Want to know why Apple blocks you buying Kindle content in the app? Blame Steve Jobs. CC-licensed photo by Robert Occhialini on Flickr.
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A selection of 11 links for you. Undelayed. I’m @charlesarthur on Twitter. Observations and links welcome.
Congress forced Silicon Valley to answer for its misdeeds. It was a glorious sight • The Guardian
Matt Stoller, who is a former Senate staffer and strong anti-monopolist:
I have reported on small and medium-sized businesses frightened to come forward with stories of how they are abused by counterfeiting or unfair fees by the goliaths. As one told me about his relationship to Amazon, “I’m a hostage.”
Fortunately, the voices of small businesspeople afraid of retaliation came through their elected leaders. “I pay 20% of my income to Uncle Sam in taxes, and 30% to Apple,” one member of Congress noted she heard from businesspeople. Representative Ken Buck, Republican from Colorado, talked about one of the few courageous businesspeople who testified openly months ago, the founder of PopSockets, who had been forced to pay $2m to Amazon just to get Amazon to stop allowing counterfeits of its items sold on the platform. Another Republican representative, Kelly Armstrong, went into the details of Google’s use of tracking to disadvantage its competitors in advertising, joined by Democrat Pramila Jayapal, who asked Google’s CEO why the corporation kept directing ad revenue to its own network of properties instead of sending ad traffic to the best available result.
Over and over, the CEOs had similar answers. I don’t know. I’ll get back to you. I’m not aware of that. Or long rambling attempts to deflect, followed by members of Congress cutting them off to get answers to crisp questions. I learned two things from the surprisingly wan responses of these powerful men. First, they had not had to deal with being asked for real answers about their business behavior for years, if ever, and so they were not ready to respond. And two, antitrust enforcers for the last 15 years, stretching back to the Bush and Obama administrations, bear massive culpability for the concentration of wealth and power in the hands of these corporations.
Stoller was one of the people in the Open Markets team at the New America Foundation (NAF). But in mid-2017, the Open Markets team wrote an article praising the EU for fining Google for breaking antitrust rules. Two days later, the Open Markets team were given two months to leave the NAF by its chief. The NAF had previously received more than $21m from the family foundation of Eric Schmidt, former Google CEO.
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Dirty tricks and the 2020 election: lessons from the KGB • CNN
Oleg Kalugin, another KGB agent who lived in the US undercover, recounted in his book “Spymaster” how the KGB paid Americans to paint swastikas on synagogues in New York and Washington. This tactic had the potential to inflame tensions in the US and give the Soviet-controlled press a negative story to tell Russians back home about their capitalist foe.
In the decades since, our lives have largely moved online — and so have Russia’s attempts at disinformation and meddling in US affairs.
In groundbreaking work from the Atlantic Council and the online investigations company Graphika, researchers showed how a suspected Russian group has been distributing forged documents online over the past few years. These efforts included a fake letter purporting to be from a US senator and another letter designed to look like it came from the Senate Committee on Foreign Relations.
The same Russian group is believed to have been behind a fake tweet from Sen. Marco Rubio claiming that a purported British spy agency planned to derail the campaigns of Republican candidates in the 2018 midterm elections. The fake tweet was picked up and falsely reported as real by RT, a Russian state-controlled news outlet. There’s no evidence of coordination between RT and the Russian group that promoted the fake tweet but RT did not issue a correction.
The internet hasn’t just made it easier for Russia to create forgeries, it’s also helped in their ability to distribute documents, forged or stolen.
Hurrah for social media! At least, if you’re a spy trying to destabilise countries that insist on letting them run rampant. Not sure why this is so hard for some folk to grasp.
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Apple emails reveal internal debate on Right to Repair • iFixit
These internal discussions reveal that what looks like Apple’s united front against Right to Repair is really an internal debate, rife with uncertainty.
The New York Times editorial in favor of Right to Repair last April set off a fire alarm inside Apple’s public relations team. When Binyamin Appelbaum reached out to research the issue, Apple’s VP of communications said in an internal email that “We should get him on the phone with [Apple VP Greg] Joz [Joswiak] or [Senior VP] Phil [Schiller].” That spawned an instant debate. “The larger issue is that our strategy around all of this is unclear. Right now we’re talking out of both sides of our mouth and no one is clear on where we’re headed.”
The emails show the high profile of Right to Repair inside Apple as leaders debate how to respond to a request for comment on an upcoming column. “The piece is using [Senator] Warren’s new right to repair for agriculture to talk about the broader right to repair effort and plans to use Apple as a symbol in that fight. We’re meeting with everyone shortly about the overall strategy and then I’ll connect with [Greg ‘Joz’ Joswiak].” The email goes on, “Appelbaum has, of course, talked with iFixIt [sic] and others.” They’re right about that!
The conversation resulted in a set of talking points that Kaiann Drance, VP of Marketing, talked through with Appelbaum. Afterwards, Apple PR wrote, “Kaiann did a great job and emphasized the need for a thoughtful approach to repair policy because of how important it is to balance customer safety with access to more convenient repairs.”
Emails detail Amazon’s plan to crush a startup rival with price cuts • Ars Technica
Quidsi’s founders didn’t want to sell their company, but Amazon’s diaper price war was starting to hurt Quidsi. Growth was slowing, and Quidsi was having trouble raising additional capital to continue expanding.
On September 14, the founders of Quidsi flew to Seattle to meet with Amazon and discuss a possible acquisition. As Quidsi’s founders were sitting in a meeting with Amazon brass, Amazon hit Quidsi in the gut. It announced a new program called “Amazon Mom” that offered free Prime service and an additional 30-percent discount on diapers if users signed up to get them through Amazon’s monthly “subscribe and save” program. This was a larger discount than Amazon offered on most other Subscribe and Save items.
This put Quidsi in an untenable situation, as [author of The Everything Store, Brad] Stone writes:
That month, Diapers.com listed a case of Pampers at $45; Amazon priced it at $39, and Amazon Mom customers with Subscribe and Save could get a case for less than $30. At one point, Quidsi executives took what they knew about shipping rates, factored in Proctor and Gamble’s wholesale prices, and calculated that Amazon was on track to lose $100m over three months in the diapers category alone. Amazon’s losses may have actually been even larger. During Wednesday’s hearing, Scanlon said that internal documents obtained by the committee showed Amazon losing $200m in a single month from diaper products.
Amazon knew it was bleeding Quidsi dry. An internal email later in September discussed the price cuts Quidsi was forced to make to compete with the new Amazon Mom discounts. “They expect to lose lots of money in the next few yrs,” wrote executive Peter Krawiec. “This will make it worse.”
Read Steve Jobs’ emails about why you can’t buy digital books in Amazon’s apps • The Verge
Two sets of emails discuss the decisions that, to this day, keep iPhone and iPad users from buying digital books in Amazon’s apps. (You have to use a web browser as a workaround.)
In one email from November 2010, marketing chief Phil Schiller wrote to Jobs, internet services lead Eddy Cue, and product marketing head Greg Joswiak about how Amazon was marketing the Kindle mobile app at the time as a way to easily read Kindle books across both an iPhone and an Android device. Jobs said, “[i]t’s time for Amazon to decide to use our payment mechanism or bow out [of the App Store],” and followed that with “[a]nd I think it’s time to begin applying this uniformly except for existing subscriptions (but applying it for new ones).”
In another conversation, Cue laid out a draft of new subscription policies for apps on the App Store on February 6th, 2011, days before Apple officially announced the new policies.
Jobs said: “I think this is all pretty simple — iBooks is going to be the only bookstore on iOS devices. We need to hold our heads high. One can read books bought elsewhere, just not buy/rent/subscribe from iOS without paying us, which we acknowledge is prohibitive for many things.”
Documents show Apple gave Amazon special treatment to get Prime Video into App Store • The Verge
During a hearing before the House antitrust subcommittee on Wednesday, Apple CEO Tim Cook testified that “we apply the rules to all developers evenly” when it comes to the App Store. But documents revealed by the subcommittee’s investigation show Apple senior vice president Eddy Cue offered Amazon a unique deal in 2016: Apple would only take a 15% fee on subscriptions that signed up through the app, compared to the standard 30% that most developers must hand over.
An email from Cue to Amazon CEO Jeff Bezos lists the terms negotiated:
That meeting took place in 2016, and at the time, Bezos said he was waiting for “acceptable business terms” before launching the Prime Video app on Apple’s platforms. Pressed for whether the terms may have included a reduction in the 30% App Store cut, Bezos told The Verge’s Nilay Patel that “private business discussions should stay private.”
That hearing sure has turned up some great content.
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Children COVID carriers: researchers find coronavirus-infected children are major carriers, further complicating the school-reopening debate • Fortune
In a study of children under five who show mild to moderate symptoms of COVID-19, those kids were found to contain higher concentrations of the virus compared to older children, teens and adults, according to researchers at a Chicago pediatric hospital and Northwestern University.
The findings come as parents, educators and policymakers around the world grapple with the question of whether it’s safe to reopen day-care centers and schools in the coming weeks.
The study, which was released Thursday in the journal JAMA Pediatrics, did not test the transmission rate of children—but does raise the prospect that children could be just as, or even more, prone to COVID infection and transmission than adults, although symptoms in the vast majority of children are comparably milder, the researchers found.
“One of the things that’s come up in the whole school reopening discussion, is: since kids are less sick, is it because they have less of the virus?,” said Taylor Heald-Sargent, the lead author and a pediatric infectious diseases specialist at Lurie Children’s Hospital of Chicago, and assistant professor of pediatrics at Northwestern University’s Feinberg School of Medicine.
“And our data does not support that,” she told Fortune. As a result, “we can’t assume that kids aren’t able to spread the virus.”
But but but: what proportion of children under five show mild to moderate symptoms? How liable are they to infection? That’s the key question that remains unanswered.
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Telegram files EU antitrust complaint against Apple’s App Store • Financial Times
In a complaint to EU competition chief Margrethe Vestager, Telegram, which has more than 400m users, said Apple must “allow users to have the opportunity of downloading software outside of the App Store”.
In June, Ms Vestager announced two antitrust investigations into Apple, one of which concerned the App Store. Apple’s conflicts with developers over the rules of the App Store have also escalated recently.
Both Spotify and Rakuten have previously complained to the EU that the app store represents a monopoly power, given that developers have to accept Apple’s terms, including a 30% commission on in-app purchases, in order to reach the hundreds of millions of people who use iPhones.
Apple’s App Store fees across the world are estimated to generate more than $1bn for the company each month.
In its complaint, Telegram took issue with Apple’s argument that the App Store commission keeps it running.
In a post this week, Mr Durov said: “Every quarter, Apple receives billions of dollars from third-party apps. Meanwhile, the expenses required to host and review these apps are in the tens of millions, not billions of dollars. We know that because we at Telegram host and review more public content than the App Store ever will.”
Google’s $2.1bn Fitbit deal faces EU antitrust probe: sources • Reuters
Foo Yun Chee:
Alphabet Inc unit Google this month offered not to use Fitbit’s health data to help it target ads in an attempt to address EU antitrust concerns. The opening of a full-scale investigation suggests that this is not sufficient.
The deal, announced last November, would see Google compete with market leader Apple and Samsung in the fitness-tracking and smart-watch market, alongside others including Huawei and Xiaomi.
The European Commission, which will launch the probe following the end of its preliminary review on Aug. 4, is expected to make use of the four-month long investigation to explore in depth the use of data in healthcare, one of the people said.
What happens to Fitbit in the meantime? Does Google slip a bit of money under the door to keep it going? The next quarterlies are on 5 August, so those will be something to watch. (In the quarter to April it lost $20m on sales of $188m, selling 2.2m devices for a lower price than the year before. It’s got $251m of cash on hand, down from $334m in December (ie down $83m). Things aren’t looking good.
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It looks like Apple’s iPhone 12 release date is definitely delayed • BGR
Qualcomm’s Chief Financial Officer Akash Palkhiwala talked to Reuters about the chipmaker’s guidance for the September quarter. The exec explained that a delay of a flagship phone next quarter would impact its bottom line of the period.
“We’re seeing a partial impact from the delay of a flagship phone launch. And so what we’ve seen is a slight delay that pushes some of the units out from the September quarter to the December quarter for us,” he said.
Palkhiwala would not explicitly name the iPhone 12 series, but only a device like the iPhone could alter earnings guidance in such a manner that Qualcomm would have to address it.
Qualcomm is expected to provide the 5G modem for all the upcoming iPhone 12 models, and that’s why a delay would impact its bottom line. The exec said that Qualcomm would provide 5G components to all major smartphone makers, including the customer facing a delayed launch. Again, the CFO did not name Apple. “Suffice to say, I think going forward we expect to be selling to all of them,” Palkhiwala said.
Assuming all of this information is accurate, and Apple will launch the iPhone 12 series in October, we’d still expect the company to unveil the handsets on time, during a mid-September press event.
I had been thinking that Qualcomm doesn’t make Apple’s CPU, but if it’s making the modems that makes more sense. Although “launch in September, but wait a few weeks for it to go on sale” isn’t that much different from normal, is it.
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Huawei trumps Samsung for first time in worldwide smartphone market in Q2 2020 • Canalys
Huawei shipped more smartphones worldwide than any other vendor for the first time in Q2 2020. It marks the first quarter in nine years that a company other than Samsung or Apple has led the market. Huawei shipped 55.8m devices, down 5% year on year. But second-placed Samsung shipped 53.7m smartphones, a 30% fall against Q2 2019.
Huawei is still subject to US government restrictions, which have stifled its business outside of mainland China. Its overseas shipments fell 27% in Q2. But it has grown to dominate its domestic market, boosting its Chinese shipments by 8% in Q2, and it now sells over 70% of its smartphones in mainland China. China has emerged strongest from the coronavirus pandemic, with factories reopened, economic development continuing and tight controls on new outbreaks.
“This is a remarkable result that few people would have predicted a year ago,” said Canalys senior analyst Ben Stanton. “If it wasn’t for COVID-19, it wouldn’t have happened. Huawei has taken full advantage of the Chinese economic recovery to reignite its smartphone business. Samsung has a very small presence in China, with less than 1% market share, and has seen its core markets, such as Brazil, India, the United States and Europe, ravaged by outbreaks and subsequent lockdowns.”
All down to China.
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Errata, corrigenda and ai no corrida: none notified