The 2Q 2016 smartphone scorecard: players searching for an exit

Exit. Who’s next? Photo by Today is a good day on Flickr.

There comes a time in every former top-ranking sports player’s career when they have to accept reality: they’re not up to it any more. They keep getting beaten by people whom they once would have trampled; what should have been easy wins are now struggles, or upsets. Eventually, they accept the reality everyone else has already seen: it’s time to exit.

And now we’re seeing that happen in the smartphone market. This isn’t really about sales of iPhones being down year-on-year – though they are, for the second quarter in a row, and though in the previous quarter Apple managed to keep its handset ASP (average selling price – calculated by total handset revenue divided by the number of handsets) up, in this quarter it was substantially down, below $600 for the first time since 2Q 2014.

But more generally, this is the quarter where China really began to muscle into the top ranks of Android OEMs – and all the players who used to be the big names there are inching towards the exit. The problem for the big-name Android OEMs is that, because it’s Android, they’re replaceable. Android on one handset is quite a lot like Android on another. But an Apple device, and its integrated software, is sui generis.

Numbers for all

So here are the numbers showing how that replacement is going. The list below is all in diminishing size of handset shipment volume. Other data sometimes has to be estimated, and in the case of Huawei, OPPO and vivo you’d have to be in one of the big analyst camps to know what their ASPs and hence revenues are, and you might have to be at the companies to know whether they’re profitable.

Standout elements from the quarter: Sony made a profit! (Even as it dwindled.) Lenovo kept shrinking; Apple’s ASP fell; Samsung trundled on; LG made more losses (the G5 flagship essentially sank); Microsoft barely turned up.

Q2 2016: the smartphone scorecard

* denotes estimate: explanations below

Company Handsets
Revenues Handset
% profit/loss
Samsung 77.0 $22.61bn $275.64* $3.75bn $48.66* 16.59%
Apple 40.4 $24.05bn $595.26 $6.71bn* $166.09* 27.9%*
Huawei 32.1 $7.06bn* $220 positive? positive? positive?
OPPO 22.6 $4bn?? $177* positive? positive? positive?
vivo 16.4 $3.7bn?? $225.60* positive? positive? positive?
ZTE 14.7 $2.5bn?? $170* ?? ?? ??
Xiaomi 14.5 $2.28bn* $150 negative? negative? negative?
LG 13.9 $2.88bn $207.52 –$177m –$12.73 –6.15%
11.3 $1.71bn $150.97 –$163m –$14.42 -9.53%
Sony 3.1 (not a misprint) $3.64bn $582.26 $4.03m $1.30 0.11%
HTC 2.3* $0.5bn* $217.39* –$128.50m –$55.87* -25.7%
1.2 (not a misprint either) $0.23bn* $190.80* –$45m* –$38* –19.56%
Everyone else 135.4m

Samsung: 6m tablets sold for $175 ASP at zero profit; 11.4m featurephones sold for $15 ASP at zero profit. (For every $1 fall in featurephone price, smartphone ASPs rise by $0.14 – so with zero featurephones and 6m $175 tablets, smartphone ASP would be $277.84. For tablets, every $5 rise in ASP lowers smartphone ASPs by $0.38 – so if tablets were free and there were no featurephones, smartphone ASPs would be $291.37. It isn’t a huge difference; tablets and featurephones are together generate about $880m, or less than 5% of overall mobile revenues.)

Apple: operating profit calculated at the historic figure of 27.9% (derived from multiple financial analysts). Might have been lower or higher – the 6S range maybe costs more to make than the 6 range, but there’s the SE range which might be cheaper because less retooling needed.

Huawei, OPPO, vivo, ZTE, Xiaomi: ASP figures all estimated, based on their perceived market power

How do I calculate the revenue figures (and hence ASPs) for OPPO, vivo, Xiaomi? According to According to Strategy Analytics,

Global Smartphone Industry revenues declined by -5% YoY in Q2 2016, due to softening of volumes. Apple was followed by Samsung, Huawei, Oppo and vivo from a revenue perspective. The report also captures the Wholesale Average Selling ASP’s for all major vendors across six regions. ASP’s in the quarter declined by -6% globally.

So if Oppo and vivo were bigger than Sony, they must have done more than 3.64bn. (Xiaomi must have been less than them too.) I’m guessing they weren’t that much bigger. For Huawei, which like those two doesn’t release revenue figures, I’ve estimated an ASP (up from the previous quarter) and generated the revenue figure from that.

LG: assume tablet sales were minimal, and had zero profit.

HTC: given that it now sells the Vive headset too, though not in large numbers (certainly not millions), it only takes a small adjustment from the overall revenue.

Microsoft Mobile: Microsoft gave figures for featurephone sales, of 9m; assuming an ASP of $15 for those and gross margin of $5 each (as before) gives the featurephone revenue. Assume the same manufacture cost as before, and you get zero gross margin; even with zero sales/marketing and R+D, you get a negative margin.

Rampant deflation

Everyone’s seeing price declines, which is what you’d expect in a growing market where you also have Moore’s Law and scale coming into play. But this is barely a growth market. Smartphone shipments were up just 0.26% year-on-year. When you look at the trend over the past nine years, we’ve really hit a wall here:

Smartphone growth year-on-year.png

The red line shows the four-quarter moving average, and that’s clearly down. What that suggestion of slowdown doesn’t quite tell is how the market is diverging. The premium end was long ago saturated: people who could buy expensive phones did so, but now there’s no new market to sell into in the developed countries – and consequently the US, China and western Europe are expected to see slowdowns, and even reductions in volume, this year (per IDC). The action, such as it is, will be in emerging markets such as the Middle East, Africa and Latin America – though even they will only see growth of about 5.6%.

In such a world, the companies which initially made Android a Huge Thing are beginning to head for the exit. HTC built the first Android phone. Sony had to go Android (as Sony Ericsson) because it was losing money hand over fist. LG had to figure out how to make smartphones quickly, because its featurephone business was being destroyed.

Now though they’re seeing those be destroyed all over again. You can see the numbers above. And here’s a graph of how pretty much everyone is seeing sales growth compared to the smartphone market turn negative (so if the market grows 10% and they grow 5%, they’re falling behind):

Smartphone OEMs: growth against the overall market

Year-on-year shipment growth measured against the overall market

But I’ve been collecting the revenue and profit/loss numbers too (and publishing them) going back to Q4 2014. That’s seven quarters. What if you add that up?

Seven quarters of hurt

Here’s the lineup when you calculate it over seven quarters:

Seven-quarter smartphone scorecard covering Q4 2014 to Q2 2016 inclusive

(all estimate elements as above)

Company Handsets
Revenues Handset
Total operating
% profit/loss
Samsung 555.4 $158.70bn $285.74 $17.95bn $32.32 11.31%
Apple 401.07 $263.59bn $657.22 $73.62bn* $183.56* 27.92%
Xiaomi 116.92 $18.62bn* $159.25 ? ? ?
LG 102.75 $21.58bn $210.02 –$428.39m –$4.17 –1.98%
121 $17.44bn $144.13 –$1,114m –$9.26 –6.39%
Sony 47.8 $17.13bn $358.37 –$908.33m –19.00 –5.30%
HTC 26.1 $6.45bn* $247.13 –$717.51m –$27.49 –11.12%
41.3 $5.76bn $139.47 –$2,621m –$63.46 –45.50%
(Huawei, OPPO, vivo and ZTE aren’t included because I don’t have figures for them over the period; and there aren’t any financials for any of them.)

This bears out a truth that is borne out again and again by analyst reports into best-selling handsets, brand loyalty, and customer satisfaction: these days it’s a two-horse race, Apple and Samsung.

Xiaomi is an unknown, financially. But all the rest are losing money hand over fist, and as Vlad Savov wrote in a terrific piece entitled “Android OEM death watch: Sony, HTC and LG edition“, you do wonder why they soldier on:

The Android ecosystem has never been more diverse than it is today, but I suspect that what we’re witnessing now is a peak from which the basic economics of a maturing smartphone market will rapidly drag us down. Niche players like Nextbit, Vertu, and BlackBerry might survive thanks to their low volume of sales and correspondingly limited costs. But the big names we’ve known for so long, the Sonys and HTCs of this world, seem fated to fade from view.

I think this is absolutely right. Look at those numbers: why is LG putting up with a division that has lost money, and shows no sign of stopping? Although Sony made money this quarter, it’s fading from view. Lenovo’s ASP is so woefully low that it’s an obvious target for every up-and-coming Chinese OEM. (I was recently contacted by Meizu, which is launching into the Asian market: yet another rival for the uncommitted phone buyer.)

It isn’t even as if these struggling companies have scale: Sony has only sold 12% as many phones as Apple over the period (and 8.6% as many as Samsung, which might be the better comparison); LG has managed a more respectable 18.5% of Samsung’s number, but it’s losing money on them, over seven quarters.

Sure these companies have a lot invested in this business; you can’t just shut down a smartphone business like closing a corner shop. There are contracts, staff, distribution deals. But you can edge out, which is what Sony seems to be doing as its range and distribution shrinks. Will LG follow, or is its rivalry with Samsung in Korea just too strong to let it ever let go?

I’m honestly puzzled by companies which tot up millions in red ink and decide it’s fine to carry on. Microsoft is clearly getting out (who wouldn’t, looking at those margins) but how can Sony or Lenovo look at their returns and feel they’re OK? That’s the puzzle here.

Sure, there’s lots else going on: Apple’s falling ASPs and falling sales point to the saturation of the markets. Equally, the cheap hardware is getting really good – the Shenzhen effect, as volume of production means that the only distinguishing thing is software and, to a lesser extent, chip design ability. (Apple, Samsung and Huawei stand alone here.) I’m certainly impressed by Huawei, which offered a dual-lens camera on the new P9 which has a neat refocus/re-aperture effect, well ahead of Apple.

(Huawei’s problem is it doesn’t have a coherent strategy: it offered “3D Touch” before Apple too – as did ZTE – but hasn’t followed through; only the latest P9 still has it. Will the dual lens offering spread to the rest of its offerings, or fall by the wayside as happened with HTC’s dual system on the M8 in 2014?)

In search of the lost profits

What then happened to all the profits that HTC, Lenovo, and Sony used to earn? Simple: eaten by Samsung, Apple, and Chinese rivals. The growth of companies like OnePlus, Meizu, and of course Huawei, vivo and OPPO and (less so) Xiaomi means the potential for scale falls away from those already in the market.

However it can take a while for these effects to become visible. HTC’s sales peaked in 2011; LG’s, Sony’s and Microsoft’s in the second half of 2014. From around that time, all the Chinese OEMs began growing rapidly, first in their home market, and then India; and in Huawei’s case, Africa, Europe and the US.

Late exit

Apple looks to have peaked in 2015 – but it has a solid ecosystem and so many users that any erosion would take a long, long time. That’s in stark contrast to every Android OEM, which (as even Xiaomi is finding out) is disposable and replaceable.

But it can take a long time. BlackBerry’s handset sales peaked in 2010, and yet it’s still going. (Though will John Chen finally announce the company is getting out of hardware at the quarterly results on September 28? One to watch.) HTC has been ebbing for a while, for example. Sony has begun withdrawing to Asia. LG is being pushed aside in Europe by Huawei.

The only question is when some of the executives at these companies will finally ask why they’re still trying to play a losing hand. There comes a time for the players to leave the game. When is it?

Start up: Theranos’s last days?, Samsung’s water-unproof S7 Active, the Pokemon Go craze, and more

Planning a crewed lunar mission? There’s some code for you on Github! Photo from Nasa Goddard Space Research Centre 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, so no spam.

A selection of 12 links for you. Apply topically. I’m charlesarthur on Twitter. Observations and links welcome.

Theranos dealt sharp blow as Elizabeth Holmes is banned from operating labs • WSJ

John Carreyrou, Michael Siconolfi and Christopher Weaver:

»Silicon Valley startup Theranos Inc. is fighting for its life after regulators decided to revoke its license to operate a lab in California because of unsafe practices and to ban founder Elizabeth Holmes from the blood-testing business for at least two years.

The sanctions were laid out in a letter to Theranos released Friday by the agency that oversees US labs, the Centers for Medicare and Medicaid Services. Theranos said it is still seeking to resolve its issues with the regulator.

One sanction, a monetary fine of $10,000 a day until all deficiencies have been corrected, goes into effect July 12. The most serious sanctions, such as the ban of Ms. Holmes, won’t go into effect for 60 days.

If it fails to reach a settlement with the government, Theranos’s options are limited. Almost any course it takes will dramatically reshape the company that Ms. Holmes founded in 2003 as a Stanford University dropout and grew to a valuation of more than $9 billion in a 2014 fundraising round.


The first version of this that I saw at 0643 BST (0143 EST) Friday had a single byline (Siconolfi’s) and began more tamely: “US federal health regulators dealt a major blow to Theranos by banning founder Elizabeth Holmes from operating a blood-testing laboratory for at least two years and pulling regulatory approval for the company’s California lab.”

Clearly, the addition of two reporters and 18 hours sharpened up the intro (“lede” in the US; first paragraph to everyone else) quite a bit. And gave them time to put a very spooky picture of Holmes at the top.

And Theranos indeed looks cooked.
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DNA sequencing costs plotted over time • National Human Genome Research Institute (NHGRI)


To illustrate the nature of the reductions in DNA sequencing costs, each graph also shows hypothetical data reflecting Moore’s Law, which describes a long-term trend in the computer hardware industry that involves the doubling of ‘compute power’ every two years (See: Moore’s Law []). Technology improvements that ‘keep up’ with Moore’s Law are widely regarded to be doing exceedingly well, making it useful for comparison.

In both graphs, note: (1) the use a logarithmic scale on the Y axis; and (2) the sudden and profound outpacing of Moore’s Law beginning in January 2008. The latter represents the time when the sequencing centers transitioned from Sanger-based (dideoxy chain termination sequencing) to ‘second generation’ (or ‘next-generation’) DNA sequencing technologies. Additional details about these graphs are provided below.

These data, however, do not capture all of the costs associated with the NHGRI Large-Scale Genome Sequencing Program. The sequencing centers perform a number of additional activities whose costs are not appropriate to include when calculating costs for production-oriented DNA sequencing. In other words, NHGRI makes a distinction between ‘production’ activities and ‘non-production’ activities. Production activities are essential to the routine generation of large amounts of quality DNA sequence data that are made available in public databases; the costs associated with production DNA sequencing are summarized here and depicted on the two graphs.


We’re good at sequencing, but less good at understanding what genomes tell us. That hasn’t improved as quickly.
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Samsung Galaxy S7 Active fails Consumer Reports water-resistance test • Consumer Reports

Jerry Bellinson put not one but two successive Galaxy S7 Actives into the equivalent of five feet of water for 30 minutes. They didn’t make it:

»For a couple of days following the test, the screens of both phones would light up when the phones were plugged in, though the displays could not be read. The phones never returned to functionality.

Samsung says it has received “very few complaints” about this issue, and that in all cases, the phones were covered under warranty.

“The Samsung Galaxy S7 active device is one of the most rugged phones to date and is highly resistant to scratches and IP68 certified,” the company said in a written statement. “There may be an off-chance that a defective device is not as watertight as it should be.” The company says it is investigating the issue.

The Active is one of three versions of the Samsung Galaxy S7, and it was the only one to fail our water-immersion test.


Could be two lemons, but that doesn’t speak well to the quality control. Waterproofing seems to be a popular feature with testers, at least, because you can.. test it.
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Teen playing new Pokémon game on phone discovers body in Wind River • County 10

»Shayla [Wiggins] tells County 10 that she woke up this morning and began playing a game on her cell phone called Pokémon Go, an augmented reality game that encourages the user to capture as many Pokémon as possible. “The Pokémon are all over Riverton,” she said. Shayla showed County 10 the game on her cellphone which displayed a map of Riverton where these Pokémon are located.

“I was trying to get a Pokémon from a natural water resource,” she explained. She said that she jumped over the fence to go towards the river in search of a Pokémon.

“I was walking towards the bridge along the shore when I saw something in the water,” Shayla said. “I had to take a second look and I realized it was a body.” She said the figure was floating about three feet from the shore and it looked like an average size male body. She reports that she thinks the man was native, but she can’t be certain. She saw a black shirt and black pants. All of the body was reportedly submerged except for part of his back and butt.


This game is taking people into bizarre situations. There are even reports of people setting up armed robberies (unproven) and using it while on patrol against Isis with Kurdish militias (verified). I’m amazed; Pokemon seems to me so transparently stupid – a set of Top Trump cards – that I’m amazed anyone over the age of 12 indulges in it. And yet…
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A malicious ‘Pokémon Go’ app is installing backdoors on Android devices • Motherboard

Joshua Kopstein:

»wannabe Pokémon masters should take heed: amid high demand for the game as it slowly rolls out across the globe, security researchers have discovered a malicious version of the Pokémon GO app floating around that installs a backdoor on Android phones, allowing hackers to exploit Poké-hype to completely compromise a user’s device.

The security firm Proofpoint discovered the malicious application, or APK, which was infected with DroidJack, a remote access tool (RAT) that compromises Android devices by silently opening a backdoor for hackers. The malicious app was uploaded to an online malware detection repository on July 7, less than 72 hours after Nintendo released the game in Australia and New Zealand.

To install it, a user needs to “side-load” the malicious app by disabling an Android security setting that normally prevents the installation of unverified third-party apps from “unknown sources.”

This is potentially a huge deal, since the game’s slow roll-out to different regions has led some impatient players to download the app from third-party websites instead of waiting for the official release on Android’s Play store, which requires side-loading to install. Proofpoint notes that several major news outlets have even provided instructions on how to find and install the app from a third party.


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Original Apollo 11 Guidance Computer (AGC) source code • Github

Lots of people are cloning it and improving it – just in case they, you know, need to pilot a lunar lander mission.
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We need to talk about AI and access to publicly funded data-sets • TechCrunch

Natasha Lomas with a hugely important analysis:

»DeepMind says it will be publishing “results” of the Moorfields research [on eye disease] in academic literature. But it does not say it will be open sourcing any AI models it is able to train off of the publicly funded data.

Which means that data might well end up fueling the future profits of one of the world’s wealthiest technology companies. Instead of that value remaining in the hands of the public, whose data it is.

And not just that — early access to large amounts of valuable taxpayer-funded data could potentially lock in massive commercial advantage for Google in healthcare. Which is perhaps the single most important sector there is, given it affects everyone on the planet. If you don’t think Google has designed on becoming the world’s medic, why do you think it’s doing things like this?

Google will argue that the potential social benefits of algorithmically improved healthcare outcomes are worth this trade off of giving it advantageous access to the locked medicine cabinet where the really powerful data is kept.

But that detracts from the wider point: if valuable public data-sets can create really powerful benefits, shouldn’t that value remain in public hands?


Yes. Exactly. This is a key point which is being ignored: data is the necessity for Google and the British government is not seeking sufficiently clear repayment for it.
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AI, Apple and Google • Benedict Evans

Quite a long musing on where we are with AI – which typically never quite arrives, because every time it does something smart (understands speech, identifies faces) we say “oh, that’s just computing“:

»A common thread for both Apple and Google, and the apps on their platforms, is that eventually many ‘AI’ techniques will be APIs and development tools across everything, rather like, say, location. 15 years ago geolocating a mobile phone was witchcraft and mobile operators had revenue forecasts for ‘location-based services’. GPS and wifi-lookup made LBS just another API call: ‘where are you?’ became another question that a computer never has to ask you. But though location became just an API – just a database lookup – just another IF statement – the services created with it sit on a spectrum. At one end are things like Foursquare – products that are only possible with real-time location and use it to do magic. Slightly behind are Uber or Lyft – it’s useful for Lyft to know where you are when you call a car, but not essential (it is essential for the drivers’ app, or course). But then there’s something like Instagram, where location is a free nice-to-have – it’s useful to be able to geotag a photo automatically, but not essential and you might not want to anyway. (Conversely, image recognition is going to transform Instagram, though they’ll need a careful taxonomy of different types of coffee in the training data). And finally, there is, say, an airline app, that can ask you what city you’re in when you do a flight search, but really needn’t bother.

In the same way, there will be products that are only possible because of machine learning, whether applied to images or speech or something else entirely (no-one at all looked at location and thought ‘this could change taxis”). There will be services that are enriched by it but could do without, and there will be things where it may not be that relevant at all (that anyone has realised yet). So, Apple offers photo recognition, but also a smarter keyboard and venue suggestions in the calendar app – it’s sprinkled ‘AI’ all over the place, much like location. And, like any computer science tool, there will be techniques that are commodities and techniques that aren’t, yet.


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Exclusive: why Microsoft is betting its future on AI • The Verge

Casey Newton got to meet lots of people at Microsoft who are working on bots and AI:

»I meet with Kirk Koenigsbauer, corporate vice president of marketing for Office. He shows me a range of ways where intelligence is making Office easier to use. In September 2014 Microsoft introduced Delve, a kind of Fitbit for productivity that is included with Office 365. The app analyzes how much time you spend in email and in meetings, and highlights times on your calendar where you have extended periods of time to do more complicated, meaningful work. It tells you what percentage of people you sent an email to actually read it, and how quickly. It will suggest reaching out to colleagues that you haven’t emailed in a while. It even shows you response times for your colleagues, and for yourself.

If your organization lives in Google Apps, as do many big Silicon Valley companies, browsing Delve felt like a revelation. You don’t have to be a numbers nerd to find this kind of information useful. If you’re a manager, Delve can tell you at a glance how much time you’ve spent with each of your employees over the past week. This kind of intelligence isn’t as sexy as a general AI that anticipates your every need — but it’s here today, it works, and it makes Google Apps look like a neglected backwater by comparison.


1) Google Apps pretty much is a neglected backwater
2) would love to know if the statistics gathered by Delve actually have any meaning in the real world, or are just numbers collected because they can be.
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Security Flaw in OS X displays all keychain passwords in plain text • Medium

Brenton Henry:

»This afternoon, a friend learned the hard way that you don’t let an unofficial company take control of your computer to provide “support”. However, it was what I learned that shocked me the most.

There is a method in OS X that will allow any user to export your keychain, without sudo privileges or any system dialogs, to a text file, with the username and passwords displayed in plain text. As of this writing, this method works in at least 10.10 and 10.11.5, and presumably at the least all iterations in between.


I tried his method; I had to click an “Allow” dialog for every single item in my keychain, which wasn’t a trivial number. So this exploit isn’t one to think deeply about. More to the point: what happened to his friend? Was it keychain-related?
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How the Feds use Photoshop to track down paedophiles • Motherboard

Joseph Cox:

»The most innocent clues can crack a case. In 2012, a holiday photo of a woman and child holding freshly caught fish ended up being a key lead in a child pornography investigation.

Found within a cache of illegal, explicit material, the photo would eventually point detectives to a outdoor camping site in Richville, Minnesota, and result in the victims’ rescue, and suspect’s conviction in December 2012.

But first, detectives had to determine where the photo was taken. To do that, they cropped out the fish, sanitized the image, and sent it to Cornell University for identification, Jim Cole, the National Program Manager for Victim Identification at US Immigration and Customs Enforcement (ICE), an agency within the Department of Homeland Security (DHS), recalled to Motherboard in a phone call.

The university determined the species of fish, which was found in a particular region. Investigators then edited the suspect and victim out of the photo, Cole said, and distributed it to advertisers for camping grounds in the area, one of which recognized the location.

When detectives arrived, the same photo was on the wall of the camping office, Cole added.

“It’s all about making the haystack smaller, so we can find the needle,” he said.


A logo on a sweatshirt? A bottle of pills in the background? It can all contribute to cracking the case
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Exclusive: Google is building two Android Wear smartwatches with Google Assistant integration • Android Police

David Ruddock has a strong and detailed rumour:

»The inevitable question with these Google smartwatches is “why?” I’m afraid I don’t have a concrete answer for you. But I can speculate. As Android Wear has evolved, manufacturer interest in it has not skyrocketed as Google likely hoped it would. At best, it appears to be holding steady. Once considered Wear’s strongest partner, LG has announced no new mainstream Wear device since the old Urbane last spring (the LTE is unashamedly niche with limited availability, and was heavily delayed). The number of new Wear OEMs announced lately has been modest, aside from a few niche fashion products that are unlikely to have a major impact on Wear’s distribution.

By building its own smartwatches, Google can implement exactly the hardware and features it believes will best demonstrate Android Wear’s capabilities.


Good luck with that. The OEMs aren’t doing it because they aren’t selling. (Unless they’re selling in China, in which case Google will have trouble too.)
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Errata, corrigenda and ai no corrida: none notified

It’s dark out there: the Q1 2016 smartphone scorecard

It’s all a bit murky in the smartphone market right now. Photo by Moyan_Brenn on Flickr.

The arrival of 2016, and the dramatic slowdown in the smartphone market in the US and China, is putting brand new pressures on the bigger players, though more noticeably on the smaller ones.

Inasmuch as nobody who isn’t Samsung, Apple or (I think) Huawei is making money at scale from smartphones. All of the “small big” players such as LG, Sony, Lenovo/Motorola, HTC, and – I’m fairly certain – Xiaomi are losing money. Of the first four named above, their collective loss on smartphones in Q1 2016 was $850m (all prices are given in US$ throughout); and for Xiaomi, which sold fewer than in the same period in 2015, at an ASP (average selling price) below everyone else including Lenovo/Motorola, it’s hard to see that it could have scraped a profit.

Not only that, but Apple finally came under pressure: both its smartphone shipments fell (despite a fair bit of inventory stuffing) and so did its ASP, from over $690 in the fourth quarter to just over $640 in this one, the lowest value since it introduced the larger-screened 6 series phones in September 2014.

Samsung meanwhile sailed along, pushing almost as many phones out of the door and seeing only mild erosion year-on-year of ASPs. Notably, Samsung’s profits were their highest since the second quarter of 2014 – helped, surely, by the decision to push the Galaxy S6 flagship out before the quarter ended.

So first the numbers.

Q1 2016: the smartphone scorecard

* denotes estimate: explanations below

Company Handsets
Revenues Handset
Samsung 81.9 $24.25bn $242.48* $3.5bn $42.75*
Apple 51.2 $32.86bn $641.83 $9.17bn* $179.06*
Huawei 27.5 $5.72bn $208 positive? positive?
LG 13.5 $2.67bn $197.57 –$224.64m –$16.64
Lenovo/Motorola 11 $1.74bn $159.36 –$105m –$9.55
Sony 3.4 $3.64bn $473.32 –$372.2m –$109.47
HTC 2.5* $0.46bn $182.80* –$148m –$59.20*
2.3 $0.50bn* $217.20* –$154m* –$67*

Samsung: featurephones (estimated 18.1m of them) sold for $15, made a profit of $0 each. If their ASP is higher, the ASP of the smartphones is lower; if their profit is higher, the per-handset profit for smartphones is lower. For tablets, the assumption is the 6m shipped had an ASP of $200, and show zero profit. If they sell for a higher price, phone ASPs are lower; if they make a profit, per-handset profit is lower.

Apple: profit margin per handset of 28%. This is a longstanding historical figure worked by analysts better at this stuff than me. It will actually vary by quarter, depending on phone mix, how new the phones are, and storage (more storage = better profit margin). But this is a usable rule of thumb.

LG: sells no appreciable number of tablets, and doesn’t make a profit or loss on them. (In Q1 2015 it shipped 1.4m tablets, which didn’t have an appreciable effect on anything.)

HTC: shipments had to be estimated based on its (woeful) revenues. I’ve said previously that I don’t think HTC will ever make a profit again in smartphones, and nothing I’m seeing makes me feel I was wrong.

Microsoft Mobile: featurephones (15.7m of them) had an ASP of $15, and made zero profit. Lower featurephone ASP would mean higher smartphone ASP. Any profit would mean more losses for smartphone handsets. Lots has to be assumed about Microsoft’s handset business, including gross margin (I assumed $50m on its $500m smartphone sales – possibly generous), and R+D costs and sales/general/administrative costs (assumed $50m and $75m respectively). The numbers still don’t work in its favour, even though a year ago those figures were over $500m together.

There’s one other notable Microsoft comment in its 10-Q: “Patent licensing revenue decreased 26%, due to a decline in licensed units and license revenue per unit.” That would be Android handsets paying a licence. Whether that’s due to Huawei rising and not having a patent deal isn’t clear. But it’s one to watch.

Discussion: gravitational pull

The takeaways from this only become clear once you look at the longer-term trends. Android OEMs losing money isn’t new, though Lenovo’s continuing inability to turn Motorola into a money-making (or “not money-losing”) proposition suggests that some things are eternal.

To do that, we have to graph what has happened since 4Q 2015 (the first quarter for which I began collecting this data.)

First though, the handset landscape – as in, how many handsets do these people shift? Best seen in graphical form, so you can get an idea of who’s rising, or falling, or what-the-helling.

Screenshot 2016 06 24 14 56 28

For phone ASPs, I’ll introduce a new measure – the “blended Android ASP”, which is the weighted average ASP, found by taking the available revenues for Android OEMs, and dividing by the total number of handsets shipped by those OEMs. Samsung tends to weigh heavily on this. I’ve included Xiaomi by assuming its ASP was $160 during 2015, falling to $157 in Q1, based on information from analysts. For Huawei, there’s no data except for Q1, when its ASP was $208.

Phone ASPs:

Screenshot 2016 06 24 14 31 15

This can be a little difficult to read, but you can see clear trends: Sony is the only company which is consistently raising its ASP. Even Apple is seeing a trend where it falls, while Microsoft in the past couple of quarters has done that. But for both, that has come at the cost of, well, profit.

Let’s see if when you compare the ASPs to the “blended” Android ASP, so you get an idea of how the prices change relative to the known ASPs. (This is not the ASP for all Android phones all over the world – for that you’d have to pay $$$$ for an analyst report from IDC or Gartner.)

Screenshot 2016 06 24 14 17 53

ASPs first: what’s pretty clear (and expected) is how far above the crowd Apple is; how Samsung’s figures tend to dominate the sector; how Sony’s are climbing; and how Xiaomi and Lenovo/Motorola are well below the crowd.

Sony has a strategy of raising ASPs in order to find profit somewhere, somehow, up there. Trouble is, it keeps not managing to. Microsoft ditto (perhaps). The problem they both have is that they’re selling fewer handsets over time, which makes profit harder to achieve because your fixed costs (overheads such as staff, administration, buildings etc) don’t shrink in the same way.

I’ve assumed that Xiaomi’s ASP was $160 throughout 2015; the figure for the first quarter of this year comes from IDC. That $160 figure makes sense: in June 2014, Bruce Einhorn at Bloomberg was comparing Huawei and Xiaomi (in a piece that seems prescient now) about Huawei’s insistence that it could be China’s top smartphone brand, and noted that

Huawei may not be able to compete with Xiaomi’s razzle-dazzle, but the Shenzhen-based Huawei has made big strides of its own in building its brand and making cool handsets. Last year it launched the Ascend PG, which Huawei said was the world’s slimmest smartphone, with a depth of just 0.24 inch (6.18 millimeters). In the first quarter of 2014, Huawei shipped 13.5 million smartphones, compared with Xiaomi’s 10 million, according to Bloomberg Industries. At $155.30, the average selling price for Huawei’s phones is slightly less than Xiaomi’s $159.60. And like Xiaomi, Huawei now sells most of its phones under its own brand. Three years ago, most of the handsets Huawei sold carried operators’ brands, with only 30% using Huawei’s own brand. Today, 95% of Huawei phones use the Huawei brand.

Note that Xiaomi’s ASP hasn’t shifted in those 18 months; by contrast, Huawei’s has rocketed, from that $155 to $208 now (according to IDC).

Profit: still mostly missing in action

For profit, the picture – unless you’re Apple or Samsung – remains unrelentingly grim. Although we don’t know how it looks for Huawei and Xiaomi.

For Huawei, its only known ASP (that I have; if anyone from IDC/Gartner wants to send more details, please do) is at a level where at best you’re breaking even. Given the colossal volume Huawei has managed in smartphones – it’s now the third biggest – it could have hit the economies of scale necessary to go past breakeven.

Xiaomi, meanwhile, is venture-funded, and selling at a very low ASP, and has seen sales go into reverse in the first quarter compared to the previous year. ASPs have followed. Even if you think that its model of selling online is clever, it’s hard to see that it would be making a profit. But we don’t know.

In the end: it looks dark

Looking at the handset shipment graphic, one would have to say that HTC, Sony and Microsoft are all heading towards the exit. They’re bigger than a lot of small players out there (OnePlus, Micromax, etc) but they’re trying to play on a global scale, and that’s very expensive. Even Lenovo, which is discarding Motorola parts as fast as it can, struggled in its home market of China and is now casting around for other places to sell.

LG seems to want to be in the game, but Xiaomi is challenging it, and Huawei has already overtaken it. All that is saving it is the fact that the smartphone business is part of a conglomerate that also makes air conditioners, washing machines, TVs and so on.

The really interesting one is Apple. Its ASP finally dropped – and by quite a bit. Its shipments fell – and again, by quite a bit (it only got where it is by stuffing the channel). Its per-handset profit dropped, in line with the ASP.

The question that keeps being asked is: how long can Apple stay above the fray? But the answer comes back, again and again: probably a lot longer than others can stay in the game.

Would you fund this?

If you were shown those graphics and asked who you’d like to be backing, it probably wouldn’t be Xiaomi; you’d want to be up there with Apple and Samsung, where the money is good and prices are high. But building a premium brand is the sort of thing that you wanted to start doing 30 years ago (at least).

I’ll admit I’m puzzled by the determination with which companies like Sony and LG and HTC stick to the smartphone business. If you’re losing money regularly, why do it? Perhaps it’s a fear of what comes afterwards – of the void beyond. Even BlackBerry is refusing to get out of the handset business, even though it barely generates gross margin on each handset (that is, hardly covers the costs of the actual device, never mind the sales/distribution/research process that gets it to someone).

Here in the UK we’re about to find out what #Brexit means; a leap into the void beyond. Maybe some smartphone makers are similarly worried about what happens if they stop making phones. Or it’s just too expensive to wind it all up, and safer to take small acceptable losses rather than big company-defining ones. (It’s the same approach that has seen once-big names in the PC business such as Toshiba simply rein in their distribution and manufacturing there.)

So maybe this is how the smartphone business ends for the companies which aren’t Apple and Samsung but which were early into the business: not with a bang, but a whimper.

Start up: how to properly break the internet, the premium phone boomlet, emoji variation, and more

Crumbling bridge

Upkeep of infrastructure probably matters more than inventing new things once you reach a certain level of complexity. Photo by BluePrince Architecture 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, so no spam.

A selection of 10 links for you. Use them wisely. I’m charlesarthur on Twitter. Observations and links welcome.

Internet mapping turned a remote farm into a digital hell » Fusion

Terrific work by Kashmir Hill:

»As any geography nerd knows, the precise center of the United States is in northern Kansas, near the Nebraska border. Technically, the latitudinal and longitudinal coordinates of the center spot are 39°50′N 98°35′W. In digital maps, that number is an ugly one: 39.8333333,-98.585522. So back in 2002, when [IP mapping company] MaxMind was first choosing the default point on its digital map for the center of the U.S., it decided to clean up the measurements and go with a simpler, nearby latitude and longitude: 38°N 97°W or 38.0000,-97.0000.

As a result, for the last 14 years, every time MaxMind’s database has been queried about the location of an IP address in the United States it can’t identify, it has spit out the default location of a spot two hours away from the geographic center of the country. This happens a lot: 5,000 companies rely on MaxMind’s IP mapping information, and in all, there are now over 600 million IP addresses associated with that default coordinate. If any of those IP addresses are used by a scammer, or a computer thief, or a suicidal person contacting a help line, MaxMind’s database places them at the same spot: 38.0000,-97.0000.

Which happens to be in the front yard of Joyce Taylor’s house.

“The first call I got was [in 2011] from Connecticut,” Taylor told me by phone this week. “It was a man who was furious because his business internet was overwhelmed with emails. His customers couldn’t use their email. He said it was the fault of the address at the farm. That’s when I became aware that something was going on.”


Something indeed was going on. MaxMind says it’s the fault of the users of its database.
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How one programmer broke the internet by deleting a tiny piece of code » Quartz

Keith Collins:

»A man in Oakland, California, disrupted web development around the world last week by deleting 11 lines of code.

The story of how 28-year-old Azer Koçulu briefly broke the internet shows how writing software for the web has become dependent on a patchwork of code that itself relies on the benevolence of fellow programmers. When that system breaks down, as it did last week, the consequences can be vast and unpredictable.

“I think I have the right of deleting all my stuff,” Koçulu wrote on March 20 in an email that was later made public.

And then he did it.

Koçulu had been publishing code he wrote to npm, a popular service that’s widely used to find and install open-source software written in JavaScript. It has become an essential tool in web development, invoked billions of times a month, thanks to npm’s ease of use and its enormous library of free code packages contributed by the open-source community.


Increasingly, very large structures are built on very small foundations whose solidity can’t be taken for granted. Talking of which…
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Innovation is overvalued. Maintenance often matters more » Aeon Essays

Lee Vinsel and Andrew Russell, who are professors at the Stevens Institute of Technology in New Jersey:

»First, it is crucial to understand that technology is not innovation. Innovation is only a small piece of what happens with technology. This preoccupation with novelty is unfortunate because it fails to account for technologies in widespread use, and it obscures how many of the things around us are quite old. In his book, Shock of the Old (2007), the historian David Edgerton examines technology-in-use. He finds that common objects, like the electric fan and many parts of the automobile, have been virtually unchanged for a century or more. When we take this broader perspective, we can tell different stories with drastically different geographical, chronological, and sociological emphases. The stalest innovation stories focus on well-to-do white guys sitting in garages in a small region of California, but human beings in the Global South live with technologies too. Which ones? Where do they come from? How are they produced, used, repaired? Yes, novel objects preoccupy the privileged, and can generate huge profits. But the most remarkable tales of cunning, effort, and care that people direct toward technologies exist far beyond the same old anecdotes about invention and innovation.


Terrific and thought-provoking essay: in the light of smart home systems being turned off within 18 months of being released, what price maintenance?
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Premium smartphones are booming » Bloomberg Gadfly

Tim Culpan:

»Exhibit A in the case for the high end is Huawei. A strong push for models such as the P8 meant that the average price of the Chinese company’s phones climbed 17% last year, according to IDC. Unit shipments jumped 45%, with the premium segment accounting for a significantly larger proportion of the total.

Apple’s average selling price rose more than 7% in calendar 2015, according to IDC data, with its shipment volume increasing 20%. The other major player to see gains from selling more-expensive phones was ZTE, with a 5.8% markup in price and a 20% jump in volumes. According to Counterpoint Research, the highest tier widened its share of total volume. So too did the bottom end, while the center got squeezed.

Given the gain for the cheapest models, it would be wrong to write off price cuts as a marketing strategy. Still, the price-demand dynamics for smartphones suggest that higher volumes driven by discounts may not translate to increased revenue (and will certainly squeeze profit per device). Whether you’re a Beijing-based startup or a Cupertino-based behemoth, the end-goal ought to be boosting sales and not market share.

The experience last year of Apple, Huawei and ZTE suggests that smartphones may in fact be a Giffen good – a product for which demand increases as prices rise.


Culpan also says that Samsung has seen a tripled demand for the S7 over the figures for the S6 last year, but I think that’s an error – Counterpoint says it’s up about 30%. What also isn’t revealed is what Huawei’s and ZTE’s ASPs were in 2014 or 2015. They might be up, but are they premium? Or is that effect principally from Apple’s bigger, pricier sales?

It’s certainly counterintuitive if premium really is booming. The graphic accompanying the article suggests it is, but it could just be Apple doing better while the rest sink.

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New and improved “block user” feature in your inbox. : announcements » Reddit

»Believe it or not, we’ve actually had a “block user” feature in a basic form for quite a while, though over time its utility focused to apply to only private messages. We’ve recently updated its behavior to apply more broadly: you can now block users that reply to you in comment replies as well. Simply click the “Block User” button while viewing the reply in your inbox. From that point on, the profile of the blocked user, along with all their comments, posts, and messages, will then be completely removed from your view. You will no longer be alerted if they message you further. As before, the block is completely silent to the blocked user. Blocks can be viewed or removed on your preferences page here.


It’s a start (and also reinforces my hypothesis that all commenting systems evolve towards the functionality that Usenet already offered in 1996). But it doesn’t stop Reddit being something of a cesspit in other regards, as this New York Times article points out. (Though Usenet was like that too.)
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Investigating the potential for miscommunication using emoji | GroupLens

»To your smartphone, an emoji is just like any other character (e.g., lower-case ‘a’, upper-case ‘B’) and needs to be rendered with a font. Since each smartphone platform (e.g., Apple, Google) has its own emoji font, the same emoji character can look quite different on different smartphone platforms. This is why when a Google Nexus owner sends [smiley emoji]  to a friend with an iPhone, the iPhone owner will actually see [slightly different smiley emoji] . This problem isn’t just limited to iPhones and Nexuses; check out all the different renderings of the single emoji character we’ve been discussing:


Read the full paper. May include emoji. (I always thought the Apple version of this one was a sort of “forced rictus grin of embarrassment”, so apologies to anyone who saw me use it and thought I was trying to transmit hilarity.)

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How can we trust Google when it lets ads call the shots? » The Guardian

Kenny Jacobs, who is chief marketing officer of Ryanair:

»A friend of mine recently went on a first date and wanted to make a good impression. Having heard about a very reliable French place in central London that might be a romantic venue, he Googled it. At the top of the results page he found the restaurant’s website, clicked through to see pictures of happy looking couples, browsed the sample menu and used a booking form to reserve a table for two.

Date night came and when the taxi arrived at the address, the cabbie asked him which restaurant he was looking for: the one that had been there for years, or the new place across the road? Being sure he’d booked the original, the pair went into the restaurant, only to be told they had no reservation, and that they should have booked by phone.


Jacobs (and Ryanair) still hate eDreams, which buys AdWords ads against Ryanair searches and then leads those who click through to a site that looks suspiciously like Ryanair’s – except that it charges extra.

Should Ryanair sue eDreams? It already is doing. The problem is that by putting AdWords ads above organic search results, rather than to the side, Google encourages users to click the adverts. That’s in its own interests, but not all users can perceive the difference, which is then to the users’ disadvantage. Shouldn’t the user advantage win in that case? Online ads aren’t necessarily so easy to spot as on TV (where they’re not necessarily easy to spot either).
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This dude’s fitness tracker may have just saved his life » Gizmodo

George Dvorsky:

»A 42-year-old man from New Jersey recently showed up in an emergency ward following a seizure. After looking at the data collected by his Fitbit Charge HR, the doctors decided to reset his heart rate with an electrical cardioversion. It’s the first time in history that a fitness tracker was used in this way.


Won’t be the last, though. Full text in the Annals of Emergency Medicine.
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RUN and RUN / lyrical school 【MV for Smartphone】 on Vimeo

RUN and RUN / lyrical school 【MV for Smartphone】 from RUNandRUN_lyrisch on Vimeo.

This music video has been going quietly viral in the west; it shows what an imaginative director can do by thinking about how a generation encounters music videos now – through the phone, not the TV. (You might want to watch it with the sound turned down low.)
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Birds measure magnetic fields using long-lived quantum coherence »

Michael Allen:

»Long-lived spin coherence in proteins found in the eyes of migratory birds could explain how the creatures are able to navigate along the Earth’s magnetic field with extraordinary precision. This is the finding of researchers in the UK and Germany, who have created a new realistic model of cryptochrome proteins that is based on advanced simulations of nuclear and electron spins. The team also provides an explanation for how the avian magnetic compass has been optimized by evolution.


“Spin coherence” is the tight quantum pairing of electron spins. That birds have evolved the ability to lengthen it, and then harness it to navigate makes evolution all the more amazing. If you read it in a science fiction plotline you’d think they were overreaching a bit.
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Errata, corrigenda and ai no corrida: none specified.

Start up: the chat bots are here!, what Windows Phone?, Spotify’s IPO debt sprint, fixing iOS 9.3, and more

Compaq’s engineers (in Houston, Texas) discovered they needed a new strategy when low-cost rivals arrived in force. Photo by lungstruck 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, so no spam.

A selection of 13 links for you. Use them wisely. I’m charlesarthur on Twitter. Observations and links welcome.

Land Registry: sell it off or open it up? » Shared Assets

»At Shared Assets we believe that privatisation is the wrong approach and is inconsistent with the Government’s stated commitment to ‘open data’. The Land Registry is currently fit for purpose, generates a surplus, and is trusted to fulfil its role underpinning over £4tn worth of property ownership across England and Wales. The Government is selling off a critical, well functioning, national statutory service that we are all obliged to use, primarily to raise funds.

We believe the potential impacts of creating a private sector monopoly on transparency and access to this critical data set are unacceptable, and that a more imaginative, and beneficial, approach would be to open up public land registry data for the common good.


I wrote on this topic too.
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Microsoft: Windows Phone isn’t our focus this year » The Verge

Tom Warren:

»A single demo of Skype running on a Windows Phone was the only time a phone running Windows 10 Mobile appeared for longer than a few seconds, and it felt like Microsoft was more focused on Windows 10 for Xbox and HoloLens. I got the chance to speak to Windows chief Terry Myerson briefly after today’s keynote, and it’s clear Microsoft focus isn’t on phones this year.

“We’re fully committed to that 4-inch screen, there will be a time for it to be our focus, but right now it’s part of the family but it’s not the core of where I hope to generate developer interest over the next year,” explains Myerson. “There’s no lack of recognition to realize how important that form factor is, but for Microsoft with Windows and for our platform it’s the wrong place for us to lead.”


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The day everything changed at Compaq » LinkedIn

Sean Burke was there as a product manager in September 1991, and saw that Compaq – which was expecting hardware gross margins of 40% – was getting walloped by IBM at the high price end and by Dell and others at the low-cost end. So he told Ben Rosen, the chairman, of his plan for a low-cost PC:

»I told Ben that it was absolutely possible for Compaq to create products that were low cost.  I mentioned that I already started working on a next generation low cost product concept, but it was not yet approved – either as an actual project or as a project that I would be assigned to.  He was interested and asked me to confidentially work on it and update him on the status.  He also told me, surprisingly, not to tell anyone about the project, including my management, but to just report back to him.

Obviously, a Product Marketing person can’t develop a product alone so I did what came natural and got the best engineering manager I could trust and rely on technically.   I had been working for the last year and a half with Jon Thompson, the Engineering Program Manager for the DESKPRO/M, and in the process we became good friends.  We began to work on this new project after normal business hours and weekends by contacting suppliers and other technology companies.  We created a story to tell these suppliers that we were going to leave Compaq and start our own PC Company.  It was amazing how many suppliers approached us and offered help.  The extent of the ideas and the pricing they offered us was even more amazing.


The internal politics turns out to be even more amazing, and Burke the naif used as a pawn. Recommended.
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Spotify raises $1bn in debt financing » WSJ

Scoop by Douglas Macmilland, Matt Jarzemsky and Maureen Farrell:

»By raising debt instead of equity, Spotify adds to its war chest without the possibility of setting a lower price for its stock, which can sap momentum and hamper recruiting.

In June 2015, Spotify was valued at $8.5bn.

In return for the financing, Spotify promised its new investors strict guarantees tied to an IPO. If Spotify holds a public offering in the next year, TPG and Dragoneer will be able to convert the debt into equity at a 20% discount to the share price of the public offering, according to two people briefed on the deal. After a year, that discount increases by 2.5 percentage points every six months, the people said.

Spotify also agreed to pay annual interest on the debt that starts at 5% and increases by 1 percentage point every six months until the company goes public, or until it hits 10%, the people said. This interest—also called a “coupon” and in this case paid in the form of additional debt, rather than cash—is commonly used in private-equity deals but rarely seen in venture funding.

In addition, TPG and Dragoneer are permitted to cash out their shares as soon as 90 days after an IPO, instead of the 180-day period “lockup” employees and other shareholders are forced to wait before selling shares, the people said.


Debt like this is dangerous. First, it can be recalled – which kills a company. Second, as here, it comes with many strings, principally financial. In the first year, Spotify will have to pay out $25m (first six months, 5% of $1bn) + $30m (6%) = $55m.

In the second year, $35m (7%) + $40m (8%) = $75m. In the third year, $95m, and after that, $100m per year. It had $600m cash before this debt, so that’s $1.6bn in cash reserves; it can pay out for a while, but the real damage is to its profitability. It isn’t making money now (as far as anyone knows) and this will put that further out of reach. I think it’s safe to say that with this debt deal, Spotify can never make an operating profit if the debt payment is included.

This therefore is a financing deal aimed at getting Spotify over the IPO finish line as soon as possible so it can get a giant cash injection. Then its future losses become the public shareholders’ problem, rather than those of the venture capitalists or music labels that have funded it so far.
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Amazon, Alibaba and an Indian Illusion » Bloomberg Gadfly

Andy Mukherjee:

»How can opening the door mean the exact opposite? The devil is in details of the policy, which says e-commerce platforms will only provide a marketplace and not influence the sale price of merchandise. In other words, while foreigners can facilitate retail, they will not really be retailers, burning their deep-pocketed investors’ money to drive myriad mom-and-pop stores out of business.Goldman Sachs believes the rules “could spell an end” to discount-led competition among e-tailers. While that might be a welcome path to eventual profitability for an industry surviving on bragging rights about how much merchandise it handles, what’s good for the collective may be bad news for individual companies. Late last year, the lobby group of traditional Indian retailers kicked up a fuss when Amazon gave out measly 200 rupee ($3) gift cards to consumers, because this purportedly showed Amazon acting as a retailer when it was only allowed to be a technology platform.If the new rules do nothing but extend the “essential continuity” of the old rules, that might please Sir Humphrey — but Jeff Bezos is certainly going to mind.


Seems that the new regulations will bring online retailing to heel in India. Not good – but smartphones will probably provide a way around it.
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Clippy’s back: the future of Microsoft is chatbots » Bloomberg BusinessWeek

Dina Bass:

»Whether you think bots are exciting or alarming, a lot of people are already using them. Microsoft’s Chinese version of Tay, called Xiaoice, has been available for 18 months and has 40 million users. Conversations with Xiaoice (pronounced shao-ice) average about 23 exchanges per session. Few users chat that long with Siri. Facebook is working on an assistant named M and already has bots operating on its Messenger app that let users book a haircut or send flowers. The Wall Street Journal reported in December that Google is working on a bot-based app that will answer users’ questions. Amazon has its best-reviewed product in years in the Echo, a voice-controlled black cylinder that sits in customers’ kitchens and performs a fast-growing list of tasks—it can look up recipes, order groceries, turn on the news, play songs, and read e-books aloud. Slack, the corporate messaging service, has bots that can manage your expenses and order the office beer.

On March 30, at Microsoft’s annual Build conference for software developers in San Francisco, Nadella will try to undo the damage from Tay and unveil his vision, which he calls “conversation as a platform.” Microsoft will show off several different bots and programs that manage tasks via discussion. Some you’ll be able to text with, like Tay; others are just concepts cooked up for the show to spark developers’ imaginations.


The question is whether, as with Tay, the corpus (that it learns from) is already poisoned. Humans learn not to do certain things in social situations; Tay and its brethren are being thrown into situations where learning is almost impossible because the barriers between good and bad behaviour are surprisingly narrow. “Hitler could have done a better job” can be said ironically, or flatly; its meaning to the listener depends on a lot of pre-knowledge.
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MOTOBOT ver.1|Tokyo Motor Show 2015 – Event YAMAHA MOTOR CO., LTD.

»What makes the MOTOBOT project unique is its approach to completely automated operation. Unlike the current methods used for automobile self-driving systems, which have progressed in recent years, the aim is for a humanoid robot to operate a vehicle unmodified for autonomous use. Based on data for vehicle speed, engine rpm, machine attitude, etc., MOTOBOT will control its six actuators* to autonomously operate the vehicle. Going forward, technology for machine position recognition (high-precision GPS, various sensors, etc.) and machine learning will be utilized to enable MOTOBOT to make its own decisions regarding the best lines to take around a racetrack and the limits of the motorcycle’s performance, so that it can improve its lap times with successive laps of the track.


First they came to conquer the chess players, but I didn’t play chess. Then they came to conquer the Go players, but I’d never heard of Go. Then they said they were going to beat the motorbike riders… by 2020.. which is only four years away.
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Google also has been ordered to help unlock phones, records show » WSJ

Devlin Barrett:

»Google has been repeatedly ordered to help federal agents open cellphones, according to court records in seven states that show Apple Inc. isn’t the only company facing government demands at the center of a fierce debate over privacy and security.

The American Civil Liberties Union found 63 instances where the government sought a court order under a 1789 law called the All Writs Act to compel Apple and Google to help them access data on locked phones.

The outcome of those cases aren’t clear. However, federal prosecutors have said until late last year, when Apple began resisting such efforts, it was routine for judges to approve such requests from federal prosecutors. And those requests aren’t a new phenomenon—the cases stretch back to 2008.

A Google spokesman said: “…we’ve never received an All Writs Act order like the one Apple recently fought that demands we build new tools that actively compromise our products’ security…. We would strongly object to such an order.”


This isn’t surprising – neither Google’s cooperation (Apple cooperated too where it could) nor the fact that the AWA hasn’t been needed; the number of Android phones out there with full disk encryption enabled must be tiny compared to the number of iPhones.
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How to fix iOS 9.3’s broken Safari, Mail and Messages links » Ben Collier

»If you’ve been hit by the iOS 9.3 broken links you can follow these steps to fix the issue whilst we wait for a full update from Apple. Unfortunately you’ll need to hook your iPhone or iPad up to your computer and sync with iTunes.


It’s a 13-step process, which is only one more than you need to make your way back from alcoholism. So far it’s only, but I feel sure that malware will try to exploit this in future.
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In snub to Google, AT&T looks to sell alternative Android phone » The Information

Amir Efrati on AT&T’s plan to sell a Cyanogen-based phone:

»Cyanogen wants to let any phone maker, wireless carrier or app developer integrate their services more deeply with its alternative form of Android, in ways that they can’t do with the official Google version. Microsoft, for instance, is integrating Skype, its Internet calling service, and Cortana, its virtual assistant, into Cyanogen. The end result is that people will be able access and interact with their Skype contacts directly from the phone’s built-in dialer app, and they will be able to summon apps like Spotify by speaking to Cortana. Such scenarios are not available on Google’s version of Android.

While Cyanogen can control many aspects of devices it powers, they all come preloaded with Google services like search, the Google Play app store and Google Maps (because Cyanogen knows that consumers need them). In exchange for having those Google services, the devices must comport with certain Google rules, such as displaying those apps prominently on the home screen. For its part, Cyanogen is able send messages to phone users to help them customize the devices so that integrations with non-Google apps will be more prominently displayed on, say, the home screen, instead of Google’s apps.


So, basically, it’s Just Another Skinned Google Android Phone. Ron Amadeo has a succinct two-paragraph rant on the oversell of Cyanogen.
link to this extract


Facebook’s Messenger lands first airline as chat app pushes into commerce » USA Today

Jessica Guynn:

» KLM Royal Dutch Airlines passengers will soon be able to check in, get flight updates, make travel changes and talk to customer service reps straight from Facebook’s Messenger chat app.

KLM is the first airline and the first major European partner for Messenger, which is used by 800 million people around the globe.

Facebook sees customer service as a natural extension of chat apps which were built for, well, chatting. The giant social network launched Messenger for Business one year ago to pursue “conversational commerce,” the notion that we will all soon be talking to — and eventually transacting with — businesses over messaging apps.

Since then, businesses in a growing number of industries have tried out the service to chat with customers, among them hotel chain Hyatt and retailers Walmart and Everlane. In a hint of the kind of commercial transactions to come, users of Uber and Lyft can hail a ride by tapping a new transportation option inside Messenger and share the details with friends.


The app becomes the platform..
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With Galaxy S7, Samsung seen rediscovering its mobile mojo | Reuters

Se Yong Lee:

»several brokerages on Wednesday upgraded first-quarter forecasts for what is still the world’s top smartphone maker, citing a strong start for the Galaxy S7 and S7 edge premium phones that were launched earlier this month.

Samsung likely shipped 9.5m S7 phones in the first quarter, significantly more than the initial estimate for 7m, Jay Yoo, industry analyst at Korea Investment & Securities, wrote in a report.

“It looks like the sell-in numbers have been pretty good and analysts are raising their sales forecasts for the S7 this year,” noted HDC Asset Management fund manager Park Jung-hoon.

“The firm is pushing up volume in the mid-to-low tier to protect market share. Starting S7 sales about a month earlier than the S6 to take advantage of Apple not having new products out yet was also a good move.”


link to this extract


Among iPhone launches, the SE is indeed Small Edition – but it’s bringing new consumers to iPhone » Slice Intelligence

»Early data from Slice Intelligence indicates that the SE may help Apple grow its maturing iPhone consumer base. Only 35% of iPhone SE buyers purchased an iPhone online in the past two years, and 16% of them were previously Android users. By comparison, 49% of iPhone 6S buyers upgraded from a previous iPhone, and 10% replaced an Android device they bought online within the past two years.

Buyers of the SE look much different than the Apple fanboy audience typically queuing up to buy the latest from Cupertino. They’re older, less educated, and surprisingly, more male. More than one fifth of SE buyers are in the 45-54 age demographic, versus 18% for all iPhone buyers; and 77% of SE buyers are men, versus 69%.


Conversation inside Apple HQ: Analyst 1: “Huh? Male, aged 45-54? Less educated?”

Analyst 2: “OH DEAR GOD. We’ve invented the TRUMP PHONE.”
link to this extract


Errata, corrigenda and ai no corrida: none notified.

Start up: Nest’s cuckoo, TayAI gets shut up, Pebble cuts staff, how mobile games rely on whales, and more


Cat parasites could make humans aggressive and clumsy. Honest. Photo by chaosphoenx 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, so no spam.

A selection of 11 links for you. Use them wisely. I’m charlesarthur on Twitter. Observations and links welcome.

Inside Tony Fadell’s struggle to build Nest » The Information

Reed Albergotti on the wrangling between Nest and Dropcam, which Google bought for $555m and then folded into Nest:

»In one meeting, [Dropcam co-founder Greg] Duffy witnessed [Nest founder Tony] Fadell berate a former Google engineer who was working on computer vision for the Nest Cam. The engineer began to explain the challenges in deciphering the different types of movement that might be captured by cameras.

In front of about 20 other people, Mr. Fadell blew up at the employee for getting off topic, Mr. Duffy recalled. Mr. Fadell told the employee to pull the algorithm from Photoshop, according to Mr. Duffy. He went on to question what the engineer had accomplished and to declare results had to be forthcoming or there would be trouble, Mr. Duffy recalled.

In Mr. Duffy’s view, Mr. Fadell’s Photoshop suggestion demonstrated that Mr. Fadell didn’t understand the technology he was trying to build and that the engineers working underneath Mr. Fadell didn’t feel empowered to forcefully push back when Mr. Fadell was wrong.

Through a spokeswoman, Mr. Fadell said he told the engineer to look at Photoshop, which offered a tool similar to what Nest was trying to accomplish, in order to learn how to implement the technology.

More than half of the 100 Dropcam employees hired by Nest have now left. In an interview with The Information, Mr. Fadell blamed the Dropcam team for the problems with the acquisition. “A lot of the employees were not as good as we hoped,” he said. It was “a very small team and unfortunately it wasn’t a very experienced team.”


Dropcam has run into the sand inside Nest, essentially.
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France fines Google over ‘right to be forgotten’ » WSJ

Sam Schechner:

»France’s data-protection regulator has slapped a fine on Alphabet Inc.’s Google for not implementing Europe’s “right to be forgotten” globally, rejecting a compromise offered by the search firm and setting up a court battle over the scope of the divisive rule.

France’s Commission Nationale de l’Informatique et des Libertes, or CNIL, said Thursday that the search engine had violated a formal order last year ordering it to apply the new right to be forgotten to “all domain names” of the search engine, including, and fined the company €100,000 ($112,000).

As part of its decision, the regulator rejected a compromise offered by Google, in which it would apply the rule to all of its sites when they were accessed from an European Union country where a removal-request originated… For example, links about a French person that are removed under the right to be forgotten would also be removed from all Google sites when the searcher is in France—but not if the searcher is in Germany or outside the EU.


link to this extract


Builder’s life saved by Apple Watch » The Sun

Daniel Jones:

»A builder who was suffering a heart attack had his life saved by his Apple Watch.

When Dennis Anselmo started to “feel terrible” he thought it was because he was coming down with a fever.

But when the 62-year-old glanced down at his Apple gadget he saw that his heart rate was more than 210 beats a minute.

Doctors who later cleared the blockage in his arteries told him if he had gone home and slept he would have likely had a second, fatal attack, in the middle of the night.


Happens that he was fascinated with checking his heart rate, but maybe it should flash a warning if your heart rate goes over something safe? Also of note: he owns 35 other watches. (He now doesn’t wear them.)

Pretty priceless advertising for Apple – this is the second case I’ve seen in the media where a heart problem has been highlighted by the Watch.
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Explosive road rage-like anger linked to parasite spread by cats » New Scientist

Brian Owens:

»Infection with Toxoplasma gondii, a protozoan parasite carried by cats, has been linked to a human psychiatric condition called intermittent explosive disorder. People who have IED typically experience disproportionate outbursts of aggression, like road rage. T. gondii is already known to change the behaviour of the organisms it infects. By making rodents bolder and more adventurous, the parasite makes them more likely to be caught and eaten by a cat, allowing the parasite to complete its life cycle.

It can also infect humans, through contact with cat faeces, poorly cooked meat or contaminated water, and as many as one-third of the world’s population may be infected. The protozoan doesn’t make us feel sick, but forms cysts in the brain where it can remain for the rest of a person’s life. Such infections have been linked to psychiatric conditions including schizophrenia, bipolar disorder and suicidal behaviour. People infected with T. gondii also have slower reaction times and are more likely to be involved in car accidents.


link to this extract


Smartwatch company Pebble is laying off 25% of its staff » Tech Insider

Steve Kovach:

»Pebble, the buzzy startup credited for being one of the first companies to launch a modern smartwatch, is laying off 40 employees this week, CEO Eric Migicovsky told Tech Insider in an interview. That’s about 25% of its total staff.

Migicovsky also said the company has raised $26m over the last eight months on top of its $20m Kickstarter campaign that started in February 2015. He wouldn’t disclose the investors, but did say Pebble has raised a mix of debt and venture capital from private investors.

Migicovsky blamed a chilly fundraising environment in Silicon Valley for the layoffs.

“We’ve definitely been careful this year as we plan our products,” Migicovsky said. “We got this money, but money [among VCs in Silicon Valley] is pretty tight these days.”


Note that: debt and VC. Debt is potentially toxic to a company struggling with cashflow because it can be called in, and it also usually imposes an ongoing cost. Pebble has problems, like a lot of wearables makers.
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Tay, Microsoft’s AI chatbot, gets a crash course in racism from Twitter » The Guardian

Elle Hunt:

»The bot uses a combination of AI and editorial written by a team of staff including improvisational comedians, says Microsoft in Tay’s privacy statement. Relevant, publicly available data that has been anonymised and filtered is its primary source.

Tay in most cases was only repeating other users’ inflammatory statements, but the nature of AI means that it learns from those interactions. It’s therefore somewhat surprising that Microsoft didn’t factor in the Twitter community’s fondness for hijacking brands’ well-meaning attempts at engagement when writing Tay. Microsoft has been contacted for comment.

Eventually though, even Tay seemed to start to tire of the high jinks.


— TayTweets (@TayandYou)
March 24, 2016
@brightonus33 If u want… you know I’m a lot more than just this.


Late on Wednesday, after 16 hours of vigorous conversation, Tay announced she was retiring for the night.

Her sudden retreat from Twitter fuelled speculation that she had been “silenced” by Microsoft, which, screenshots posted by SocialHax suggest, had been working to delete those tweets in which Tay used racist epithets.


Honestly – I noted its existence, went to sleep and woke up to find it had run amok. Neatly proving that Mary Shelley’s Frankenstein was a parable for all the ages.
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Google and Obama administration connect over Cuba » WSJ

Brody Mullins and Carol Lee:

»When President Barack Obama was working secretly to restore diplomatic and business relations with Cuba two years ago, he got some help from an unlikely place.

Google Executive Chairman Eric Schmidt and other company executives, with encouragement from the White House, traveled to Havana in June 2014 to talk with the Cuban government about the benefits of Internet access. When he returned, Mr. Schmidt called for an end to the trade embargo.

The White House didn’t tell Google, now a unit of Alphabet Inc., about the secret negotiations with Cuba. But by the time Mr. Obama announced that December the U.S. would restore diplomatic ties, Google had established a toehold in the island nation by rolling out versions of its popular search engine and other Internet offerings.

On Monday, during the first full day of Mr. Obama’s historic trip to Havana, the president announced that Google had reached a deal to open a temporary demonstration project in Havana to showcase some of its Internet products.


link to this extract


The mobile games industry is kept afloat by less than 1% of users » The Next Web

Amanda Connolly:

»game creators often use a free-to-play model, allowing users to play a good chunk of the game before having to pay for access to additional levels or features. However, that’s risky business because there is no guarantee that the users will ever pay.

A new report is highlighting that risk, showing that almost half of all the revenue generated in mobile gaming comes from just 0.19% of users.

That means the other 99.81% of users aren’t worth anything money-wise to the creators. Of course, high user numbers are never bad and advertising also plays a key role in generating cash but it’s the people who play the games that dictate the success.

Of the 0.19% who are spending money, very few of these are doing it often; 64% are making just one paid in-game purchase per month, while it’s just 6.5% making five or more paid in-game purchases, with the average spend per player being $24.33.

Conducted by marketing firm Swrve, the report looked at over 40 free-to-play games through February 2016, analyzing the uses of more than 20 million players.

It makes for a stark look at how such a big industry, worth more than $10bn, is so reliant on a few hardcore users for revenue.


From 20 million players, 0.19% is 38,000 people; and 6.5% of them is 2,470. As the $24.33 figure relates to the 38,000, then the revenue from those 20 million players is $0.92m, across 40 F2P games in a month. Average per game: $23,110 in a month. But it will be skewed – one game probably gets 80% of the revenue. That means the remaining 39 would get an average of $4,741 in the month (while the big one gets $740,000).
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Samsung says S7 sales exceed forecast » Korea Times

Kim Yoo-chul:

»”Samsung is satisfied to see good sales of Galaxy S7,” Ko Dong-jin, head of the company’s mobile business division, told local reporters. “Yes, the initial shipment numbers are looking good.”

The remarks came on the sidelines of Ko’s participation in the weekly meeting with top executives of Samsung Group affiliates in Seocho Samsung Tower, southern Seoul.

The mobile boss, however, remained tightlipped about how many S7s have so far been sold since the devices became available for preorder on March 11.

Market analyst said that sales and preorders of the S7s have exceeded earlier forecasts in China, Europe and India. Specifically in Europe, it is said that the company saw a 250 percent increase in combined preorder sales.


Studiedly vague. It was only a couple of years ago that Samsung used to give precise numbers for preorders.
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Vice CEO Shane Smith on dealing with agencies: ‘We want to make great shit but it’s a war.’ » Digiday

Shareen Pathak reporting on the 4A Transformation conference on Tuesday:

»The issue of “not rocking the boat” is a consistent charge leveled at ad agencies. Last week, a top buyer at a media agency told Digiday that agencies are often afraid of starting from scratch to solve client problems because it’s too hard. And that kind of mindset has helped fuel to the rise of innovative branded content at publishers like Vice and the New York Times. [NYT chief executive Mark] Thompson said the [NY] Times’s brand content arm, T-Brand Studio, now has 70 employees and is doing $60m in revenue.

Of course, the pressure is also on publishers: Thompson said the talk of “disruption” happening at the agency-oriented conference this week is old news to publishers and journalism organizations, which have now realized that ads and subscription-based businesses are not going to cut it. “In the digital publishing and legacy publishing business, winter is coming,” he said. “A lot of people have bet their futures on very large, wide and thin digital audiences, monetized through commoditized display advertising. I think a lot of people are going to go out of business.”


“Winter is coming”. Related: IBT Media, which publishes International Business Times and Newsweek, has laid off at least 15 people (perhaps more?) in New York and California.
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Why you should try that crazy virtual reality headset » WSJ

Joanna Stern provides a number of examples – with 360-degree video – to show how VR can have real-world applications:

»By visiting places in the real world that I’d already seen in VR, I came to realize that these silly headsets can be magical. They also have a dark side: It’s easy to end up nauseous, and—more frighteningly—virtual experiences can sometimes get too real. More often than I imagined, the line between the two realities starts to blur.

I’m walking into the master bath of a $7.3M penthouse that just hit the market. The blue tub that backs up to a stunning view of downtown San Francisco is perfect. While examining the square showerhead, I feel something I never have before, a newfangled sort of déjà vu. Though my physical body has never been here, I remember it. In my office just two days ago, I was staring at the same brass spigot, via a VR headset.

The first person you try VR with could be a realtor rather than a Best Buy employee. San Francisco realtor Roh Habibi now keeps a Samsung Gear VR headset in his car. “I’ve locked in showings just after having a client put on the headset,” he says. Sales gimmick or no, when I set foot in that house, I knew exactly how to get to that bathroom.


(Though the examples are, when viewed just on a browser, pretty much a recap of Quicktime VR, which dates back to 1994.)
link to this extract


Errata, corrigenda and ai no corrida:

Start up: Spotify hits 30m, Google’s Syria wish, Apple’s iPhone aim, the truth behind Powa, and more

Is it really a good idea to do a charity parachute jump? Photo by puritani35 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, so no spam.

A selection of 11 links for you. Use them wisely. I’m charlesarthur on Twitter. Observations and links welcome.

Spotify hits 30 million subscribers » The Verge

Micah Singleton:

»Spotify has 30 million paid subscribers, CEO Daniel Ek announced today in a tweet. This is the first subscriber update Spotify has given out since it announced it had 20m subscribers days before Apple Music hit the market last June, and shows the increased competition has had little to no effect on Spotify’s growth.

In the nine months that Apple Music has been available, the service has picked up 11 million subscribers. Spotify has added 10m paid subscribers in the same time.

The Swedish streaming service is now adding an average of 10m paid customers a year — it only had 10m subscribers total in 2014— a growth rate it will need to maintain as it goes up against Apple Music and its substantial marketing war chest.

What’s also notable is the flood of exclusive content put out by Apple Music and Tidal over the past few months seemingly hasn’t harmed Spotify’s user retention.


It was going so well until that last sentence. Singleton has no idea what has happened to Spotify’s user retention; it might be seeing colossal churn (people joining while others leave) or be rock steady. The raw numbers don’t tell you. It’s a reasonable guess, but that’s all it is – a guess.

That might seem like nitpicking, but it matters: it’s key to knowing whether Spotify really does have loyal users, or just fly-by-nights. And it’s also a bad idea to state things as fact that you don’t know directly.
link to this extract


Apple: the mother of all iPhone installed base models, via Stifel »

Tiernan Ray:

»After combining the installed base numbers, churn, new sales, upgrade rates, and such, Rakers arrives at a “guesstimate model” for how the Apple installed base may expand, and how that trickles down to potential iPhone sales.

That results in numbers that would be above his own estimates. For example, Rakers figures if Apple’s installed base total 625m units in 2015, if Apple maintains an 18.8% share of the global smartphone market this year, which is projected to be 3.958bn units, and it if gets 19.6% of the expansion of that total smartphone market, it would bring Apple’s installed base to 744m units.

Rakers then backs out of that an “implied gross change” of 144m units, backs out of that refurbished sales of 95 million, and comes up with 49 million “implied net new iPhone installed base shipments.” He then combines that with “new iPhone shipments into prior year installed base,” and comes up with a potential sales level of 239m iPhones this year.

That’s above Rakers’s own estimate for 217.4m units, and above what he deems Street consensus of 208m units. It would also be growth from last year, versus the decline everyone’s expecting this year.


The pricing for the new iPhone SE, lower than any new iPhone, could make a difference there.
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US top court agrees to hear Samsung-Apple patent fight » Reuters

Lawrence Hurley and Andrew Chung:

»The US Supreme Court on Monday stepped into the high-profile patent fight between the world’s two fiercest smartphone rivals, Apple and Samsung, agreeing to hear Samsung’s appeal of what it contends were excessive penalties for copying the patented designs of the iPhone.

Samsung Electronics paid Apple more than $548m in December related to a jury verdict from 2012. It is seeking to pare back the $399m of that amount that was awarded for infringing on the designs of the iPhone’s rounded-corner front face, bezel and colorful grid of icons, saying they contributed only marginally to a complex device.

Apple sued in 2011, claiming the South Korean electronics company stole its technology and ripped off the look of the iPhone.


The Jarndyce and Jarndyce of the digital world. But it also matters (notes Neil Cybart) because it affects how one values design. Google and Facebook wanted the Supreme Court to hear it; Apple didn’t, he says.
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Trump supporters aren’t stupid » Medium

Emma Lindsay with a terrific insight:

»Normally, when liberals talk about racism, they use “racist” as an end point. “Trump is racist” is, by itself, a reason not to vote for him, and “being racist” is an indicator of a person who is morally deficient.

But, if you don’t take this as an end point — if you instead ask “what do people get out of being racist?” — you’ll start to unravel the emotional motivations behind it. One of the best unpacking of this I have read is Matt Bruenig’s piece Last Place Avoidance and Poor White Racism. To summarize, no one wants to occupy the “last” place in society. No one wants to be the most despised. As long as racism remains intact, poor white people are guaranteed not to be “the worst.” If racism is ever truly dismantled, then poor white people will occupy the lowest rung of society, and the shame of occupying this position is very painful. This shame is so painful, that the people at risk of feeling it will vote on it above all other issues.


And as she also points out, “America is terrible at giving its citizens dignity and meaning.” This should be required reading in many places.
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Parachuting for charity: is it worth the money? » PubMed

»All parachute injuries from two local parachute centres over a 5-year period were analysed. Of 174 patients with injuries of varying severity, 94% were first-time charity-parachutists. The injury rate in charity-parachutists was 11% at an average cost of 3751 Pounds per casualty. 63% of casualties who were charity-parachutists required hospital admission, representing a serious injury rate of 7%, at an average cost of £5,781 per patient. The amount raised per person for charity was £30. Each pound raised for charity cost the NHS £13.75 in return.


Caveat: it’s from 1999. Even so, you can’t be too careful. (You can read the paper in full for $31.50. Perhaps raise the money through a sponsored parachu..? OK then.)
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Why we should fear a cashless world » The Guardian

Dominic Frisby:

»We already live in a world that is, as far as the distribution of wealth is concerned, about as unequal as it gets. It may even be as unequal as it’s ever been. My worry is that a cashless society may exacerbate inequality even further.

It will hand yet more power to the financial sector in that banks and related fintech companies will oversee all transactions. The crash of 2008 showed that, when push comes to shove, banks have already been exempted from the very effective regulation that is bankruptcy – one by which the rest of us must all operate. Do we want this sector to have yet more power and influence?

In a world without cash, every payment you make will be traceable. Do you want governments (which are not always benevolent), banks or payment processors to have potential access to that information? The power this would hand them is enormous and the potential scope for Orwellian levels of surveillance is terrifying.

Cash, on the other hand, empowers its users. It enables them to buy and sell, and store their wealth, without being dependent on anyone else. They can stay outside the financial system, if so desired.


The two opposing viewpoints are: in a world where corporations try to avoid tax and there might be a dwindling workforce, it’s important to have visibility of every transaction so that the taxable ones are visible. Alternatively, as Frisby argues, the ability to spend shouldn’t depend on access to technology which can be denied, or surveilled at will.
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Clinton email reveals: Google sought overthrow of Syria’s Assad » Washington Examiner

Rudy Takala:

»Google in 2012 sought to help insurgents overthrow Syrian President Bashar Assad, according to State Department emails receiving fresh scrutiny this week.

Messages between former secretary of state Hillary Clinton’s team and one of the company’s executives detailed the plan for Google to get involved in the region.

“Please keep close hold, but my team is planning to launch a tool … that will publicly track and map the defections in Syria and which parts of the government they are coming from,” Jared Cohen, the head of what was then the company’s “Google Ideas” division, wrote in a July 2012 email to several top Clinton officials.

“Our logic behind this is that while many people are tracking the atrocities, nobody is visually representing and mapping the defections, which we believe are important in encouraging more to defect and giving confidence to the opposition,” Cohen said, adding that the plan was for Google to surreptitiously give the tool to Middle Eastern media.


The headline is overwritten: Google wasn’t seeking Assad’s overthrow. It was seeking to provide help to those inside Syria who wondered how many were really defecting. As the story points out, though, the anti-Assad movement helped create the conditions for ISIS to become strong.

And it’s really not good for Google to be visible as having tried to influence the internal affairs of a Middle Eastern state – even in this roundabout way. Now one begins to wonder where else it might have tried to be “helpful”.
link to this extract


Powa: The start-up that fell to earth » BBC News

Rory Cellan-Jones spoke to multiple people who had worked for Powa, a British company run by Dan Wagner which once claimed a $2.7bn valuation but collapsed into administration in February:

»What those people have told me is that Powa was an almost textbook case of how not to run a company – no clear strategy, directionless management, overblown claims about the technology and a reckless attitude to money.

For the last couple of years, I’ve been receiving emails from Powa’s PR agency urging me to cover the company’s ground breaking technology the PowaTag which “allows users to purchase anytime, anywhere in just three seconds by simply scanning an item or advertisement with their smartphone”.

Eventually, the company claimed that it had 1,200 businesses signed up to use the PowaTag.

I was not particularly impressed. I saw little evidence that the technology was being used, but one investor did bite. A Boston-based firm Wellington Management invested a sizeable sum in Mr Wagner’s venture. Eventually they along with other investors poured more than $200m into Powa.

It seems likely they were told the same story that was peddled to journalists – that the PowaTag was going to be used by some of the world’s leading brands including L’Oreal and Carrefour.

But what’s emerged since the collapse of the business is that none of those companies had signed contracts, merely “letters of intent”, which did not commit them to anything. One senior figure in the company told me that young inexperienced sales staff were rewarded with a £2,000 bonus every time one of these letters was signed “so they weren’t particularly concerned about the quality of the deal”.


Textbook piece of investigative journalism where you talk to people and gather facts and talk to more people. (The headline is also clever – read all the way to the article’s end to find out why.) I bet there’s plenty more that Cellan-Jones couldn’t include because the BBC’s lawyers wouldn’t let it past. (Notably, FT Alphaville puts Powa’s real value at $106m, based on court documents filed in the US.) None of it looks good for Dan Wagner. Speaking of whom..
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Talk:Dan Wagner » Wikipedia

From the Talk (discussion about editing/content) page relating to Wagner:

»Wikipedia definition of Vandalism = Vandalism is any addition, removal, or change of content, in a deliberate attempt to compromise the integrity of Wikipedia. [[2]]

The amends I made that Techtrek has reverted as being “vandalism” were externally sourced, and links provided. I ask Techtrek to explain on what basis they consider them to be vandalism? It has been requested that any changes are raised and can be discussed on here so that we can get consensus.

It is my belief that by reverting any negative and independantly verified and sourced updates Techtrek is responsible for vandalism as they are deliberately attempting to compromise Wikipedias integrity. They have made a number of unsourced claims to the re-write and repeatedly used language that is not in keeping with Wikipedias guidelines [3]. It has been claimed on User talk:Techtrektalk page the they are Flame PR [[4]] if so then this must be disclosed. I ask Techtrek to please respond otherwise I will revert the change. Ol king col (talk) 09:26, 21 June 2014 (UTC)


That’s a busy PR company if it’s burnishing a client’s personal Wikipedia page. Wonder how much of the VC money went to Flame PR? Though the fact that the Wikipedia user only edits Wagner’s page is… notable.
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An iCloud scam that may be worse than ransomware » Malwarebytes Labs

Thomas Reed was contacted by a woman who said her iMac was hit by “ransomware”:

»From the screenshots she sent me, it soon became clear what had happened. The hacker had somehow gotten access to Ericka’s iCloud account.

Using this, he was able to remotely lock her computer using iCloud’s Find My Mac feature, with a ransom message displayed on the screen. (For some reason, the iPhone did not actually end up locked, but displayed the same message.)

The message read: “Contact me: hblackhat(at) All your conversation sms+mail, bank, computer files, contacts, photos. I will public + send to your contacts.”

She also received an e-mail message, in similarly broken English, from her own iCloud address. The message said he had access to all her bank accounts, personal information, etc, and would publish it if she didn’t respond within 24 hours.

This is a pretty serious threat, and quite different from the typical Windows malware. Unfortunately, the story doesn’t end there. Apple designed Find My Mac/iPhone as an anti-theft feature. It is intended to allow you to take a number of actions on a lost or stolen device, including displaying a message, locking it, locating it physically and even remotely erasing it.


As Reed points out, the same happened previously in Australia in 2014. Perils of the connected world: do you want to be able to find your machine if it’s stolen? But then, how secure is your cloud account?
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What Americans don’t understand about Nordic countries » Business Insider

Anu Partanen moved to the US seven years ago:

»Americans are not wrong to abhor the specters of socialism and big government. In fact, as a proud Finn, I often like to remind my American friends that my countrymen in Finland fought two brutal wars against the Soviet Union to preserve Finland’s freedom and independence against socialism. No one wants to live in a society that doesn’t support individual liberty, entrepreneurship, and open markets.

But the truth is that free-market capitalism and universal social policies go well together—this isn’t about big government, it’s about smart government. I suspect that despite Hillary Clinton’s efforts to distance herself from Sanders, she probably knows this. After all, Clinton is also endorsing policies that sound an awful lot like what the Nordics have done: paid family leave, better public schools, and affordable day care, health care and college for all.

The United States is its own country, and no one expects it to become a Nordic utopia. But Nordic countries aren’t utopias either. What they’ve done has little to do with culture, size, or homogeneity, and everything to do with figuring out how to flourish and compete in the 21st century.


The article originally appeared at The Atlantic, but the comments at BusinessInsider show how incredibly difficult Americans find it to grasp the idea of everyone benefiting from everyone paying more general taxes. While they defend their terrible healthcare system. And overlook the products that the Nordics have produced, such as Ikea and Lego and Linux.
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Errata, corrigenda and ai no corrida: none notified.

Start up: Twitter’s ongoing API cull, NSA v Hillary, life without Facebook, Apple’s cloud moves, and more

Boston Dynamics robot dog

“A Boston Dynamics robot is for life, not just for Christmas.” Photo by jurvetson 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, so no spam.

A selection of 9 links for you. Still, it’s Friday, somewhere. I’m charlesarthur on Twitter. Observations and links welcome.


Matthew Rothenberg:

»Nearly three years since they officially blessed it with “partner” access (and after 14 billion emoji tweets tracked), Twitter has decided to shut Emojitracker down.

To be more accurate, they are removing its elevated access to the Streaming API that Emojitracker depends on in order to operate at its high volume


Twitter continues to cut off developers’ noses to spite its face.
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NSA refused Clinton a secure BlackBerry like Obama, so she used her own » Ars Technica UK

Sean Gallagher:

»[US State Department coordinator Donald] Reid was tasked with trying to find a “BlackBerry-like” solution that would allow Clinton to be able to check her e-mail while in the secure office suite. The problem was that the solution supported by the NSA—its SME PED (Secure Mobile Environment Portable Electronic Device)—was hardly BlackBerry-like. SME PED devices are based on a secure version of Windows CE, and they’re only rated up to “Secret” classification. And as Clinton was taking over at State, the SME PED was only just becoming available. “The current state of the art is not too user friendly, has no infrastructure at State, and is very expensive,” Reid noted in one e-mail.

The NSA refused to give Clinton a device similar to the one used by Obama: a modified BlackBerry 8830 World Edition with additional cryptography installed. And while Clinton’s predecessor Condaleeza Rice had obtained waivers for herself and her staff to use BlackBerry devices, Clinton’s staff was told that “use [of the BlackBerry] expanded to an unmanageable number of users from a security perspective, so those waivers were phased out and BlackBerry use was not allowed in her Suite,” an e-mail from the NSA’s senior liaison to the State Department noted.


It’s basically the fight that everyone has with their IT department, but with state secrets involved.
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Google puts Boston Dynamics up for sale in robotics retreat » Bloomberg Business

Brad Stone and Jack Clark:

»Executives at Google parent Alphabet Inc., absorbed with making sure all the various companies under its corporate umbrella have plans to generate real revenue, concluded that Boston Dynamics isn’t likely to produce a marketable product in the next few years and have put the unit up for sale, according to two people familiar with the company’s plans.

Possible acquirers include the Toyota Research Institute, a division of Toyota Motor Corp., and Inc., which makes robots for its fulfillment centers, according to one person. Google and Toyota declined to comment, and Amazon didn’t respond to requests for comment.

Google acquired Boston Dynamics in late 2013 as part of a spree of acquisitions in the field of robotics. The deals were spearheaded by Andy Rubin, former chief of the Android division, and brought about 300 robotics engineers into Google. Rubin left the company in October 2014. Over the following year, the robot initiative, dubbed Replicant, was plagued by leadership changes, failures to collaborate between companies and an unsuccessful effort to recruit a new leader.


OK, I’m astonished. The intersection between AI/neural networks and robotics seems so obvious that this points to deep problems within Alphabet – specifically, inability to create collaboration (as it mentions).
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The secret life of a Silk Road 2.0 mastermind » Motherboard

Joseph Cox:

»In the real world, Dread Pirate Roberts 2 explained to me, people often made judgments about others before a conversation had even started. But in the dark web, where most people act pseudonymously thanks to the protections offered by Tor, the only social cue to go on is people’s actions.

“In this environment, you only heard what people were saying,” he told me. “There was nothing to judge them on other than what they did.”

Take Defcon, who offered his services as a programmer to DPR2 in a private message. DPR2 was intrigued by Defcon’s calm tone among the chaos of Silk Road being shut down, and put him to the test.

Within a few hours, Defcon had put what would become the Silk Road 2.0 forum online, along with a host of security features that others often neglect.

“He knew what he was doing, I could tell instantly,” DPR2 said.

Defcon did make a mistake, however. It would later be revealed that he registered a Silk Road 2.0 server with his personal email address.


He knew what he was doing. I could tell instantl… oh.
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A Facebook experiment » Above Avalon

Neil Cybart:

»I deleted Facebook off of my iPhone six months ago. I had one simple reason in mind: I thought I would be able to analyze Facebook more accurately and completely by not using it or its companion apps, cold turkey. Purchasing an iPhone 6s Plus at launch gave me the perfect opportunity to begin my experiment. My initial assumption proved true. In just the first eight weeks, I learned more about Facebook, Instagram, WhatsApp and Facebook Messenger, than the last eight years. I’ve reached a number of observations over the past six months on Facebook’s value and vulnerabilities and a definite answer to what was once a seemingly difficult question: Are Facebook and Apple becoming competitors?


The answer to the latter is no, but the things he found out along the way about Facebook use ring very true.
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The journalist and the troll: Benjamin Wey spent two years trying to destroy me online » Bloomberg Business

Dune Lawrence discovered a “news” site set up by a Chinese entrepreneur who had decided she had wronged him in articles she’d written for Bloomberg:

»The site’s other articles were an odd mix of celebrity gossip, entertainment news, and stabs at reporting on serious topics such as drug marketing. It wasn’t exactly high journalism, but it looked professional, not like some amateur blog. Google seemed to think so as well, because the story instantly went to the top of the results when I searched my name.

In September 2015 the FBI arrested the man behind TheBlot, one Benjamin Wey. Not for smearing me or the other people he imagined were his enemies. He’s primarily a financier, and he was charged with securities fraud and other financial crimes involving Chinese companies he helped to list on U.S. stock markets. The U.S. Department of Justice alleges Wey pocketed tens of millions of dollars in illicit profits that he funneled through associates overseas and back into accounts in the U.S. Wey denies the charges. A trial has been set for March 2017.


Lawrence is brave here, and Wey comes across as an utter scumbag – but also someone who is completely hyperactive, willing to spend hours cooking up totally libellous nonsense about people. That’s the problem online: the hyperactive idiots drive out the rational people.

One other point: Google really favours that junk site Wey created. Searching on duckduckgo, TheBlot is some distance down the results.
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Cloud makes for strange bedfellows: Apple signs on with Google, cuts spending with AWS  » CRN

Good scoop by Kevin McLaughlin and Joseph Tsidulko:

»Alphabet’s Google has quietly scored a major coup in its campaign to become an enterprise cloud computing powerhouse, landing Apple as a customer for the Google Cloud Platform, multiple sources with knowledge of the matter told CRN this week.

Since inking the Google deal late last year, Apple has also significantly reduced its reliance on Amazon Web Services, whose infrastructure it uses to run parts of iCloud and other services, said the sources, who all requested anonymity to protect their relationships with the vendors.

Apple has not abandoned AWS entirely and remains a customer, the sources said.

According to the sources, Google executives have told partners that Apple is spending between $400m and $600m on Google Cloud Platform, although this couldn’t be independently confirmed. Also unclear is whether this range refers to an annual spending rate or a set amount of capacity.

AWS said Apple’s move to work with Google does not signify “competitive defection.”


Apple is in the position where it can get the big cloud providers to bid against each other. (Microsoft’s Azure was also said to be a supplier when iCloud started.) The question is, should Apple be trying to supplant them all with its own infrastructure – as Dropbox did to exit AWS? Well, let’s see…
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Google adds Apple iCloud storage to cloud platform » Re/code

Mark Bergen:

»Apple has announced three data centers opening soon, and spent an estimated $1bn last year on AWS. It’s a logical move for Apple if it wants more independence from its tech rivals. And it’s one Apple should make to store the growing media libraries from its mobile, TV and TBD products.

According to a source familiar with the matter, Apple already has a team working on this; it’s known internally as “McQueen,” as in Steve. It’s unclear if that project will materialize or when. But a source tells Re/code that the codename refers to Apple’s intent, sometime in the next few years, to break its reliance on all three outside cloud providers in favor of its own soup-to-nuts infrastructure.

Apple has reckoned, one source says, that given the fees it is paying Amazon and Microsoft, it could break even with its own data centers within about three years and not have the headache of negotiating with companies it considers rivals in other areas of its business.


Pretty remarkable if Apple can build all that infrastructure and serve everyone and make it pay off that quickly. That would make the shift to Google just a temporary thing to drive down prices from those suppliers.
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Observations on switching to the Galaxy S7 Edge from a non-Galaxy user » AndroidAuthority

Kris Carlon:

»The first thing I noticed when switching to the Galaxy S7 Edge is how bad the touch responsiveness seems to be (although I might just be unlucky). It’s not so much the screen, although it does kind of “grab” at your finger as you swipe on it compared to the Nexus 6P, but rather the touch response itself.

Quite often, when swiping away notifications the S7 Edge registers it as a press and launches the app instead. Likewise, when tapping UI elements it occasionally doesn’t register any press at all and I have to give it a serious press to get a response. Feel free to tease my ability to use a phone if you like, but something here is not right.


Quite a few of Carlon’s complaints (they’re mostly complaints) fall into the 1% category – is it really such awful news that the back of your phone shows fingerprints? – but the touchscreen point, and his complaint that “it’s laggy” seem like gigantic points, which are lined up as being just as important (or unimportant) as how crowded the folder UI is.
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Errata, corrigenda and ai no corrida: none notified

Start up: Trump’s casino flop, Micromax hits a bump, Samsung’s warning, the prime conspiracy and more

Google’s Deepmind systems are used to recognise handwriting in images. Photo by invisible monsters 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, so no spam.

A selection of 10 links for you. Use them wisely. I’m charlesarthur on Twitter. Observations and links welcome.

Here’s how Donald Trump treats the little people » Mother Jones

Kevin Drum on the publicly listed Trump casino-controlling company in the 1990s:

»Trump’s fans were conned into buying up his debt-laden properties and turning them into a public company. Trump, who plainly had no interest in running a casino and had demonstrated no corporate management skills during the prior decade, paid himself millions of dollars from the company’s coffers for doing essentially nothing. He then unloaded his third casino onto the public company at an inflated price.

The public company didn’t show a profit during a single year of its existence. In 2004 the stock was delisted and the company forced into Chapter 11 reorganization. It was renamed Trump Entertainment Resorts, but with Trump still at the helm it continued to pile up losses and amassed debts of nearly $2bn. In 2008, after missing a $53m bond payment, it declared bankruptcy yet again and Trump resigned as the company’s chairman. Its investors lost all their money.

In case you’re curious, this is how Trump treats the little people.


Just so you can’t say you weren’t warned. Would a President Trump be as corrupt as Berlusconi? Odds seem strong.
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Google DeepMind: What is it, how it works and should you be scared? » Techworld

Sam Shead interview with Mustafa Suleyman, co-founder of Deepmind, who explains where the systems are used inside Google:

»We use it to identify text on shopfronts and maybe alert people to a discount that’s available in a particular shop or what the menu says in a given restaurant. We do that with an extremely high level of accuracy today. It’s being used in Local Search and elsewhere across the company.

We also use the same core system across Google for speech recognition. It trains roughly in less than 5 days. In 2012 it delivered a 30 percent reduction in error rate against the existing old school system. This was the biggest single improvement in speech recognition in 20 years, again using the same very general deep learning system across all of these.

Across Google we use what we call Tool AI or Deep Learning Networks for fraud detection, spam detection, hand writing recognition, image search, speech recognition, Street View detection, translation.

Sixty handcrafted rule-based systems have now been replaced with deep learning based networks. This gives you a sense of the kind of generality, flexibility and adaptiveness of the kind of advances that have been made across the field and why Google was interested in DeepMind.


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Letter to shareholders » Samsung Investor Relations

Oh-Hyun Kwon, CEO of Samsung Electronics:

»In 2016, the overall global economy may slow down, and uncertainties such as financial risks in emerging markets are expected to increase. The IT industry will change in an unprecedented speed, and competitions will intensify further.

We expect core products of our company, such as smartphone, TV, and memory, will face oversupply issues and intensified price competition. Our competitors will follow close behind our leading position in the global IT industry with aggressive investments and innovations. Moreover, innovative business models such as O2O (Online to Offline) and sharing economy are undermining the importance of hardware, which is our strength, and shifting the core competitiveness to software platform.

To cope with these changes in the business environment, we will continue to implement groundbreaking changes and innovations, and strive to secure differentiated competitiveness.


“Oversupply issues” probably doesn’t apply to the smartphones, but the price competition will. And there’s no explanation of how it’s going to cope exactly with that shift to software-based competition.
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Privacy absolutism » AVC

Venture capitalist Fred Wilson:

»I do not think that because we now have the technology to lock things down (strong encryption) and because the industry that develops and maintains all of this technology has a strong libertarian bent that we should just abandon the framework that has worked in our society for hundreds of years. If society thinks someone is doing something wrong, and if law enforcement can get a warrant, there should be a mechanism to get access to our devices.

I would love to see the tech sector work to figure out a smart way to address this issue. My partner Albert has suggested an approach on his blog. There are some interesting approaches that are already being used in cold storage of bitcoin that could be applied to this situation.

But my meta point here is that I am saddened by the tech sector’s absolutist approach to this issue. The more interesting and fruitful approach would be to think about the most elegant solutions and build them.


The linked suggestion by his partner is this:

»I would posit that each device should ship with an *individual* key that is created by the manufacturer specifically for the purpose of unlocking the device. The key should then be stored in a way where it can be requested by law enforcement (either by the manufacturer or a third party that specializes in compliance for this). The process for such a request should run via the judiciary and mirror that for a warrant.


It’s also known as “key escrow” and was part of the “Clipper chip” idea which was proposed by the Clinton administration in the 1990s and comprehensively shown to be a bad idea by Matt Blaze (who is still around, on Twitter and elsewhere).

Wilson is the one who was previously stunned by Apple not making iMessage cross-platform, despite the fact that it is demonstrably valuable as an iOS exclusive. I’m approaching the point where I learn what Wilson’s view is on something, and then assume the opposite is what will happen.
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Microsoft stops taking Bitcoin for Microsoft Store payments » Digital Trends

Trevor Mogg:

»Much was made of Microsoft’s move two years ago to start accepting Bitcoin as a form of payment for purchasing content from its online store.

The situation has, however, quietly changed, as the computer giant has recently added a note to its website revealing it’s no longer accepting the cryptocurrency in the Microsoft Store on Windows 10 devices.

“You can no longer redeem Bitcoin into your Microsoft account,” the message says, though adds that existing balances in user accounts “will still be available for purchases from Microsoft Store, but can’t be refunded.” So to be clear, any funds in your account now are good to use, but forget trying to make any new deposits into your account using Bitcoin.


Microsoft accepted Bitcoin? For Windows apps? Doubt that troubled the blockchain very much.
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India’s Micromax, once a rising star, struggles » Reuters

Himank Sharma:

»A year ago, Micromax vaulted past Samsung Electronics Co Ltd to become India’s leading smartphone brand. Today, its market share has nearly halved, several top executives have resigned, and the company is looking for growth outside India.

In Micromax’s slide to second place is a tale of the promise and peril of India’s booming but hyper-competitive smartphone industry.

India is the world’s fastest-growing smartphone market. Shipments of smartphones jumped 29% to 103m units last year.

Rapid growth has helped nurture a crop of local brands, led by Micromax, that outsourced production to Chinese manufacturers. Now, as Samsung rolls out more affordable phones, the same Chinese factories are entering the Indian market with their own brands, depressing prices and forcing Indian mobile makers to rethink their strategies.

“What the Indian brands did to the global brands two years ago, Chinese phone makers are doing the same to Indian brands now, and over the next year we see tremendous competition for Micromax and other Indian smartphone makers,” said Tarun Pathak, analyst at Counterpoint Research in New Delhi…

…Last May, Alibaba walked away from a mooted $1.2bn purchase of a 20% stake, citing a lack of clarity on growth plans, according to one executive involved in the discussion. Micromax co-founder Vikas Jain said in an interview with Reuters this week that the company and Alibaba disagreed on a future roadmap.


The smartphone business’s evolution has been like the PC business’s evolution speeded up; India’s is like the smartphone one, speeded up again.
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Here’s what a knockoff Apple Watch looks like » Daily Dot

Mike Wehner, way back in April 2015:

»The story of how I came to own this forgery isn’t particularly remarkable: In early March, just as the hype around Apple’s new wearable was reaching a fever pitch, I found a Taiwanese seller who claimed to be selling the Apple Watch for immediate shipment. There was no size option or “collection” to choose from, just four colors, so I selected one and placed an order. It cost me the equivalent of roughly $53, and while I knew the watch that eventually arrived wouldn’t be anything impressive, I was nonetheless curious about just how bad it would be. Now I know.


Pretty dire. Wonder if they’re any better now?
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Music piracy hasn’t gone, it has merely changed its spots » MIDiA Research

Mark Mulligan:

»P2P piracy was tailor made for the 2000’s when:

• Home internet connections were slow
• Most content consumption was desk top based
• People still liked owning music

Now in the streaming era all three of those market dynamics have lessened massively. So little wonder then that piracy technology has evolved to meet the needs of the streaming consumer.

With YouTube the number one digital music destination, and with a catalogue that no other music service will ever be able to match, it makes complete sense that YouTube rippers have emerged as one of the key strands of music piracy tech. Many of which transform YouTube into a fully offline, on demand, ad free, high quality music service.


And that’s why the music labels tend to hate YouTube.
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GMG’s David Pemsel: Membership will make up a third of the Guardian’s revenue within three years » The Media Briefing

Chris Sutcliffe:

»The Guardian has not been agile enough to respond to the challenges faced by the publishing industry over the past few years, according to Guardian Media Group CEO David Pemsel.

Speaking at Digital Media Strategies 2016, Pemsel said that an overly narrow focus on the “big number” of its global audience masked some of the strategic issues that the Guardian was facing:


“I think all those big numbers are a proof point about how fast and innovative we’ve been in getting to digital [but] monetising anonymous reach is essentially over.

“To be able to parade around and say ‘we’re big’ is not good enough. We want to convert our anonymous reach into a known audience.”


That conversion of its unknown audience to a known one is a “massive opportunity”, based around a refinement and reinvention of The Guardian’s membership scheme, which Pemsel believes could make up one third of the Guardian’s overall revenue within three years.


The point about “monetising anonymous reach is essentially over” is a key one. Pemsel is saying that online advertising in itself isn’t enough to fund the Guardian – which ought to worry everyone else.
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Mathematicians discover prime conspiracy » Quanta Magazine

Erica Klarreich:

»Two mathematicians have uncovered a simple, previously unnoticed property of prime numbers — those numbers that are divisible only by 1 and themselves. Prime numbers, it seems, have decided preferences about the final digits of the primes that immediately follow them.

Among the first billion prime numbers, for instance, a prime ending in 9 is almost 65 percent more likely to be followed by a prime ending in 1 than another prime ending in 9. In a paper posted online on Sunday, Kannan Soundararajan and Robert Lemke Oliver of Stanford University present both numerical and theoretical evidence that prime numbers repel other would-be primes that end in the same digit, and have varied predilections for being followed by primes ending in the other possible final digits.

“We’ve been studying primes for a long time, and no one spotted this before,” said Andrew Granville, a number theorist at the University of Montreal and University College London. “It’s crazy.”


My first objection on reading those paragraphs was “they should do it in a different number base than decimal”. Then it turns out that they started in a different number base (3) and worked out from there. So yes, this is a spooky property.
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Errata, corrigenda and ai no corrida:

Start up: Samsung’s US chance, Google’s RTBF extension, hacking Isil, bionic feels!, and more

The world of professional bridge is struggling with accusations of cheating. But how do you prevent people communicating in code, if they can communicate? Photo by jaxx2kde on Flickr.

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

Sizing the US opportunity for Samsung Galaxy S7 & S7 edge » Kantar Worldpanel

Carolina Milanesi:

»By the end of January [2016], the Galaxy S6 represented only 9% of Samsung’s installed base in the US, and the Galaxy S6 edge a mere 2%. The Galaxy S5 remained the most popular device in the installed base, representing 21.5% followed by the Galaxy S4 – now a three-year-old phone – at 14.2%.

Between February 2015 and January 2016, only 26% of Samsung smartphones in use were upgraded. This creates a huge opportunity for Samsung to persuade consumers it is time to upgrade to the new devices.

Of the 26% of Samsung devices that were upgraded, the greatest percentage (27.5%) chose the Galaxy S5, 26.2% the Galaxy S6: 9.4% the Galaxy Note 4: 7.9% the Galaxy Note 5: and 5% the Galaxy S6 edge. The rest of the upgrades were divided among 33 different models, demonstrating how wide the Samsung offering remains in the US market, despite all the attention being given to its flagship products.

Only 3.6% of current Galaxy S6 owners said they are planning to upgrade their smartphone in the next 12 months. This should not worry Samsung, however, as we have shown that a significant opportunity remains among owners of older phones, making them a much easier target for the Korean brand.


Suggests that the S6 and S6 Edge really weren’t a big hit, as the S4 has a higher share than both together.
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Dirty hands » The New Yorker

David Owen, with a fantastic piece about cheating in the world of professional bridge:

»When Brogeland made his first announcement, his evidence against Fisher and Schwartz consisted solely of what he believed to be a collection of suspicious hands; he still didn’t know how they might be exchanging information. A few days later, he created a new Web site, called, and posted three YouTube videos from the 2014 European Team Championships, which Fisher and Schwartz’s team had won. Each video had been shot from a camera mounted near the table. It showed all four players, as well as the table paraphernalia of modern tournament bridge: four bidding boxes (containing each player’s pre-printed bidding cards); a felt-covered bidding tray (on which the players place bidding cards before sliding it back under the screen); and a plastic duplicate board (a flat, rectangular box in which four pre-dealt hands have been delivered to the table). Brogeland asked for help from other players, and the search for evidence immediately became a collaborative international project.


As you read it, you realise that every human element in bridge – speaking, coughing, card movement, any physical movement – makes it feasible to create a code to cheat; the only way to prevent it would be to have people playing via screen, without words or gestures. Which would take away everything that might make it fun.
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Google finally extends right-to-be-forgotten rules to all search sites, including dot-com » Ars Technica UK

Kelly Fiveash:

»Google has responded to European Union data watchdogs by expanding its right-to-be-forgotten rules to apply to its search websites across the globe.

In 2014, search engines were ordered by Europe’s top court to scrub certain listings on their indexes. Google—which commands roughly 90 percent of the search market in the EU—claimed at the time that such measures amounted to censorship of the Internet.

However, the landmark European Court of Justice ruling in fact stated that search engines were required to remove links that are old, out of date or irrelevant, and—most significantly of all—not found to be in the public interest.

Indeed, the right-to-be-forgotten may seem evocative to privacy campaigners, but as the UK’s Information Commissioner’s Office has previously stated, “there is no absolute right [under the ruling] to have information removed.”


Google’s blogpost on the topic says “We’re changing our approach as a result of specific discussions that we’ve had with EU data protection regulators in recent months”. No mention of the swingeing fines the regulators threatened.
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Bionic fingertip gives sense of touch to amputee » Reuters

Matthew Stock:

»A bionic fingertip has given an amputee the sensation of rough or smooth textures via electrodes implanted into nerves in his upper arm.

Scientists from EPFL (Swiss Federal Institute of Technology) and SSSA (Sant’Anna School of Advanced Studies, Italy) successfully allowed amputee Dennis Aabo Sørensen to receive this sophisticated tactile information in real-time.

The research, published in science journal eLife, says Sørensen is the first person in the world to recognize texture using a bionic fingertip connected to electrodes surgically implanted above his stump.

The nerves in Sørensen’s arm were wired to a machine with the fingertip attached to it. The machine then controlled the movement of the fingertip over pieces of plastic engraved with different textures, either rough or smooth. When the fingertip moved across the plastic, its sensors generated an electrical signal which was translated into a series of electrical spikes that mimic the language of the nervous system. This was then delivered to Sørensen’s nerves.


Odd – and a little sad – how little of the billions washing around Silicon Valley are being used to set up companies to do things like this.
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AlphaGo defeats Lee Sedol in first game of historic man vs machine match » Go Game Guru

You probably heard the news that Google’s DeepMind system AlphaGo beat the best player in the world. Here are the reactions of the pros (“9p” means “9-dan professional”, ie the highest level):

»Lee Changho 9p said,  “I’m so shocked by AlphaGo’s play!”

Meanwhile Cho Hanseung 9p remarked, “AlphaGo is much stronger than before, when it played against Fan Hui 2p! When Google said the odds were fifty-fifty, it seems they weren’t joking. I still can’t believe its performance even though I just saw it with my own eyes.”

In a post-game interview, Lee Sedol was visibly startled by AlphaGo’s strength. “I was so surprised. Actually, I never imagined that I would lose. It’s so shocking. Regarding the game, I got off to a bad start and AlphaGo played well right until the end. Even when I was behind, I still didn’t imagine that I’d lose. I didn’t think that it would be able to play such an excellent game. I heard that the DeepMind CEO Demis Hassabis said that he respects me as a Go player, but I have great respect for both of them [referring to Demis Hassabis and Eric Schmidt] for making this amazing program. I also respect all the programmers who helped to make AlphaGo.”


The second game should finish around 0800 GMT on Thursday.
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Exclusive: 1736 documents reveal ISIS jihadists personal data » Zaman Al Wasl

»Zaman Al Wasl has exclusively obtained the personal data of 1736 ISIS fighters from over 40 countries, including their backgrounds, nationalities and hometown addresses.

The document that branded by ISIS as confidential is shedding the light on the inner circle of the de facto a state which has its own institutions and official documents as well data bank.

Two thirds of ISIS manpower are from Saudi Arabia, Tunisia, Morocco and Egypt. 25% of ISIS fighters are Saudis, the data disclosed.

While Turkish fighters are taking the lead among ISIS foreign fighters, French fighters come next.

Syrians are just 1.7 % of the total number of fighters. The Iraqis make 1.2.

Expert told Zaman al-Wasl that Iraqis and Jordanians can make the backbone of ISIS but most of them are based in Mosul and ISIS-controlled areas in Ramadi.

The most notably that ISIS fighters do not know the real names of their fellow fighters since they used to have code names, or names de guerre, and for security issues they have been obliged to follow high ranks of secrecy.

The documents have been written and organized by the General Administration of Borders, and ISIS commission that tracks all Jihadists data.

The data document is including 23 fields, starting with the Jihadist’s first name, last name, code name, date of birth and nationality. The jihadist who cross the the Islamic State’s borders for the first time is ought to acknowledge the Borders Administration everything about himself, even what he wants to be in ISIS, a fighter or a suicide bomber.


Hacking is damned annoying thing.
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Maybe we could tone down the JavaScript » fuzzy notepad

Alex Munroe is kinda annoyed about pages which insist on a ton of Javascript:

»These aren’t cutting-edge interactive applications; they’re pages with text on them. We used to print those on paper, but as soon as we made the leap to computers, it became impossible to put words on a screen without executing several megabytes of custom junk?

I can almost hear the Hacker News comments now, about what a luddite I am for not thinking five paragraphs of static text need to be infested with a thousand lines of script. Well, let me say proactively: fuck all y’all. I think the Web is great, I think interactive dynamic stuff is great, and I think the progress we’ve made in the last decade is great. I also think it’s great that the Web is and always has been inherently customizable by users, and that I can use an extension that lets me decide ahead of time what an arbitrary site can run on my computer.

What’s less great is a team of highly-paid and highly-skilled people all using Chrome on a recent Mac Pro, developing in an office half a mile from almost every server they hit, then turning around and scoffing at people who don’t have exactly the same setup. Consider that any of the following might cause your JavaScript to not work:

• Someone is on a slow computer.
• Someone is on a slow connection.
• Someone is on a phone, i.e. a slow computer with a slow connection.
• Someone is stuck with an old browser on a computer they don’t control — at work, at school, in a library, etc.
• Someone is trying to write a small program that interacts with your site, which doesn’t have an API.


And he’s only just getting started.
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How the smartphone shapes millennials’ online activities » Global Web Index

Chase Buckle:

»From a marketing perspective, the term Millennial is increasingly becoming synonymous with mobile. And for good reason – almost 90% own a smartphone and these internet users clock up on average over 3 hours per day online via mobiles (rising to over 4 hours in Latin America and the Middle East). That means they’re spending up to 5x longer per day online on mobile than older age groups.

Understandably, this enthusiasm for smartphones is having a huge impact on their online activities. Our latest research shows that Millennials overwhelmingly cite smartphones as their most important device for getting online, and we’re seeing more-and-more staple internet activities take place on mobile.


What I notice about the above graphic is that in the past month, about 76% used a search engine on mobile – and (slightly) more used a social network. By contrast on desktop, it would probably be 100% and 100%. Plus these are the millennials; for those who are older, both uses will be less. That search engine use is Google’s problem on mobile: lots of people don’t do search on a daily basis on mobile.
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We need to save online journalism from ad blocking – and here’s how » Alphr

James O’Malley:

»Historically, journalism has had two major sources of income: Advertisers and readers. But now publishing is being squeezed from both ends. Thanks to the internet, and the explosion in ‘content’ (that’s what we call it now), people are very reticent to pay to read news, like they would have done for a print newspaper. And now thanks to ad-blockers, fewer people are looking at the adverts.

So what to do? How can a business model be found that will make journalism pay? Is there anything that can save this noble trade?

Bizarrely, the solution to this problem has already been invented. Six years ago. By one of the last people you’d expect to have an interest in paying people for their work.

Flattr was co-founded in 2010 by Peter Sunde, who is better known as one of the co-founders and former spokesperson for The Pirate Bay. Given that his website is responsible for distributing huge swathes of pirated content, you can’t help but wonder if Flattr was his attempt at atonement.

Flattr is a “microdonation” platform. The idea is that you sign up and allocate a fixed amount of cash to pay in every month – say £10 for the sake of argument – and then if you’re reading an article online that you like, you can click the “Flattr” button nestled amongst the existing social media sharing links. At the end of the month, your £10 is then divided up between the publishers of the articles that you’ve chosen to flattr. So if you flattr two articles, they earn £5 each. If you flattr ten, then each gets a pound. And so on.

The genius is that it solves the biggest problem with any micropayment system: Friction.


Neat idea. The problem now is just adoption by publishers and readers (and getting users of adblockers to see it in the first place).
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Errata, corrigenda and ai no corrida: