2014, within just two weeks, the iPhone 6 series (6 & 6 Plus) together generated more than three times the revenues generated by Xiaomi’s total smartphone revenues in Q3 2014. [Xiaomi was the third biggest smartphone company by shipments in Q3 2014.]

Meanwhile, the Samsung Galaxy S5 alone generated more revenues than all the mobile phone hardware revenues generated by Nokia+Lenovo+Motorola+HTC combined.


The Shazam effect >> The Atlantic
Derek Thompson looks at whether the advent of products such as Shazam – which can map exactly where people are getting interested in a song, and how it spreads – are “bad for music”. (No.) But we, humans, are:

Now that the Billboard rankings are a more accurate reflection of what people buy and play, songs stay on the charts much longer. The 10 songs that have spent the most time on the Hot 100 were all released after 1991, when Billboard started using point-of-sale data—and seven were released after the Hot 100 began including digital sales, in 2005. “It turns out that we just want to listen to the same songs over and over again,” [Silvio] Pietroluongo [Billboard’s director of charts] told me.

Because the most-popular songs now stay on the charts for months, the relative value of a hit has exploded. The top 1% of bands and solo artists now earn 77% of all revenue from recorded music, media researchers report. And even though the amount of digital music sold has surged, the 10 best-selling tracks command 82% more of the market than they did a decade ago. The advent of do-it-yourself artists in the digital age may have grown music’s long tail, but its fat head keeps getting fatter.


Samsung, white-box players looking to take over 10-15 million feature phone demand from Microsoft Mobile >> Digitimes Research

With Microsoft Mobile’s announcement in July 2014 it will terminate its feature phone business within a year and a half, Samsung Electronics and China’s white-box handset players have been aggressively competing for the market since the third quarter, and MediaTek and Spreadtrum are both expected to benefit from Microsoft’s decision.

Digitimes Research estimates that Microsoft Mobile’s monthly feature phone shipments in 2014 are around 10m-15m units.

Visiting China’s white-box handset players and related component makers, Digitimes Research discovered that the white-box industry is shipping 35m-40m feature phones each month in the second half of 2014, and with Microsoft gradually reducing its feature phone scale, they are eagerly trying to take over demand left by the software giant.

Feature phone market is shrinking fast, but there’s a little margin left at the bottom.


Google must be crazy? A web balloon crashes in south Africa >> Digits – WSJ

According to a report Thursday in the Afrikaans-language Beeld newspaper, Urbanus Botha, who farms in the arid landscape of the Karoo south of Bloemfontein and Lesotho in the center of South Africa, came across the crashed balloon and initially thought it a weather balloon from the nearby weather station at De Aar. He called up the station’s office but nobody picked up, so he packed it into his pickup truck, thinking that its plastic could come in handy as he planned to repaint his shed.

“The huge piece of plastic filled my whole van,” Botha said.

Botha didn’t know what to make of the balloon, especially since it contained several electronic components. His 20-year-old daughter, Sarita, was just as intrigued, and took photos of the balloon on her smartphone, sending them to her brothers John, 30, and Benny, 27. The brothers identified the words “Made in the USA” and “Google X” on the pictures, and so Googled “Google X” and balloons…

…Project Loon should have a “semipermanent” ring of balloons floating across the Southern Hemisphere in the next year or so, Google says.

Similar to June 2014, when another Google Loon balloon crashed into the sea off New Zealand.


Breached webcam and baby monitor site flagged by watchdogs >> BBC News

The public is being warned about a website containing thousands of live feeds to baby monitors, stand-alone webcams and CCTV systems.

Data watchdogs across the world have drawn attention to the Russian-based site, which broadcasts footage from systems using either default passwords or no log-in codes at all.

The site lists streams from more than 250 countries and other territories.

It currently provides 500 feeds from the UK alone…

…China-based Foscam was the most commonly listed brand, followed by Linksys and then Panasonic.

This “warning” is shutting the stable door after the horse has moved to the next town, got married and brought up a family. The terrible security on the systems, though, is the makers’ fault.


Malicious software said to spread on Android phones >> NYTimes.com

For years security researchers have warned that it was only a matter of time before nasty digital scourges like malicious software and spam would hit smartphones.

Now they say it is has finally happened.

A particularly nasty mobile malware campaign targeting Android users has hit between 4m and 4.5m Americans since January of 2013, according to an estimate by Lookout, a San Francisco mobile security company that has been tracking the malware for about two years.

Lookout first encountered the mobile malware, called NotCompatible, two years ago and has since seen increasingly sophisticated versions. Lookout said it believes, based on attempted infections of its user base of 50m, that the total number of people who have encountered the malware in the United States exceeds 4m.

Yikes. Here’s Lookout’s blogpost, and fuller investigation, which notes that “The operators behind NotCompatible.C have built up their population of infected devices on the back of massive spam campaigns and a lack of mobile threat protection on device populations.” NotCompatible disguises itself as a system update, and uses very sophisticated detection prevention and C&C work. (Thanks @Steven Moore for the link.)


App Annie reports global app store growth and opens doors to the underdog >> Infinite Monkeys

The joint App Annie/MEF report portrays a global app economy dominated by two giants of the industry: Google Play had downloads this year that were 60% higher than the iOS App Store, but the App Store managed to maintain a similar 60% lead in overall revenue. With emerging markets looking to get a piece of both companies’ profits, the drive for market share has become an uphill battle.

As Google Android (as opposed to AOSP Android) goes into more emerging economies, this difference – more downloads, but less per-download revenue versus iOS – is likely to wider. Benedict Evans calculated in the summer that on average an iOS user generated 4x the revenue of an Android user; projects such as Android One will make that tend towards 5x and 6x, even as the Android user base expands.

That’s not a bad thing; it’s just an outcome of the numbers.


Machine learning showdown: Apache Mahout vs Weka >> Algorithmia Blog

We here at Algorithmia are firm believers that no one tool can do it all – that’s why we are working hard to put the world’s algorithmic knowledge within everyone’s reach. Needless to say, that’s a work that will be in progress for awhile, but we’re well on the way to getting many of the most popular algorithms out there. Machine learning is one of our highest priorities, so we recently made available two of the most popular machine learning packages: Weka and Mahout.

Test machine learning against hand-drawn numbers (your hand does the drawing). The results are quite variable.


Inside Apple’s broken sapphire factory >> WSJ
Great work by Daisuke Wakabayashi:

Manufacturing wasn’t the only problem. In August, one of the former workers said, GT discovered that 500 sapphire bricks were missing. A few hours later, workers learned that a manager had sent the bricks to recycling instead of shipping. Had they not been retrieved, the misfire would have cost GT hundreds of thousands of dollars.

By that point, it was apparent that sapphire wouldn’t be used for the screens on the new iPhones, which went on sale Sept. 19. Yet Apple still was eager to get as much sapphire as possible, the people familiar with its operations said. Apple’s letter said it only received 10% of the sapphire that GT originally promised.

Also notable:

Apple consumes one-fourth of the world’s supply of sapphire to cover the iPhone’s camera lens and fingerprint reader. Early last year, the company began looking for a much larger supply, to cover the iPhone’s screen.


Business lessons from Apple suppliers >> WSJ

“Apple always asks the suppliers to expand their manufacturing facility to meet the rush demand for its new product, but we have to make our own judgment as the big orders only last for a few months,” said a manager at an Apple supplier. “For example, Apple might want us to increase 100 production lines, but we would only add 50 to 60 gradually.”

Taiwanese touch screen maker Wintek is one example of a company that over-expanded on Apple hopes. Long a secondary touch screen supplier for Apple’s iPhones and iPads, the company expanded its facilities on the prospect of growth, but ended up losing new orders when Apple shifted to new technology to make screens thinner, people familiar with the matter said. The company has languished for the past few years in operating losses.

Some suppliers said they refused similar arrangements as the one GT took, as they did not want to give up their autonomy.

“I know some suppliers took Apple’s offer to reduce investment in machinery but the equipment can only be used to manufacture Apple’s product,” an executive at a different Apple supplier said. “This is a risky arrangement as it limits the supplier’s ability to adjust its manufacturing resources when Apple’s orders decrease.”

The Apple-GTAT episode should probably be taught in business schools.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s