Start up: Facebook v journalists, give me your email!, iPhone dips ahead, whose fault is Theranos?, and more

Android Wear hasn’t been a hit, even among Android fans. Howcome? Photo of a Samsung Gear Live by pestoverde on Flickr.

You can now sign up to receive each day’s Start Up post by email. You’ll need to click a confirmation link. Try not to confuse it with today’s second link.

A selection of 12 links for you. Too soon? I’m charlesarthur on Twitter. Observations and links welcome.

Want to know what Facebook really thinks of journalists? Here’s what happened when it hired some » Gizmodo

Michael Nunez:

»if you really want to know what Facebook thinks of journalists and their craft, all you need to do is look at what happened when the company quietly assembled some to work on its secretive “trending news” project. The results aren’t pretty: According to five former members of Facebook’s trending news team—“news curators” as they’re known internally—Zuckerberg & Co. take a downright dim view of the industry and its talent. In interviews with Gizmodo, these former curators described grueling work conditions, humiliating treatment, and a secretive, imperious culture in which they were treated as disposable outsiders. After doing a tour in Facebook’s news trenches, almost all of them came to believe that they were there not to work, but to serve as training modules for Facebook’s algorithm.


Server farms, like humans, require temperature control, but they don’t demand free lunch. So in time any tech company will try to replace the latter with the former.
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I Want Your Email Address » Moneylab

»Can I have your email address? I’ll be here when you’re ready.

Give It To Me

Can I please have your email address before you go?

I’m trying to increase my subscriber rate by 600%, so you should be typing in your email address right about now.


This is brilliant. Scroll all the way through. Enjoy.
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Speaker maker Bowers & Wilkins sells out to a tiny Silicon Valley startup » Bloomberg

Joshua Brustein:

»Bowers & Wilkins’s most devoted customers will probably be skeptical about a Valley startup being the best steward for a fancy speaker brand. Audiophiles often turn their noses up at digital music companies, which have a reputation for sacrificing fidelity for convenience. “It will take some explaining,” said Atkins. “I think when the verdict comes back, it will be clear that this is exactly what Bowers & Wilkins should be doing.”

Atkins will become CEO of the combined company, and Yu will be executive chairman. They will drop the name Eva in favor of the much more familiar Bowers & Wilkins brand. Yu and Atkins said there will be no staff cuts, and the company will continue to sell the current lineup of Bowers & Wilkins products. Atkins, who owns 60% of Bowers & Wilkins, will take a significant ownership stake in the new company. Bowers & Wilkins’s outside investors, Caledonia Investments and Sofina, will cash out.

Yu has been a Silicon Valley dealmaker for years. He was chief financial officer at YouTube when Google bought the company for $1.65bn. At Facebook, he helped the social network raise money from Microsoft Corp. As a partner at Khosla Ventures, he was an early investor in Square Inc. He also owns part of the 49ers and championed the football team’s new stadium in the Valley.

Yu said his latest deal is a potential model for other well-funded startups. “I think there will be others to follow,” he said. “This is the way that Silicon Valley and other industrial companies raise the game for consumer-brand electronics.”


It’s certainly the only way to add value; simply being high-end hardware isn’t sufficient in any space now. You need software, and something special.
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TalkTalk to scrap separate line rental charge » TalkTalk Telecom Group PLC

»TalkTalk is leading the way in making broadband pricing simpler and more transparent by putting an end to separate line rental charges.

The UK’s fiercely competitive broadband market has been increasingly characterised by attention-grabbing broadband prices, underpinned by less prominent – and more costly – landline charges. Government, consumer groups and the Advertising Standards Authourity all agree that presenting landline and broadband costs separately adds unnecessary complexity and risks broadband deals appearing misleadingly cheap. However, TalkTalk is the only provider to have openly and consistently called for change.

Today, TalkTalk is going one step further by announcing that it is set to become the first major broadband provider to end the practice of separate pricing. TalkTalk will instead move toward a single monthly cost including line rental, known as ‘all-in pricing’, which will come into effect this autumn.


Good move, though it looks as though the regulator Ofcom will force this in time, so this is “we’re jumping before you push us”. The additional line rental cost has always been a bugbear in all the adverts for broadband services.
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Craig Wright is not Satoshi Nakamoto » New Web Order

Nik Cubrolovic with some interesting insight into Craig Wright’s business dealings:

»What Wright did was establish a company for the purpose of carrying out research and development on e-learning software it had acquired from Wrights own trust. Wright would inject $30 million in Bitcoin to fund the company, $29 million of which would be paid to Wright’s trust to acquire the software and $1 million of which would fund operational costs – including an office in Sydney and 40 employees.

The purpose for the structure and why someone could commit fraud in this way becomes clear in the next action the company takes:


Further to incurring a range of expenses, the Company lodged its GST return for the September 2013 quarter, claiming a GST refund of $3.1 million (“the GST refund”). After various discussions and correspondence, the ATO issued a notice to the Company on 20 January 2014 notifying that it intended to withhold the refund pending further verification of transactions and the treatment of Bitcoin.


The sales tax (GST) component of the $29 million invested by Wright into the company was eligible for a refund. Thus by shuffling around some Bitcoin between entities you control yourself, it is possible to trigger a sales tax refund (in real cash).

Another Wright entity, DeMorgan, made the largest ever R&D tax concession claim in Australia – as per their own press release. The R&D tax concession is a program in Australia where companies investing in R&D are eligible for a 45% tax refund on each dollar spent. We know now that the supercomputers that were claimed to be part of this spending didn’t exist, so it is possible that the refund was an attempt to make a false claim.

While it is still early in the investigations against Wright’s companies, one can come away from reading about his firms with the conclusion that their primary business was to seek tax refunds from the government, and that most of the businesses were set up precisely for this.


You have to admit that if it’s fraud, it’s rather clever. So why would Wright claim to be Nakamoto? Because it could help him raise some *real* money.
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Apple’s plan for refurbished iPhones in India faces opposition » Bloomberg

Saritha Rai:

»India has rejected Apple Inc.’s request to import and sell refurbished iPhones to the world’s second largest mobile population, a telecommunications ministry official said Tuesday.

The U.S. company’s application has been turned down, the official said, asking to not be identified, citing official policy. Apple has been seeking permission to import and sell used phones to court price-conscious consumers with a similar proposal rejected in 2015 by the environment ministry.

Apple declined to comment.

Apple’s rivals have mounted a public campaign against the effort, arguing that such a move would trigger a flood of used electronics while defeating the government’s Make-in-India program to encourage local manufacturing.


Oh, and they also didn’t like it because it would also allow Apple to sell more iPhones. Quite a blow for Apple. Speaking of which…
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iPhone warning signs » Above Avalon

Neil Cybart has substantially reduced his forecasts for how many iPhones will be sold over the next 18 months, citing a number of key shifts (such as China Mobile as a one-off, India not being China, and so on):

»When looking at all of these iPhone warning signs, it is becoming clear that Apple has a significant iPhone growth problem on its hands. The combination of a slowing iPhone upgrade rate and declining number of growth catalysts for expanding the iPhone’s addressable market will make it very difficult for management to report unit sales growth going forward given its current strategy. In addition, the iPhone SE highlights how any strategy to fix some of these issues will likely end up jeopardizing iPhone ASP and margin trends.

It is important to note that the iPhone business is not imploding. Satisfaction rates and loyalty trends remain industry-leading. Apple has a very attractive iPhone installed base numbering close to 550 million users with additional users purchasing an iPhone in the grey market. Each quarter, Apple is still bringing new people to the iOS ecosystem. Instead, it is becoming much more difficult for Apple to grow iPhone unit sales each year.

All of this seems a bit surreal. Apple just recorded its best quarter for iPhone sales in 1Q16. How can there now be so many iPhone warning signs only a few months after this milestone to the point that even Apple management was caught off guard?

The iPhone 6 and 6 Plus masked deteriorating iPhone trends. While those two iPhone models ushered in a wave of sales from both existing iPhone users and consumers new to iOS, upon closer examination the iPhone installed base had become much more diverse than first thought when it comes to thoughts on upgrading.


Bear in mind that Apple has been locked into two-year design cycles for the iPhone since 2008, meaning that even if there had been realisation in 2015 that everything would be different by now, there would be no way to stop it. The market has shifted, and it is extremely hard to see Apple ever returning to the record-setting numbers of the past.
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Rant: has Android Wear failed to make a case to normal users? » Android Police

David Ruddock:

»When someone asks me if they should buy an Android Wear device, I always answer with something along the lines of, “not if you actually expect to get your money’s worth.” The desirable smartwatches are all generally $250+, the cost of a decent entry-level smartphone these days. The inevitable next question is “what does it actually do better than a phone?” My stock response generally focuses on the ability to swipe away low-priority notifications without pulling out your phone, the ability to voice-dictate an SMS or text on major messaging platforms, media controls (when they work), track your steps, and the ability to perform simple voice commands or queries. And, of course, to look neat.

And the responses I receive each and every time? Either “but a smartphone already does that” or “but is it actually better at those things than my phone?” And the answer to the latter is plainly no. A phone allows you to type responses to messages. A phone allows you to see more text in a notification, or to expand it into the app full a complete view. A phone supports more voice commands and full web searches. A phone can track your steps. A phone – or often even your headphones – has media controls.


Quite a few of these criticisms are specific to Android Wear; reading the comments, people want to be able to use their Wear watches to do contactless payments too. The Apple Watch already does these things (including pay, steps and maps). But of course the Watch too has struggled so far to make progress beyond the early adopters.

Suspect there’s a big update, probably including payment, coming up for Wear at Google I/O. But will that really change anything? Android Wear still has fewer than 5m activations in more than 18 months. Apple has lapped it at least twice.
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The secret culprit in the Theranos mess » Vanity Fair

Nick Bilton says the tech press bears some of the responsibility for failing to ask tougher questions:

»When I’ve asked V.C.s why they didn’t pour millions of dollars into a company that appeared to be changing the world, I was told that it wasn’t for lack of trying on Holmes’s part. She met with most top venture firms. But when the V.C.s asked how the technology worked, I was told, Holmes replied that it was too secret to share, even to investors. When they asked if it had been peer-reviewed, she insisted once again it was too secret to share—even to other scientists.

Maybe the tech press should have chosen to do the same thing. If Holmes wouldn’t explain how the technology that they were writing about actually worked, the blogosphere shouldn’t have written about it in the first place.

Since Carreyrou’s initial story was published, Holmes has stopped doing her endless media and speaking tours, and is instead trying to save her company and, presumably, her job. She has even abandoned social media. Her last tweet is a relic from December, back when the director of stage content at TEDMED tweeted a link to a story about Theranos, and subsequently defended the company and its founder by noting that the “media is so quick to idolize and then tear down brilliant change-makers, esp women.” Holmes replied with a single, terse word: “humbled.”


“Investigate and deeply understand the technology” is not a compatible requirement of journalists who are also required to churn out a ton of posts per day. The WSJ investigation took months, and was sparked by an inside source – but the key method, of asking ex-employees and peers how it could work, is open to anyone.

The chin-stroking over “why didn’t the US tech sites get this?” is exactly the same as it was over the Snowden revelations, and has the same answer: it’s not what they’re incentivised to do, as Bilton points out.
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First Response’s Bluetooth pregnancy test is intriguing — and a privacy nightmare » The Verge

Ashley Carman:

»This is a list of the app’s permissions on Android, emphasis my own:

  • Device & app history – retrieve running apps
  • Identity – find accounts on the device
  • Calendar – read calendar events plus confidential information, add or modify calendar events, send email to guests without owners’ knowledge
  • Contacts – read your contacts, find accounts on the device
  • Phone – read phone status and identity, directly call phone numbers
  • Photos/Media/Files – modify or delete the contents of your USB storage, read the contents of your USB storage
  • Storage – modify or delete the contents of your USB storage, read the contents of your USB storage
  • Device ID & call information – read phone status and identity
  • Other – full license to interact across users, receive data from the internet, full network access, view network connections, pair with Bluetooth devices, access Bluetooth settings, prevent device from sleeping, use accounts on the device.

Church and Dwight also list a Privacy Policy for the app, which explicitly says in bold, “If you opt-in, we may share your Personal Information with third parties for third party marketing purposes.” Not only can the app call users’ contacts without their permission, search their device for social media accounts, and send emails to calendar event guests without permission, but it can also use all that data to create tailored ads.


The company told Carman: “Church & Dwight Co., Inc. puts users’ privacy first and works to ensure that the trust users place in our products is recognized and respected with the utmost discretion.”

Which notably isn’t “we would never send emails or messages to everyone without your permission saying HEY SHE’S PREGGERS!”
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Flaws in Samsung’s ‘smart’ home let hackers unlock doors and set off fire alarms » WIRED

Andy Greenberg:

»The security research community has been loudly warning for years that the so-called Internet of Things—and particularly networked home appliances—would introduce a deluge of new hackable vulnerabilities into everyday objects. Now one group of researchers at the University of Michigan and Microsoft have published what they call the first in-depth security analysis of one such “smart home” platform that allows anyone to control their home appliances from light bulbs to locks with a PC or smartphone. They discovered they could pull off disturbing tricks over the internet, from triggering a smoke detector at will to planting a “backdoor” PIN code in a digital lock that offers silent access to your home, all of which they plan to present at the IEEE Symposium on Security and Privacy later this month.


Feels like we’re roughly at the Windows95 level of device security, but with hackers working at the Windows 7 level.
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Nelly Furtado: ‘YouTube pays more than nothing. That doesn’t make it fair’ » The Guardian

Nelly Furtado:

»I was lucky enough to meet and open for Prince and see him live several times over the years. He stood for pure music and honouring music with proper reverence. Prince’s death reminds all of us artists to wake up and smell the coffee. As I sit here writing this, I am listening to Zayn Malik’s new album – absolutely transported by the freedom, beauty and universality in it – and I’m certain of the labour put into making it great. I am putting the finishing touches on my new album right now, and I won’t stop working on it until it feels complete, much like a cabinet maker or a window cleaner would. We are all “working” class. This work is valid and has value. I love YouTube, but I think it is underpaying and getting away with it. I know the truth hurts, but someone’s got to tell it.

1. YouTube needs to use its Content ID system in a more productive way. It is interesting to note that it is ultra-efficient at removing anything pornographic or beyond certain limits of taste. But it seems not so effective for artists’ music, publishers, and labels. Let’s not forget that YouTube is owned by a technology company with the ability and resources to solve the problem.


And she has more points. But principally, it’s that YouTube is getting away with murder.
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Errata, corrigenda and ai no corrida: Yesterday’s photo was by cjjgbella on Flickr.

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