Start up: Apple v chipmakers, the plot to sell Dell, is Android Auto safe?, casinos’ slotty problem, and more


Hey! Young man! You’ll never get anywhere sitting on desks throwing floppy disks around! Photo from Esparta on Flickr.

A selection of 9 links for you. May contain nuts. I’m charlesarthur on Twitter. Observations and links welcome.

The contortions of the consumer electronics market » DIGITS to DOLLARS

Jonathan Greenberg on Apple’s dual-sourcing of A9 chips:

I know whole villages in China that have been essentially de-populated overnight when the factory that anchors the town lost Apple business and had to shut down.

The rational side of me understands that this is just part of the reality of modern capitalism. What staggers me about last week’s news is that Apple is now putting semiconductor foundries in that position. It costs several billion dollars to build a fab. Imagine spending that kind of money to ensure having enough capacity for Apple, only to lose that business a year from now when the next version o the iPhone comes out.

I know that TSMC, in particular, has angered another very large customer because they devoted so much effort to winning the Apple business. They are going to be in a very tight spot when they go back to Apple to negotiate for A10 production. They have already lost a lot of business from that other customer, and at some point will have to negotiate with Apple for the next chip. If they lose Apple, they will have a an empty $5bn building. Apple knows that, and will use this fact when it comes time to talk about price.

I do not want to paint Apple as some ruthless group of cutthroats. This is just business. Apple may want to reconsider its approach to suppliers, as they may someday need to call in favors, but that day is not today.

This is just the reality of the market. Apple did not invent these practices. When Nokia had 50+% share of handsets, they operated in a similar fashion.

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Best of luck Microsoft, but the Surface Book isn’t going to save the PC » Telegraph

James Titcomb:

In making the Surface Book, which by all accounts is the pinnacle of laptop engineering, Microsoft is screaming: “Hey, PCs are still exciting, look at this one!” It is also sending a message to other computer manufacturers that they need to up their game if they want to keep a slice of what is left of the market.

Can it save the PC? Probably not. Consumers are unlikely to give up using their ever-more capable smartphones just because a slightly-better PC comes along. One could argue that laptop and desktop computers will always have to exist to get “real work done”, but it is becoming increasingly apparent that this is not really the case.

Slack, an office collaboration tool that works just as well on mobile as on computers, is replacing email in many workplaces. Last month, Apple unveiled the iPad Pro, a high-powered tablet with a laptop-sized screen and keyboard that many will see as a realistic alternative to buying a new computer. Google has a similar proposition with its new Pixel C.

But history has few instances of a declining technology being saved by a spectacular version of it – Sony’s decision to develop higher-capacity MiniDiscs in response to the iPod never really paid off, to give one example.

Microsoft is doing everything it can to keep the industry that has defined it alive. But it’s probably too late.

There are huge numbers of grumpy old sysadmins in the comments, but Titcomb gets to the meat of the issue: selling a super-premium 2-in-1 isn’t going to help anyone but Microsoft.
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Silver Lake explored sale of Dell’s PC business ahead of EMC deal » Re/code

Arik Hesseldahl:

Private equity firm Silver Lake, co-owners of Dell, last week approached Hewlett-Packard, Lenovo and Huawei to explore the possibility of selling off Dell’s personal computing business, sources familiar with the matter told Re/code.

But by Monday, Dell proposed to pay a combined $67 billion to acquire the data storage company EMC and its subsidiary VMware in what is the largest proposed technology M&A deal in history.

It was not immediately clear if Silver Lake acted alone or if Dell was consulted. It is also unclear if Silver Lake or Dell would continue to explore a sale at this point.

Lenovo didn’t think it would get regulatory approval; Huawei doesn’t want a PC anchor; HP has quite enough problems. Hesseldahl’s estimate is that Silver Lake might have sought $8bn – a third of revenue. Compare to the $25bn LBO in 2013: that’s some drop in value.
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Biggest tech acquisitions of all time » Business Insider

Matt Rosoff:

Dell’s $67bn purchase of EMC is the biggest pure tech acquisition ever. (AOL’s $162bn buy of Time Warner in 2000 was larger, but Time Warner was a media company, not a tech company.) This chart from Statista shows some of the largest tech acquisitions of the past decade, measured in 2015 dollars. 

There are a lot of dogs on the list.

Remarkably, three of those dogs are by HP: with Compaq (under Carly Fiorina), with EDS (under Mark Hurd), and with Autonomy (under Meg Whitman). Google-Motorola ($13.2bn in 2015 dollars) also stands out as one which really didn’t make its price back.
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Casinos bet on growth in table games, removing slot machines to make room » The Washington Post

Joe Heim notes that the number of slot machines in Nevada casinos has dropped precipitously since a high in 2001:

Nevada’s governor, Brian Sandoval (R) last week signed a bill that allows for the development of interactive slot machines. These are games that would presumably be more appealing to millennials who don’t seem interested in the passive — and mostly solitary — experience of playing traditional slot machines.

“This bill allows gaming manufacturers to use cutting-edge technology to meet the challenges prompted by a younger, more technologically engaged visitor demographic,” Sandoval told the Las Vegas Review Journal.

Casinos and machine manufacturers are now free to pursue slot games that would mirror video games and introduce some level of skill rather than pure chance into the slot experience.

Five years ago, Eric Meyerhofer helped found Gamblit Gaming, a Glendale, Calif., company that develops video and mobile games for gambling.

“There was a recognition in the casino gaming industry that the traditional products are doing a great job attracting and entertaining people from their late 40s up into their 60s or 70s, but they have very little penetration into the 45-and-under group,” Meyerhofer said. “And that doesn’t bode well for a casino industry without coming up with ways to adapt.”

Gotta keep the millennials (and Gen Zs) happy.
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Mobile is not a neutral platform » Benedict Evans

Evans points to the fact that Google and Apple get to decide how much control and visibility apps and their constituent functions work on their respective platfirms:

the deeper issue is that we haven’t just unbundled search from the web into apps – we’re now unbundling apps, search and discovery into the OS itself. Google of course has always put a web search box on the Android home screen (and indeed one could ask why there needs to be an actual browser icon as well) but this is much more fundamental.

That is, this isn’t really about what kinds of boxes slide onto your screen from where. it’s about how you talk to your friends, how you discover new services and how you decide to spend money. 

This, obviously, is why Facebook keeps trying to insert its own layers into the OS (and why Amazon made a phone). I sometimes feel that every spring Facebook holds F8 and says “this is what interaction on smartphones will look like”!”, and a few weeks later Apple and Google say “look, sorry kid, but…”. It’s not Facebook’s platform to change. But if Facebook is successful in using Messenger to close the loop between its online identity platform (which both Apple and Google lack) and notification and engagement on the phone, then it it’ll have managed to create its own layer at last. 

Really, what we see here is a search for another run-time. We had the web, and then we added apps, and now we look for another. Notifications? Siri/Now? Messaging (as forWeChat in China)? Something else?  But each of the previous run-times lacked search, discovery and acquisition as a fundamental part of the architecture – they had to be added later (and arguably that’s still not there with apps). On Facebook’s desktop platform, in contrast, both halves were there almost from the beginning. The next run-times on mobile might have both halves too. 

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Android Auto isn’t slurping Porsche engine data, says Google – but questions remain » The Register

Iain Thomson follows up on the “Android Auto doesn’t want data” denial from Google, pointing out that the CAN bus which controls data flow in cars generally doesn’t have any security:

In the above case, from the OpenXC platform, the Android device can be firewalled off from the critical CAN bus by a suitable CAN-to-USB translator; the Android gadget can only request information, such as wheel speed or whether the parking brake is on.

That gateway could block requests for low-level statistics that manufacturers and drivers would rather keep private. But if that gateway honors any request for data, we’re relying on Google keeping to its word and programming Android Auto to only fetch limited types of information.

The second thing that springs to mind is: can the connected smartphone write to the CAN bus as well as read from it? If the device is completely compromised in some way – such as by malware exploiting Stagefright bugs – can it fire commands into the vehicle’s brain stem? Android Auto needs to be able to control the audio system to pump up the volume or turn it down, for example, and if that means it writes to the CAN bus to do so, then any mayhem can be caused by the phone.

Perhaps the cars compatible with Android Auto have compartmentalized CAN buses so the audio system is blocked by a gateway from the engine control hardware – although reprogramming controllers on the bus to bypass these defenses is possible.

Slightly concerning, actually.
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Why the floppy disk is still used today » Digital Trends

Brad Jones:

Today, there’s a pleasing sense of nostalgia to the business model that mimics the product that [Tom Persky’s company Floppydisks.com] sells — while half of orders come via the web store, the other half are typically completed over the phone.

This allows Tom to build up a rapport with his customers, something that typically can’t be found at Staples or OfficeMax. Speaking to the men and women buying his wares also allows Tom to keep track of just how floppies are used circa 2015.

“There are people who love floppy disks,” he tells me, giving the example of a court reporter who uses the format for sheer convenience and force of habit. “There’s a large embroidery company that does 500 jobs a day,” he goes on. “They could do that on a hard drive — except their machinery doesn’t work with a hard drive.”

Therein lies the biggest reason that floppy disks are still in demand in some corners of industry. “In the 1990s, hundreds of thousands of industrial machines were built around floppy disks, which were high-tech of the time,” he tells me. “They were built to last fifty years.”

But floppy disks were not.

Replacing the machines would seem the logical option, but many of them are too valuable to scrap, or can’t be easily replaced by a modern equivilent. Tom lists the aforementioned embroidery machines, as well as ATMs, and some aviation tech as prime examples of devices that still have a need for data introduced through a floppy drive.

The reach of the floppy disk today goes further than you might expect. If the thought of vital flight equipment using a floppy for input seems far-fetched, then you may well be surprised to hear that the format is still in use by the United States Department of Defense.

End date uncertain; owning a million is too many, thinks Persky, but half a million is too few.
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From pixels to pixies: the future of touch is sound » Reuters

Jeremy Wagstaff:

UK start-up Ultrahaptics, for example, is working with premium car maker Jaguar Land Rover to create invisible air-based controls that drivers can feel and tweak. Instead of fumbling for the dashboard radio volume or temperature slider, and taking your eyes off the road, ultrasound waves would form the controls around your hand.

“You don’t have to actually make it all the way to a surface, the controls find you in the middle of the air and let you operate them,” says Tom Carter, co-founder and chief technology officer of Ultrahaptics.

Such technologies, proponents argue, are an advance on devices we can control via gesture – like Nintendo’s Wii or Leap Motion’s sensor device that allows users to control computers with hand gestures. That’s because they mimic the tactile feel of real objects by firing pulses of inaudible sound to a spot in mid air.

They also move beyond the latest generation of tactile mobile interfaces, where companies such as Apple and Huawei are building more response into the cold glass of a mobile device screen.

Ultrasound promises to move interaction from the flat and physical to the three dimensional and air-bound. And that’s just for starters.

Not sure about the “invisible controls around your hand” idea. How do you decide if it’s meant to respond or not? 3D interaction is complex already; having invisible things to interact with, even harder. (Think of how confusing people find taps that operate depending on where and how you wave your hand near them. Now try to imagine controlling your radio that way.)
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