Start up: Google and real accident rates, who really buys iPods?, Reddit and trolls, and more

Posted on July 20, 2015 by charlesarthur

Apple Music is available if you’re running iOS 8.4. Photo by danielooi on Flickr.

A selection of 7 links for you. Do you feel lucky? Well, do ya, punk? I’m charlesarthur on Twitter. Observations and links welcome.

Apple Music adoption » Mixpanel Trends

This is amazing: from 29 June, when iOS 8.4 was released (bringing Apple Music), Mixpanel’s measurement suggests that it passed 50% of all installed iOS devices by 16 July. That’s less than three weeks. It’s gaining about 1% per day. There has to be an upper limit, but it’s pretty high – 84% of devices are running iOS 8.

This also means, if Mixpanel is representative, that about 200m devices could already be able to try Apple Music.
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The view from the front seat of the Google self-driving car, chapter » Medium

(That’s Google’s SDC being rear-ended on July 1 in the right-hand lane: the car causing the crash doesn’t even brake.)

Chris Urmson, who leads Google’s SDC effort:

National crashes-per-miles-driven rates are currently calculated on police-reported crashes. Yet there are millions of fender benders every year that go unreported and uncounted — potentially as many as 55% of all crashes, according to the National Highway Traffic Safety Administration. (None of the accidents in which people hit us resulted in a police report — not even the July 1 crash, even though the police were on site.) Furthermore, the numbers that are available don’t distinguish between miles-driven before causing a crash vs simply being involved in one. This all means no one knows the real crashes-per-miles-driven rates for typical American streets.

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Who’s actually buying iPods these days? » BirchTree

Former Target manager Matt Birchler:

Kids would buy (or their parents would buy for them) the iPod Touch because of 3 things:

• It played games (Minecraft, mostly)
• It had YouTube
* It could stream music

A lot of families stopped buying iPod Touches once the iPad Mini got down to the $249 price point. You get a lot more device for your buck, and Touch sales dropped off very quickly. I could go on and on about this, but young kids love iPads more than most of us 20-30 somethings can imagine.

You also see more and more kids just using a hand-me-down smartphone that the parents have since upgraded from.

And then there were older people who bought Touches. They were more rare, but they were people who wanted something to FaceTime with their kids/grandkids. Maybe they wanted to use a couple apps they had heard about, but didn’t want to pay the ridiculous data fees to get them on a smartphone. This was a much smaller market, and many of them would end up buying an iPod Nano (for reasons I’ll address in the next section).

Nano and Shuffle had very different audiences. I asked who used to buy the Classic; his reply: “You’d be shocked how few were sold. Let’s just say it’s too few for me to draw any real conclusions.”
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HTC won’t ship the Grip after all, but its fitness ambition lives on » Engadget

Chris Velazco:

Hey, remember that time HTC built a fitness tracker (with a little help from Under Armor) and showed it off in Barcelona? The one that was originally slated for a Spring launch? Well, we’re knee-deep in Summer already, and the company just confirmed to us that it no longer plans to ship the Grip we’ve already seen. As a spokesperson put it, the company “decided to align Grip with the entire product portfolio for health and fitness launching later this year” after “extensive wear testing and user feedback.” In other words, the exact Grip we saw in Spain won’t hit the market, but something better will.

Uh-huh. Let’s see how this progresses. HTC made the right call putting off its smartwatch (pre-announced in February 2014); this would also be a tough sell when it’s losing money. Problem is, how do you make money except with new things?
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How iCloud Drive deletes your files without warning » Michael Tsai

Tsai quotes Mark Jaquith:

let’s say that, on your shiny new Mac, you want to move these files from iCloud Drive to your local hard drive, or to another synced drive like Google Drive or Dropbox. Well, you can just drag their folders do the other destination, right? You sure can. Apple kindly warns you that your dragging action is moving that folder, and that the files will be moved to your Mac, and won’t exist on iCloud Drive anymore. Fine. That’s what dragging a file from one place to another generally does!

But what happens if there are files inside this folder that haven’t yet synced to your local machine? Well, the move operation will be slower, because your Mac has to first download them from iCloud Drive. But once they download, they’ll be in their new location. Right?

Nope. Those files are now gone. Forever.

Tsai then follows up to show that Apple knows about this – though also pulls together other comments, including one from an ex-Apple services employee, showing that this problem is known internally, but it is being starved of funding.
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Former Reddit CEO Ellen Pao: the trolls are winning the battle for the Internet » The Washington Post

To understand the challenges facing today’s Internet content platforms, layer onto that original balancing act a desire to grow audience and generate revenue. A large portion of the Internet audience enjoys edgy content and the behavior of the more extreme users; it wants to see the bad with the good, so it becomes harder to get rid of the ugly. But to attract more mainstream audiences and bring in the big-budget advertisers, you must hide or remove the ugly.

Expecting internet platforms to eliminate hate and harassment is likely to disappoint. As the number of users climbs, community management becomes ever more difficult. If mistakes are made 0.01% of the time, that could mean tens of thousands of mistakes. And for a community looking for clear, evenly applied rules, mistakes are frustrating. They lead to a lack of trust. Turning to automation to enforce standards leads to a lack of human contact and understanding. No one has figured out the best place to draw the line between bad and ugly — or whether that line can support a viable business model.

The basic problem is that we remember the vicious words and acts more than the kind ones; possibly we’re evolutionarily set out that way.
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Dozens of phone apps with 300M downloads vulnerable to password cracking » Ars Technica

Dan Goodin:

many smartphone apps still allow users to make an unlimited number of login attempts. That failure allows attackers to cycle through long lists of the most commonly used passwords. Given the difficulty of entering strong passwords on smartphone keyboards, it’s a likely bet that it wouldn’t be hard to compromise a statistically significant number of accounts over a period of weeks.

According to research from smartphone security firm AppBugs, dozens of Android and iPhone apps downloaded more than 300 million times contain no limits on the number of logins that can be attempted. Per the company’s disclosure policy, researchers give app developers up to 90 days to fix vulnerabilities before making them public. That means most of the 50 or so apps identified by AppBugs still aren’t being made public. Still, the grace period has expired on at least 12 apps, including those from CNN, ESPN, Slack, Expedia, Zillow, SoundCloud, Walmart, Songza, iHeartRadio, Domino’s Pizza, AutoCAD, and Kobo. Three other apps, from Wunderlist, Dictionary, and Pocket, were found to be vulnerable but were later fixed after AppBugs brought the weaknesses to the developers’ attention.

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Start up: how we view innovation, FBI malware v Tor, drones on the farm, Samsung in India, and more

Posted on July 17, 2015 by charlesarthur

Small; soon invisibly so? Photo of a SIM card by smjbk on Flickr.

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

Innovation isn’t dead » Money.com

Morgan Housel, with the only article you need about innovation and people being dismissive of stuff on the basis of “I’d never want one”:

The typical path of how people respond to life-changing inventions is something like this:

• I’ve never heard of it.
• I’ve heard of it but don’t understand it.
• I understand it, but I don’t see how it’s useful.
• I see how it could be fun for rich people, but not me.
• I use it, but it’s just a toy.
• It’s becoming more useful for me.
• I use it all the time.
• I could not imagine life without it.
• Seriously, people lived without it?

This process can take years, or decades. It always looks like we haven’t innovated in 10 or 20 years because it takes 10 or 20 years to notice an innovation.

Planes, lasers, cars, antibiotics, laptops – they’ve all gone through it. What’s going through exactly the same now?
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Drawbridge hires Apple ad executive to track users across devices » WSJ

Douglas MacMillan and Elizabeth Dwoskin:

If a desktop computer and a smartphone are connecting to the same WiFi network, the network will recognize the unique ID in each device and pass that information to Drawbridge.

The guesswork gets more accurate the more frequently Drawbridge can capture instances of devices being in the same place or connecting to the same network. Drawbridge uses this cross-device matching system to build rich profiles of people’s behavior, interests, spending habits, demographic information, and sometimes their locations. They claim their matching software is more than 80% accurate.

Methods of tracking consumers online have drawn longstanding criticism from privacy advocates. The advertiser’s holy grail, of capturing every interaction a consumer has with their brand, also requires extensive surveillance of people’s behavior, and increasingly, their comings and goings. Privacy watchdogs say consumers do not want to be monitored in this way, and that the methods companies use to obtain consent to collect people’s data are broken.

Many apps ask for consumers’ permission to collect their location as a condition of downloading the app, but advocates warn that consumers are largely unaware of the extent of the information being collected or how it is being used. A recent study found that roughly 60% of consumers withdrew their consent when presented information about how their data was being shared.

Drawbridge says the company doesn’t maintain a database of names or of people’s real identities, but builds anonymous profiles using identification numbers.

Oh, come on. “Anonymous profiles using identification numbers”? Including, say, location, age, sex, marital status, interests, and so on? Quit the obfuscation; it’s profiling, of people, and Apple tries to limit its extent, and everyone else doesn’t.
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Feds bust through huge Tor-hidden child porn site using questionable malware » Ars Technica

Cyrus Farivar and Sean Gallagher:

A newly unsealed FBI search warrant application illustrates yet another example of how the government deploys malware and uses sophisticated exploits in an attempt to bust up child pornography rings.

The 28-page FBI affidavit (text-only, possibly NSFW) was unsealed in a federal court in Brooklyn, New York earlier this month. It describes a North Carolina server hosting a Tor hidden service site. The setup was seized in February 2015, but law enforcement allowed it to run for two additional weeks as a way to monitor its nearly 215,000 users.

Currently, at least three men—Peter Ferrell, Alex Schreiber, and James Paroline—have been charged in connection with this site.

Ferrell, username “plowden23,” is the target of the search warrant affidavit. Schreiber, 66, of Queens, was a former New York City schoolteacher. The two New York men have been released on bond.

“Questionable” malware in the sense that the legal rules about venue of infected PC are very hand-wavey; how do you know where a PC you’re infecting via Tor is based? By getting it to phone home (to the FBI). What if that’s out of venue? Ignore it?
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Apple, Samsung in talks with telecom groups to launch e-Sim card » FT.com

Daniel Thomas and Tim Bradshaw:

Apple and Samsung are in advanced talks to join the rest of the telecoms industry to launch electronic Sim cards, in a move could fundamentally change how consumers sign up to mobile operators.

The GSMA, the industry association which represents mobile operators worldwide, is close to announcing an agreement to produce a standardised embedded Sim for consumer devices that would include the smartphone makers.

The traditional Sim card locks in the user to a network but an embedded Sim would enable a smartphone, tablet or wearable user to avoid locking themselves into a plan with a single operator or sign up to switch instantly.

Wouldn’t expect this in 2015, but next year would make perfect sense. And that’s another opening/point of failure removed from phones. I bet Apple is working on making the iPhone 7 “waterproof” – and perhaps at a dual-SIM model.
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Agricultural drones: the new farmers’ market » Engineering & Technology Magazine

Katia Moskvitch:

In the past, when farmers had smaller fields, they knew which areas had enough water, or were ready to harvest, just by walking around their land. However, to stay connected with today’s much bigger parcels of farm land, they need precision agriculture, with crop management that relies on GPS and big data analytics to increase yields and profits while cutting down on pesticide and water use.

Many tractors are now guided by GPS, to plant perfectly straight rows of crops. Farmers can monitor the progress of their driverless tractor on a tablet at home. Monsanto, the world’s largest seed company, estimates that data-driven prescriptive planting could increase global crop production by about $20bn a year, or about one-third the value of 2013’s US corn crop.

Drones are the latest addition in the toolkit of precision farming, collecting the key datasets used to make agronomic decisions. Right now, they are still new, and regulations how to use them vary from country to country. But farmers everywhere are waking up to the potential benefits, and “in a few years, drones could be a common sight above British farms,” says Alex Dinsdale, sales manager at Ursula Agriculture, a company that delivers crop intelligence from drones. But are they really useful, or just a technology gimmick?

“I remember driving the vineyards with my grandfather as a child, we would constantly stop, get out, and look at the vines. Right up close,” says Kunde. “He would take off a leaf and look at the undersides, show me, throw it down, then choose another.” At other times groups of men would use magnifying glasses to inspect the leaves, looking for potential pest problems in the vines. Fast-forward to today, and much of that work “could have been helped by advanced tools and aerial imagery,” he says.

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How spyware peddler Hacking Team was publicly dismantled » Engaget

The Hacking Team hack has spawned so many stories, but this by Violet Blue pulls together some of the worst behaviour uncovered. Such as:

Ethiopia’s Information Network Security Agency (INSA) was employing Hacking Team to target [security researcher, The Intercept journalist, First Look Media director of security and former Google employee Morgan] Marquis-Boire, likely over his tracking of the company’s malware for Citizen Lab and at Google’s anti-malware team – one which culminated in a particularly bad PR moment for Ethiopia.

The Citizen Lab research in question found Ethiopia’s INSA using Hacking Team’s malware to target journalists; Ethiopian authorities use arbitrary arrests to silence journalists, and detainees routinely allege torture and ill treatment. The Ethiopian government’s spokesperson in Washington vehemently denied the use of products provided by Hacking Team.

Yet PhineasFisher’s haul shows Hacking Team not only provided its products to Ethiopia, but also proposed a new contract with Ethiopia because, according to a leaked email from operations chief Daniele Milan, “700K is a relevant sum.”

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Samsung’s smartphone market share falls to 21.5% from 28% in India in June quarter | ETtech

Danish Khan:

Samsung’s smartphone market share fell to 21.5% from 28% in the previous quarter, the report [by tracking firm Cybex Exim Solutions] said. The company, however, still leads the overall handset market in the country with 18.9% share.

Home-bred handset maker Micromax is going steady at the No.2 position, with 12.6% share of the overall mobile phone market in the quarter to June, up from 10% in the previous quarter. In the smartphone segment, Micromax’s market share rose to 17.9% from 13%.

The Indian smartphone market grew by 23.5% sequentially to reach 25m units (according to Cybex). If you do the maths, that means Samsung’s smartphone sales did actually fall, from 5.7m to 5.4m, while Micromax’s rose from 2.6m to 4.5m. Samsung has a problem: it’s being out-competed at the low end.
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Navy warns that fingerprint records were compromised in OPM breach » Darkmatters

Anthony Freed:

The Department of the Navy (DON) has sent a notice to more than 436,000 active duty personnel and reservists, as well as over 195,000 civilian employees, warning that data compromised in the recent breach at the Office of Personnel Management (OPM) also included fingerprint records.

“The interagency team has now concluded with high confidence that sensitive information, including the Social Security Numbers (SSNs) of 21.5 million individuals, was stolen from the background investigation databases,” said Thomas W. Hicks in performing the duties of the Under Secretary of the Navy.

“This includes 19.7 million individuals that applied for a background investigation, and 1.8 million non-applicants, predominantly spouses or co-habitants of applicants. Some records also include findings from interviews conducted by background investigators and approximately 1.1 million included fingerprints.”

Please update your fingerprints accordingly, using at least one whorl and two loops. (Though seriously, how can they be abused? Unless you’re going to whirl off into a plot involving a top-flight general using an iPhone with TouchID.)
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In praise of Apple Music in my iTunes Library » Six Colors

Jason Snell:

I don’t know what I was expecting from Apple Music integration. I guess I assumed that when I added a track to “my library” from Apple Music, it would go to some special Apple Music tab, or playlist, or library. Nope—that music just shows up in the My Music section of iTunes, mixed in with all of the stuff I’ve bought over the years.

I realize that this approach may not work for everyone—one of the great challenges in designing any computer-based music service is going to be the endlessly different ways people consume to music—but boy, does it work for me. I play music from a lot of self-built playlists, but now I can add Apple Music playlists too, and they’re seamlessly integrated. Apple Music’s integration with my music library lets me listen to music in the same way I’ve been doing it for the past 14 years—but with the addition of tracks from Apple Music’s nigh-endless supply.

I can also see just how insidious this approach is. My music library is no longer pristine, no longer a collection owned by me. Now I’m acquiring albums and tracks not by buying them, but by clicking that Add to Library button. It’s already started to happen, after a couple of weeks. After a few months or years with this service, how will I ever be able to cancel it?

There are roughly 800m iTunes accounts, growing at about half a million per day in 2013.
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Start up: Fitbit’s problem, Google’s staff boom, Apple Watch keeps ticking, and more

Posted on July 16, 2015 by charlesarthur

Oh, that tsunami. Photo(montage) by arkhangellohim on Flickr.

A selection of 12 links for you. Use them wisely. I’m charlesarthur on Twitter. Observations and links welcome.

Fitbit’s dilemma: what problems will it solve better than other devices? » Mobile Forward

Hristo Daniel Ushev on the company that’s presently valued at $9bn (that’s the net present value of the stock market’s guess of its total future profits):

Smartwatches – at least the Android ones – will eventually rival the price of Fitbit’s high-end products. Fitbit will need to either make smarter products or lower-priced products. It doesn’t appear to have the basis for the former, and it likely won’t have the cost structure for the latter (compared to low-cost rivals). It might just maintain an existence in the US, where its installed base and brand are strong (today). I don’t doubt there will always be some consumers who prefer the Fitbit’s design, user interface, analytics, subscription services, or power efficiency.

But, at least in terms of the performance level visible today, Fitbit’s proficiency in those areas doesn’t appear to be unique enough to constitute a protect-able advantage.

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Earthquake experts on ‘The Really Big One’: Here’s what will actually happen in Seattle » GeekWire

Following the New Yorker article on the coming (but nobody knows when) earthquake around Seattle, some earthquake scientists did a Reddit AMA:

“Washington’s resilience plan estimates it could be months before all major transport routes are reopened, though emergency routes … will open up before that,” Doughton said. Bridge inspectors will be among the first responders, checking for small cracks that could lead to devastating failures soon after the quake.

With transportation down, supplies are going to be tight. Goetz recommends that residents keep a 7-to-10-day supply of food, water and essentials in case of a major earthquake, along with some supplies at work and in their car.

“Beyond supplies, I always encourage people to talk about their plans,” Goetz said, “especially around communication, which we know will be affected. Where will they be? How can they get back together? Where could they meet if not at home?”

She also suggests staying put once the quake starts.

“Getting on the roads will only create more congestion and depending on the damage to bridges and streets, you honestly may not get very far,” she said. “Smartest plan—take a protective action, keep yourself safe, check on others and help them afterwards.”

Yeeaah. Not quite going to buy that seaside condo in Seattle though.
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Toyota recalls 625,000 hybrids: Software bug kills engines by THERMAL OVERLOAD » The Register

Iain Thomson:

The recall is for Prius vehicles sold between 2012 and 2014, and affects 109,000 vehicles in the US, 340,000 in Japan, 160,000 in Europe, and sundry other locales. Toyota didn’t say how many cases the Prius had suffered, but did mention that there were no reports of injury as a result of the flaw.

“In the involved vehicles, the current software settings for the motor/generator control engine control unit (ECU) and hybrid control ECU could result in higher thermal stress in certain transistors, potentially causing them to become damaged,” Toyota said in the recall notice.

“If this happens, various warning lights will illuminate and the vehicle can enter a failsafe mode. In rare circumstances, the hybrid system might shut down while the vehicle is being driven, resulting in the loss of power and the vehicle coming to a stop.”

Seems not good.
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No more mobile fun: mobile game app users decrease for five consecutive months » BusinessKorea

Cho Jin-young:

The number of mobile game app users has decreased for the first time in the last two years. It clearly shows stagnation in the growth of the domestic mobile game market.

According to market research institution Nielsen Korea on July 14, the number of mobile game app users with Android OS stood at 19.95 million last month. The figure has decreased by 850,000, or 4.11 percent, from the 20.81 million of June last year. It is the first time in the last two years that the monthly number of game app users has shown a year-on-year decrease.

In particular, the number of game app users is on the decrease this year, even though the total number of mobile app users is steadily increasing.

Offered as a data point.
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Microsoft has finalized Windows 10 » The Verge

Tom Warren:

Microsoft has now finalized Windows 10, ready for its release later this month. Sources familiar with Microsoft’s plans tell The Verge that the software giant has selected build 10240 as the final release to manufacturing (RTM) copy, allowing PC makers to start loading the software onto new machines ready for release. We understand that Microsoft is signing off on the build internally today, and may announce the RTM publicly by the end of the week or choose to ignore the milestone and focus on the launch.

Goes live on 29 July, in case you’d forgotten.
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Preliminary Q2 2015 global smartphone market and observations » Tech.pinions

Ben Bajarin:

For Samsung, we believe shipments will be in the low 70m range, 73-74m to be exact. Our Apple estimates are for 53m units sold. Huawei announced 50m smartphones sold in the first half of 2015 which, by doing the math on first quarter sales, means 32m smartphones shipped. Xiaomi announced 34m smartphones shipped in first half of 2015 for first quarter shipments of 20m.

For philosophical reasons, I do not lump Lenovo and Motorolla sales together. If we were to combine the two, Lenovo would be #4 and Xiaomi #5.

Folks love to talk about Xiaomi but it is clear their initial target of 100m smartphones sold in 2015 is unlikely.

(This is content for subscribers; there’s more to it, obviously, and you can pay per-article.)
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Feb 2015: Google layoffs inevitable » blogorrhea

Kaz Thomas, in February 2015:

With ad revenues leveling off and expenses skyrocketing (G&A has quadrupled in 5 years), Google is headed for a financial meltdown, and when it happens, the company will need to shave $2 billion a year off its $16 billion/yr in R&D and G&A costs, which means, if we count the fully burdened cost of a Google employee at $200K per year, it needs to shave 10,000 jobs.

Google has $100 billion in the bank, so the situation is hardly dire, but Wall St. likes to see expenses cut by some other method than hauling money out of the bank. They like to see a sound Income Statement, and very soon, Google’s Income Statement will be anything but sound.

On a percent-of-income basis, Google outspends Apple on R&D six-to-one. Where is that money going? Driverless cars, Google Glass, body odor patents. Stuff that doesn’t have a chance in hell of generating revenue any time soon. On the one hand, Google is to be credited with thinking long-term, something American companies don’t tend to do very well, but on the other hand, Google needs to execute well on the revenue side.

Now read on.
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Google takes stricter approach to costs » WSJ

Alistair Barr:

Google will offer an update on its expenses on Thursday, when it reports second-quarter financial results after regular trading hours and Ms. Porat is expected to speak during a conference call with Google analysts for the first time. The company declined to comment for this article.

The clearest sign of the new attitude: Google added 1,819 employees in the first quarter, bringing its total to 55,419. That was the smallest increase since the final quarter of 2013; last year, Google added an average of 2,435 employees per quarter.

For many years, Google teams assumed they could add staff each year. Now, Google executives are selecting which groups can hire, based on the company’s strategic priorities. Since late last year, many Google teams have had to submit plans describing how additional employees will produce specific business objectives, such as increased revenue or more users.

For example, Google last year capped hiring at the struggling Google+ social-media division, while the Nest connected-home unit was given more leeway to grow, according to people familiar with the changes.

It’s been really evident since this article appeared that Wall Street really likes Google’s course of action here: its stock rose every day (until, of course, now I choose to link to it) from this article appearing.
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MacBook users outraged over ‘Staingate’ display damage » ZDNet

Adrian Kingsley-Hughes:

“We are a group of Apple customers that paid more than 2000 USD/EUR for a Macbook that is showing horrific stains in the screen,” writes the group on its website, Staingate.org.

“The stains can start as early as 7 months after the purchase. There is no clear pattern as to how it starts: some experience it in small spots around the edge, on other screens it appears in the middle as large patches.”

Apple claims that this is “cosmetic damage” and as such it is not covered by the warranty, leaving owners facing repair costs that can total up to $800.

The worst affected MacBooks appear to be those sold in 2013 but it seems that the problem dates back to 2009.

Seems to be a problem with the antiglare coating, as Kingsley-Hughes says. Currently over 3,000 people on the Staingate database. “Cosmetic”, perhaps, but cosmetic on the thing you look at all the time.
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Apple Watch, not dead yet » Re/code

Dawn Chmielweski:

To find another way to gauge the popularity of the Apple Watch, we consulted several veteran technology analysts with contacts in Apple’s manufacturing supply chain who claimed Slice’s data does not represent the whole market, and does not correspond to what they’re hearing from supplier sources.

Ben Bajarin of Creative Strategies said he is seeing production gain momentum, not decrease, as Apple moves into its September quarter. He has raised his own Apple Watch sales forecast based on research with suppliers, estimating Apple will sell 20m smartwatches this calendar year, up from his initial projection of 19m.

Information research firm IDC is hearing the same based on its ongoing source checks in the global manufacturing and supply chain. IDC said the Apple Watch appears to be selling as expected: Following an initial burst of interest from Apple enthusiasts, demand tapered off. But sales continue apace, and appear to be on track to reach about 21.2m units sold this year.

“What we’ve heard and what I’ve confirmed with other analysts is … [the Apple watch] is still growing,” said Ryan Reith, research director for IDC’s mobile devices team. “They’re expecting it to grow throughout the year.”

Wait to see how big the “Other” chunk is in Apple’s results next Tuesday, and how much changed from previous quarters.
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Have you been hacked? Take this quiz to find out » The New Republic

Has your information been compromised, perhaps without your knowing it? Only the hackers know, but perhaps this quiz can help.

Just answer yes – it’ll be quicker. (One of my emails is on this list. Sodding Adobe.) Or you could use the excellent Have I Been Pwned site, maintained by Troy Hunt.
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The web we have to save » Medium

Hossein Derakhshan, who was jailed in Iran for six years and only released seven months ago, on the changes he perceives:

the web started out by imitating books and for many years, it was heavily dominated by text, by hypertext. Search engines put huge value on these things, and entire companies — entire monopolies — were built off the back of them. But as the number of image scanners and digital photos and video cameras grows exponentially, this seems to be changing. Search tools are starting to add advanced image recognition algorithms; advertising money is flowing there.

But the Stream, mobile applications, and moving images: They all show a departure from a books-internet toward a television-internet. We seem to have gone from a non-linear mode of communication — nodes and networks and links — toward a linear one, with centralization and hierarchies.

The web was not envisioned as a form of television when it was invented. But, like it or not, it is rapidly resembling TV: linear, passive, programmed and inward-looking.

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Start up: Seattle v the Quake, Nadella on phones, Apple Pay in UK, Google’s giant ad and more

Posted on July 15, 2015 by charlesarthur

Forgotten. But by who? Photo by theen… on Flickr.

A selection of 11 links for you. Follow The Overspill on Twitter (this isn’t optional). I’m charlesarthur on Twitter. Observations and links welcome.

Exclusive: CEO Nadella talks Microsoft’s mobile ambitions, Windows 10 strategy, HoloLens and more » ZDNet

Nadella tells Mary Jo Foley:

If anything, one big mistake we made in our past was to think of the PC as the hub for everything for all time to come. And today, of course, the high volume device is the six-inch phone. I acknowledge that. But to think that that’s what the future is for all time to come would be to make the same mistake we made in the past without even having the share position of the past. So that would be madness.

Therefore, we have to be on the hunt for what’s the next bend in the curve. That’s what, quite frankly, anyone has to do to be relevant in the future. In our case, we are doing that. We’re doing that with our innovation in Windows. We’re doing that with features like Continuum. Even the phone, I just don’t want to build another phone, a copycat phone operating system, even.

So when I think about our Windows Phone, I want it to stand for something like Continuum [which lets you plug a phone into a suitable dock/keyboard and have it render PC-sized screens]. When I say, wow, that’s an interesting approach where you can have a phone and that same phone, because of our universal platform with Continuum, and can, in fact, be a desktop. That is not something any other phone operating system or device can do. And that’s what I want our devices and device innovation to stand for.

Last week’s announcement was not about any change to our vision and strategy, but for sure it was a change to our operating approach.

That last bit puzzles me. What is your “operating approach”, if it isn’t the embodiment of your vision and strategy?
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Sixty-five THOUSAND Range Rovers recalled over DOOR software glitch » The Register

John Leyden:

Jaguar Land Rover is recalling no less than 65,000 of its SUVs due to a software problem that caused the cars’ doors to unlock themselves – potentially while in motion.

The issue, which potentially creates a heightened theft-by-hijack risk, affects Range Rover and Range Rover Sport vehicles sold in the UK over the last two years, the BBC reports. The flaw means that doors can remain unlatched even when in the “closed” position so that they can open while the car is in motion, Automotive News explains.

The recall follows recent reports that car thieves were targeting Range Rovers and BMW X5s using readily obtainable black box kit that made it straightforward to unlock and start cars that relied on keyless ignition systems.

On the plus side, they sold 65,000? Should have said “oh, man, we have to recall TWO MILLION. Yes, very successful year, so sorry, got to go.”
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UK launch of Apple Pay heralds start of something big » CCS Insight

Ben Wood of the analysis company:

UK consumers and retailers, unlike their US counterparts, are familiar with the concept of “tap and pay”; it’s not an unfamiliar mechanism that they need to be educated to adopt.

Add to that the huge number of iPhone users in the UK and it’s clear Great Britain is something of a “golden isle” for Apple. Our research suggests that more than half of active users on some mobile networks have an iPhone; even though many won’t have a model that works with Apple Pay, the fierce brand loyalty that Apple inspires could prompt many to upgrade to a compatible iPhone.

The allure of the Apple brand also means everyone wants to work with the company, or is pushed to do so. Barclays bank initially refused to support Apple Pay, instead favouring its own bPay service. Early this morning, on the launch day for Apple Pay and in the face of considerable customer pressure, Barclays tweeted to say that it would support Apple Pay in the future.

Further evidence of Apple’s clout and determination is getting Apple Pay to work with the complexities of the London Transport network and the body that runs it, TFL. Although Apple isn’t the first company to offer such support, its scale means that millions of people travelling around London now can pay for their travel using an Apple device.

That “more than half of active users on some networks have an iPhone” stat is one worth considering. Generally, iOS has about 30-35% of the smartphone install base in the UK. Another stat to record: UK contactless stats show that in December 2014

“£380.8m was spent in the UK in December using a contactless card. This is an increase of 25.8% on the previous month and 330.8% over the year.”

Let’s see how that changes.
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Apple Pay » Transport for London

Note this part:

Always use the same device

If you use Apple Pay on more than one device, for instance when the same payment card is linked to both an iPhone and an Apple Watch, make sure to choose one device and use it every time you travel, so you:

• Avoid incomplete journeys
• Benefit from daily and weekly capping
Please be aware that you might receive payment notifications on all your devices, regardless of which one was used for touching in or out.

Seems to imply that a different token is created when you put the same card onto the phone and the watch. Which, in the longer term, would mean the watch could be completely independent of the phone (once you figure out how to embed the card..)
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Why buying ‘death of PC’ hype is dangerous » Laptop Mag

Avram Piltch:

Even though people won’t stop using (or buying) computers any time soon, the widespread but incorrect belief that computers are on the way out has serious implications. Corporate executives, investors and developers read the same news stories as everyone else and change their plans accordingly. While the PC space needs more innovation and better apps, many companies that make software and publish Web tools will transition even more of their resources to mobile. Websites that today offer more content on the page for desktop could end up getting stripped down for all users, on the belief that phone screens are the only ones that matter.

“The challenge the PC has is that it isn’t attracting much in the way of apps that exploit its capabilities and resonate with a broad audience,” said Ross Rubin of Recticle Research.

News of the form factor’s demise certainly won’t help.

As investors jump on the anti-PC bandwagon, companies that make computer hardware will be under increased pressure to produce fewer and lower-quality products. Consumers will see fewer innovations like the Microsoft Surface and Lenovo Yoga, and more commodity laptops in their place.

Hate to break it to you, Avram, but customers aren’t generally buying the Surface and the Yoga. They’re already buying, as they have been for years, the commodity products – where NPD says (in the article) that the average desktop sells for $482, and laptop for $442.

Set the rapid improvements in mobile (cameras, processors, form factors, sensors) against the dead-end nature of most PC tasks, and you can see why developer resources in hardware and software are going into mobile. There’s a lot of uncharted territory to explore.
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The earthquake that will devastate Seattle » The New Yorker

Kathryn Schulz:

Under pressure from [tectonic plate] Juan de Fuca, the stuck edge of North America is bulging upward and compressing eastward, at the rate of, respectively, three to four millimetres and thirty to forty millimetres a year. It can do so for quite some time, because, as continent stuff goes, it is young, made of rock that is still relatively elastic. (Rocks, like us, get stiffer as they age.) But it cannot do so indefinitely. There is a backstop—the craton, that ancient unbudgeable mass at the center of the continent—and, sooner or later, North America will rebound like a spring. If, on that occasion, only the southern part of the Cascadia subduction zone gives way—your first two fingers, say—the magnitude of the resulting quake will be somewhere between 8.0 and 8.6. That’s the big one. If the entire zone gives way at once, an event that seismologists call a full-margin rupture, the magnitude will be somewhere between 8.7 and 9.2. That’s the very big one.

Flick your right fingers outward, forcefully, so that your hand flattens back down again. When the next very big earthquake hits, the northwest edge of the continent, from California to Canada and the continental shelf to the Cascades, will drop by as much as six feet and rebound thirty to a hundred feet to the west—losing, within minutes, all the elevation and compression it has gained over centuries. Some of that shift will take place beneath the ocean, displacing a colossal quantity of seawater.

• Last earthquake involving Juan de Fuca: 315 years ago.
• Usual frequency of earthquakes involving Juan de Fuca: every 243 years.
• Variance of quake timing: not given (but known by someone at Oregon State University).
• Value of real estate in Seattle and Oregon: probably falling by the time you read this.
• To put the tech lens on this, consider that Microsoft and Amazon are both headquartered in Seattle. Now wipe them off the map. Pause.
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Google accidentally reveals data on ‘right to be forgotten’ requests » The Guardian

Sylvia Tippman and Julia Powles:

Less than 5% of nearly 220,000 individual requests made to Google to selectively remove links to online information concern criminals, politicians and high-profile public figures, the Guardian has learned, with more than 95% of requests coming from everyday members of the public.

The Guardian has discovered new data hidden in source code on Google’s own transparency report that indicates the scale and flavour of the types of requests being dealt with by Google – information it has always refused to make public. The data covers more than three-quarters of all requests to date.

Previously, more emphasis has been placed on selective information concerning more sensational examples of so-called right to be forgotten requests released by Google and reported by some of the media, which have largely ignored the majority of requests made by citizens concerned with protecting their personal privacy.

These include a woman whose name appeared in prominent news articles after her husband died, another seeking removal of her address, and an individual who contracted HIV a decade ago.

In other words, the “Right to be forgotten” is overwhelmingly about ordinary people who don’t want to be indexed. This is so telling about the PR spin that has gone on around this (“the ruling has already been criticised after early indications that around 12% of applications were related to paedophilia. A further 30% concern fraud and 20% were about people’s arrests or convictions… many other applications have come from corrupt public figures and criminals desperate to hide their past.
An actor who had an affair with a teenager, a celebrity’s child who was convicted of criminal offices and a man who tried to kill members of his family were among the first requests.” Where do you think the Daily Mail got those details?).

And guess what happened when they queried Google about it?

“The underlying source code has since been updated to remove these details.”

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Google’s largest shopping ad EVER spotted on the SERPs » Wordstream

Margot da Cunha:

the new ad format takes up just about the entire right side of the page. But, don’t get too excited, if you look closely you’ll see that this isn’t just one ad for one advertiser, but rather a price comparison between different e-commerce sites and stores. So no, one advertiser cannot pay to completely dominate the right side of the page, but rather can be included in the product comparison sponsored ad on the right side. It looks like regular, non-sponsored Knowledge Graph results, but it’s definitely sponsored. Google started experimenting with adding ads to the bottom of Knowledge Graph results early back in 2014, but most of the info there was still organic.

“The way Google lists the pricing in these makes it much more obvious which options are the less expensive ones, so advertisers will probably have to ensure they have the least expensive option if they take advantage of this new format,” says Slegg.

Clever: advertisers will have to bid more to get placement, yet price lower to be chosen, thus eroding their margins. The only winning strategy long-term is to not need to be found through search. (SERPS in the headline, if you don’t know, is “Search Engine Results Page[s]”.)
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Xiaomi success inspires every man and his dog to make smartphones in China » Reuters

Yimou Lee and Paul Carsten:

The call of the world’s biggest smartphone market is proving irresistible for entrepreneurs in China, where even purveyors of concrete mixers, refrigerators and rock music are mimicking local trailblazer Xiaomi with their own handsets.

But the market shrank in early 2015 for the first time in six years and sales have fallen at one-time leader Xiaomi. That sudden about-turn raises questions over whether there is any chance for the likes of construction machinery maker SANY Group Co Ltd, Gree Electric Appliances Inc of Zhuhai and veteran rockstar Cui Jian.

The slowdown may be too much for all but the largest handset makers, much less a plethora of me-toos, some analysts say. In a crowded market plagued by price wars, entrants will have to convince buyers to abandon established brands with phones that surpass even premium models, US research firm Gartner said.

“It’s not that easy to go bankrupt making phones, but it’s also not easy to be profitable,” said Taiwan-based Gartner analyst CK Lu, who covers the mainland smartphone market. “If you don’t have good differentiation, you’re putting yourself in a saturated market.”

China had 155 smartphone brands selling over 1,000 handsets a month as at end-March, from 110 two years ago, said analyst Neil Shah of Counterpoint Research. In neighbouring India, there were 103 brands, over half of which are Chinese.

There will be a shakeout, but quite when is a separate question.
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Kuwait announces mandatory DNA database for its citizens » DNAForce

The recent suicide bombing that slain 26 innocent people during Friday prayers on the 26th of June has finally reached its ultimatum as the Kuwaiti legislature has now implemented a law that calls for a mandatory DNA testing on every single Kuwaiti citizen including its foreign residents.

The law states that security agencies must help the government to create a database on all 1.3 million Kuwaiti citizens and 2.9 million foreign residents in order to make faster arrests when it comes to criminal cases.

It is also stated that for those who refuse to give out their sample will be sent to jail for a year. It will also come with a fine of $33,000 or €29,700. If a citizen is proven guilty of faking their sample, they are entitled to be imprisoned for seven years.

Note how the foreign residents greatly outnumber the nationals. Will it apply to visitors too? This is a really slippery slope, and Kuwait has put itself halfway down it straight away.
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The real threat posed by powerful computers » The New York Times

Quentin Hardy:

the real worry, specialists in the field say, is a computer program rapidly overdoing a single task, with no context. A machine that makes paper clips proceeds unfettered, one example goes, and becomes so proficient that overnight we are drowning in paper clips.

In other words, something really dumb happens, at a global scale. As for those “Terminator” robots you tend to see on scary news stories about an A.I. apocalypse, forget it.

“What you should fear is a computer that is competent in one very narrow area, to a bad degree,” said Max Tegmark, a professor of physics at the Massachusetts Institute of Technology and the president of the Future of Life Institute, a group dedicated to limiting the risks from A.I.

In late June, when a worker in Germany was killed by an assembly line robot, Mr. Tegmark said, “it was an example of a machine being stupid, not doing something mean but treating a person like a piece of metal.”

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Start up: life as an “Invisible”, why use adblocking?, how Spotify’s eating your drive, and more

Posted on July 14, 2015 by charlesarthur

BlackBerry has been a loser as smartphones have taken off in Africa. Photo by shizhao on Flickr.

A selection of 9 links for you. Surprise your friend by tweeting an inline link. Follow The Overspill on Twitter to get updates on what’s posted here. I’m charlesarthur on Twitter. Observations and links welcome.

I was an Invisible Girlfriend for a month » Fusion

Kashmir Hill tried being one of the workers who texts (but never, never sexts) with people who want not-really-just-virtual-but-real boyfriends or girlfriends:

Over all, the number of users who seemed to really want companionship outnumbered the skeptics. The founders say one user told them she was going through chemotherapy and that her real-life boyfriend had dumped her. So her invisible boyfriend had become a serious emotional support while she fought cancer.

I didn’t encounter anyone like that. Instead, I met a guy in his late 20s who wanted to have an extended conversation with his “lovingly nerdy, best-friend-turned-girlfriend” about taxidermy. He said that if he were a taxidermist, he would sew a cat to a dog. I texted, “Would you put a cat head on a dog body or a dog head on a cat body?” But I didn’t get to see his response, nor find out if the conversation was about to go to a darker place that might warrant alerting authorities.

It’s hard to put a price on love. But Crowdsource did. It’s worth a whopping five cents. That’s how much I got paid to write each of these texts.

If I spent an hour answering texts, and took the full five minutes to write each one, I’d be making 60 cents an hour, far below the minimum wage. This is legal because all the workers on the platform are classified as independent contractors rather than employees.

But of course. She’d get $5 for answering 100 texts; the service charged $15-$25 for the same.

Also, this is frighteningly reminiscent of Her, whose central character’s job is writing cards for people too busy to write cards.
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Why I’ve started using an adblocker » Three Dot Lounge

Chuq von Rospach:

The problem for me is not actually the ads. I understand sites need to pay the bills and that advertising is how many sites do that. But so many of the ads today have gotten so aggressive about hiding content from me or blaring unrelated crap into my eyes or in my ears that I have finally had it.

Beyond that, an even bigger problem for me is that more and more networks are using these advertising inclusions to install trackers and beacons to watch me as I wander around the net, and these trackers and beacons are in almost all cases things I have no way to opt out of, have never agreed to use and cannot see what’s being collected and sold about me along the way.

That is why I have finally installed an ad blocker. The ads are in many cases intrusive and annoying, but the growing trend of tracking without my permission and without any way to opt out of the tracking is abusive of me, my privacy and my online experience. And because of that, I’m now blocking the trackers and beacons that do this, and as a side effect the ads have gone away as well. This may hurt the sites that depends on the advertising, and I’m sort of sorry for that — but they are also the sites that have allowed these networks to install these tracker systems onto them, and so they are indirectly complicit in that way.

I don’t see this ending well for small or medium sites reliant on ads; the word about adblocking is going to spread relentlessly, and if it makes sites more pleasant to read then it’s going to snowball. Large sites may be able to shrug off the lure of the crud ads. Smaller ones won’t; you’re already seeing (elsewhere) the effects of the race to the bottom.
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Spotify’s swallowing your disk space – and you can’t stop it » Expert Reviews

Barry Collins:

The streaming service stores a local cache of music on users’ PCs, normally containing their most recently played tracks or music they’ve requested to be stored offline (a feature only available to Premium subscribers).

An update to Spotify earlier this year removed the option to determine where this cache was stored and to limit its size, leaving users who run the software on laptops or tablets with limited capacity SSDs fuming. “I’ve unsubbed yesterday because of this,” wrote one user on the Spotify forums. “I can’t believe how incompetent your software engineers or whoever thought of this idea to take away KEY functionaliites like cache variability and installation paths.”

“Like everyone, I have an SSD as my primary drive and [it] has a very limited space in it,” writes another customer. “With all my music save [sic] offline, Spotify is eating up almost 30% of my SSD space without my knowledge!”

An update to Spotify last week returned the feature that allowed people to select an external drive as the location for the cache. But the option to limit the size of the cache remains missing in action.

Slightly wonkish, but one to properly annoy the wonks.
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Artist arrested on suspicion of ‘abstracting electricity’ to charge iPhone on London Overground train » London Evening Standard

Tom Marshall and Laura Proto:

An artist has criticised transport police after he was arrested for using a plug on a London Overground train to charge his iPhone.

Robin Lee was handcuffed and put into a police van after using the power socket on a train from Hackney Wick to Camden Road on Friday, July 10.

The 45-year-old, who lives in Islington, said the whole episode was “ridiculous” and was first confronted on the train by a police community support officer who said he was taking the electricity illegally.

He was arrested on the platform after getting off at Camden Road. “She said I’m abstracting electricity,” he said. “She kept saying it’s a crime. We were just coming into the station, and there happened to be about four police officers on the platform. She called to them and said ‘This guy’s been abstracting electricity, he needs to be arrested’.”

The plugs say “Cleaners’ use only”. Maybe he should have said he was a cleaner. (He was arrested, and then “de-arrested”.)
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Middle East and Africa smartphone market to top 155m units in 2015 as sub-$200 segment surges » IDC

Featurephone sales fell 20%, smartphone sales grew 66% to hit 36m, or 63% of total regional phone shipments in Q1, driven by cheap Android phones:

almost half of all the smartphones shipped across Africa (45.1%) in Q1 2015 were priced below $100, while almost 75% fall under $200. Low-priced smartphones are also having a considerable impact in the Middle East, with the $100–200 price band accounting for the market’s biggest share.

“This price bracket seems to be the sweet point for most vendors launching in the region, as well as for established vendors looking to increase their shares by targeting the lower end of the market,” says Nabila Popal, research manager for IDC’s Mobile Phone Tracker in the Middle East, Africa, and Turkey. “This has resulted in phones priced under $200 accounting for about 36% of the Middle East smartphone market, while at the other end of the spectrum the $450+ price band has seen its share fall from 25% in Africa and 48% in the Middle East a year ago, to 14% and 34% today.”

Nigeria and South Africa contributed significantly to the overall growth seen in Africa, with the countries experiencing year-on-year growth of 135% and 56%, respectively. Nigeria accounted for 14% of all smartphone shipments across the continent during Q1 2015, while South Africa was responsible for 12%. Samsung, Tecno, and Apple were the leading smartphone vendors in Africa during the quarter, with Huawei being ousted from the top three. The three leading vendors accounted for a combined 55% share of Africa’s smartphone shipments in Q1 2015.

Losers in this: BlackBerry (hit by BYOD) and Microsoft (both the Nokia and Lumia models).
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Nintendo president Satoru Iwata dies of cancer » FT.com

Leo Lewis makes an important point:

however dismally its successor has fared, the original Wii console, released in 2006 as the defining management feat of Mr Iwata, was revolutionary.

Even as Nintendo’s celebrated games designer, Shigeru Miyamoto, was receiving the plaudits for the Wii’s groundbreaking controllers and gameplay, the management hand of Mr Iwata was evident.

Three titles of which Mr Iwata was executive producer — Wii Sports, Wii Fit and Wii Play — were games that sold more than 130m units between them and changed not only the physical way that games were played, but the demographic universe of gaming.

In the global list of best selling video games, Nintendo reigns supreme. Of the top 40 games that have sold or been downloaded more than 15m times, 12 were released under the presidency of Mr Iwata.

One has to hope Nintendo had a really solid succession plan in place.
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Satoru Iwata was Nintendo » The Verge

Sam Byford on Nintendo’s chief executive, a skilled programmer who has died of cancer at 55:

everything Iwata did was driven by an unshakeable belief in what Nintendo is and what it stands for. Nintendo is sometimes late to certain parties, but when it does do things that people have long clamored for, like mobile games or an online service, it does so on its own terms. Iwata passionately stood against the devaluation of games, for example, which is why you won’t see ports of existing Nintendo titles on phones. And his forward-thinking perspective extended to how he ran the company on an operational level. “If we reduce the number of employees for better short-term financial results, employee morale will decrease,” he told an investor who was calling for heads to roll in 2013. “I sincerely doubt employees who fear that they may be laid off will be able to develop software titles that could impress people around the world.” The exchange sums up Iwata’s leadership — empathetic on a human level, yet grounded in a firm perspective that it was the right thing to do for business…

…”Trust your passion, believe in your dream,” Iwata said in an inspiring speech at the 2011 Game Developers Conference. “For 25 years, game developers have made the impossible possible. So I ask you, why would we stop now?”

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Facebook’s security chief calls for Adobe Flash to be killed off » HOTforSecurity

Graham Cluley:

Amongst those who would be happy to see the back of Adobe Flash is Alex Stamos, Facebook’s newly-appointed security chief.

In a tweet this weekend, Stamos – who is a respected member of the security community who is credited for improving the security stance of Yahoo at his previous job – said that it was time for Adobe to announce when Flash would be killed off, and for browsers to assist by dropping support at the same time.

“It is time for Adobe to announce the end-of-life date for Flash and to ask the browsers to set killbits on the same day.”

In a followup tweet, Stamos said that Adobe’s death date didn’t have to be today or tomorrow – but a date had to be set in stone for systems to be made more secure:

“Even if 18 months from now, one set date is the only way to disentangle the dependencies and upgrade the whole ecosystem at once.”

Yup. Stake through the heart. Only way.
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Apple’s share of smartphone industry’s profits soars to 92% » WSJ

Shira Ovide and Daisuke Wakabayashi, quoting a Canaccord Genuity report:

One key to Apple’s profit dominance: higher prices. Apple’s iPhone last year sold for a global average of $624, compared with $185 for smartphones running Android, according to Strategy Analytics. In its fiscal quarter ended March 28, Apple sold 43% more iPhones than a year earlier, at a higher price. The average iPhone price in the quarter rose by more than $60 to $659, on the strength of the larger-screen iPhone 6 and 6 Plus models.

As the smartphone market matures and growth slows, it is starting to resemble the personal-computer business in some ways. Average PC prices have plunged, and most manufacturers struggle to eke out profits. But Apple captured more than half of industry profits last year, even though its Mac line accounted for only about six of every 100 computers sold, according to Bernstein Research.

Despite the changing leader boards of the past decade, some industry veterans say Apple’s profit crown looks more secure.

“The dominance of Apple is something that is very hard to overcome,” said Denny Strigl, former chief operating officer of Verizon Communications Inc. “Apple has to stumble somehow or another, and I don’t think that’s going to happen.”

That’s pretty much how I showed it in my latest examination of the PC industry. However, that “92%” figure is misleading; the negative amounts by Microsoft, BlackBerry and others shouldn’t really be included. Otherwise, with Microsoft’s giant $7bn+ writedown on Nokia negating all Samsung’s profit and a chunk of Apple’s, you’ll have a situation in Q2 where Apple makes 150% of industry profits. Clearly not realistic.
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The deaths of “Others”: how the PC market’s implosion is squeezing smaller players

Posted on July 13, 2015 by charlesarthur

PC market 1998 to 2015: rise and decline

IDC data shows how the PC business has grown – and shrunk. “Others” (grey) are selling fewer and fewer.

Back in April 2011, when the results for the first quarter of PC shipments for the year came in, I wrote a story beginning:

“The PC market is showing signs of having passed its peak. Weak demand by consumers for PCs, coupled with a switch to tablets such as Apple’s iPad, meant that worldwide PC shipments fell compared with the same period in 2010, according to two leading research groups.”

Perhaps predictably, this observation of what the numbers were saying riled some of the PC diehard commenters (generally sysadmins with time on their hands who obsessively trawl comment threads looking for places in which to be superior). “I’m looking forward to seeing the looks on Mac users’ faces when Apple – as they display every intention of eventually doing – pull out of the PC market altogether,” said one.

My own observation was that the principal downturn had come in the mature markets of the US and Europe, and that the forthcoming problem was that the rise of smartphones (especially cheap Android) would mean that in Asia/Pacific and Latin America “lots of those people who a few years ago would have been a prime target for a PC might now not need it.”

And so it turned out. The market actually hit its biggest-ever figure in the third quarter of 2011, with 96m PCs shipped. But since the third quarter of 2012, if you exclude Apple figures, the Windows PC market has shrunk for 12 straight quarters. Now it’s 31% down on that peak, and nobody’s quite ready to call the bottom. It’s going to be under 300m this year – the smallest since 2009, in the midst of the financial crash – and that’s even with the launch of Windows 10. (For those saying “aha, but it’s falling because people are making their own PCs using motherboards” – nope. The motherboard industry is trending down just as quickly as the general PC industry.)

What gets people buying computers? Seems that Apple has the answer – launch new products and promote the hell out of them. (In the second quarter it refreshed the MacBook Air, MacBook Pro and introduced the “MacBook”.) It’s working a lot better for them than for the Windows PC market.

For the past 12 quarters, Windows PCs shipment figures have shrunk – while Apple generally grows faster

Apple has stayed fairly consistent, shipping between 4m and 5m personal computers per quarter – apart from the first half of 2013, when it couldn’t supply enough new iMacs to meet demand.

The demand for Macs means that Apple is now the fourth-largest PC company for shipments, behind only Lenovo, Dell and HP, and ahead of Asus and Acer, on IDC’s measurement. (IDC doesn’t include Chromebooks and 2-in-1s.) It’s quite a turn of events, but one where it has grown faster than the Windows PC market for quite a long time.

Long-term trends for Windows PC v Apple growth show Apple ahead for almost all of the past 11 years

Dying in a ditch without a saviour

The deeper question is: what happens to the PC market? It’s become a replacement business, but one in which replacement cycles are also lengthening. There’s barely any innovation – Lenovo’s efforts with the Yoga 2-in-1 seems to be the only thing happening, and that’s a minority sport. Gartner and IDC don’t give clear figures, but there doesn’t seem to be a big move to the new form factors. Thing is, it’s usually new form factors that drive revivals in the market.

So far, though? No. Canalys reckons that in Q1 “hybrid and convertible” shipments (that’s the 2-in-1s, and includes the Surface) totalled 3m, and that was a doubling year-on-year. There’s likely money to be made, but not many buyers handing over the moolah. And Chromebooks? A mighty 1.3m in Q1, also according to Canalys, which reckoned 90% went to the US and Europe. I don’t hold out much hope for a gigantic leap in Q2, though education buyers (the principal ones) will likely bump those Chromebook numbers up in Q3.

Brutal reality: revenue down, profit down

I track the big PC companies’ results, where you can generally find both revenues and operating profits for their PC divisions, though not usually PCs shipped (I take the latter from IDC). Apple is different – it gives you shipments and revenues, but no calculation of operating profit (because it doesn’t split out its figures that way).

And over the past 10 years, there are two trends that stand out: per-PC revenues have been falling along with per-PC profits for Windows makers, while Apple has seen similar pressures but sits miles ahead of the rest.

“Big six” per-PC revenues, based on financial reports and IDC data.

In fact Apple has such high per-PC revenues that it’s actually now the third-biggest PC maker by revenue – excluding Dell, because we don’t know what Dell’s revenues are, because it is privately owned. Acer and Asus, by contrast, are on a path downwards; it’s notable that for the past couple of quarters they haven’t figured on IDC’s numbers for US shipments, meaning they had fewer than a million sales there. (And in timely fashion, Asus just chopped its notebook shipment forecast for the year to 20m units, down from 22.8m it was aiming for, and below 2014’s 20.3m.)

Figures to 1Q 2015: despite fewer shipments, Apple’s revenues outdo Acer and Asus

The picture gets even worse if you look at total profits. We have to assume an operating profit for Apple; I use 18.9% because that’s the historical figure, extracted from pre-iPod days. On that measure, Apple makes the largest profit from PCs by a mile.

Apple is miles ahead of the rest, based on an estimated 18.9% historical operating margin

Total profits in the PC industry for the 'big 6'

Data to 1Q 2015: on a historical figure, Apple is miles ahead, while Asus and Acer struggle to break even

The figure for Apple is twice that of any of the others. The graph for Acer isn’t a mistake – its operating profit is all over the shop, and has been negative quite a lot. (Remember this is operating profit – what’s left after paying for the product components, assembly, shipping, associated R+D, sales and marketing.)

The deaths of Others

But if profits are squeezed for the “big five” (or six, now Apple’s in the club), what’s it like for the smaller players such as Toshiba, Samsung, LG? Logically, worse, because just as in the smartphone market they don’t get the economies of scale that let them compete.

The problem is, there just isn’t room for them. Having been above 50% of the whole market back in 2005, they’ve tumbled down until now they’re trending below 30%.

"Other" PC makers are a smaller segment of the market

From 50% before, “others” are now less than 30% of a smaller market. The red line is the four-quarter moving average.

Since the market began shrinking, shipments by “Others” – those Windows PC makers outside the top five (HP, Lenovo, Dell, Asus, Acer) – have really fallen off.

As the PC market has shrunk, the “Others” category has shrunk faster.

The Windows PC market is shrinking – but “Others” is shrinking faster

Shipments outside the “big 6” have roughly halved from the market peak

“Others” (the remainders outside the top six if you include Apple) has dropped from just under 36m to less than 18m in less than four years. That’s a real crunch.

That means fewer sales, less revenue and less profit (if any) for those bit players – which includes Samsung, LG and a few others. Sony gave up PCs as a bad idea a while back. Samsung pulled out of the European market in late 2014.

Samsung, in particular, doesn’t have anything to gain from making PCs: it can’t make the chips in its foundries (they’re Intel not ARM) and it’s not generally offering touchscreens, so it doesn’t get the “flywheel effects” that it relies on for smartphones, where it makes the parts as well as the finished object.

If I were to bet, I’d expect Samsung to exit the PC market in a year or two. There just isn’t much in it there; you can see from the part of its “IM” division revenues that aren’t smartphones that it’s dwindling.

Ride to the end

There isn’t any good news for the PC industry, and I don’t expect Windows 10 to bring about dramatic changes. (Nor do IDC and Gartner.) There’s always a PC sales lull ahead of a Windows launch, but there’s still not great driving reason for the average consumer to buy a new PC because of Windows 10; remember how Windows 8 didn’t help that downward plunge.

And for businesses, if they’re on Windows 7 then they probably won’t see any reason to shift to Windows 10. And they probably binged on upgrades moving up from XP last year.

So get used to the new normal: PC sales will be increasingly concentrated among the top five or six, for whom R&D is pretty much an afterthought, and Apple is coining it – and pushing with the R&D – just as it is in phones.

How long before Apple’s share is 10%, up from its current 7.8% (which has more than quadrupled from its sub-2% low in the end of 2004)? On current trends (falling PC sales/rising Apple sales), it might be a year or two, but it seems shockingly in reach.

And those “Others”? With less and less market to shoot for, I’d expect some to quietly exit. Sony can’t have been the only one losing money.

Start up: Reddit implodes, catching criminals via Spotify, Cameron’s mad encryption plan, and more

Posted on July 13, 2015 by charlesarthur

A better way to think of Reddit? Photo by avisualstudy on Flickr.

A selection of 11 links for you. With added anchors, so you can link direct to observations Kontra. I’m charlesarthur on Twitter. Observations and links welcome.

Cops nab fugitives in Cabo San Lucas by tracking Spotify IP address » Ars Technica

David Kravets:

Husband Peter Barr and wife Brittany Nunn of Wellington, Colorado, were brought to Denver days ago and face felony charges in connection to the children’s disappearance. Nunn had lost custody of her children to their fathers, but she did not appear when the exchange was supposed to happen in December. The duo had been on the lam ever since, and they are accused of unlawfully taking the woman’s two biological children, 4 and 6, to Mexico, according to The Coloradoan.

The case was broken by Larimer County Sheriff’s investigator Drew Weber. According to the paper:

Drawing on new investigative tactics, Weber executed a search warrant and pulled records from Nunn’s Spotify account. He found it was being used from an IP address in Mexico. He later pulled search records from Netflix and Nunn’s other accounts and eventually tracked a package that Nunn had ordered to be shipped to Cabo San Lucas.

A private investigator soon joined Weber and helped monitor the family for months while agents with FBI, customs officials and the US State Department worked with the consulate in Mexico on a plan to bring the children and alleged abductors home.

This is how it’s going to be from now on: go on the lam, stay offline. Or get caught. And staying offline will be increasingly difficult.
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Student’s Dilemma, a riff of the Prisoner version with extra credit » Flowing Data

By way of Chris Volinsky, a quiz dilemma for students who want extra credit. It’s a variation on the Prisoner’s Dilemma, a popular game theory example that uses two criminals instead of students and lesser jail time instead of extra credit.

What’s your answer? I take the two.

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FTC exploring Apple rules for streaming music rivals in App Store » Reuters

Diane Bartz and Julia Love:

U.S. government antitrust regulators are looking into claims about whether Apple’s treatment of rival streaming music apps is illegal under antitrust law, according to three industry sources.

Apple recently launched a new music streaming service, Apple Music. It also provides the App Store platform for competing streaming services including Jango, Spotify, Rhapsody and others.

Apple takes a 30% cut of all in-app purchases for digital goods, such as music streaming subscriptions and games, sold on its platform.

While $9.99 has emerged as the going monthly rate for music subscriptions, including Apple’s, some streaming companies complain that Apple’s cut forces them to either charge more in the App Store than they do on other platforms or erode their profit margins.

That’s OK – all Apple needs to do is put its Beats sub on the App Store and take a 30% cut. Oh, wait!

But the 30% tithe has been in place since before Apple had a streaming service. Hard to see the antitrust case here, unlike the ebooks “let’s agree to alter prices upwards” case. Google also has the same 30% cut in place, and a larger market share.
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Bruce Schneier: David Cameron’s encryption ban would ‘destroy the internet’ » Business Insider

Rob Price:

amid heightened terror fears, Cameron says “we must look at all the new media being produced and ensure that, in every case, we are able, in extremis and on the signature of a warrant, to get to the bottom of what is going on.”

The prime minister first indicated that he would try to clamp down on secure communications that could not be decrypted by law enforcement in January, after the Charlie Hebdo shootings in Paris. His comments sparked an immediate flurry of condemnation from privacy and security activists, but his recent statements show he’s not backing down. (Number 10 has not responded to requests for clarification about Cameron’s comments.)

Business Insider reached out to Bruce Schneier to discuss the feasibility of Cameron’s proposed ban on “safe spaces” online. Schneier, a widely respected cryptography and security expert, is a fellow at the Berkman Centre for Internet and Society at Harvard Law School, serves on the board of the digital-liberties pressure group the Electronic Frontier Foundation, and writes frequently on encryption and security. He didn’t hold back.

The Cameron suggestions are clearly nonsense, which as Schneier points out, raises the question of why nobody around him has said “er, we can’t implement that, because it’s totalitarian, and also unworkable.”

So how does Cameron extricate himself from this?
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Why Android and Windows should embrace RAW photography before Apple catches up » The Next Web

Napier Lopez:

Sticking with JPEG is like watching The Lion King on VCR when it’s available on Blu-Ray.

Not everyone cares about taking better photos, but it’s clear many do. Just take a look at apple’s “Shot with iPhone” campaign; advertising for flagship phones centers around cameras, flaunting things like resolution and aperture when a more substantial improvement lies with a feature right under our noses.

For Android and Windows Phone, investing resources into making their RAW files more accessible can help give them a big head start over Apple. RAW support on its own is awesome, but software developers and manufacturers need to make it easy to use before the masses adopt it. I should be able to upload a RAW file straight onto Instagram, not be forced to buy a Lightroom Mobile subscription or load it onto my computer.

In any case, it’s likely RAW will come to iOS too.

Might do, although probably only as an option; it sucks up a lot of storage, and some people are already pushing it on their photo libraries.
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Reddit is not the front page of the internet » The Daily Beast

Samantha Allen with an excoriating (but also pinpoint accurate) take:

Reddit became a web destination and a traffic powerhouse by virtue of the clicking, viewing, and typing habits of a relatively narrow subsection of Internet users. 74% of Reddit users are men, the highest of any social networking website. Instagram, Facebook, and YouTube all come much closer to gender parity. Describing Reddit without making reference to its gender asymmetry is akin to reporting on Pinterest, which is 72% female, without noting that the site caters to women.

And, indeed, when The New York Times reviewed Pinterest in 2012, they rightly referred to it as “female-oriented,” but when the CEO of a 74% male social network resigns after facing intense criticism from its users—much of it laced with misogyny—they somehow forget to label Reddit, in turn, as “male-oriented.” Reddit too often passes in the media as unmarked and neutral territory while sites like Pinterest get pigeonholed as girly.

Reddit is also one of the most youthful social networks, with nearly 60% of its visitors coming in under age 34. For comparison, over 60% of Facebook users are above age 34. Increasingly, younger Internet users seem to perceive Facebook as a network for grandmas but, in 2015, grandmas are as vital a part of the internet as anyone else—even if they’d never be caught dead on its supposed “front page.” Only 2% of people over 50 use Reddit.

She also captures it in one phrase elsewhere: “Reddit is not so much the generic front page of the Internet as it is its spacious, tricked-out man cave: a lot of people can fit inside, but only some people feel comfortable hanging out there.”
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The death of Reddit » Chuq Von Rospach

Von Rospach has been in charge of online community efforts at Apple and Palm, among others:

I see poor management with a naive attitude about the use of the site, weak tools and IP, a mis-aligned power structure where there’s no need for the people with the real power to care what the company wants, no real communication between company and its moderators or users, and a lot of really toxic users and groups that have caused the site major PR and reputation disasters but which the company is both reluctant and in many cases unable to control or remove.

Other than that, Mrs. Lincoln, how did you like the play?

How do you fix this?

You don’t. You can’t. Reddit has failed, and we are now witnessing its immolation.
So what should Reddit do? Let me say up front this basic fact: if the Reddit board were to call me up and offer me a blank check to come in and fix Reddit for them, I would laugh and hang up. I wouldn’t touch this disaster under any circumstances. But if they were to ask me what advice I have for the idiot stupid enough to take this gig, here’s what I’d tell them:

Don’t try to fix it. It’s broken. It can’t be fixed. Instead, it’s time to decide what the service you want is, and build that service out of the ashes of the failure of this Reddit. A great starting point is the AMA and the most popular reddits. Figure out the revenue model and make sure it’s baked in to this new model. Anything that isn’t part of this new model that exists on the old site will end up being shut down. you can expect that won’t go well when you announce it.

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The dark side of Google 10x » Business Insider

Jillian D’Onfro on how Google’s “10X” projects, which are meant to be the “moonshots” that are ten times better than anything else, can go awry:

One former exec told Business Insider that the gospel of 10x, which is promoted by top execs including CEO Larry Page, has two sides. “It’s enormously energizing on one side, but on the other it can be totally paralyzing,” he says.

“Larry’s job is to point out things you haven’t thought of, so he has to suspend reality a little bit,” he said.

When it comes to building out-there ideas like smart contact lenses, that contrarian instinct makes a lot of sense. But this former employee believes it’s dangerous when that logic gets applied to products that don’t need it.

For example, when Google was designing the remote control for its early iteration of Google TV, Page didn’t think any of the prototypes were ambitious enough.

Why doesn’t it have a screen in case you needed to go to the bathroom and keep watching? Page asked. Why not a mouse pad, a keyboard?

When the team tried to argue that a remote didn’t need those things, Page kept pushing for more ambitious features that no other controllers out there came with.

There are more.
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Google Photos may be uploading your pics, even if you don’t want it to » Nashville Business Journal

David Arnott:

All I had to do to turn my phone into a stealth Google Photos uploader was to turn on the backup sync, then uninstall the app. Whereas one might reasonably believe uninstalling the app from the phone would stop photos from uploading automatically to Google Photos, the device still does it even in the app’s absence. Since making this discovery, I have re-created the issue multiple times in multiple settings on my Galaxy S5.

I reached out to Google, and after reaching someone on the phone and describing the issue, was told to wait for a comment. Several hours later, I received a terse email that said, “The backup was as intended.” If I want to stop it from happening, I was told I’d have to change settings in Google Play Services.

It goes almost without saying that this makes no sense, and makes me not trust Google. Plus, it seems to me to possibly represent a security issue. If I understand how Google Photos works, none of my photos were made public to the wider world. But that’s beside the point — I didn’t want Google to have them, either.

Here’s his tweet when he first discovered it. This might make sense for people who don’t really care, but you delete the app and it lives on? That’s counterintuitive.
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Consumers are ‘dirtying’ databases with false details » Call Week

It only takes a relatively small percentage of database entries to be ‘dirty’ before its value disproportionately declines, according to the report. Companies therefore need to up their efforts to encourage people to give the right information.

The research shows that 60% of consumers intentionally provide incorrect information when submitting their personal details online. Broken down by the types of data provided, birth dates are the most commonly falsified, as almost a quarter of consumers (23%) give the wrong date of birth to companies ‘some of the time’, 9% do this ‘most of the time’ and 5% ‘always’ give the wrong date.

The research also shows that nearly one-third of people give a fake email address and a made-up name at least some of the time. It is a similar story for incorrect information given about home addresses, phone numbers, job titles and company names.

“The upside of providing information has not been articulated,” says managing director at Verve Colin Strong. “The case is not always made by companies about what consumers
are going to get in return for providing information, but people see the immediate effects of being put on more marketing lists and being pursued by online advertising and email spam.”

The original article is actually on Marketing Week, but you have to register, and — you get the picture. The upside is far smaller than the downside (“happy birthday!” emails from sites you logged in to once, say).
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Microsoft mission statement: so many words, most of them empty » FT.com

The wonderful Lucy KEllaway eviscerates Satya Nadella’s memo in which he axed thousands of jobs in Windows Phone:

With some clearing of the throat about how proud he is in announcing it, the CEO unveils the new mission of Microsoft: “to empower every person and every organisation on the planet to achieve more”.

The first sign of trouble is the word “planet”. There is a rule that says whenever this word is used as a substitute for “world”, the sentence in which it appears is utter tosh. If the cosmic resonance is gratuitous, the author is writing through his hat.

In the early days of Microsoft, Bill Gates came up with a vastly better mission: a computer on every desk and in every home. There was no windy nonsense about planets, nor any tiresome talk of empowering. Best of all, it was precise. The main problem with the new mission is not its grandiosity but its emptiness. Achieve more what? On this vital question, Mr Nadella is silent.

Indeed, the best way to empower people on the planet to achieve more would be to persuade them to love their mobile devices a little less and turn them off occasionally and get on with something real instead.

Not content with announcing his new mission, Mr Nadella empowers himself to achieve still more: “Today I want to share more on the overall context and connective tissue between our mission, worldview, strategy and culture.”

To have a mission and a vision and worldview is greedy. But to have so many abstract things with lots of connective tissue between them leaves one feeling slightly sick.

One good thing, though: parsing this sort of stuff will remain beyond AI for many years to come. Human: “Oh, he’s firing a ton of people in Devices.” Machine: “VOID.”
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Start up: YouTube’s smartest change, Google + Huawei, the truth on ads, Windows Phone redux, and more

Posted on July 10, 2015 by charlesarthur

When Javascript hits a particular temperature… Photo by Tom Gill on Flickr.

A selection of 11 links for you. Too much, right? I’m charlesarthur on Twitter. Observations and links welcome.

The ‘terrifying’ moment in 2012 when YouTube changed its entire philosophy » Business Insider

Jillian D’Onfro:

the discovery algorithm often recommended videos that weren’t the best fit. For example, if a user searched for the footage from a recent fight, YouTube might recommend a clip with a thumbnail image of a juicy punch and a title about someone getting knocked out. When the user clicked, the actual video would be not fight footage, but a dude sitting in his living room just talking about the epic punch.

But when the frustrated user clicked through several different videos, the algorithm tallied up the views and counted it as an accomplishment.

“We realized that if we made the viewer click that many times, it didn’t seem to be a good estimate of how much value they were deriving from YouTube,” [YouTube’s director of engineering for search and discovery, Cristos] Goodrow said. “Instead, we realized that if they didn’t leave a video and continued watching, that seemed like a better estimate of the value they were getting.”

So, after bouts of data collection and analysis coupled with countless meetings, YouTube re-jiggered its search-and-discovery algorithm on March 15 to make watch time, not views, the determining factor in what videos to recommend.

Seems obvious. But actually, that’s the sort of customer dissatisfaction that’s really hard to spot in the first place, and then really hard to change – because it upsets the existing order.

Google’s best Android friend » The Information

Amir Efrati:

Unlike other Android hardware partners like Samsung and Xiaomi, Huawei has no ambition whatsoever to compete with Google in mobile software and services. Huawei has agreed to help Google distribute a mobile app store in China, a market where Google has largely been shut out, say people briefed on the talks between the companies. (It remains to be seen whether Google can get a green light from the government to do so.)

Huawei, whose core networking-equipment business has helped it develop relationships with wireless carriers globally, could help Google expand its nascent wireless network service outside the U.S. and work on other wireless experiments to expand Internet access in emerging markets. Google might also seek to license some of Huawei’s patents in that area.

Meanwhile, Huawei this fall will become the first mainland China manufacturer to produce a “Nexus” smartphone together with Google, people with direct knowledge of the project have said. While the phone likely won’t be a big seller, it will serve as a status symbol for a privately-held Chinese firm that is trying to boost its consumer brand around the world and be as beloved as Coca-Cola.

Risky game for Google: Huawei has found it impossible to shake off suspicions in the US about its Chinese ownership and allegations of spying. There’s absolutely no evidence against Huawei, but that isn’t an obstacle for some.

Content blockers, bad ads, and what we’re doing about it » iMore

Rene Ritchie explains why there are sometimes tons of ads on iMore pages – which led one person to write a content blocker for iOS 9. This part though is worth noting:

Just as desktop ads pay far less than old-fashioned print ads, mobile ads pay far less than desktop. Because phone displays are smaller than desktop, ads are also far harder to ignore. They’re not off to the side or a small strip on a big screen. They’re in our faces and in our way.

As more and more people move to mobile, revenue goes down, and the typical response is to amp up the ads in an attempt to mitigate the loss. That, of course, just makes them even more annoying.

Ad networks have not responded well to any of this. Hell, they still haven’t fully responded to Retina and HiDPI displays, and those came out in 2011.

You’d think the ad industry would be at the forefront of user experience, and that making gorgeous, high performance, highly engaging ads would boost conversion and ultimately income for everyone. Unfortunately, it seems like whatever math they’re running shows crappy ads perform well enough that making great ads isn’t worth the extra effort.

Note that first paragraph: “because phone displays are smaller than desktop, ads are also far harder to ignore”. In that case, why do they pay less on mobile, which has more readers?

Scary internet scam becoming disturbingly common » TidBITS

Randy Singer:

While the legions of Mac viruses still haven’t appeared, there is a new nasty out there that takes advantage of this paranoia. It isn’t a virus, a Trojan Horse, or any other sort of actual malware. Instead, it’s more like a phishing scam, using social engineering to get you to do something that the bad guys want you to do. It does it by scaring the willies out of you, and it is becoming disturbingly common. Some call it “scareware” or “ransomware.”

What happens is that you visit a Web site and seemingly have your browser maliciously frozen. You’ll find that you can’t quit, nor can you navigate away from the page by clicking the Back button.

Next, a page or pop-up appears telling you any of a number of stories (often tailored to your location), perhaps that your Mac has a problem or has illegal material on it, or that your data has been encrypted by some malevolent entity.

The real culprit: a (non-destructive) Javascript hack. But if you follow the scam instructions, you will have a real problem.

Musings on autonomous transport: are self-driving Starbucks the future? » Core77

Michael Ditullo:

what happens when the car evolves from a means of transport to a place itself? Commuting to work? Take a Starbucks owned and operated car where you can get a latte and lounge at a table while working on your laptop along the way. A long drive to see the in-laws? Call for a movie car where you can watch a Michael Bay blockbuster in full surround sound on that two hour ride. Need to run some errands and grab lunch? Sounds like a burrito car. Need to work off the day’s stress on the way home? Pick from a workout car or a zen meditation car.

Once upon a time Starbucks called itself the “third place.” Not home, not work, that other place you wanted to go in-between. The self-driving car could very well evolve into that third place, but a place on-the-go. The in-between place becomes something that can also get you where you need to go. I imagine an entire crop of small businesses existing solely on cars. The payment in exchange for the goods and services these businesses provide would pay for the car journey itself.

This all assumes that we’ll need to travel to exactly the same extent. Can we be sure that’s true? Why take the Michael Bay blockbuster car if you could get the same at home? Does the car become a relief from home? So many assumptions are built into the way we view self-driving cars. More working from home, less travel?

The three unlikely lessons from the Microsoft/Nokia Adventure » VisionMobile

Michael Vakulenko:

Looking at the industry through the lens of software-defined business models has helped us to accurately predict years before the story unraveled the duopoly of Apple and Google (2009), the demise of Palm (2009), the outcome of HP’s foray into mobile with WebOS (2010), BlackBerry’s meltdown (2010), and the failure of Windows Phone (2012).

The story repeats in Internet of Things. Much like in mobile, software-defined business models cause deep shifts in how value is created and delivered. The IoT winners will be decided by business model innovation, not by technology, product features or standard committees. VisionMobile’s Stijn Schuermans wrote about it here – What the Internet of Things is not about.

How bad is it for Microsoft if it misses out on the IoT?

Microsoft takes $7.6bn Nokia writedown and cuts 7,800 jobs » FT.com

Richard Waters and Richard Milne with the collateral damage:

The job cuts will include 2,300 of the 3,200 remaining Nokia handset workers in its home country of Finland, adding to a decline in the pulp and paper industry that has led some to dub it the new “sick man” of Europe as unemployment and public debt levels have risen.

Microsoft took on 25,000 workers with the acquisition in April last year, inflating its headcount to 128,000. By the end of March this year it had cut its workforce back to about 119,000.

“In practice, this means the end of Nokia’s old business in Finland,” Juha Sipilä, the country’s prime minister, told a hastily-convened press conference on Wednesday. The situation is so serious in the country, which has been mired in recession for the past three years, that the new centre-right government has called for an extra budget in September to help the affected workers.

Also in the story:

“It’s a repudiation of the Ballmer strategy to buy Nokia,” said Ken Dulaney, an analyst at Gartner. Microsoft should have acquired BlackBerry instead to focus on its core business users, he added — a strategy that the company backed on Wednesday, as Mr Nadella announced a narrowing of the handset division’s focus to making handsets for workers and a smaller number of “flagship” devices.

Yes: Microsoft really should have bought BlackBerry. Wouldn’t have cost much more, and would have been a valuable asset adding to what it’s trying to do. Love to know the discussions that happened, or didn’t, over that.

Wikileaks release indicates Hacking Team sold spyware to FSB, Russia’s secret police » Forbes

Tom Fox-Brewster:

in December 2012, a NICE employee asked Hacking Team whether it had sold directly to the FSB rather than via the Israeli company.

“Yes we did,” the Hacking Team employee responded. “We discussed this opportunity in the past and you were aware of the fact we were working there. I’d like to take advantage of this conversation to ask you a feedback about Azerbaijan.”

Asked about working in Russia, Hacking Team head of communications Eric Rabe said: “We have not sold to blacklisted countries — at least when they were actually on a blacklist. As you know these things can change and a country, that is considered respectable, may later on turn out not to be.”

So classy. Here’s the Wikileaks link, if you’ve got a few spare years to read through the emails.

Hacking Team Flash zero-day tied to attacks in Korea and Japan… on July 1 » Trend Micro

Weimin Wu:

Earlier this week several vulnerabilities were disclosed as part of the leak of information from the Italian company Hacking Team. We’ve noted that this exploit is now in use by various exploit kits. However, feedback provided by the Smart Protection Network also indicates that this exploit was also used in limited attacks in Korea and Japan. Most significantly, these took place before the Hacking Team leak took place; we first found this activity on July 1.

The exploit code we found is very similar to the code published as part of the Hacking Team leak. As a result of this, we believe that this attack was carried out by someone with access to the Hacking Team tools and code.

According to the Adobe security bulletin, the vulnerability CVE-2015-5119 affects all of the latest Flash versions on Windows, Mac, and Linux. Adobe has since provided a security update for this vulnerability.

Not clear from this – and apparently not to Trend Micro either – whether this attack was by Hacking Team, or by someone who had already broken into their systems and was using this attack for themselves.

In other news, Adobe’s security update team must be one of the hardest-working in the industry.

Apple plans record number of new iPhones » WSJ

Lorraine Luk and Daisuke Wakabayashi say it has ordered 85m-90m devices – up from 70m-80m last year:

The changes in the iPhone models expected to be released later this year will be less noticeable than last year’s. The phones are expected to feature Apple’s Force Touch technology that can distinguish between a light tap and deep press, allowing users to control a device differently depending on how hard they push on the screen, according to people familiar with the matter. Apple has added this feature to the Apple Watch and MacBook laptop computer.

In addition to keeping the display size unchanged, Apple is expected to keep the screen resolution about the same, according to people familiar with the matter.

It may offer a fourth color for the aluminum casing of the iPhone, in addition to silver, gold and space gray, these people said.

Force Touch is being signalled so strongly it would be surprising if it weren’t there. (I’ll elucidate later.)

Finland enlists convicted Lizard Squad hacker to fight cyber crime » Newsweek

Caroline Baylon:

17-year-old Julis Kivimaki, a member of the infamous Lizard Squad hacking group, was found guilty of over 50,000 counts of computer crime by a Finnish court, local media have reported, but rather than face prison time, the judge has ordered that Kivimaki himself help “fight against cyber crime”.

The extent of Kivimaki’s punishment will be a two-year suspended sentence, the confiscation of his computer, and being made to return some €6,500 in profits earned from cyber crime.

Kivimaki, known by the online nickname “zekill”, has been hacking since age 15 and committed a wide range of attacks directed at individuals, engaging in online harassment and identity theft, as well as corporations, where he triggered data breaches, hijacking of emails, and stealing credit card information.

To catch a thief…

Start up: Windows Phone hits the buffers, more Flash woes, do Google ads discriminate?, and more

Posted on July 9, 2015 by charlesarthur

If there’s a stream and nobody listens… hang on. Photo by jjjj56cp on Flickr.

A selection of 9 links for you. They flip, they bend, they twirl away. I’m charlesarthur on Twitter. Observations and links welcome.

Zero-day Flash player exploit disclosed in ‘Hacking Team’ data dump » The Hacker News

Swati Khandelwal:

While analyzing the leaked data dump, researchers discovered at least three software exploits – two for Adobe Flash Player and one for Microsoft’s Windows kernel.
Out of two, one of the Flash Player vulnerabilities, known as Use-after-free vulnerability with CVE-2015-0349, has already been patched.

However, the Hacking Team described the other Flash Player exploit, which is a zero-day exploit with no CVE number yet, as “the most beautiful Flash bug for the last four years.”
Symantec has also confirmed the existence of the zero-day flaw in Adobe Flash that could allow hackers to remotely execute code on a targeted computer, actually allowing them to take full control of it.

Researchers found a Flash zero-day proof-of-concept (POC) exploit code that, after testing, successfully worked on the most latest, fully patched version of Adobe Flash (version 18.0.0.194) with Internet Explorer.

Successful exploitation of the zero-day Flash vulnerability could cause a system crash, potentially allowing a hacker to take complete control of the affected computer.

Flash depresses me. I removed it from my machine some time ago; it’s basically a malware vector whose functions can almost always be replaced with HTML5 by normal users. See below.

How to enable click-to-play plugins in every web browser » Hot-To Geek

Chris Hoffman:

Most web browsers load Flash and other plug-in content as soon as you open a web page. Enable “click-to-play” plug-ins and your browser will load a placeholder image instead — click it to actually download and view the content.

Click-to-play allows you to conserve download bandwidth, improve page load times, reduce CPU usage, and extend laptop battery life. This feature gained popularity with Flashblock for Firefox and is now built into modern browsers.

Do this, for the safety of your system.

Satya Nadella email to employees on sharpening business focus » Microsoft News Center

Phones. Today, we announced a fundamental restructuring of our phone business. As a result, the company will take an impairment charge of approximately $7.6bn related to assets associated with the acquisition of the Nokia Devices and Services business in addition to a restructuring charge of approximately $750m to $850m.

This isn’t actual lost money, but lost value of the business – a “goodwill” writedown. The phones aren’t any more or less profitable as a result.

I am committed to our first-party devices including phones. However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family.

Translation: phones that don’t run Windows are not needed. Say goodbye to those Nokia featurephones (24.7m in Q1, likely fewer in Q2, probably zero by Q4).

In the near term, we will run a more effective phone portfolio, with better products and speed to market given the recently formed Windows and Devices Group. We plan to narrow our focus to three customer segments where we can make unique contributions and where we can differentiate through the combination of our hardware and software. We’ll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they’ll love.

Translation: cheap Lumias continue; will do a flagship. Business customers will get support on whichever platform.

In the longer term, Microsoft devices will spark innovation, create new categories and generate opportunity for the Windows ecosystem more broadly. Our reinvention will be centered on creating mobility of experiences across the entire device family including phones.

Translation: phones aren’t so important, are they?

September 2013: The deal that makes no sense » Stratechery

Ben Thompson, back in September 2013:

Early this morning Microsoft acquired Nokia for €3.79 billion (plus €1.65 billion for patents). It is a deal that makes no sense.

While industry observers love to pontificate about mergers and acquisitions, the reality is that most ideas are value-destroying. It is far better to form an alliance or partnership; most of the benefits, none of the costs.

A partnership similar, in fact, to the one formed just two years ago between Microsoft and Nokia.

From Microsoft’s perspective, that was a brilliant deal; Matt Drance characterized it as “Microsoft Buys Nokia for $0B,” and he wasn’t far off. The premier pre-iPhone phone maker, with what was even then one of the best supply chains, distribution networks, and brands in the world would be exclusively devoted to Windows Phone.

There is nothing further to be gained by an acquisition.

Actually, turned out to have negative value, financially speaking. (The whole post is very well worth re-reading in hindsight.)

Two-Factor authentication » Apple Developer

Is going to be built in to iOS 9 and OSX 10.11 (aka “El Capitan”):

Whenever you sign in with your Apple ID on a new device or browser, you will verify your identity by entering your password plus a six-digit verification code. The verification code will be displayed automatically on any Apple devices you are already signed in to that are running iOS 9 or OS X El Capitan. Just enter the code to complete sign in. If you don’t have an Apple device handy, you can receive the code on your phone via a text message or phone call instead.

Once signed in, you won’t be prompted for a verification code again on that device unless you erase your device, remove it from your device list, or need to change your password for security reasons. When signing in on the web, you can choose to trust your browser so you won’t be prompted for a verification code the next time you sign in from that computer.

The problem with 2FA is always “what if I lose my phone?” Google gets around this by letting you have printed codes that act as verification numbers; it’s a good idea that Apple might do well to take up.

But this looks a lot better than the version used at present in iCloud.

Study suggests Google’s ad-targeting system may discriminate » MIT Technology Review

Tom Simonite:

Researchers from Carnegie Mellon University and the International Computer Science Institute built a tool called AdFisher to probe the targeting of ads served up by Google on third-party websites. They found that fake Web users believed by Google to be male job seekers were much more likely than equivalent female job seekers to be shown a pair of ads for high-paying executive jobs when they later visited a news website.

AdFisher also showed that a Google transparency tool called “ads settings,” which lets you view and edit the “interests” the company has inferred for you, does not always reflect potentially sensitive information being used to target you. Browsing sites aimed at people with substance abuse problems, for example, triggered a rash of ads for rehab programs, but there was no change to Google’s transparency page.

What exactly caused those specific patterns is unclear, because Google’s ad-serving system is very complex. Google uses its data to target ads, but ad buyers can make some decisions about demographics of interest and can also use their own data sources on people’s online activity to do additional targeting for certain kinds of ads. Nor do the examples breach any specific privacy rules—although Google policy forbids targeting on the basis of “health conditions.” Still, says Anupam Datta, an associate professor at Carnegie Mellon University who helped develop AdFisher, they show the need for tools that uncover how online ad companies differentiate between people.

Google didn’t respond to the researchers’ requests. But, oddly, it changed the language on that transparency page. This is the AdFisher study

Apple Music and the listener-to-buyer ratio » Music Industry Blog

Mark Mulligan on the maths of streaming v buying:

What quickly becomes apparent is that the most viable route to ensuring Apple Music streaming revenue offsets the impact of lost iTunes sales revenue is as big an installed base of streaming users as possible. The more Apple Music users there are, the more likely more of them will find and listen to your music. This is why the scale argument so is so important for streaming and also why small labels feel the effect less quickly. If you have a vast catalogue you don’t need to worry too much about the listener-to-buyer ratio because you have so many tracks that you are a much bigger target to hit. The laws of probability mean that most users are going to listen to some of your catalogue.

Let’s say you are a big major with 1 million tracks out of the 5 million tracks that get played to any meaningful degree in streaming services. That gives you a 20% market share. But if you are an independent with 50,000 tracks that gives you 1%, 20 times less than the major. Which means that you are 20 times less likely to have your music listened to. And that is without even considering the biases that work in favour of the majors such as dominating charts and playlists, and other key discovery points.

YouTube gaming star PewDiePie ‘earned $7m in 2014’ » BBC News

YouTube continues to be a profitable enterprise for its top tier stars, who earn money from advertisements placed around their videos.

The site’s terms and conditions forbid creators from disclosing how much they earn, but on Monday gamer Olajide Olatunji, known as KSI, told the newspaper Metro he had earned enough money to buy his parents a house.

Although some stars supplement their income with product placement deals, [Felix] Kjellberg [aka PewdiePie] says he does not do very many.

“I make more than I need from YouTube,” he wrote on Reddit. “With that freedom, but also to respect my fans for making that possible, I don’t end up doing many endorsements.”

[Ian] Maude [of Enders Analysis] has a word of caution for anybody eyeing up YouTube with dreams of becoming a millionaire.

“As with many things, a few people at the top do exceptionally well but there’s a long tail of people who don’t make any money at all,” he said.

Why can’t they disclose how much they earn?

Apple Watch sales plunge 90% » MarketWatch

Brett Arends:

two-thirds of the watches sold so far have been the lower-profit “Sport” version, whose price starts at $349, according to Slice, rather than the costlier and more advanced models that start at $549.

In an ambitious bid for the luxury market, Apple also unveiled a gold “Edition” model priced at $10,000 or more. So far, fewer than 2,000 of them have been sold in the U.S., Slice contends.

Slice bases its research on electronic receipts sent to millions of email addresses following purchases. The company conducts market research on behalf of consumer-goods companies, among others, many of them in the Fortune 500.

Wall Street has been desperately trying to work out how well the new watch has been selling, but Apple has been refusing to say. The company, which in the past has updated Wall Street on the sales of new products soon after the launch, has yet to release any numbers about the watch.

Those Edition watches will have made a ton of profit. But apparently the fall in sales is “ominous”. Seems like about 3m sold in the US in the quarter. That’s about four times the number of Android Wear devices sold in seven months or so from multiple manufacturers at lower prices worldwide last year. Ominous.

Start up: Samsung’s missing numbers, Lizard Squad hacker convicted (but..), transparent aluminium!, and more

Posted on July 8, 2015 by charlesarthur

The internet of things, old style. Photo by Leo Reynolds on Flickr.

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

Optically clear aluminium provides bulletproof protection » Total Security Solutions

While the U.S. Navy is busy with the development of a new bulletproof material called Spinel, Surmet Corporation is already commercially producing its own version called ALON®. Technically known as aluminium oxynitride, Star Trek fans may be more familiar with the term “transparent aluminium” first proposed by Scotty in the 1986 movie, Star Trek IV: The Voyage Home. While ALON isn’t quite what Scotty had in mind (it’s not truly a transparent metallic aluminium, but rather a transparent aluminium-based ceramic), it’s pretty darn close.

transparent aluminium Bloody hell, it is too. If this isn’t a con, it’s amazing. (And it’s aluminIum, dammit.)

Lizard Squad hacker convicted on 50,000 hacking charges » Daily Dot

William Turton:

Julius “zeekill” Kivimaki, 17, was sentenced to a two-year suspended prison sentence and was “ordered to fight against cybercrime” according to Finnish media. The charges against Kivimaki include data breaches, felony payment fraud, telecommunication harassments, and other counts relate to fraud and violations of company secrets. Neither the Ministry of the Interior, Police Department of Finland, nor the District Court of Espoo, the court presiding over Kivimaki’s case, were available for comment in time for publication due to time differences.

Kivimaki helped lead massive distributed-denial-of-service (DDoS) attacks on Microsoft’s Xbox Live and Sony’s Playstation Network over last year’s winter holidays, making international headlines. Kivimaki appeared on camera during an interview with U.K. television station Sky News. Blair Strater, a victim of Kivimaki’s repeated harassment, was “absolutely disgusted” by the ruling, he told the Daily Dot in a phone interview, because he felt the sentence was too light. Kivimaki has, according to Strater, repeatedly called in fake threats to American law enforcement, resulting SWAT teams arriving at the Strater residence, a practice commonly known as “swatting.” For three years, Kivimaki has harassed the Strater family by stealing their identities and wreaking havoc on their finances and personal lives, Strater said.

Doubt he would have got that little in the US, despite his age.

Television is no longer the screen of choice for kids » Advertising Age

Anthony Crupi:

Mobile devices are so popular with kids that nearly half of the 800 parents quizzed by Miner & Co. reported that they confiscate their kids’ tablets when they act up and make them watch TV instead, thereby fostering a sort of Pavlovian response that equates TV with punishment. (That these parents simply don’t restrict their kids’ access to video altogether when they misbehave suggests that they’re raising a generation of spoiled content junkies, but that’s another story.).

“Go to your room and watch TV!”

The anxious ease of Apple Music » The New Yorker

Alex Ross:

So, contrary to plan, Apple has not necessarily succeeded in making music better. Then again, it might not be doing long-term damage; indeed, it might not be having much effect at all. The musicologist Deirdre Loughridge recently published a blog post about the history of music-subscription services, which date back to sheet-music lending libraries in the 18th century.

By the 1830s, pundits were fretting that such libraries were undercutting the economics of the music business and altering the nature of listening. “One enjoys superficially, one always wants something new,” a critic groused in the Allgemeine musikalische Zeitung. A few decades later, a piano teacher wrote, “Music lending libraries could very well be called ‘music snacking libraries.’” Almost identical complaints are being levelled at Spotify, YouTube, and the rest. These anxieties are now forgotten because, as Loughridge notes, the very existence of music-lending libraries has been forgotten. If they hurt music sales, the damage was soon repaired. Loughridge suggests that this obscure history should promote a “healthier skepticism toward claims that any model represents ‘the’ answer for the music industry.”

All I’d ask for from Apple Music is what Deezer offers, called “Flow”: one press and it generates a neverending playlist based on what you’ve listened to and liked, but adding new “alike” tracks.

How the tech press forces a narrative on companies it covers » Medium

Aaron Zamost:

I don’t remember who told me company narratives were like a clock. I was at Google, where I’d taken a job on the communications team despite zero experience in communications. During my early days there, I tried to navigate my new profession by listening to the many comms experts already at the company from whom I would learn so much. One theory about narratives stuck with me: A company’s narrative moves like a clock: it starts at midnight, ticking off the hours. The tone and sentiment about how a business is doing move from positive (sunrise, midday) to negative (dusk, darkness). And often the story returns to midnight, rebirth and a new day. It was a passing remark, and hardly revolutionary — it closely followed the hero’s journey and other theories of storytelling. But it made a ton of sense.

Oh wow, does it ever. (Though: not just tech, is it?)

Smartphone trends in the US » Tech.pinions

Jan Dawson:

One of the key things I’m hearing – and which was somewhat evident already in the Q1 2015 results the carriers announced – is that the huge upgrade cycle which happened in 2014, and especially in Q4, is somewhat sucking the wind out of sales in 2015 so far. Though that upgrade cycle was partly driven by massive iPhone sales, and is therefore good news for Apple, it seems to be somewhat depressing Android device sales in the first half of 2015, despite the new device launches from major vendors including Samsung, LG, and HTC.

In general, I suspect we’ll see somewhat lower rates of upgrading this year than we did last year, as there were a number of factors that drove higher than usual rates in 2014 and many of those customers will now not be upgrade-eligible until late 2015 or even 2016.

Convenient for Apple that it doesn’t really focus its efforts until late in the year.

Samsung sees seventh straight profit decline » WSJ

Jonathan Cheng and Min-Jeong Lee:

When the Galaxy S6 and its curved-screen variant, the Galaxy S6 Edge, were launched in April, the phones were praised by reviewers and greeted with strong advance orders from consumers. But Samsung appears to have badly miscalculated in its expectations for what kinds of smartphones these consumers were after. According to a person familiar with the matter, the company initially expected to sell four Galaxy S6 smartphones for each Galaxy S6 Edge that it sold, and set up its production facilities accordingly. Instead, demand was much likely closer to even for the two devices, the person said. That led to a glut of unsold Galaxy S6 devices—particularly white-coloured devices—and not enough Galaxy S6 Edge smartphones, the person said.

Analysts quoted in the story are estimating between 71m and 76m smartphones shipped in the quarter, of which the S6 and Edge would be “slightly more than 20%” (that’s 14.2m-15.2m – so take it as 15m). Being left with a colour variant is bad, bad news.

The reddit rebellion, how should reddit make money?, the disappearance of high-end Android » Stratechery

From Ben Thompson’s paid daily briefing:

This is a pretty clear screw-up by Samsung that suggests they don’t understand just how starkly the smartphone market has bifurcated: the only people buying a high-end Android phone want the top-of-the-line, and that means the Edge. Anyone who is concerned about price isn’t going to save $100 by buying a normal S6; they’re going to save $500 and get a perfectly serviceable phone that runs the exact same software. That said, I suspect that even had Samsung properly forecast Edge demand sales would have still been disappointing…

…it does seem likely that the S6 stole whatever HTC One customers existed: the Taiwanese smartphone manufacturer just reported a loss of $261 million on revenues of just over $1 billion; the company originally forecast revenues of $1.57 billion but the One M9 has been a complete flop. It seems likely (pending LG’s numbers) that there is only room for one high-end Android model, for now anyways; small solace for Samsung, but solace nonetheless.

I don’t usually excerpt from subscriber products like Thompson’s (because it’s effectively breaking the paywall, which is his livelihood) but this was too apposite to miss. Subscribe. It’s low-priced and insightful. (His suggestion for how reddit should make money is smart.)

Billion dollar turnaround: Sony Mobile CEO » ArabianBusiness.com

Neil King:

As an inevitable by-product of the unit’s recent performance, [Sony Mobile chief Hiroki] Totoki has had to fend off rumours that Sony is, or was, planning to sell off its mobile division as a result of the dire financial results. A defence, he says, is easy to make when you look at the reasons behind the poor figures. “The speculations arose because in 2014 we made a huge loss as a mobile business,” he says. “It mainly came from the write-off of the goodwill of our impairment asset. When we bought back Ericsson’s share [in 2012], we bought back 100 percent of it. And obviously that price was high. We had to write it down and it made a substantial loss for the company.

“But this was an accounting loss and did not impact our cash flow. Our cash flow is very healthy. But the accounting loss was so huge — that’s why people have speculated like this. “Before that rumour, we exited the VAIO business, which was the PC business. That led people to think that Sony would exit the smartphone business, as well. But the smartphone business is very different from PCs. “Smartphones are completely connected to other devices, also connected to people’s lives — deeply. And the opportunity for diversification is huge. We’re heading to the IoT (Internet of Things) era and have to produce a number of new categories of products in this world, otherwise we could lose out on a very important business domain.”

Two things: the writeoff of value wasn’t the entirety; Sony still made an operating loss, even ignoring goodwill writeoffs. Secondly, the IoT argument is why I think Microsoft will stick with the smartphone business despite its horrendous losses. Interesting to see Sony Mobile using it too.