Start up: Apple’s hacker flaw, Downing St’s FOI oddity, machines that parse art, and more

“You mean all we need to do to defeat him is adopt HTML5? Why didn’t you say?” Photo by Tom Simpson on Flickr.

A selection of 8 links for you. Uninflammable. I’m charlesarthur on Twitter. Observations and links welcome.

Encryption “would not have helped” at OPM, says DHS official » Ars Technica

Sean Gallagher:

pressed on why systems had not been protected with encryption prior to the recent discovery of an intrusion that gave attackers access to sensitive data on millions of government employees and government contractors, [US Office of Personnel Management Katherine Archuleta] said, “It is not feasible to implement on networks that are too old.” She added that the agency is now working to encrypt data within its networks.

But even if the systems had been encrypted, it likely wouldn’t have mattered. Department of Homeland Security Assistant Secretary for Cybersecurity Dr. Andy Ozment testified that encryption would “not have helped in this case” because the attackers had gained valid user credentials to the systems that they attacked—likely through social engineering. And because of the lack of multifactor authentication on these systems, the attackers would have been able to use those credentials at will to access systems from within and potentially even from outside the network…

…nearly every question of substance about the breach—which systems were affected, how many individuals’ data was exposed, what type of data was accessed, and the potential security implications of that data—was deferred by Archuleta on the grounds that the information was classified. What wasn’t classified was OPM’s horrible track record on security, which dates back at least to the George W. Bush administration—if not further.

Serious OS X and iOS flaws let hackers steal keychain, 1Password contents » Ars Technica

Dan Goodin:

The malicious proof-of-concept apps were approved by the Apple Store, which requires all qualifying submissions to treat every other app as untrusted. Despite the supposed vetting by Apple engineers, the researchers’ apps were able to bypass sandboxing protections that are supposed to prevent one app from accessing the credentials, contacts, and other resources belonging to another app. Like Linux, Android, Windows, and most other mainstream OSes, OS X and iOS strictly limit app access for the purpose of protecting them against malware. The success of the researchers’ cross-app resource access—or XARA—attacks, raises troubling doubts about those assurances on the widely used Apple platforms.

“The consequences are dire,” they wrote in a research paper titled Unauthorized Cross-App Resource Access on MAC OS X and iOS. “For example, on the latest Mac OS X 10.10.3, our sandboxed app successfully retrieved from the system’s keychain the passwords and secret tokens of iCloud, email and all kinds of social networks stored there by the system app Internet Accounts, and bank and Gmail passwords from Google Chrome.”…

…It’s not the first time researchers have found flaws in application sandboxes. The attack exploiting WebSocket weaknesses, for instance, can also succeed in Windows under certain conditions, the researchers said. Interestingly, they said application sandboxing in Google’s Android OS was much better at withstanding XARA threats.

For the time being, the researchers told Ars, there isn’t much end users can do except wait for Apple to fix the vulnerabilities.

Bad (though not deluge-of-malware bad; instead it’s sneaky-Trojan bad). Apple was told about this in October 2014. The best hope is that this is fixed in OS X 10.11 and iOS 9, but there’s no clear indication of how hard it is to fix.

Freedom of information turns into Mission Impossible for Downing St emails »

Jim Pickard and Kiran Stacey:

Emails sent from computers in Downing Street are automatically deleted within three months under a system that makes it harder for the public to obtain answers to “freedom of information” requests, former staff have disclosed.

The system, instigated a decade ago but not widely known about, means that messages are only held beyond that period if an individual saves them. It is widely blamed by government advisers for what one former employee called a sometimes “dysfunctional” operation at the heart of Whitehall.

The email system was introduced under the Labour government in late 2004, just weeks before January 2005 when the Freedom of Information Act belatedly came into force.

“The timing of this very strongly indicates that it was not a coincidence,” said Maurice Frankel, director of the UK Campaign for Freedom of Information.

Gee, ya think?

China and Russia almost definitely have the Snowden docs » WIRED

Bruce Schneier (who is a veritable security expert; if he says it, it’s true):

The vulnerability is not Snowden; it’s everyone who has access to the files.

First, the journalists working with the documents. I’ve handled some of the Snowden documents myself, and even though I’m a paranoid cryptographer, I know how difficult it is to maintain perfect security. It’s been open season on the computers of the journalists Snowden shared documents with since this story broke in July 2013. And while they have been taking extraordinary pains to secure those computers, it’s almost certainly not enough to keep out the world’s intelligence services…

…In general, it’s far easier to attack a network than it is to defend the same network. This isn’t a statement about willpower or budget; it’s how computer and network security work today. A former NSA deputy director recently said that if we were to score cyber the way we score soccer, the tally would be 462–456 twenty minutes into the game.

Even airgapped, never-connected computers can be attacked (don’t ask me how). The Guardian took extraordinary pains with its London copy: two people needed to enter passwords, at least two people needed to be present when documents were read, the computers used had never been online and had no connection.

But a simpler thought is this: if Snowden was one of 10,000 or so NSA staff with access to that data (and more in the UK), what are the chances that absolutely none of those has somehow been coerced or willingly turned over data to foreign powers? Pretty much zero.

Flash will soon be obsolete: it’s time for agencies to adapt » Advertising Age

David Evans on the fact that major browsers on desktop are hurrying to dump Flash:

If this sounds like a big problem to you, you’re absolutely right. If the major browsers were to disable Flash immediately, we could be looking at a scenario where roughly 84% of banners across the internet would not be viewable on desktop browsers. Rather than clicking on a visually dynamic, animated ad created to capture attention with movement and video, users would instead see a static banner in place of the intended ad, and most advertising creatives don’t pay much attention to the creation of static backups.

For advertisers, this could mean shelling out first-class money for economy-class impressions.
Though it might be painful to admit for an industry that has relied on Flash for over a decade, the right choice is to start creating desktop ads in the HTML5 language used to create ads for mobile.

This is a bit obvious to anyone who’s been paying attention for the past three years (minimum), but perhaps advertising has been looking somewhere else.

Market Monitor Q1 2015: LATAM smartphones grow 25% annually » Counterpoint Technology

Tina Lu:

LATAM is third, behind North America and Europe in the global ranking of smartphone shipment penetration.

• Except for Peru, majority of the key LATAM markets are seeing a significantly higher smartphone demand, with shipment penetration of total handsets between 77% and 99%.

• Overall feature phone demand has been declining, and so has been the overall scale and profitability of manufacturing and selling them. As a result, in countries like Argentina, due to government protectionist measures and import restrictions, vendors are manufacturing and selling only the more profitable smartphones. This has led to smartphone shipment penetration of sales to reach 99%; the highest in the region.

Here’s the shipment figure: Latam smartphone shipments Q1 2015

If you do the maths, on a 25% yoy growth both Samsung’s and LG’s shipments actually fell; Apple’s more than doubled. Alcatel and “Others” both grew faster than the market.

Apple’s Siri, Spotlight extend Google-like search inside iOS 9 apps, without tracking users » Apple Insider

Daniel Eran Dilger:

Because Apple is indexing in-app content for its search results, it can more easily suppress “Search Engine Optimization” malicious content or link spamming, as relevancy is tied to user engagement. If few users find a search result worthwhile, it can fade from relevance.

Many of the new search-related features Apple debuted for iOS 9 and OS X El Capitan bear a strong resemblance to some of predictive search features first introduced by Google starting back in 2012 as part of Android 4.1, branded as “Google Now.”

Since then, Google has introduced “app indexing,” a related feature designed to make the company’s web-style search more relevant to mobile users by delivering results that can open within local apps. For example, a recipe might open within a cookbook app, rather than just presenting the same information on a web page or dumping users into the app to find the recipe on their own.

The most profound difference between the two companies’ approach to in-app search is that Apple does not monetize its search with ads, and therefore has no need to capture and store users’ data and behaviors for future profiling, tied to a persistent user and device identifier that individuals can’t easily remove.

Apple is perhaps two years behind Google on this – but most people are using a version of Android that is at least two years old (87% are using 4.4, KitKat, from November 2013, or earlier). Which means that by November or so, Apple will roughly have parity on this feature.

Machine vision algorithm chooses the most creative paintings in history » MIT Technology Review

The job of distinguishing the most creative from the others falls to art historians. And it is no easy task. It requires, at the very least, an encyclopedic knowledge of the history of art. The historian must then spot novel features and be able to recognize similar features in future paintings to determine their influence.

Those are tricky tasks for a human and until recently, it would have been unimaginable that a computer could take them on. But today that changes thanks to the work of Ahmed Elgammal and Babak Saleh at Rutgers University in New Jersey, who say they have a machine that can do just this.

machine vision view of art

They’ve put it to work on a database of some 62,000 pictures of fine art paintings to determine those that are the most creative in history. The results provide a new way to explore the history of art and the role that creativity has played in it.

Can’t be long before someone puts a human art historian up against the machine to see who spots the fake. (By the way, there was no byline I could find on the story. Maybe a robot wrote it.)

Windows Phone: Microsoft’s really good reason to keep it going isn’t about phones

Important equations. Photo by the waving cat on Flickr.

The abrupt departure of Stephen Elop as leader of the hardware devices business at Microsoft, which will instead be united under Terry Myerson, creates a big, obvious question: is Microsoft about to kill the Lumia smartphone business that it bought from Nokia for $9bn?

Let’s go through the arguments for and against.

Kill it because: the Windows Phone business loses money hand over fist – no phone maker, including Nokia, has ever managed to make it profitable. My analysis of its financials suggests that in Q1 it was losing around $40 per handset even if you assumed that featurephones made zero profit. Even assuming a loss per featurephone, the calendar Q1 (fiscal Q3) figures still showed a $29 per handset loss, even with generous assumptions about marketing and ignoring goodwill writeoffs.

And Microsoft has warned that it’s going to take a whacking loss pretty soon on the phones division. The logical time to do that is at the end of the fiscal year – which is two weeks from now. Elop’s leaving just means the mess is already cleaned up when Satya Nadella goes on the analyst call.

Other handset makers simply won’t touch Windows Phone; they know they can’t make money from it. Huawei’s consumer marketing chief famously said last September that it wasn’t worth doing.

In addition, the number of Windows Phone users worldwide is really small in the context of the whole business. Out of more than 2 billion connected smartphone users, around 80m use Windows Phone – and the majority of those are using low-end versions.

Why do they primarily use low-end phones? Because they’re not worried about apps, and that’s fine, because Windows Phone hasn’t managed to attract app developers to any great extent – it’s very much a distant third (or even fourth) for development.

So Windows Phone has no momentum, is a money pit, and nobody’s interested in it – not the users or developers.

Now we come to the reasons to keep it.

Keep it because: Microsoft has to have a play in mobile because mobile is the biggest computing platform on the planet, bar none. Mobile is essential; if you aren’t in that, you simply aren’t in the game. True, Microsoft is writing software for rival platforms (sometimes before it does for Windows Phone itself) but to get any idea of the challenges and advances of what’s happening in the mobile world, you have to be a player yourself. Being exposed to the harsh vicissitudes of the market, and its demands, shows you what it is that people want and need much more immediately than if you’re trying to figure it out at second hand by observing Apple’s or Google’s manoeuvres with their operating systems.

Not only that, but mobile is an intermediate stepping stone between the desktop and the coming internet of things – which you could call sub-mobile. IoT depends on components that have become pervasive through their use in smartphones (GPS, accelerometers, camera sensors, fingerprint sensors, barometers…) and understanding how their capabilities interact, and fuse, and how their price points vary, is essential to seeing what the world is going to look like in five years’ time.

That’s what I see as a subtext in the announcement about the reorganisation of the “devices” side:

Executive Vice President Terry Myerson will lead a newly formed team, Windows and Devices Group (WDG), focused on enabling more personal computing experiences powered by the Windows ecosystem. This new team combines the engineering efforts of the current Operating Systems Group and Microsoft Devices Group.

“More personal computing experiences”? That’s “more personal” as in “closer to the person”, I think, rather than “more things that are PC”. (Update: to clarify, for those it isn’t clear to, I take that to mean things like Hololens – which relies heavily on accelerometers and real-time tracking and lens technology – and wearables. You don’t get much closer to the person than screens a few centimetres from your face and something that’s actually next to your skin.)

So what now?

Even to a Windows Phone sceptic like me (even though I really liked its interface when I first encountered it), it’s obvious that the second argument is by far the stronger one. It would be different if Microsoft couldn’t bear the cost of losses on Windows Phone (if it were, say, HTC), but the fact is that it can. It can bear those losses pretty much endlessly.

Logically, therefore, this is going to happen:
• Microsoft is going to announce a whacking loss on the phones business, which will be merged into the Devices business, at the end of this quarter
• the Lumia business will continue to tick over, functioning essentially as an R+D department for future IoT devices – note how Microsoft killed the proposed Nokia smartwatch in favour of its own Band
• Windows Phone will continue to sell poorly, and lose money, but it won’t matter. For Microsoft, mobile is now a lost battle; it’s moving on to the next thing. Are you ready for the platform battle of the internet of things?

Start up: Grexit to bitcoin?, Google’s antitrust deadline, Merkel’s suspect PC, Samsung security hole and more

Stockpiled – a bit like HTC’s unsold phones. Photo by .dh on Flickr.

A selection of 7 links for you. Use them wisely. I’m charlesarthur on Twitter. Observations and links welcome.

Bitcoin surges as Grexit worries mount, posts best run in 18 months » Reuters

Jemima Kelly:

Joshua Scigala, co-founder of, a firm that holds bitcoin for its customers and allows them to exchange it for gold and vice versa, said that Greeks were buying the currency as their trust in the authorities waned. It is also unclear what currency would be used if a Grexit does occur — another potential factor driving Greek demand for bitcoin.

“Some people aren’t waiting for the government to figure out an exit plan and are doing it for themselves,” said Scigala.

“You have people worrying about their families’ wealth or their life savings, and worrying that their money might be locked up in banks … They’d rather hold money in a private asset like gold or bitcoin.”

Scigala said over the past two months, with Greece locked in talks with its creditors, the company had seen a 124% pick-up in inflows from Greek IP addresses – numerical labels that identify computers and other internet-enabled devices.

124% = doubling. Which doesn’t amount to much, really, unless Greece was already a lot of business. Here’s the problem with this story. To buy bitcoin, you have to sell the euros to someone. If Greeks are withdrawing their euros from banks, why not hold on to those euros instead of buying bitcoin with them? Do they really think a post-Grexit euro will be worth less, rather than more? I’d bet on the latter.

There may be some Greek euros moving into bitcoin, which is moving bitcoin – but that only indicates that bitcoin has low liquidity, and so small amounts of money can move the value easily. Or else it’s something else altogether causing it.

Critics due to get EU’s Google antitrust charge sheet this week: sources » Reuters

Foo Yun Chee:

Microsoft, German publisher Axel Springer and 17 other critics of Google are expected to get a copy of the EU’s antitrust charge sheet against the search engine giant this week in order to allow them to provide feedback, four people familiar with the matter said on Tuesday.

The 19 companies, which include U.S. online travel site Expedia, U.S. consumer reviews website Yelp, online mapping service Hot-map and British price comparison site Foundem, helped triggered the European Commission’s case against Google nearly five years ago…

…Google has until July 7 to respond to the accusations. This can be extended on request. It can also seek a closed-door hearing to argue its case before a broad audience of antitrust officials and the critics.

The complainants were told on Monday to sign confidentiality waivers not to disclose the so-called statement of objections to journalists or public affairs consultants before they could get a copy of the redacted document, according to a Commission letter seen by Reuters.

The critics were told to restrict the charge sheet to their lawyers and economists.

Leaks in 3,2,1… And there’s Andrew Orlowski’s writeup of the Foundem examination into Google’s “search for harm” blogpost.

One tiny number can reveal big problems at a global smartphone maker » Bloomberg Business

Tim Culpan:

Tucked away in a corporate earnings report—past the data on profit margins and revenue growth, hidden deep inside a balance sheet—is a number that can tell you a lot about a mobile phone maker’s health. In the global smartphone war, brands are routinely measured by market share, revenue, profit, and the coolness of their ads. But one line item called finished goods inventory, which refers to the percentage of materials that were manufactured into phones but went unsold, can give insight into whether a company’s fortunes are changing.

The latest company to let phones pile up in warehouses and on store shelves is HTC. The Taiwanese company’s stock just fell to its lowest point in a decade after lowering its sales forecast on June 5 and announcing a NT$2.9 billion ($93 million) writedown, though it’s recovered some of that loss amid speculation the decline could make it a buyout target. HTC’s finished goods inventory had climbed to a record high 2.35% of total assets at the end of last quarter. During the company’s heyday, that figure rarely nudged above 1%.

Culpan has done a neat job, building on what I pointed out last week about HTC’s broader inventory numbers. Relating inventory to total assets is an effective way to look at it; here’s the graph.

HTC inventory as percent of assets
So now it’s higher than ever before. Finished goods inventory is going to be one of the first numbers people look at when the Q2 figures are published (in late July, probably).

Merkel’s PC was the first one infected in the Bundestag hack »Security Affairs

I have written many posts regarding a recent attack against the German Bundestag with caused a major data breach.

We discussed the possibility that the cyber attack against the German Parliament was coordinated by Russian state-sponsored hackers that spread a highly sophisticated malware inside the network of the Bundestag.

The consequence of the data breach could be serious for the German Government, German media states that Bundestag may need to replace 20,000 computers after the intrusion, an operation that could cost millions of euros.

New revelations in the investigation confirms that the cyber attack on the German Bundestag began with the compromise of Chancellor Angela Merkel’s personal computer.

Her phone by the NSA, her computer by Russia…

Flaw lingers in Samsung phones, illustrating hacking risk » WSJ

Danny Yadron:

Last fall, researchers at cybersecurity firm NowSecure found a bug in most Samsung smartphones that could allow hackers to spy on users.

In March, Samsung told NowSecure it had sent a fix to wireless carriers that they could distribute to users. It asked NowSecure to wait three months before going public.

Last week, the researchers bought two new Samsung Galaxy S6’s from Verizon Wireless and Sprint. They found both were still vulnerable to the security hole, which involves how the phone accepts data when updating keyboard software.

NowSecure CEO Andrew Hoog shared his version of events with The Wall Street Journal as his company prepared to release its research Tuesday. The story helps illuminate why hacking is so hard to stamp out.

That’s particularly true in smartphones, with its diffuse system of device makers, software programmers and network operators. Things likely are only to get worse as Americans connect their thermostats, door locks and cars to the Internet and face the need to update their software…

…Welton found he could hijack the process of updating one of the virtual keyboards Samsung installs on many Android smartphones. From there, he could eavesdrop on phone conversations, rummage through text messages and contacts, or turn on the microphone to capture audio.

That was possible, Hoog said, because Samsung didn’t encrypt the update process.

It’s the IOT vulnerability that’s the real worry here, much more than which make of phone is involved. Except that Samsung asked NowSecure for a year to fix the bug – a month after it was told about it. And what does this mean for Google’s “we find a bug and we publicise it in 90 days” stance?

Nokia faces lengthy arbitration over LG patent royalty payments » Reuters

Jussi Rosendahl:

Nokia said the arbitration with LG is expected to conclude within two years. Shares in Nokia rose 1.4 percent by 1204 GMT (8.04 a.m ET).

“This is becoming a more and more common model. The companies won’t go to the court but instead let an independent party decide,” said Nordea analyst Sami Sarkamies.

He estimated that the Samsung deal, expected to conclude later this year, could eventually mean Nokia receives 100-200 million euros of additional royalty payments annually, on top of retroactive payments.

Seems to be related to 4G patents; Nokia signed a similar deal with Samsung a while back. For LG, means that profitability in the smartphone side becomes that little bit more elusive – especially after the back payment.

Apple News curation will have human editors and that will raise important questions » 9to5Mac

Jordan Kahn:

Techmeme‘s founder Gabe Rivera gave us the hard truth on why being an algorithm-based service like Google News doesn’t make sense for the Apple News app saying, “All news aggregators intended for the mass market need editors, so this makes sense for Apple.” But the flip side of Apple’s human-based curation is that without a separation of editorial and the business, there will undoubtedly be conflicts of interest. Rivera points out that “…as the world’s most valuable corporation, they can’t and shouldn’t be trusted to present well-rounded coverage on many important topics.” Rivera continues, “But most readers won’t care about that.”

Apple doesn’t want this to be an algorithm thing, because (a) algorithms might not pull outré-yet-fascinating stuff to the surface (b) if some story that were grisly/violent/sexual – pick the topic you think Americans in particular would react in horror to – popped up, Apple would of course get the blame. Apple hates that.

So it wants humans on hand to stop the Bad Stuff that will Offend People finding its way into the app. But that immediately raises the question: what will it define as Bad Stuff? Are Mark Gurman’s well-sourced leaks of Apple plans Bad Stuff? Is vicious criticism of Apple?

I suspect people are overplaying this; Apple is really wary of consumer backlashes over pr0n. Look at how Facebook struggles with the same topic, and the issue of content posted by millions of people which some find offensive and others really don’t.

No simple answer, but Apple may not have realised it was putting itself in the position of a publisher.

Start up: LastPass’s warning, Google tracks down racists, HTC snubs Asus, valuing maps, and more

Health risk? An LED bulb sign board. Photo by Patrick Hoesly on Flickr.

A selection of 9 links for you. Use them wisely. I’m charlesarthur on Twitter. Observations and links welcome.

Competition and Partisanship » ignore the code

Lukas Mathis:

I wish we’d see even more competition! I wish Samsung would get serious with its own OS. I wish HP would revive Web OS. I wish Blackberry would stop making bad decisions, and start kicking ass again. I wish smaller companies like Jolla, Ubuntu, and the Firefox OS team would be better able to compete with the big guys. I wish Microsoft would get more credit for the progress it has made in UI design, instead of just getting crap for changing things from how they were in Windows 95. And I wish people would look outside of the confines of their chosen platform, and acknowledge the positive contributions that other companies are making. Get out of your bubbles! Other systems are great and interesting and useful, too!

The problem with this view, happy as it is, is that there’s a cognitive load associated with learning a new OS, and the cognitive load grows geometrically the more OSs you have to work on.

LastPass Security Notice » The LastPass Blog

Joe Siegrist:

We want to notify our community that on Friday, our team discovered and blocked suspicious activity on our network. In our investigation, we have found no evidence that encrypted user vault data was taken, nor that LastPass user accounts were accessed. The investigation has shown, however, that LastPass account email addresses, password reminders, server per user salts, and authentication hashes were compromised.

We are confident that our encryption measures are sufficient to protect the vast majority of users. LastPass strengthens the authentication hash with a random salt and 100,000 rounds of server-side PBKDF2-SHA256, in addition to the rounds performed client-side.

That’s grea– hang on, “vast majority” of users?

Do lightbulbs need a health warning label? » Consumer Reports

Consumer Reports’ medical experts say that studies have shown that exposure to light at night is clearly associated with an increased risk of sleep problems as well as mood disorders. Additional research has linked light at night with an increased risk of breast cancer, obesity, type 2 diabetes, and cardiovascular disease, however, much more research remains to be done to determine just how significant that risk may be.

So, why single out LEDs? LEDs do emit more blue light than CFLs, and incandescents emit very little. And while any light can suppress melatonin, the hormone that facilitates sleep, research has shown that human eyes are especially sensitive to blue (which is also emitted in higher levels by most of today’s indispensable electronic devices).

Fred Maxik, founder and chief technology officer of Lighting Science, says that in contrast to the older incandescent bulbs, LEDs and CFLs have significantly changed the impact light has on human health, affecting our circadian rhythms. He believes the effects can be beneficial, such as promoting alertness or enabling natural sleep hormones to be released. But “there’s a growing amount of evidence that light can also have negative biological effects,” he says. And that’s why the company created the label. Maxik is also encouraging other lighting manufacturers to make consumers aware of the effects of light on health.

Lighting Science has hired former U.S. Secretary of Health and Human Services, Louis W. Sullivan, M.D., as a consultant. “The fact is that the wrong kind of light can be disruptive on sleep patterns,” he says. “I think this label gives interesting information to the public so they can decide, particularly for people with sleep problems.”

Short answer: no, unless you’re an American.

Use Google searches to figure out how racist your neighbourhood is » Gizmodo

Annalee Newitz:

What [data scientist Seth] Stephens-Davidowitz ultimately discovered was that racism “appears to have cost Obama roughly four percentage points of the national popular vote in both 2008 and 2012.” He determined this by showing that the higher the number of searches there were on “nigger” in a given area, the more likely it was that Obama lost votes there — even controlling for things like income, already-existing political affiliations, and more. In other words, even in an area where people typically voted for Democrats, you’d see a less-than-typical number of votes for Obama if the rate of Google searches on “nigger” was higher than average. As Stephens-Davidowitz put it, “An area’s racially charged search rate is a robust negative predictor of Obama’s vote share.”

Campbell’s law, Goodhart’s law, and the trouble with observation » mmitII

Matt Ballantine pointed me back to this observation of his from 2012, following the article I linked the other day about how most mobile benchmarks aren’t much use:

Charles Goodhart is an economist from the London School of Economics, and a former member of the Bank of England’s Monetary Policy Committee.

The law named after him was first noted in a paper he published in 1975, and states:

“that once a social or economic indicator or other surrogate measure is made a target for the purpose of conducting social or economic policy, then it will lose the information content that would qualify it to play that role.”

And if you use benchmarks to try to value a phone (or PC) they’ll be gamed and become worthless.

BlackBerry: an Android phone won’t move the needle » Seeking Alpha

Zenith Investments:

So what can BlackBerry bring to the table so that they can make a profit from an Android smartphone if it can’t bring security? The sources spilling the beans on BlackBerry’s potential Android phone also indicated that they plan to differentiate their phone with a physical keyboard. Again I see the argument – this should appeal to the hardcore BlackBerry fans who had to switch to Android because of the added apps. The problem is that this was tried before – with the Motorola Droid Pro. It was an Android phone that was equipped with a physical keyboard, but it suffered from very low sales. The problem seems to be that the people, who desperately want a physical keyboard, also want the BlackBerry operating system.

That’s pretty much it. Seeking Alpha is a site where you can find any opinion that suits you, but this one on the “Android BlackBerry” is at least realistic about why people buy the phones. I’m forecasting an operating loss of about $20m in the just-gone quarter.

To clarify the news on Asustek will not rule out the possibility of acquiring HTC Corp » HTC

HTC’s formal announcement to the Taiwanese stock exchange on Monday:

We didn’t contact Asusteck and will not consider the acquisition. As an international brand, HTC will continue to design world-class innovative smart devices through its pursuit of brilliance brand promise.

Let’s put a marker down on that one.

Where are Maps going? » Asymco

Horace Dediu, using Apple’s data points about map requests per week:

In December 2012 I posted an analysis on the the cost of maps. It showed that maintaining maps requires an investment of between $1 billion and $2 billion/yr. With the addition of new features such as 3-D mapping, transit maps and thousands of new cities, the cost is likely to have increased. $2 billion/yr is probably the norm today.

Apple then could be seen as spending about $6.5/user/yr on maps and Google could be spending about $2/user/yr. To be profitable Google would need to find ad revenues of $2/user/yr and Apple would need to find $6 of profit on each phone/yr. Clearly, each of these targets is achievable.

In contrast we can see why Nokia’s HERE Maps business is now worth a lot less than it was in 2007. The asset has been for sale for some time and the latest bid  has been for $3 billion, making the $5 billion lost in market value and $7 billion of investment since seem like a catastrophe. Without a business model the data is worthless – with only 30 million users the cost per user reaches $66/yr. A buyer needs to find an appropriate model for sustaining a $2 billion/yr burn rate.

So the question of where maps are going depends on the business model for maps.

The point about the loss in value of HERE is well made.

Apple Music vs. Spotify: don’t repeat Bob Lefsetz’s mistake » Medium

Lefsetz, you’ll recall, was hugely dismissive of Apple Music. Michael Vakulenko thinks it is a different play altogether – a platform play in a different world of music:

Apple Music is more than a differently-packaged version of Spotify. Google AdWords is more than a less-expensive advertising agency, iOS is more than a nicer-looking version of Symbian, Uber is more than a digital version of a Taxicab stand, AirBnB is more than renting mattresses to strangers and Munchery is more than a bigger restaurant kitchen. These are platforms having very different economics from traditional products. As Marshall Van Alstyne said: “Platforms beat products every time.”

Platforms disrupt industry after industry: telecom, computing, watches, automotive, consumer electronics, banking, education, food, transportation, hospitality, healthcare, and more. When you see a new idea in the market or a new competitor, ask yourself: “Is it a market-creating platform?” and “What will it mean for my business if the platform reaches critical mass?”

Start up: Apple’s Sonos rival?, Nokia’s smartwatch, three-ton Twitter, Netscape in the NHS, and more

Sunday Times sourcing? Photo by DrJohn2005 on Flickr

A selection of 8 links for you. Why not? I’m charlesarthur on Twitter. Observations and links welcome.

Apple Music’s missing link: how Beats Electronics fumbled its Sonos killer (EXCLUSIVE) » Variety

Janko Roettgers:

Beats was looking to build a premium product that would mimic and compete with wireless speakers produced by Sonos. Like Sonos, Beats wanted to give consumers the option to place speakers in multiple rooms of their house, and then have them all play the same music synchronously. And like Sonos, Beats was looking to introduce a bigger, more powerful speaker for the living room first, and then follow up with a smaller, more affordable product for the kitchen and bedroom.

However, Beats wasn’t just looking to copy Sonos. The company was also working on combining Bluetooth with Wifi and NFC to allow for seamless handovers, effectively making it possible to launch music playback as soon as you’d enter the room, said a source familiar with technical details of the project. And thanks to its premium brand, Beats wasn’t looking to undercut Sonos — quite the contrary: Word has it the company was looking to sell its bigger Wifi speaker for as much as $750.

1) wouldn’t have been a Sonos killer
2) this is utterly random, but my next-door neighbour works in the (legal) pharma industry, and four months ago told me the story of going to a party in San Diego where “people from Apple” were talking about exactly this device. So I’m inclined to believe it, weirdly. Also, my neighbour’s reaction: “I said, so you’ve reinvented the boombox?” Probably why it was canned.

Apple’s WWDC keynote: issues with structure, approach, direction » Mobile Forward

Hristo Daniel Ushev on the messy Apple WWDC keynote:

Ultimately, the issues above are symptoms of weak (or hand-cuffed) direction. Not just in the form of what to do (e.g., don’t have Eddy Cue focus on the app) but also in terms of what not to do – i.e., editing. Editing in this context: shortening the list of presenters, directing them to use fewer slides (at one point, they flashed by like pages in a flip book), and saying no to distracting uses of humor and movement. When viewed through this lens, I think this keynote lacked a director. Or at least one that could effectively influence the senior executives and the choices they made. (Believe me, I’m not saying any of this is easy.)

Will all this impact the products’ success? Not directly. Indirectly, however, key influencers of consumers (developers, fans, and journalists) may get a fuzzier picture of Apple’s intent or advantage.

The music segment was terrible. The rest, fine.

Sunday Times Snowden story is journalism at its worst » The Intercept

Glenn Greenwald on the Sunday Times’s story – its front-page lead (aka “splash”) claiming that UK intelligence agencies “had to move” agents and that Russia and China “had cracked” the files (here’s text of the print version; try reading it first):

how could these hidden British officials possibly know that China and Russia learned things from the Snowden files as opposed to all the other hacking and spying those countries do? Moreover, as pointed out last night by my colleague Ryan Gallagher – who has worked for well over a year with the full Snowden archive – “I’ve reviewed the Snowden documents and I’ve never seen anything in there naming active MI6 agents.” He also said: “I’ve seen nothing in the region of 1m documents in the Snowden archive, so I don’t know where that number has come from.”

Greenwald is furious, and rightly so. The Sunday Times story is clearly hung on a single quote from a UK intelligence agency source, but one which doesn’t support the story’s claims. The Snowden archive is vast, but putting a number on it is surprisingly difficult, because it has interrelated files – there’s an almost wiki-like quality to some parts.

Given that the UK (and US) intelligence agencies don’t claim to know what’s in the Snowden files, they can’t know what the Russians or Chinese know from it – if for the sake of credulity we believe that the Russians and Chinese have cracked the encryption, which I seriously doubt.

When I used to work Sunday shifts as a news reporter at The Independent, I often had to “follow up” stories that appeared in the Sunday Times. The problem was, as soon as you began trying to establish the facts they claimed, the stories fell apart – the claims didn’t match reality. This is another example, although that hasn’t stopped the BBC repeating it (though an analysis by Gordon Corera in the middle of this straight-up followup rather backs away from the Sunday Times claims).

Microsoft Moonraker was Nokia’s smartwatch before it was killed » The Verge

Tom Warren:

Nokia’s Moonraker smartwatch never made it to market primarily because Microsoft was anticipating its wearable Band. While the Moonraker had a number of sensors to allow you to lift your arm to read texts or drop it to turn off the display, Microsoft opted for the Band as it had more functionality. Nokia took the familiar “Metro” interface from Windows Phone and paired it with simple email, phone, and messaging apps on its smartwatch. There was even a camera remote feature to take pictures on a smartphone from the watch. Facebook and MixRadio integration was also built-in, alongside customizable watch faces and different colored straps.

It’s unlikely that the “Moonraker” will ever make it to the market, but given time Microsoft may want to bring some of the more fashion-related aspects of it over to the Band in the future. Microsoft is now working on the second generation of its Band. While the software platform on the upcoming Microsoft Band 2 will remain largely the same, the look and feel of the device will improve. Microsoft is expected to launch its next-generation Band later this year after Windows 10 is available broadly.

The UI looks unfinished in the photos. And would it have worked only with Windows Phone? If so, it was dead already.

The Twitter of the three-ton nail » Medium

Zeynep Tufekci on Twitter’s “metric-driven” approach to please Wall Street:

if you set up an absurd game, as Wall Street often does, ruled by the incentives of those who set the rules (their quarterly bonus calculations depend on chasing growth for the sake of growth), people will, naturally, game the system and produce the results you want, just as absurdly.

At the moment, sadly, Wall Street is not solely a representative of market dynamics, but also a collective madness imposed upon us by the distorted over-accumulation of capital in the hands of too-few people. This “elite failure” has repercussions beyond my beloved platform: from global warming to revving up global growth (you can’t grow demand if people don’t make money) but in a sustainable manner (because the annual bonus is not the right time-frame). We are paying the price for having surrendered our economy to a game that is not about some independent logic of the market, but the absurdity of accumulating more zeroes in a bank account (which you cannot spend in any reasonable lifetime).

If you’re not following @zeynep, you should. She’s so incisive.

Misunderstood or inappropriate mobile benchmarks are hurting the industry and consumers » Forbes

Patrick Moorhead:

Because of the creation, use and promotion of these inaccurate, misunderstood, and/or gameable  benchmarks, we are seeing smartphone manufacturers and SoC vendors dedicating time and engineering resources to ensuring that their performance in these benchmarks is up to expectations. After all, if so many people are using or mischaracterizing AnTuTu and Geekbench, it lends them credibility even when it shouldn’t.

Or vendors are adding features that make the misrepresentative benchmarks look better, like by adding more CPU cores beyond what any piece of software can use to improve the experience outside of battery life.

Additionally, because so many reputable tech blogs don’t run ANY benchmarks at all, they are essentially giving the ones that do more credibility when they show AnTuTu and other benchmarks.

I trust Anandtech (as does Moorhead), but most other benchmarks strike me as crap because they tell you nothing about experience. Google’s Project Butter (smoother scrolling) and Project Volta (longer battery life) and focus, in Android M, on standby life tells us that benchmarks tell you barely anything about real-life use.

Exclusive: BlackBerry may put Android system on new device: sources » Reuters

Euan Rocha:

BlackBerry is considering equipping an upcoming smartphone with Google’s Android software for the first time, an acknowledgement that its revamped line of devices has failed to win mass appeal, according to four sources familiar with the matter.

The move would be an about-face for the Waterloo, Ontario-based company, which had shunned Android in a bet that its BlackBerry 10 line of phones would be able to claw back market share lost to Apple’s iPhone and a slew of devices powered by Android.

The sources, who asked not to be named as they have not been authorized to discuss the matter publicly, said the move to use Android is part of BlackBerry’s strategy to pivot to focus on software and device management. BlackBerry, which once dominated smartphone sales, now has a market share of less than 1%.

Rocha is based in Toronto. I’d trust his sources. Can’t see why BlackBerry thinks this is a good idea though. It’s losing money on handsets; this would be a way to get commoditised out of the solar system, and lose its faithful buyers too.

NHS browser statistics » LinkedIn

Mark Reynolds:

Have you wondered what technology the NHS uses? We gather anonymous statistics on those using NHSmail and so have a good picture of technology across healthcare in England and Scotland.

88% of users access the service via Windows, with 8% on Macs and 3% on Linux. Amazingly we have a user browsing NHSmail using their Wii, which suggests dedication to the cause or spoofing the browser data. 65% of users are on Windows 7, followed by XP (20%) and Vista (3%). Windows 8 usage is too low to register. 

Microsoft Internet Explorer dominates browser statistics at 73%, followed by Chrome (13%), Safari (7%), Mozilla (5%) and Firefox (2%). 0.9% of traffic comes from Netscape! Internet Explorer 7 and 8 account for 61% of the traffic, with IE 11 too low to register.

Two things: Netscape > Windows 8. Also: XP > Vista + Windows 8. That’s inertia.

Worth comparing with stats for web browsing.

Start up: Oculus here!, when cashless fails, what Twitter needs now, EC’s ebook probe, and more

Musical toast? Photo by on Flickr.

A selection of 9 links for you. Use them wisely. I’m charlesarthur on Twitter. Observations and links welcome.

April 2015: Twitter needs new leadership » Stratechery

Ben Thompson nailed it months ago:

I believe it’s time for Twitter’s leadership, in particular CEO Dick Costolo, to make way for new leadership that has improved credibility with Wall Street, with developers, and within Twitter itself…

…Twitter would be better off retooling their API and developer agreements to ensure they are learning from every application they interact with, and in return sharing their graph along with advertising in the form of their MoPub or Namo Media-derived offerings. The advantage of this approach is that the imagination and ingenuity of a massive developer ecosystem will always be far faster and more innovative than anything any one company can do on its own — just ask Apple.

Worth reading (or re-reading). The accompanying podcast nails it too.

Apple Music » Lefsetz Letter

Bob Lefsetz has a typically nuanced take on Apple’s new offering:

It’s toast.

Its success was based upon eliminating free. But that positively non-techie entity known as the government put the kibosh on that. Now the labels and Apple are too scared to enact their plan of eliminating freemium. So while the techies leap ahead, creating solutions to problems we didn’t even know we had, those in the music business stay mired in the past, believing backroom dealings and brawn will get them what they want.

But it won’t in the new world.

What I find puzzling is that nobody at the record labels has heard of the Laffer curve.

Oculus teams up with Microsoft on Rift VR headset »

Tim Bradshaw:

Oculus faces mounting competition from Sony PlayStation’s Project Morpheus and games software maker Valve’s Vive headset, made by HTC. Google is also investing heavily in VR, after unveiling updates to its low-cost Cardboard headset last month, including its Jump 360-degree video system.

Oculus emphasised its headset’s ease of use and a familiar video-gaming content for its launch.

“It rests comfortably right on your brow,” Mr Iribe said of the Rift. “You’re going to put it on like a baseball cap. It’s going to be simple and easy . . . The goal is you put it on and it goes away, it disappears.”

Download Festival-goers left hungry as cashless system goes to Borksville » The Inquirer

Chris Merriman:

Festivalgoers are ready to throw a Five Finger Death Punch at organisers after a cashless society model involving digital currency failed.

The Download Festival at Castle Donington is completely cashless this year, and visitors are being issued with a dog-tag At the Gates.

However, the system for topping up the dog-tags with currency has failed, and there’s no back up, leaving many people complaining of being unable to eat or drink.

This is a huge embarrassment for cashless as the future of money in the week that Apple Pay was announced for the UK market.

Download proudly hailed itself as the first major festival to use RFID technology to replace cash, but the Utopian dream seems to have turned into a nightmare as festival goers are not only unable to eat, but face the prospect of seeing Slipknot sober.

Test, and then test. Then test it again. Then pull out something essential. Test.

Who’s afraid of DNS? Nominet’s ‘turing’ tool visualises hidden security threats » Techworld

John Dunn:

UK domain registry Nominet has shown off a striking new visualisation tool called ‘turing’ that large organisations can use to peer into their DNS traffic to trace latency issues and spot previously invisible botnets and malware.

In development for four years, and used internally by Nominet for the last two, at core turing is about representing DNS traffic in visual form, allowing administrators to ‘see’ patterns in real time that would normally be impossible to detect let alone understand.

EU opens investigation into Amazon’s e-book selling » Reuters

Julia Fioretti:

The investigation adds to the pressure on the online retailer in Europe, where it is already being investigated for the low tax rates it pays in Luxembourg.

The Commission said it would look in particular into certain clauses included in Amazon’s contracts with publishers.

These clauses, it said, required publishers to inform Amazon about more favorable or alternative terms offered to Amazon’s competitors, a means to ensure Amazon is offered terms at least as good as those of its competitors…

…”Amazon has developed a successful business that offers consumers a comprehensive service, including for e-books,” Competition Commissioner Margrethe Vestager said in a statement.

“Our investigation does not call that into question. However, it is my duty to make sure that Amazon’s arrangements with publishers are not harmful to consumers, by preventing other e-book distributors from innovating and competing effectively with Amazon.”

Similar in that sense to Apple’s bad action in the “most favoured nation” clause for ebooks it sought from publishers.

Google’s Android One may go down as an interesting idea that bombed » ETtech

Gulveen Aulakh:

Google’s first set of phone-making partners Micromax, Karbonn and Spice have no development roadmap for the platform’s next batch of devices. Some are clearing available stock at discounts, executives told ET. Intex, Lava and Xolo, which were to join the above three, no longer seem to be keen, leading some to question whether the search giant is planning to drop the Android One project altogether.

Google insisted it’s still committed to the product. “We’re not backing away from the programme,” Caesar Sengupta, vice president of product management at Google, told ET. “We’ve learnt a lot from the initial round with our partners and they have learnt in terms of device availability, in channel and others. Over time, as we work with our partners, we will keep working on making sure that we do things much better.” But with the products not doing too well, executives at the three partners said they weren’t working on the next lot of Android One devices.

The problem with Android One being that it tried to force a uniform experience – which left the OEMs no way to differentiate. Who benefits? Only Google.

jansoucek/ » GitHub

Jan Soucek:

Back in January 2015 I stumbled upon a bug in iOS’s mail client, resulting in HTML tag in e-mail messages not being ignored. This bug allows remote HTML content to be loaded, replacing the content of the original e-mail message. JavaScript is disabled in this UIWebView, but it is still possible to build a functional password “collector” using simple HTML and CSS.

It was filed under Radar #19479280 back in January 2015, but the fix was not delivered in any of the iOS updates following 8.1.2. Therefore I decided to publish the proof of concept code here.

Here’s the Youtube video:

It uses a targeted email to capture the person’s iCloud password (if their iCloud email is the same email). The prime weakness is the way iOS 8 keeps popping up dialogs asking you to sign into the App Store. Secondary weakness may be loading images in Mail; I don’t know whether turning off “load images” guards against this.

Bad that it has taken Apple six months not to do anything for a potential targeted phishing attack.

The mobile to machine learning era: privacy in the new age. » Praxtime

Nathan Taylor on Apple, privacy and machine learning:

there’s a risk that inside the company Apple could cripple their machine learning efforts by overcommitting to their own marketing and privacy ideology. I noticed Apple’s Phil Schiller was on message last night about privacy on John Gruber’s The Talk Show. It’s hard to be certain of Apple’s motivation here. It’s likely some mix of being out of touch with recent trends so being overly creeped out by machine learning, spinning their backwardness in cloud and machine learning in the best light, having some real and serious moral concerns about privacy, plus some very cynical distancing from Google. The latter since they know Google will be the one to bear the brunt of the lawsuits and tech regulations around privacy as machine learning explodes. And then Apple can follow serenely behind in their wake…

…What I noticed and liked about the Apple keynote at WWDC this week is Craig Federighi clearly loved all the new cool features based on machine learning and searching with natural language. He has an infectious enthusiasm. It’s great to see. Apple clearly takes machine learning very seriously. They just want to do it their own quirky and backhanded way.

The point about lawsuits and regulation is one I hadn’t seen raised before. But once it’s said, it feels inevitable.

Windows Phone, in five tweets

US installed base of smartphones

Data from ComScore of US installed base of smartphones

Don’t expect this situation to change.

Start up: iOS 9, Google and adblocking; Kaspersky under attack; the Search for Harm Data, and more

Adblock? Roadblock? Photo by lludovic on Flickr.

A selection of 9 links for you. Oh yes. I’m charlesarthur on Twitter. Observations and links welcome.

A blow for mobile advertising: the next version of Safari will let users block ads on iPhones and iPads » Nieman Journalism Lab

Joshua Benton:

Why would Apple do this?

An Apple partisan might argue it just wants to give users control of their iPhone experience, and having debuted extensions in the last version of iOS, allowing them to alter web content is a natural next step.

An Apple realist might argue that its great rival Google makes more than 90% of its revenue from online advertising — a growing share of that on mobile, and a large share of that on iPhone. Indeed, Google alone makes about half of all global mobile advertising revenue. So anything that cuts back on mobile advertising revenue is primarily hurting its rival.

An Apple cynic might note that the company on Monday unveiled its new News app, which promises a beautiful reading experience — and a monetization model based on Apple’s iAds.

Oh, it’s that cynic again. Alternatively, someone who’s used iOS might have found their browsing hijacked by bad ads that take you to the App Store, and wanted to block those too – they’re a terrible user experience, and Apple hates things that cause bad UX (remember Flash and Java?)

Google gets its slice principally from iOS search – will those get blocked? Meanwhile, and unintuitively, AdBlock Plus doesn’t seem keen on it.

Google losing billions in adblocking devil’s deal » Inside PageFair

Pagefair is an “anti-adblock technology company”:

even more controversial than the debate over the ethics of adblocking is the sheer scale of the payments being made – and what that money is funding.

It is safe to assume that Google – rumored to be paying $25m – is the largest customer on the Acceptable Ads program. This is a relatively small sum for a global corporation with revenues of nearly $60bn, while being a huge cash injection for a fast-growing adblocking startup in Cologne. It is not credible that these funds are simply being spent on the administration of the acceptable ads program. Instead, they are presumably being reinvested in the future development of adblocking.

“Acceptable Ads” means that if you pay up, your ads don’t get automatically blocked. Taboola has done the same; AdBlock Plus must be minting it. And there’s no sign that this is going to go away. For both ABP users and ABP itself, it works perfectly.

Kaspersky Lab investigates attack on its own network » Kaspersky Lab Official Blog

Eugene Kaspersky:

We’ve found that the group behind Duqu 2.0 also spied on several prominent targets, including participants in the international negotiations on Iran’s nuclear program and in the 70th anniversary event of the liberation of Auschwitz. Though the internal investigation is still underway we’re confident that the prevalence of this attack is much wider and has included more top ranking targets from various countries. I also think it’s highly likely that after we detected Duqu 2.0 the people behind the attack wiped their presence on the infected networks to prevent exposure.

Kaspersky hints, but doesn’t outright say, that a nation state was behind the attack.

Washington scrutinizes the sharing economy »

Rebecca Ruiz:

Matthew W. Daus, former commissioner and chairman of the New York City Taxi and Limousine Commission, took issue with calling Uber a member of the sharing economy.

“We’re coming up with these incredible definitions and clarifications, and I’m just trying to throw some water on everybody’s faces,” Mr. Daus said. “There’s no sharing going on. This is about for-hire transportation, and there needs to be a level playing field,” he said, suggesting that capping the number of vehicles on the road was necessary.

Across town at the exact same time, at another conference focused on the intersection of technology, business and government, the sharing economy was also under the microscope. The conference, called Techonomy Policy, included participation from the F.T.C. and the Federal Communications Commission.

“How sustainable is this?” asked Arun Sundararajan, a professor at New York University’s business school.

Perhaps more sustainable than some would like. Why would AirBnB or Uber go away?

Analysing Google’s public response to the EC’s Statement of Objections

Remember Google’s blogpost “The Search for Harm“, which suffered from misquoted statistics about incoming search to news websites?

This analysis by Foundem (one of the EC complainants over search) suggests – very strongly, with data to back it up – that the graphs Google included there to show how little effect it was having on online price comparison shopping, which is what the EC complaint is about initially, looked at quite different topics.

And that when you look more closely at what Google’s been doing, you discover far more effect than you might expect.

It’s a fascinating analysis; Google has questions to answer.

Huawei delays launch of its SmartWatch to September-October in China »

Peter Holden:

Huawei’s Watch was first unveiled at MWC back in March, and it is still one of the better-looking Android Wear devices around. There is no set shipping date for the Huawei Watch just yet, although it is available to pre-order in most countries. Not in China though, availability of the Huawei Watch has been delayed until at least September, although October hasn’t been ruled out if things don’t go to plan.

It all stems down to Google having left the Chinese market due to disagreements with the Chinese government. This means that Google’s Services won’t work in China, which has left Huawei with the task of adapting Android Wear to use its own services. Obviously this isn’t going to be a quick fix.

Given that many westerners can’t pronounce Huawei (it’s Hoo-wah-way), and won’t know it has a smartwatch, no great loss of face. Also, Peter Holden: things stems *from*, not “down to”.

Open data on council spending is largely unread by voters » The Guardian

Ben Worthy at the Public Leaders Network:

there has been less interest in the data than many hoped. Council finance data is viewed around 200 times each month. The person on the street has not been desperate for data. No army of armchair auditors has sprung up. There are some enthusiasts here and there; a concerted campaign in Barnet used open data to build its case against the (now deceased) Conservative council. But few people have the time and, most importantly, the motivation to scroll through complicated pdf documents of raw council spending data. Data needs a narrative, and pdf documents and spreadsheets don’t yet tell a good enough story.

This links to a further problem. If you do find a smoking gun among the spreadsheets, who do you send it to? The council itself, the opposition or the local press? It’s notclear what the next step would be and how it would fit in with the processes by which councils are accountable to citizens.

The better news is that something is being done with the data. Users include businesses, pressure groups and journalists as well as a handful of members of the public. While they haven’t unleashed a wave of accountability, there have been sudden bursts of data-driven questioning of local authorities.

Sounds like there’s been pretty much exactly the right amount of interest in the data. And the key point is, if the councils and politicians know that the data is auditable, they will realise they can’t hide stuff. Compare and contrast: FIFA payments.

Why I’m breaking up with the Apple Watch »

Jessica Friedman:

the busywork the watch’s apps can replace — handing over airline boarding passes, opening hotel room doors — seems less like an advance than a loss of control. Call me a Luddite, but honestly, I don’t mind unlocking things with my actual hands. The new watches announced this week may change the situation, but I am not sure I have the patience to wait.

Likewise (and I know this will be heresy to anyone really excited about the coming Fitbit initial public offering), the fitness-app aspect — the tracking of my steps, the measuring of my heart rate, the telling me to stand up when I am in the middle of an article — seems more like a burden than freedom.

I have worked hard to wean myself from a reliance on exercise machines telling me how hard I had worked — how many calories I had burned, how many stairs I had climbed — in part because I knew I was cheating pretty much all the time anyway and thus could not trust the results, and in part because it became an excuse to modify, or not, my ensuing behavior.

But the truth is, I know when I am in shape; I can see the difference in my body and feel it when I ride my bike in the park. The watch threatened to drag me back into a numbers-driven neurosis, and that’s a temptation I would rather not have.

The secrets of seven amazingly surreal photos revealed » Lumia blog

When it comes to Lumia photography, we think Pritesh Patel knows a thing or two about inspiring others. His amazingly surreal work is inspiring on many levels, with a magical combination of skill, creativity, and originality all working together to create some seriously fantastic photos.

Pritesh is a 22-year-old Mechanical Engineering graduate from Anand in Gujarat, India who has been a big lover all things Lumia for quite some time. And luckily for us, he’s here to tell us all about the magic behind his super photos — what he loves about his Lumia, what inspired him to create his photos, how he does it, and how you can do it too.

They are clever photos (though lots of post-editing is needed; it would be nice if some were clever trompes l’oeil). Also, “amazingly surreal” photos? Either amazing or surreal. Not both.

Start up: more PC slowdowns, Apple Pay goes big, Facebook gets AI, Uber’s early days, and more

2012 Keynote
Big touchscreens: what are they good for? Photo by Microsoft Ignite NZ on Flickr.

A selection of 9 links for you. Use them wisely. I’m charlesarthur on Twitter. Observations and links welcome.

A compilation of robots falling down at the DARPA Robotics Challenge » YouTube

I for one welcome our new robotic ove.. AH, NOT SO SMART NOW, ARE YOU?

Siri’s search power grows, as Apple accelerates machine learning » Mobile Forward

Hristo Daniel Ushev:

I’m changing my mind about Google’s data-volume-based advantage. I believe Apple sees a volume of (anonymized) user data that’s on the same order of magnitude as Google (on mobile). Google Now may provide Google with more question/intent data, but Apple sees the bigger picture of what consumers (in aggregate) do/need throughout the day. I base my belief on iOS’s huge installed base, high app downloads and usage, and Apple’s full-stack access to iOS devices.

With so many dots to connect – Mac, iPhone, iPad, Apple Watch, Apple TV, Siri, Maps, News, HealthKit, HomeKit, and CarPlay – Apple will have great opportunities to add value to consumers’ daily life.

Machine learning is to 21st century devices as the graphical user interface was to 20th century computers. I don’t mean that as a user interface metaphor, but as a way to express how critical it will be to a high-performance product.

At a machine learning conference the other day, someone said to me: “a really smart AI wouldn’t need a ton of data. It would figure out what lions look like from just one picture of a lion, not hundreds. Maybe Google’s aren’t that good if they need so much data.” Well, perhaps..

Samsung’s new smartwatch to offer mobile payments: Electronic Times » Reuters

Tech giant Samsung Electronics Co Ltd plans to offer a mobile payments function in a smartwatch to be launched in the second half of the year, South Korea’s Electronic Times newspaper reported on Monday citing unnamed sources.

Samsung would use near-field communication (NFC) technology to support mobile payments on the smartwatch, the report said. This is the same technology Apple Inc uses for the Apple Pay function supported by its smartwatches.

How about that.

The future of computers is the mind of a toddler » Bloomberg Business

Jack Clark:

On June 9, Facebook plans to publish a research paper detailing a system that can chew through several million pieces of data, remember the key points, and answer complicated questions about them. A system like this might let a person one day ask Facebook to find photos of themselves wearing pink at a friend’s birthday party, or ask broader, fuzzier questions, like whether they seemed happier than usual last year, or appeared to spend more time with friends.

While AI has long been an area of interest for Hollywood and novelists, companies hadn’t paid much attention to it until about five years ago. That’s when research institutions and academics, aided by new techniques for crunching reams of data, started breaking records in speech recognition and image analysis at an unexpected rate. Venture capitalists took notice and invested $309.2 million in AI startups last year, a twentyfold increase from 2010, according to research firm CB Insights. Some of these startups are helping to break new ground. One in Silicon Valley, called MetaMind, has developed improvements to computers’ understanding of everyday speech. Clarifai, an AI startup in New York, is doing complex video analysis and selling the service to businesses.

Facebook’s office for this is in France. British companies are big in this too. Cannot emphasis enough how important this field is. (Can’t find the research paper, though.)

Apple Pay UK: some retailers to ditch £20 contactless limit » Pocket-lint

Stuart Miles:

As is the case with Apple Pay in the US, Apple has convinced retailers and banks to remove the limit because they can prove the customer is present thanks to the use of the Touch ID fingerprint scanner on the iPhone.

MasterCard have confirmed similar options for Apple Pay retailers in the UK too:

“Currently the vast majority of payment terminals here in the UK are set to accept contactless transactions up to the £20 spending limit, but that will rise to £30 in September (for cards as well),” a spokesman for MasterCard told Pocket-lint when we asked about clarification on the limit thresholds.

“As more digital services like Apple Pay come to market, we’re [MasterCard] supporting retailers and banks as they update the terminals so that they can accept authenticated transactions above that limit from digital devices.”

Uber: An oral history » Fortune

Some fascinating interviews by Adam Lashinsky (with Uber’s cooperation, of course), which are all worth reading; including this by Conrad Whelan, who was its first engineer:

When I joined the company, you couldn’t actually sign up for the product. It was just a way to order the car. So I built the sign-up flows that would take a credit card and make user accounts. So as soon as we did that, we could officially launch, which was June 1st, 2010, two months after I started.

I think the next thing I did, which I really enjoyed, was optimize the dispatch algorithms to take into account drivers that might miss a dispatch. That lasted like three years, or something like that, which is pretty cool.

Sounds throwaway, but gives a hint of the huge complexity involved.

Large touchscreens: what’s different? » Nielsen-Norman Group

Amy Schade tried out a 24in tablet with her children (because children don’t know what they’re not supposed to not do):

While the large screen was completely enthralling to my 2 year olds, the size of the touchscreen was a drawback for my daughter. She leaned on the screen with one hand in order to reach another part of the screen. As a result, the puzzle pieces that she was trying to move jumped from one hand to the other, if they moved at all.

Using the large screen was particularly hard for her, based on her size relative to the device —most of us aren’t using devices that are nearly as big as we are. However, her attempts to use it also illustrate a problem far more likely to be encountered with large touchscreens: that of unintended two-handed touches and other accidental touches.

We see this play out in our testing of mobile devices. We witness more accidental touches or brushes of the screen as people maneuver standard sized tablets than we do when watching people use their phones.

Designs need to anticipate and accommodate accidental touches and consider ways to incorporate larger gestures, hand presses versus finger touches, and multi-hand interactions.

PC inventory issues growing serious in Europe; retailers boycotting vendors dumping inventory » Digitimes

Monica Chen and Joseph Tsai:

First-tier PC vendors reportedly are seeing serious inventory issues in Europe and may try to digest stocks by offering price cuts. At the same time, some channel retailers are reacting to the news by boycotting the vendors to avoid having inventory dumped on them, according to sources from the upstream supply chain.

The PC supply chain was originally optimistic about demand for PCs in the second quarter, but component suppliers have seen their orders from brand vendors weakening during the quarter as most vendors have high inventory levels on hand, which they are struggling to clear as most consumers have halted their notebook purchasing to wait for the release of Windows 10, which is scheduled for the end of July…

…In addition, Windows 10’s free upgrade strategy is also expected to weaken consumers’ demand for buying new PCs.

“First-tier PC vendors” is probably code, here, for Asus and Acer.

Facing the music » All this

Dr Drang on the longest half-hour ever, at the end of the Apple keynote in which Eddy Cue introduced Apple Music:

nothing justifies the dancing. I’m sure Eddy thought it was funny and self-deprecating, but it was just annoying and a waste of our time. I often think Craig Federighi overdoes the jokes, but he knows when to pull it back and doesn’t let his presentation get derailed. Eddy doesn’t have that sense.

As to whether Apple Music is really good, we’ll have to wait and see, but the signs aren’t pointing in that direction. The elevator pitch is that “Apple Music is three things” – an attempt to tie it to the 2007 introduction to the iPhone. (And someone should have explained that to Iovine before sending him onstage. He clearly didn’t understand the audience’s reaction to the “three things” line.) But while the advantages of a multifunction device are obvious, the advantages of a multifunction app aren’t. The App Store’s success is largely based on tightly focused apps, not sprawling suites.

HTC’s prospects begin to look like a death spiral

HTC's stock has plummeted in the past few days after a profit warning.

HTC’s stock has plummeted in the past few days after a profit warning.

On Friday, HTC released a gold edition of its flagship M9 smartphone. Oh, hubris: the timing couldn’t have been worse. Not only did it emerge that the product promo photos had been taken with an iPhone, but within hours the company also issued a formal warning that its financial performance in the current quarter (running from April to June) would be substantially worse than it had expected. Revenues in May were terrible – down by 48% from the year before, which itself had been nothing to sing about.

Now it says that Q2 revenues won’t be the forecast TW$46-51bn (about $1.7bn), but more like TW$33-36bn (about $1.1bn) and that rather than a small profit it will make a net loss – between TW$9.70 and $9.94 per share, which is about TW$8.2bn (US$250m).

HTC has been skating along on operating margins of less than 1% for the past three quarters; cumulative net profits for that period is TW$1.47bn, or US$47m (yes, forty-seven million).

This latest news though feels like a headlong plunge into the abyss.

The forecast suggests that HTC’s June revenues will be as low as they’ve ever been since 2009 – perhaps worse.

HTC revenues through 2015 by month

Forecast for June is as low as 2009 – before the Android explosion.

The stock market certainly seems to think so, marking HTC’s shares down 9% for two successive days – the maximum drop allowed before “circuit-breakers” come in.

Caught in the value trap

HTC’s story is a cautionary tale about life in the value trap – when you don’t make the core software, and so have to rely on hardware differentiation and software add-ons. It has reduced the PC business to one where the five biggest Windows PC OEMs have 60% of the market, and pretty much all the profits; it’s doing much the same to the Android smartphone market, except the profits there are accruing to just one company (Samsung).

HTC’s problem is that its hardware advantage ran into the sand once Samsung really got serious about dominating the smartphone space, and now – rather like Samsung – it’s being eaten from below by Chinese rivals that do the job just as well, and at the high end is being outcompeted by LG (which has upped its game enormously in the past two years) and to a lesser extent by Sony (which offers features such as waterproofing and SD cards). Let’s also not mention those terrible adverts with the no-doubt-expensive Robert Downey Jr.

In its profit warning, HTC said:

“The change for revenue outlook is due to slower demand for high-end Android devices, and weaker than forecast sales in China, while gross margin is revised primarily on product mix change and lowered scale. At the same time, increased competition has raised operating costs for product promotion; HTC is enacting measures to further improve operating efficiency.”

In brief: the M9 (this year’s flagship) isn’t selling; Chinese buyers are buying other phones (or fewer phones altogether); it’s harder to get noticed with so many rivals; HTC’s going to cut some jobs and spending in an attempt to save itself.

HTC has been a sub-scale player for some time now – remember the calamitous delay to the HTC One in March 2013? – and to some extent the only interesting question is whether any of its attempts to escape the downward spiral can succeed. On the plus side, it’s well-capitalised, so it’s unlikely to abruptly go bust. Its key problem is how quickly it can ramp up other businesses such as its Vive VR headset and Re camera, and how much revenue they’ll generate, while it tries to rely on making smartphones that too few people want to buy.

Losing traction

You can actually trace the point where the wheels came off by looking at HTC’s accounts, and specifically the inventory levels. “Inventory” is a mixture of goods waiting to be made into handsets in factories, work-in-progress, and finished devices.

Now compare HTC’s revenues with its inventory level. You can see that it remains largely under control through to the end of 2012 – although it’s beginning to rise as the iPhone 5 and Galaxy S3 began pushing it out of the market, meaning it was harder to sell handsets. (The lines are on slightly different scales: by the end of 2012, inventory was about 40% of revenue.)

HTC revenues and inventory, by quarter

Revenues kept ahead of inventories, at least to the end of 2012…

But in 2013, it hit that problem sourcing camera sensors for the HTC One M8 (the original – thanks Matjaz Ropret). And it shows up in inventory: all those goods sitting in factories and warehouses waiting to be shipped. Inventory spiked to 89% of revenue for the quarter. Revenues have tracked down, and inventories have stayed relatively high (above 35% of revenue, and sometimes 76%) ever since. High inventories are bad because they’re goods that you’ve paid for, but can’t sell; they’re a drag on business, and what’s worse is that as they age they drop in value. Tim Cook described inventory as “like milk – it goes off after a few days”. (Apple’s inventory is consistently below five days of hardware sales.) HTC had 45 days’ worth of inventory at the end of Q1; watch out for the figure at the end of June, because it will tell us how the M9 has sold to carriers, if not end users.

HTC inventory v revenues

Suddenly at the end of 2012, things go out of control…

Basically, the inventory story breaks into two parts – green marks the OK stage, and red the point where it’s gone bad:

HTC inventory v revenues

The red period, from the end of 2012 on, shows inventories growing way above associated revenues

(This, by the way, is why it matters to look at company accounts. You can find stories if you read them closely enough. That’s where I found BlackBerry’s PlayBooks piling up in 2011.)

The company’s caught in a bind. It doesn’t make enough profit to invest in really top-level R+D that might let it break through into new spaces. Here’s its R+D spending by quarter, in US dollars:

HTC R+D, by quarter

With spending at about $100m per quarter, HTC can’t break out of its position as a mid-tier smartphone maker.

It’s pretty hard to spot where it is spending money on the HTC Re camera, or the HTC Vive VR headset. The latter seems like a smart move (whereas the camera is a complete commodity product whose minimal margins will get eaten by rivals, just like in the phone market). HTC’s in there comparatively early, and has a deal with Valve. I wouldn’t rely on that being the saviour of the business, though.

In search of a USP

So how does HTC get out of this? A better way to ask the question is: what’s HTC’s unique selling point (USP)? What does it bring to the smartphone and device party that nobody else does? Apple has its brand and vertical integration; Samsung has scale and vertical integration (it makes the chips and displays for its own phones); LG has vertical integration; Sony has its brand and terrific photo sensors, though I don’t think that’s necessarily sufficient for the survival of its smartphone business, it is at least a USP.

HTC doesn’t have a geographical advantage (it’s not in China, it’s in Taiwan); it doesn’t have a vertical integration advantage. It isn’t developing the software, though its Sense overlay for Android is nice. There’s no point making Windows Phone handsets, because they don’t sell except at the low end, and there’s no profit there.

Contrast BlackBerry and HTC: both are now pulling in roughly the same revenue per quarter (sub-$2bn). BlackBerry sells far fewer handsets than HTC – only 1.6m in the December-February quarter, and by my estimates perhaps 1.3m in the March-May period, while HTC shipped around 5m handsets in Q1.

BlackBerry’s advantage, though, is that it has a cushion of customers, particularly in enterprise, who are willing to pay subscription fees. If handsets were all BlackBerry had, it would have gone bust long ago.

HTC doesn’t have that cushion. So what does the future look like? At one time in 2012/3, Amazon was interested in buying it – but Cher Wang, its chair (and now CEO, having pushed Peter Chou over to the “future products” side) turned Jeff Bezos down. That looks like a bad decision. Short of a miracle, it doesn’t look like anything’s going to pull HTC out of the mire.