Start Up: Magic Leap’s sexism suit, Snap slips, regulating new monopolies, enthusiast smartphones!, and more


Is Amazon charging you a different price from other people? Now you can find out. Photo by herzogbr on Flickr.

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A selection of 13 links for you. Not terminated yet. I’m @charlesarthur on Twitter. Observations and links welcome.

Magic Leap settling sex discrimination lawsuit with former employee • VR & FUN

SJ Kim:

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The key responsibilities for [the former Head of Strategic and Brand Identity at Magic Leap, Tannen] Campbell was to help Magic Leap with the “pink/blue problem” and make the workplace more diverse and inclusive. 

But she wasn’t able to fulfill her duties due to roadblocks within the company. In the complaint it states, “Scott Henry, CFO, is the kind of man who sits a little too close to women and makes them feel uncomfortable with his body language, flirting and objectification. He generally treats women as objects of beauty (or not) rather than co-workwers worthy of respect. He is a bully and when he does not get his way, he belittles his adversary.” The document goes on further, shedding light on other executives and portraying them in an unfavorable manner. 

The lawsuit additionally reports that it found fault with IT support lead Euen Thompson. On page 15 and 16, it describes Thompson as saying,

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“Yeah, women always have trouble with computers.” The women in the group, in apparent disbelief, asked Thompson to repeat what he said and Thompson replied, “In IT we have a saying; stay away from the Three Os: Orientals, Old People and Ovaries.”

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To quickly pull the plug on this case, Magic Leap has settled with Campbell and came to an agreement that made sense for both parties.

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Anyhow, what’s that you say about a sexism problem?
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Snapchat parent posts $2.2bn loss in first quarterly report; stock plunges • WSJ

Georgia Wells:

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Snap’s costly efforts to build a new kind of advertising platform deepened its adjusted loss before interest, taxes, depreciation and amortization, which grew to $188.2m from $93.2m in the year-ago period. That was worse than analyst expectations for a loss of $181m, according to FactSet.

Revenue in the first quarter jumped sharply, to $149.6m from $38.8m a year ago, but still below analysts’ expectations of $158m. Snap’s revenue also failed to exceed its fourth-quarter level of $165.7m.

Snap went public at $17 a share in March. While its stock has been volatile since it started trading, it has stayed above the IPO price and closed Wednesday at $22.98.

Investors have gravitated to Snap since its IPO in March, the highest-profile tech listing in years. But the comparisons with Facebook and Twitter—its two biggest rivals—raise questions about whether Snap can elbow its way into a crowded social media market. Facebook has grown into a powerhouse with nearly 2 billion monthly users and, together with Google parent Alphabet Inc., captures nearly all the growth in digital advertising.

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Snap’s interesting. It’s looking beyond just the app, with Spectacles; it knows who it’s trying to reach. The key question will come in the next five years, as its first audience ages. Can it attract today’s 10-year-olds? And can it retain this year’s 16-year-olds?
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Windows 10 installed base hits 500 million • ZDNet

Ed Bott:

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On the first day of its Build 2017 developer conference in Seattle, Microsoft announced that Windows 10 is now running on 500 million “monthly active devices.”

(That metric includes devices that have been active in the past 28 days, Microsoft officials have said in the past. The figure includes not only Windows 10 installed on PCs, tablets, and phones, but also on Xbox One consoles and a very small number of HoloLens and Surface Hub devices.)

The half-billion milestone is an important one for convincing developers to write software for the Universal Windows Platform and to convert desktop apps so they can be sold in the Windows Store.

Ironically, though, that seemingly large number is also a slight disappointment. At the Build conference in 2015, Windows boss Terry Myerson set an audacious goal for Windows 10: It would be installed on 1 billion devices within two to three years, meaning by late summer 2018.

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Apple buys Beddit, a sleep-tracking company with existing Apple Watch app • Ars Technica

Valentina Palladino:

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Apple may be looking to integrate own sleep-tracking features to its product lineup sooner rather than later. According to a report by CNBC, Apple acquired the sleep tracking company Beddit. Beddit’s website confirms the acquisition on its Privacy Policy page, which was last edited May 8, 2017: “Beddit has been acquired by Apple. Your personal data will be collected, used and disclosed in accordance with the Apple Privacy Policy.” No financial details of the acquisition have been made public yet.

Beddit makes both sleep-tracking hardware and software and already has an existing Apple Watch app that works with its Beddit 3 Sleep Monitor. The device is a flat strip of fabric with sensors inside that sits atop your mattress, and under you, while you sleep. Using a variety of sensors including those for motion, humidity, and temperature, the Beddit 3 Sleep Monitor tracks sleep time and quality, heart rate, breathing patterns, deep and light sleep times, sleep efficiency, and more. Both its iOS and Apple Watch app connect to the monitor, so they currently don’t track sleep independently from Beddit’s hardware.

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Well, everybody does sleep. And it could work while the Watch recharged.
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Tesla starts taking orders for premium solar roofs • Reuters

Nichola Groom:

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To get in line for a solar roof, homeowners must put down a $1,000 deposit via Tesla’s website. There, they can also calculate the estimated upfront cost of a solar roof.

A 1700-square-foot roof in Southern California, with half the roof covered in “active” solar tiles, would cost about $34,300 after a federal tax credit, according to the calculator. Tesla estimates such a roof could generate $76,700 of electricity over 30 years.

The company said its solar roofs would cost between 10 and 15% less than an ordinary new roof plus traditional solar panels.

But Jim Petersen, chief executive of PetersenDean Inc, which installs about 30,000 new roofs plus solar a year, estimated that a 1700-square-foot roof with new solar panels, including the tax credit, would cost about $22,000, well below the Tesla website’s estimate. Costs vary depending on roof type.

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I love the idea but the practice is crazy: roof tile microinverters will fail well before those 30 years.
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Comparison: all of the Android Wear devices announced or released in 2017 so far • Android Police

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Android Wear started off, as many Google products do, as something closer to a proof-of-concept than a finished product. The first watches had problems, the software was unfinished, and tech companies were the only ones producing them. Now that Android Wear is becoming a more mature platform, mostly thanks to the long-awaited 2.0 update, we’re starting to see more watches than ever hit the market.

It was fairly easy to compare Android Wear watches in years past – only a handful of tech companies even bothered. But now, a vast amount of wearables are being released, with most of them by actual watch companies. So how do they all stack up?

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There are 20 of these things. How do they stack up? Like things that people don’t want to buy. I’ve tracked the ratings for Android Wear on Google Play for nearly two years, and (1) fewer than 10m have been activated (2) ratings in the past few weeks have trended down calamitously. With this many OEMs crowding the space, nobody can make a profit (prices range from $192 to $1,650; median price $325, for which you can get an Apple Watch that’s better-looking and thinner).

I don’t see how Google hopes to see this thrive.
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Regulating the internet giants: the world’s most valuable resource is no longer oil, but data • The Economist

The Economist (no fan of antitrust action) muses over what grounds one could find for antitrust action against big tech companies – and how you’d make it effective:

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The nature of data makes the antitrust remedies of the past less useful. Breaking up a firm like Google into five Googlets would not stop network effects from reasserting themselves: in time, one of them would become dominant again. A radical rethink is required—and as the outlines of a new approach start to become apparent, two ideas stand out.

The first is that antitrust authorities need to move from the industrial era into the 21st century. When considering a merger, for example, they have traditionally used size to determine when to intervene. They now need to take into account the extent of firms’ data assets when assessing the impact of deals. The purchase price could also be a signal that an incumbent is buying a nascent threat. On these measures, Facebook’s willingness to pay so much for WhatsApp, which had no revenue to speak of, would have raised red flags. Trustbusters must also become more data-savvy in their analysis of market dynamics, for example by using simulations to hunt for algorithms colluding over prices or to determine how best to promote competition (see Free exchange).

The second principle is to loosen the grip that providers of online services have over data and give more control to those who supply them. More transparency would help: companies could be forced to reveal to consumers what information they hold and how much money they make from it. Governments could encourage the emergence of new services by opening up more of their own data vaults or managing crucial parts of the data economy as public infrastructure, as India does with its digital-identity system, Aadhaar.

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Google and Facebook’s idealistic futures are built on ads • Bloomberg

Ashlee Vance:

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Google and Facebook both pursue lofty ideals and champion hopeful aspirations. But there remains a fracture between their inventive side and the motivations of their core business. Google may want to cure death, and Facebook may want to bring an epic virtual reality to life. It’s just that along the way, the companies would really like to make sure that you’re online as much as possible and that their algorithms know as much as possible about you, so they can sell you more stuff. This is the first time engineers—paid for by advertising—have risen to such a crucial role in our future. “Nerds never had such power before,” [author of Homo Deus, Yuval Noah] Harari says. “On the whole, I think humanity is much better off in the hands of nerds than in the hands of the Genghis Khans and the Napoleons. Yet there are dangers inherent in nerd power, too.”

As Harari says, Zuckerberg is likely right to call for some type of global community, and Facebook is arguably in the best position to build one. “All our major problems are global in nature: global warming, global inequality, and the rise of disruptive technologies such as artificial intelligence and bioengineering,” he says. “My impression is that if humankind fails to create a truly global community in the 21st century, we are heading toward an unprecedented disaster.”

The question is whether Zuckerberg wants people leaving their computers to gather together in the world or whether that’s just more lip service to distract us. “I think it is good that Facebook is interested in helping to create a global community rather than in just making money,” Harari says. “But if Facebook is sincere about it, it will probably have to change its business model. You cannot bring humankind together if you are busy selling advertisements.”

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Is Amazon price gouging you? This browser extension will tell you • Vocativ

Joshua Kopstein:

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It’s no secret that Amazon, like many commerce sites, shows different prices for their wares depending on who’s browsing. Retailers can raise or lower prices depending on a customer’s race, location, age, browsing history, and more.

But the hidden “black box” algorithms that make those determinations are being pushed into the light, thanks to a browser extension that detects when the price you see on Amazon and other sites might be altered.

The Chrome extension is the result of a project by members of Volunteer Science, a “citizen science” platform that connects networks of volunteers. They took findings from a 2014 study that showed how Amazon’s algorithms change prices depending on the user’s location and whether they’re logged in, as well as other factors. Volunteer Science then reverse-engineered the automated pricing systems of sites like Amazon, Priceline, and and Google Flights, which in theory are kept completely hidden from the public.

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A rather more comprehensible writeup of the work described at Discover magazine.

More generally, it’s an important point: we expect that the internet looks the same to everyone when they’re buying, just like a physical shop. That turns out to be a dangerous assumption. Ideally, you want the site to think you’re really poor so it will depress its prices.
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Android 87% share in China; more brands competing • Kantar Worldpanel

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The latest smartphone OS data from Kantar Worldpanel ComTech reveal that in the first quarter of 2017, and despite an Apple earnings report that did not meet Wall Street’s expectations for iPhone sales, the company continued to make year-on-year share gains across most markets except urban China. The greatest increase for iOS came in Great Britain with 40.4% of smartphone sales, an increase of 5.6 percentage points, and in the US, with 38.9% of smartphone sales, an increase of 5.2 percentage points year-over-year…

“As a percentage of Android sales, Huawei continued to dominate in urban China at 36%. Oppo, which took the Chinese market by storm in 2016, has become the second largest Android brand with 13% of sales. Samsung fell to sixth place behind local Chinese vendors Xiaomi, Meizu, and Vivo, at just 5% of sales,” reported Tamsin Timpson, Strategic Insight Director at Kantar Worldpanel ComTech Asia. “Oppo’s strength is in its brick-and-mortar presence, which accounts for 86% of their smartphone sales. This contrasts with most other brands in the market who all make at least a third of their sales online, except for Vivo.”

…“Across EU5, Chinese brands have grown over the past year to account for 22% of smartphone sales,” said Dominic Sunnebo, Business Unit Director for Kantar Worldpanel ComTech Europe. “Huawei, the second largest Android brand across France, Italy, Germany, and Spain, has also started to make its presence known in Great Britain, where it has historically struggled. Huawei accounted for 6.3% of smartphone sales in Great Britain in the first quarter of 2017, an all-time high, making it the third-largest Android brand in that market behind Samsung and Sony.”

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It’s pretty clear that Apple has a problem in China once the excitement over a new phone subsides; this year in particular has been lower there.

The Huawei detail there caught my attention: if it’s third behind Samsung and Sony (and the latter is shrinking fast globally) then the numbers involved are really not big. Perhaps it’s an 85-10-5 breakdown. But longer-term, Samsung is at risk of getting chewed up in Europe just as it has been in China. Apple, though, isn’t: iOS loyalty is high.
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The smartphone market paradigm shift and the “enthusiast segment” • Strand Consult

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Almost 2 billion phones are sold globally annually, about 1.4 billion of which are smartphones. The market is large, but it is flat. There is little innovation in smartphone technology, an opportunity that companies and entrepreneurs can address. Strand Consult’s research shows that smartphones no longer have the same euphoric appeal they did a decade ago when consumers would be willing to stand in line for hours for the latest model. It takes more today to impress consumers than a new model number or letter on a smartphone.

The PC market already experienced the challenges that smartphones face today, but was able to birth new innovation. For some time Apple dominated the PC market as the leading maker of laptops with cool design. Traditional PC makers responded with a new category of PCs to address the “enthusiast segment.” To compete with Apple, PC manufacture launched a series of cool PCs with good design at an affordable price. Dell’s XPS, Lenovo’s X1, HP’s Spectra, and Microsoft’s Surface are examples of products in the enthusiast segment.

Strand Consult never believed there would be a large market for extravagant phones, for example a smartphone encrusted with diamonds. Nokia tried the Vertu; Siemens made a phone series that looked like jewellery; and other names such as Sirin, Mobiado, Lamborghini have tried and failed. As such, the intelligent mobile phone maker will not make extremely expensive luxury products but instead will focus on how to add value to products with similar price point as an iPhone or Samsung smartphone.

The key to the enthusiast segment is to serve those consumers who want something unique without it costing a fortune, and then creating volume in that segment. We expect this segment to grow in the future, though it will probably be more fragmented than the PC market. In practice, the market for phones sold in 20,000-100,000 units will grow. Not only will these phones have nice design, but they will have special features similar to the upscale PCs.

There are many possibilities for small players. One obvious way forward is for phone makers to create new products on top of existing platforms. Another is to develop unique functionality for specific market segments, like the enthusiast. The challenge is to identify and define the new segments in the smartphone market and to understand its customers.

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The problem is identifying segments people will want to pay extra for, and being profitable. (They’ll be Android, obviously, just as the “innovation” in the PC market was on top of Windows.) Enthusiasm might wane if the companies keep going bust.
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The Threat • Edge.org

A transcript of a video (also on the page) with Professor Ross Anderson of Cambridge University:

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There were only a few application areas that people really worried about 30 years ago: diplomatic and military communications at one end, and the security of things like cash machines at the other. As we’ve gone about putting computers and communications into just about everything that you can buy for more than ten bucks that you don’t eat or drink, the field has grown. In addition to cash machines, people try and fiddle taximeters, tachographs, electricity meters, all sorts of devices around us. This has been growing over the past twenty years, and it brings all sorts of fascinating problems along with it.

As we have joined everything up together, we find that security is no longer something that you can do by fiat. Back in the old days—thirty years ago, for example, I was working for Barclays Bank looking after security of things like cash machines, and if you had a problem it could be resolved by going to the lowest common manager. In a bureaucratic way, things could be sorted by policy. But by the late 1990s this wasn’t the case anymore. All of a sudden you had everything being joined up through the World Wide Web and other Internet protocols, and suddenly the level of security that you got in a system was a function of the self-interested behavior of thousands or even millions of individuals.

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That in turn meant engaging with social science, and the economics of networks. There’s some amazing detail too about crime statistics – how the extent of online crime was hidden.
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Apple employees are reportedly testing the ‘Siri speaker’ inside their homes • The Verge

Chris Welch:

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Apple employees have been testing a product designed to rival Amazon’s Echo inside their homes for several months, according to Bloomberg. The company’s “Siri speaker” project has been in the works for some time, but so far Apple has managed to avoid any significant leaks about its features or design. Last September, Bloomberg reported that Apple engineers had begun in-home testing of a prototype device. A public unveiling could come at next month’s WWDC keynote.

It’s unclear whether Apple’s unannounced product will feature a display (like Amazon’s brand new Echo Show) or instead focus just on audio (like the regular, cylindrical Echo speaker or Google Home). But VP Phil Schiller recently emphasized the value of consumer gadgets having a screen.

“The idea of not having a screen, I don’t think suits many situations,” Schiller said in an interview with Gadgets 360.

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Though the Verge story is (as usual) just a rewrite of other content, with no value-add, I’ve linked to it because it brings the Apple story, which is utterly buried in Mark Gurman’s story at Bloomberg, to the surface.

As it happens, I’ve also heard persistent rumours – stretching back over two years – about Apple staff testing something at home, more sophisticated than just an Apple TV. That’s come from people who’ve met the staff in informal settings. It may be that it’s about choosing the right time to release it.

I think, though, that (like Google) Apple’s reasons for offering this are far weaker than Amazon’s. As Ben Thompson points out, Amazon can sell you stuff directly. Apple and Google would have to link to a store – in which case why not just get Amazon’s thing? As Thompson also says, losing in mobile might mean Amazon can win in the home.
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Errata, corrigenda and ai no corrida: none notified

4 thoughts on “Start Up: Magic Leap’s sexism suit, Snap slips, regulating new monopolies, enthusiast smartphones!, and more

  1. But weren’t iOS’s China users supposed to be loyal too ? How can Samsung be in danger of being china’d worldwide, but not Apple ? Both are similarly being china’d in China…

      • Although if I remember right Apple has loyalty in the 90s around the world (i.e. their next phone will be an iphone) but 50% in China as WeChat is the OS of choice and that’d what people look at when buying a phone.

        This hints that if a WeChat type app becomes really popular for doing everything (facebook? amazon?) then Apple might be in trouble (but no where as much trouble as Samsung)

  2. I’M doubtful about the enthusiast segment’s definition. Shouldn’t it be separate segments for gamers, fashionistas, photographs… Or is it just a price thing, in which case it’s “the expensive segment” ?

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