Start up: Facebook’s dwindling teens, Safe Harbour or balkanisation?, the privacy tsunami, and more

No, really, no difference. Move along there and find another story. Photo by Bob Jouy on Flickr.

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

Facebook is big, but big networks can fall » Bloomberg View

Megan McArdle:

Looking at the most recent Pew study on Internet usage among young people,  I see that 71% of teens use Facebook, with the median user having slightly less than 150 friends; 41% of them report that they use Facebook most often. But when I look at a similar Pew study from 2013, it looks to me as if 76 percent of teens were using Facebook, with a median number of 300 friends, and 81% of social media users reported that they used Facebook most often. If I were Facebook, those numbers would keep me awake at night – not because Facebook can’t survive with only 70% of the market, but because a network that is getting smaller and less valuable to its users is a network that is very vulnerable to disruption.

What’s actually astonishing is just how evanescent such strategic advantages have proven. Fifteen years ago, people worried that Microsoft’s network-effect advantages made it unstoppable; now it’s an also-ran in everything new-market except gaming consoles. The rotting corpses of old social media sites litter the landscape. And of course, finding a place to send Aunt Maisie that birthday telegram is getting darned hard.

She also makes a point about network effects: the thing about “all your photos are in Facebook” isn’t a network effect, but a switching cost – a quite different thing.
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Apple says battery performance of new iPhone’s A9 chips vary only 2-3% » TechCrunch

Matthew Panzarino:

In a statement to TechCrunch, Apple said that its own testing and data gathered from its customers after a few weeks with the device show that the actual battery life of both devices varies just 2-3%. That’s far, far too low to be noticeable in real-world usage.

With the Apple-designed A9 chip in your iPhone 6s or iPhone 6s Plus, you are getting the most advanced smartphone chip in the world. Every chip we ship meets Apple’s highest standards for providing incredible performance and deliver great battery life, regardless of iPhone 6s capacity, color, or model.

Certain manufactured lab tests which run the processors with a continuous heavy workload until the battery depletes are not representative of real-world usage, since they spend an unrealistic amount of time at the highest CPU performance state. It’s a misleading way to measure real-world battery life. Our testing and customer data show the actual battery life of the iPhone 6s and iPhone 6s Plus, even taking into account variable component differences, vary within just 2-3% of each other.

Though there have been a bunch of articles and videos about how much power one chip or the other uses, the tests have largely been what Apple calls ‘manufactured’. Basically, they are unrealistic machine-driven tests that do not and can not reflect real-world usage.

So this year’s iPhonegate lasted slightly less than 24 hours. Apple is even managing to balance supply and demand here too.
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EU Safe Harbour ruling a ‘nightmare’: Wikipedia founder » CNBC

Arjun Kharpal:

Jimmy Wales, the founder of Wikipedia, said the regulatory issues that could come with this might be a problem for some businesses.

“You want your data to be secure, you don’t really care or you shouldn’t have to care where it sits,” Wales told CNBC in an interview at IP EXPO Europe in London.

“If I’m in Europe I hope they are near me on a server in Europe, but other than that I want them to provide the best technical experience for me. And if they suddenly have all those requirements and have to keep certain pictures in certain places, it just sounds like a nightmare, so I like the idea of uniformity in the law so that we can all not worry about it.”

Wales added in a separate session with reporters that the ECJ ruling could lead to a “balkanized era where data has to be secure very specifically across many many different jurisdictions”.

Great point. So does this mean he’ll be lobbying the US to implement strong data protection rules that match those of Europe? I do hope so. I mean, that’s the best way to protect everyone’s interests, isn’t it, Mr Wales?
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Why is it so hard to convince people to care about privacy? » The Guardian

Cory Doctorow:

The only way to be sure you don’t leak data is to not collect or retain it, and Big Data’s hype and the cheapness of hard drives has turned every pipsqueak tech company into a Big Data packrat with a mountain of potentially toxic personal info on millions of people, all protected by a password that’s simple enough for a CEO to remember it.

Every week or two, from now on, will see new privacy disasters, each worse than the last. Every week or two, from now on, will see millions of people who suddenly wish there was more they could do to protect their privacy.

For privacy advocates in 2015, the job is clear: have a plan in your drawer. A plan: how to safeguard your privacy, how to understand your privacy, how to understand the breach. A plan that explains that your lack of security isn’t a fact of nature, it’s the result of conscious decisions made by people who were either hostile or indifferent to your wellbeing, who saved or made money through those decisions. A plan that shows you what you can do to keep you and yours safe – and whose head your should be demanding on a pike.

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Get AMP’d: Here’s what publishers need to know about Google’s new plan to speed up your website » Nieman Lab

Joshua Benton:

What’s it all mean for publishers?

As I said, AMP [Accelerated Mobile Pages] is full of terrific ideas. It really does speed up load times.

But that success comes with tradeoffs. For most publishers, you’re being asked to set up two parallel versions of your stories. (Unless you really think you won’t need to ever do anything outside what AMP allows on any page, which is unrealistic for most.) That takes significant time and resources. You’re being asked to set aside most or all of the ad tech and analytics that you use. You’re trading in open web standards for something built by Google engineers who, despite what I don’t doubt are the best of intentions, have incentives that don’t line up perfectly with yours. And you’re becoming an disempowered actor in a larger Silicon Valley battle over ad tech. (Google advocating something that blocks enormous slices of contemporary ad tech can’t be viewed in isolation from the fact Google is the dominant force in online advertising, and as interested as any company is in extending its power.)

And it’s yet another case of a technology company coming along to promise a better experience for users that takes one more bit of power away from publishers.

The fact that publishers’ interests aren’t exactly aligned with Google’s shouldn’t be overlooked. And Google’s interests aren’t aligned with third-party ad networks at all, except that they all want to serve up ads. (Meanwhile, iOS 9 content blockers still block ads on the AMP demo.)
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This is why Android Pay is asking you for a ‘Google Payments PIN’ when making purchases » Android Central

Andrew Martonik:

when you have a card from one of these supported banks (check the latest list from Google here) in Android Pay, it’s amazingly seamless to make payments. Just unlock your phone, tap the terminal and you just paid.

Confusingly, though, Android Pay actually lets you add unsupported cards to the app as well.

This is a hold over from the old days of Google Wallet, which had an entirely different system that worked without the cooperation of the banks. With Google Wallet, every time you made a transaction it actually made that purchase with a virtual prepaid debit card from “Bancorp Bank” and then that same amount was subsequently charged to your own bank. It was clunky, less secure and downright confusing to everyone involved — and the most annoying user-facing part of this system is the need for an extra PIN code to make a payment.

As Google Wallet hands the reigns over to Android Pay in this transition of mobile payments, this legacy system of using an unsupported card is actually still baked into Android Pay — though Google isn’t exactly promoting it as such. This is partially due to the fact that you can bring previously-used debit and credit cards from Google Wallet into Android Pay, and partially because Android Pay just doesn’t support that many banks yet — just 10 at the time of writing.

My first reaction was that this is a poor user experience; why make people who are new to Android Pay have to use a PIN? Then I realised that most Americans aren’t used to PINs for purchasing, and are just adjusting to chip-and-sign. So this might be faster. (The fact that you might have two cards, and one will require a PIN and one won’t, seems like bad design though.)
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Former Reuters journalist Matthew Keys found guilty of three counts of hacking » Motherboard

Sarah Jeong:

In 2010, Keys posted login credentials to the [his then former employer] Tribune Company content management system (CMS) to a chatroom run by Anonymous, resulting in the defacement of an LA Times article online. The defacement was reversed in 40 minutes, but the government argued the attack caused nearly a million dollars in damage…

…”This is not the crime of the century,” Segal said, adding that nonetheless Keys should not get away with his acts. At minimum, he may receive probation. Sentencing is scheduled for January 20, 2016.

Keys said he was disappointed with the verdict, and worried about the sentence affecting his ability to work. However, he also expressed his intention to appeal the conviction, and was optimistic it would be overturned.

Keys added that a few months after his first story about Anonymous, he was approached by the FBI, but Keys refused to allow them to scan his computer. He was indicted a couple of years later.

In order to be convicted under the CFAA, the damage had to exceed $5,000. The government claimed that Keys caused $929,977.00 worth of damage. During the trial, the defense tried to cast doubt on the total damages, claiming that the expenditures in response to the hack were not reasonable, and Tribune employees had grossly inflated the hours spent on incident response.

Lesson 1: change passwords ex-employees had access to. Lesson 2: don’t post passwords of companies that you used to work for on Anonymous chatboards.
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Will digital books ever replace print? » Aeon

Craig Mod used to read only ebooks (on Kindle) but now finds he has fallen out of love with it in favour of the physical form again:

Take for example the multistep process of opening a well-made physical edition. The Conference of the Birds (2009), designed by Farah Behbehani and published by Thames and Hudson, is a masterclass in welcoming the reader into the text.

The object – a dense, felled tree, wrapped in royal blue cloth – requires two hands to hold. The inner volume swooshes from its slipcase. And then the thing opens like some blessed walking path into intricate endpages, heavystock half-titles, and multi-page die-cuts, shepherding you towards the table of contents. Behbehani utilitises all the qualities of print to create a procession. By the time you arrive at chapter one, you are entranced.

Contrast this with opening a Kindle book – there is no procession, and often no cover. You are sometimes thrown into the first chapter, sometimes into the middle of the front matter. Wherein every step of opening The Conference of the Birds fills one with delight – delight at what one is seeing and what one anticipates to come – opening a Kindle book frustrates. Often, you have to swipe or tap back a dozen pages to be sure you haven’t missed anything.

Because the Kindle ecosystem makes buying books one-click effortless, it can be easy to forget about your purchases. Unfortunately, Kindle’s interface makes it difficult to keep tabs on those expanding digital libraries: at best, we can see a dozen titles at a time, all as inscrutably small book covers. Titles that fall off the first-page listing on a Kindle cease to exist. Compare that with standing in front of a physical bookshelf: the eye takes in hundreds of spines or covers at once, all equally at arm’s length. I’ve found that it’s much more effortless to dip back into my physical library – for inspiration or reference – than my digital library. The books are there. They’re obvious. They welcome me back.

The pile of unread books we have on our bedside tables is often referred to as a graveyard of good intentions. The list of unread books on our Kindles is more of a black hole of fleeting intentions.

The comparison of a bookshelf to the limited real estate on a screen is so important in many contexts: when we got into a supermarket or bookshop we can scan hundreds of items at once. How many on a screen when you don’t know what you’re searching for?
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Sony buys Belgian image sensor technology firm » Reuters

Ritsuko Ando:

Japan’s Sony Corp said it bought Belgian image sensor technology company Softkinetic Systems for an undisclosed sum, stepping up investment in an area that has become one of its strongest amid weak sales of its TVs and smartphones.

Softkinetic specializes in a type of technology that helps measure “time of flight”, or the time it takes for light to reflect off an object and return to an image sensor, Sony said.

Put like that, it sounds like “you’re measuring light round trips? Those are nanoseconds, right?”. Judging from the site, though, it’s more about location in 3D and general position sensing and mapping in domestic environments. So does this mean we’ll go to 3D photos next?
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Start up: can Google accelerate publishers?, DuckDuckGo profitable, 3D Touch coming to Android?, and more

Antennagate, Bendgate, and now – Transistorgate? It’s the regular iPhone two-weeks-after-launch news cycle. Photo by khaiphotoart on Flickr.

A selection of 11 links for you. Not legal in Delaware. I’m charlesarthur on Twitter. Observations and links welcome.

Google speeds up news article downloads on mobile devices » BBC News

Leo Kelion:

Dozens of leading news organisations, including the BBC, are taking part in a scheme that will allow their web-based articles to load more quickly on smartphones and tablets.

Leaders of the Accelerated Mobile Pages (AMP) initiative promise that the stripped-back versions of the pages will be “lightning fast” to load.

The move has been led by Google, which is providing use of its servers.

Participants believe it may discourage the use of ad-blocking plug-ins.

AMP works by simplifying the technical underpinnings of the pages involved.

Much of the Javascript code used on normal webpages is absent, meaning articles should not only appear faster but use less battery power.

Publishers can continue to tap into the same ad networks as before, but they will not be able to display some types of adverts including pop-ups and “sticky” images that move as users scroll down a page.

Twitter, LinkedIn, Pinterest and WordPress have said they also intend to make use of the technology.

Facebook is a notable exception. The social network recently launched an alternative programme called Instant Articles, which speeds up the delivery of third-party content by hosting it on its own platform.

Less Javascript, eh? Notable that “participants” (in the test) think it will discourage adblocking. I don’t see why they think that. It might forestall some people from using them. But people who visit pages that aren’t on AMP will get the same dire experience; they won’t know if they’re on AMP pages or not, will they? And then they search for “adblocker”…
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Google’s Accelerated Mobile Pages – a quick reaction (no js) » Kevin Marks

Marks has long open source experience. He’s not that impressed by Google’s new offering with publishers:

Specifically, they replace img, audio, video with their own versions implemented as custom elements and so requiring javascript to appear. They ban loaded style sheets, requiring inline styles, but oddly allow font-face, one of the slowest things on the mobile web. They also replace the Twitter embed fallback markup with a custom type made up by themselves, which combined with the iframe ban means that you need their blessing to extend the web.

This means that if javascript is not loaded, images will disappear.

They also require a lot of arbitrary weird markup (like emoji in the html element, which violates content encoding), a weird style incantation that makes the page opaque, and require the proprietary markup.

Now, my site is not very complex; indeed it loads very fast on mobile already, but it does use a few javascript enhancements: fragmention to let you link to a phrase; webmention injection for comments as seen below, and the twitter embed enhancement javascript. Without these, the page still renders and makes sense, and it is parseable as microformats. This is known as progressive enhancement; AMP looks more like graceless degradation.

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Does your iPhone have a good or bad A9 CPU? » Engadget

Abdul Dremali:

There’s a little drama brewing less than two weeks after Apple released it’s brand new line of iPhones. As reported by Anandtech, the A9 processor of the iPhone 6s and 6s Plus were dual sourced from Samsung and a company called TSMC. The differences between these chips was not evident for some time as fans assumed the smaller 96mm² by Samsung would be the superior chip. Users are conducting tests and reporting the results via forums on Reddit and Mac Rumors which have resulted in the conclusion that the TSMC A9 has approximately 2 hours better battery performance than the Samsung.

It recommends an app you can download to check which make you have. Can we call this Transistorgate? (It’s going to be quite a thing if there really is that big a difference. Though when Apple introduced the retina MacBook Pro, it sourced screens from Samsung and LG; the LG ones were worse. It’s a coin flip..)
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Thank HN: for helping me get traction with DuckDuckGo and Traction book – AMA » Hacker News

Gabriel Weinberg, who set up the DuckDuckGo search engine, took the slightly unusual step of doing an AMA (ask me anything) on Hacker News, rather than Reddit, because he credits HN with getting it all off the ground. He also has a book about how his startup(s) got traction to sell. And this nugget:

DuckDuckGo is actually profitable! It is a myth you need to track people to make money in Web search. Most of the money is still made without tracking people by showing you ads based on your keyword, i.e. type in car and get a car ad. These ads are lucrative because people have buying intent. All that tracking is for the rest of the Internet without this search intent, and that’s why you’re tracked across the Internet with those same ads.

(Disclosure: I use DDG as my default. I like it. You can copy a link from the results without it being stuffed with Google obfuscation.)
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I used an Android watch with my iPhone — and I hate it » Business Insider

Matt Weinberger:

Now, after more than a week wearing a Huawei Watch provided by Google,  I can say that I don’t care for it very much. It doesn’t actually fulfill the mission of helping me look at my phone less.

It’s not really Huawei’s fault. Not entirely. Apple is notoriously protective of the iPhone’s ecosystem, and it’s a minor miracle that an Android watch can sync with an iPhone at all.

But as it stands, the only real superpower that using an Android Wear watch has going for it is that it pushes your phone’s notifications straight to your wrist with a little buzz. If you actually want to do anything about those notifications, you have to take your phone out of your pocket anyway.

But it was good for telling the time. There was that. Looks like the expectation that Android Wear being able to link to iOS would bring a boom in competition (and sales) was overblown.
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Sony may consider options for smartphone unit if no profit next year » Reuters

Reiji Murai:

Sony Corp’s chief executive flagged next year as a make-or-break year for its struggling smartphones, saying it could consider other options for the unit if it failed to turn profitable.

After years of losses, Chief Executive Kazuo Hirai has engineered a successful restructuring drive at Sony, with recent results showing improvement thanks to cost cuts, an exit from weak businesses such as PCs, as well as strong sales of image sensors and videogames. But its smartphone business has been slow to turn around.

“We will continue with the business as long as we are on track with the scenario of breaking even next year onwards,” Hirai told a group of reporters on Wednesday. “Otherwise, we haven’t eliminated the consideration of alternative options.”

Told you: trying to go upmarket in Android is not a smart move, but that’s the strategy Sony tied itself to without having any clear differentiation.
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Press release: Synaptics announces ClearForce technology for smartphones » Synaptics

Synaptics, the leading developer of human interface solutions, today announced broad sampling of its ClearPad® ClearForce™ force-sensing solutions. ClearForce enables OEMs to differentiate smartphones by providing customers with new dimensions in user interfaces such as speed scrolling, zoom, gaming, and text or photo editing by applying variable force with a finger or stylus. Synaptics® has been working closely with leading global OEMs and LCMs to deliver this new dimension in touch with force-enabled smartphones expected to ship in early 2016.

With a rich history in force technology dating back to 1996, including over 60 granted and pending patents worldwide, Synaptics’ third-generation force-sensing solution, ClearForce, enables global OEMs and LCMs to differentiate smartphones — with tablet, wearables, and automotive manufacturers to follow. Variable force creates numerous opportunities to invent new user interface capabilities and increases productivity for touchscreen applications.

“ClearForce”. Unlike, say, Force Touch or 3D Touch. What’s the betting that Samsung’s Galaxy S7 includes this? Question is, will it only be for Samsung apps, or will other app developers (even Google?) take advantage of it?
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Twitter’s Moment » Stratechery

Ben Thompson is excited about the fact and the potential of Twitter’s new Moments service:

When you first tap the Moments tab at the bottom of the Twitter app you’re dropped into the ‘Today’ view that lists a mishmash of stories that, well, happened today.

• Touch any of the stories to get a curated list of tweets that tell the story in question through videos, images, and sometimes just text. It’s a really great experience, and I found the sports stories with their combination of highlights and tweeted reactions particularly enjoyable

• For any Moment in progress, you can tap a button to add tweets about that Moment to your main timeline. Crucially, though, those tweets only persist for the duration of the event in question; the ‘Unfollow’, which is the most essential action when it comes to building a Twitter feed you actually read, is done for you

• Finally, in what was probably the biggest surprise in the product, there is a carousel at the top leading to more focused categories:

Each of these categories includes not only ‘News’ or ‘Entertainment’ Moments that just happened, but also more timeless content, particularly in ‘Fun.’ Look carefully at those category titles, though — they sure look familiar:

That’s right, Twitter just reinvented the newspaper. It’s not just any newspaper though — it has the potential to be the best newspaper in the world.

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Japan’s Murata sees slowdown in global smartphone market growth » Reuters

Makiko Yamazaki and Reiji Murai:

Global demand for smartphones is likely to slow in the next fiscal year due to weaker demand from the world’s biggest market China, the head of Japanese smartphone component maker Murata Manufacturing Co told Reuters on Wednesday.

Chief Executive Tsuneo Murata said growth for the fiscal year starting April 2016 would be in the high, single digits, below the 12 percent growth forecast by the company for fiscal 2015/16.

Murata, however, said this slowdown was unlikely to hurt the company’s business because demand for the high-end phones it provides parts for is expected to remain robust.

“Everyone seems to be worried about the future of the smartphone market, but there should be no change to growth in demand for high-speed and high-performance handsets,” said Murata, one of the sons of the Kyoto-based company’s founder.

“Such high-end handsets need to use more of our products.”

IDC is forecasting overall growth at about 10% for this year compared to 2014; Murata sees that slowing after January.
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iOS hits twelve-month low in US ahead of iPhone launch » Kantar Worldpanel

“Across Europe’s ‘big five,’ Android continues to struggle, with only the heavily prepaid markets of Italy and Spain registering a year-over-year share growth,” said Dominic Sunnebo, business unit director at Kantar Worldpanel ComTech Europe. “In Great Britain, Samsung, the undisputed Android leader, dropped market share both period-over-period and year-over-year, while Sony and LG were the only two Android vendors able to grow share over the last year and over the three months ending in July 2015.”

Europe’s “big five” markets are Great Britain, Germany, France, Italy, and Spain.

“In the US, Samsung’s Galaxy S6 grew its share of smartphone sales but did not threaten the iPhone 6 leadership position,” [research director Carolina] Milanesi added. “In April through August 2015 – the months following the launch of the new flagships – only 29% of the Samsung smartphone installed base were upgraded to new devices. Among those who upgraded, 23% changed to a Galaxy S5, 4% to a Galaxy S6, and 1% to a Galaxy S6 Edge.”

Android is hardly “struggling” in Europe; in some countries such as Spain it has nearly 90% sales share. On that last point – this means that of the total US Samsung smartphone installed base (52m according to separate data from ComScore), 29% (15.1m) upgraded; of those 23% (3.4m) got last year’s S5, 4% (0.6m) got an S6 and 1% (150,000) got an Edge. That’s a pretty dramatic preference for the S5; does price alone explain it?
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Verizon’s zombie cookie gets new life » ProPublica

Julia Angwin and Jeff Larson:

Verizon is giving a new mission to its controversial hidden identifier that tracks users of mobile devices. Verizon said in a little-noticed announcement that it will soon begin sharing the profiles with AOL’s ad network, which in turn monitors users across a large swath of the internet.

That means AOL’s ad network will be able to match millions of internet users to their real-world details gathered by Verizon, including — “your gender, age range and interests.” AOL’s network is on 40% of websites, including on ProPublica.

AOL will also be able to use data from Verizon’s identifier to track the apps that mobile users open, what sites they visit, and for how long. Verizon purchased AOL earlier this year.

The decision came after a ProPublica article revealed that an online advertiser, Turn, was exploiting the Verizon identifier to respawn tracking cookies that users had deleted. Read the story.

Privacy advocates say that Verizon and AOL’s use of the identifier is problematic for two reasons: Not only is the invasive tracking enabled by default, but it also sends the information unencrypted, so that it can easily be intercepted.

Or you can opt out (and hope it sticks).
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Start up: boarding pass hacks, Microsoft Surfaces, the truth about Android Auto, ad fraud explained, and more

Kindle display at Waterstone’s: they were coming soon, now they’re gone. Photo by DG Jones on Flickr.

A selection of 10 links for you. Contains no additives. I’m charlesarthur on Twitter. Observations and links welcome.

What’s in a boarding pass barcode? A lot » Krebs on Security

Brian Krebs was contacted by a reader who had looked at a friend’s boarding pass:

“I found a website that could decode the data and instantly had lots of info about his trip,” Cory said, showing this author step-by-step exactly how he was able to find this information. ‘

“Besides his name, frequent flyer number and other [personally identifiable information], I was able to get his record locator (a.k.a. “record key” for the Lufthansa flight he was taking that day,” Cory said. “I then proceeded to Lufthansa’s website and using his last name (which was encoded in the barcode) and the record locator was able to get access to his entire account. Not only could I see this one flight, but I could see ANY future flights that were booked to his frequent flyer number from the Star Alliance.”

The access granted by Lufthansa’s site also included his friend’s phone number, and the name of the person who booked the flight. More worrisome, Cory now had the ability to view all future flights tied to that frequent flyer account, change seats for the ticketed passengers, and even cancel any future flights.

The information contained in the boarding pass could make it easier for an attacker to reset the PIN number used to secure his friend’s Star Alliance frequent flyer account. For example, that information gets you past the early process of resetting a Star Alliance account PIN at United Airline’s “forgot PIN” Web site.

Worrying. Keep it on your phone instead.
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Every device is a compromise, part 2 » Beyond Devices

Jan Dawson:

immediately after the SP4 was introduced, we were shown the Surface Book. Which is a laptop. And Panos Panay, the presenter, started out by talking about all the things a laptop does that the Surface Pro does poorly – a better typing experience, a bigger screen, and so on. This was one of the most bizarre juxtapositions I’ve ever seen at a tech event. After 30 minutes of talking about how the Surface Pro 4 could replace your laptop with no compromises, the very same presenter offered up a laptop which was clearly better, because it didn’t make certain of those compromises.

Taking a step back for a minute, both products look really promising. I’ll withhold final judgment until I get to use these devices (or at least until others I trust have done so and shared their opinions). But this “no compromise” nonsense continues to do a massive disservice to Microsoft and to its customers.

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Microsoft has warmed my cold cynical heart with hot new hardware » The Verge

Vlad Savov:

The brand new Surface Book is, like the original Surface Pro, another effort at complete reinvention. The Surface Book deconstructs the laptop and reconstitutes it in the shape of a hybrid device of the sort we’ve never seen before. Microsoft didn’t just make a new tablet with a detachable keyboard, it designed a whole new hinge and attachment mechanism, and it intelligently split up the internal components to deliver both a light and sleek tablet and a powerful laptop. The discrete Nvidia graphics chip sits among a battery of batteries inside the keyboard dock, liberating the tablet of most of its heft when power is not a priority, but keeping it substantially PC-like when the whole thing is connected and operating as one.

I am hugely impressed by the clear-eyed purpose underpinning every one of the decisions that Microsoft has made with its two Surface devices introduced today. The boundlessly charismatic Panos Panay — now in charge of both the Lumia and Surface product lines at Microsoft — simply didn’t allow a moment’s questioning or dubiety. Every time he presented a new feature or change, he asked the rhetorical “why?” question himself, and he answered it convincingly. Here are a thousand levels of pressure sensitivity for the stylus, and here’s what you can do with that. Here’s a keyboard with 1.6mm of travel and here’s why you’d want to mash your fingers against it. Panay elicited something that every tech company strives for, but few achieve: desire.

Presentation is so important, as is explaining why something needs to exist; that’s something Steve Jobs really used to do well. Apple doesn’t have anyone who can enunciate the need for something to exist in the way he could, and technology really needs that skill.

That said, Microsoft hasn’t priced these (or its Surface Pro 4) cheaply. Which means the rest of the PC OEMs will be left scrapping for dollars while, if these sell at all, Microsoft reaps both the hardware and software profits.
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Verizon scraps its exclusive Sony phone before it even launches » CNET

Roger Cheng:

Sony said both companies agreed on the cancellation. “The decision was made after we have taken into consideration such factors as the competitive landscape and launch timing,” said a company spokeswoman. A Verizon spokesman echoed those sentiments without offering additional specific details.

There have been hints of problems with the Xperia Z4v, which was a modified version of the Xperia Z4 that added a larger battery and wireless charging. After its initial unveiling in June, both companies grew silent about the product. A Sony event held in New York over the summer was dominated by games from PlayStation, its virtual reality system, and other products like cameras, with only a single small area dedicated to showing off the Xperia Z4v.

Then there is the Xperia Z5 family, which debuted at the IFA trade show in September. The announcement of the three new phones rendered the Xperia Z4v outdated before it even launched.

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Fraud is a million $ business; Here’s how they’re doing it » LinkedIn

Mike Nolet digs into a “golf” site which had fencing content (huh) and an absurd number of video views per visitor (177 per week?) but whose referrers seemed to be porn sites, among others:

as I mentioned in my disclaimer there’s never a way to know for sure, but here’s what I suspect:

• Unsurprisingly, I think the site is fake. No real users that go there.
• Traffic is sourced from adware programs and porn sites and show the site in popups, most likely hidden from view.
• They used to do display fraud, but got busted, and so started putting fake display ads to make the site seem more legitimate. They still get away with Video.
• They run a series of checks to try to determine whether or not they are being watched, and if they are, the sites behave normally.
• When they’re not being watched that they spam as many videos into a popup as they can.
• Gross they are generating $1.5m/week in ad impressions on this one site which is clearly part of a network of sites.
• Now, this traffic was caught, but even if only 2% of their traffic gets past the filters, it’s still a million $ business.

Scary. And this is just one site in a huge network. Hurrah for online advertising!
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13 cool facts about the 2017 Porsche 911 » Motor Trend

Jonny Lieberman:

There’s no technological reason the 991/2 doesn’t have Android Auto playing through its massively upgraded PCM system. But there is an ethical one. As part of the agreement an automaker would have to enter with Google, certain pieces of data must be collected and mailed back to Mountain View, California. Stuff like vehicle speed, throttle position, coolant and oil temp, engine revs—basically Google wants a complete OBD2 dump whenever someone activates Android Auto. Not kosher, says Porsche. Obviously, this is “off the record,” but Porsche feels info like that is the secret sauce that makes its cars special. Moreover, giving such data to a multi-billion dollar corporation that’s actively building a car, well, that ain’t good, either. Apple, by way of stark contrast, only wants to know if the car is moving while Apple Play is in use. Makes you wonder about all the other OEMs who have agreed to Google’s requests/demands, no?

That’s Acura, Chevrolet, Honda, Hyundai, and Volkswagen to start with. (Insert joke about the VW data being worthless.) None of the stories which used this snippet then bothered to ask Google if it’s true – apart from Android Police, which was told:

we take privacy very seriously and do not collect the data the Motor Trend article claims such as throttle position, oil temp and coolant temp. Users opt in to share information with Android Auto that improves their experience, so the system can be hands-free when in Drive, and provide more accurate navigation through the car’s GPS.

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Apple acquires startup developing advanced AI for phones » Bloomberg Business

Jack Clark and Adam Satariano:

Apple [has] acquired Perceptio, a startup developing technology to let companies run advanced artificial intelligence systems on smartphones without needing to share as much user data.

The company’s leaders, Nicolas Pinto and Zak Stone, are both established AI researchers who specialize in developing image-recognition systems using deep learning. Deep learning is an approach to artificial intelligence that lets computers learn to identify and classify sensory input…

Perceptio’s goals were to develop techniques to run AI image-classification systems on smartphones, without having to draw from large external repositories of data. That fits Apple’s strategy of trying to minimize its usage of customer data and do as much processing as possible on the device.

Apple said last week that it had acquired a U.K.-based software startup that made AI technology to create Siri-like digital personal assistants capable of having longer conversations.

Apple really is going all-in on AI. Which of course it needs to.
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Waterstones is removing Kindles from stores » The Bookseller

Lisa Campbell:

Waterstones is removing Amazon’s Kindle devices from many of it stores as sales “continue to be pitiful”.

The company’s managing director James Daunt said there had been no sign of a “bounce” in Kindle sales, so the company was “taking the display space back” to use for physical books instead. 

He told The Bookseller: “Sales of Kindles continue to be pitiful so we are taking the display space back in more and more shops. It feels very much like the life of one of those inexplicable bestsellers; one day piles and piles, selling like fury; the next you count your blessings with every sale because it brings you closer to getting it off your shelves forever to make way for something new. Sometimes, of course, they ‘bounce’ but no sign yet of this being the case with Kindles.”

David Prescott, chief executive of Blackwell’s, has also confirmed that fewer e-reading devices were being sold at his chain. “We’re not seeing a great deal of people who are buying an e-reader for the first time now,” he said. “People are buying e-reader replacements, but that’s it.”

Douglas McCabe, analyst for Enders, said it was “no surprise” Waterstones was removing Kindle device sales from its shops. “The e-reader may turn out to be one of the shortest-lived consumer technology categories,” he said.

I dunno, have to compete with the Kinect there.
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Taking pictures with flying government lasers » Generalising

Andrew Gray:

A few weeks ago, the Environment Agency released the first tranche of their LIDAR survey data. This covers (most of) England, at varying resolution from 2m to 25cm, made via LIDAR airborne survey.

It’s great fun. After a bit of back-and-forth (and hastily figuring out how to use QGIS), here’s two rendered images I made of Durham, one with buildings and one without, now on Commons:

The first is shown with buildings, the second without. Both are at 1m resolution, the best currently available for the area. Note in particular the very striking embankment and cutting for the railway viaduct (top left). These look like they could be very useful things to produce for Commons, especially since it’s – effectively – very recent, openly licensed, aerial imagery…

You can play too – just download QGIS (open source, Windows/Mac/Linux) and find the place where you live. Oh, LIDAR? Laser Interferometry Detection And Ranging (though Wikipedia has it as “Laser Imaging”). You’re welcome. The whole Generalising blog is worth browsing if you like people noodling with data. They do it wonderfully.
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Scrivener crashes after upgrading to El Capitan (OS X 10.11) » Literature & Latte Support

There is a bug in El Capitan that can cause crashes in 32-bit applications when they try to access font data. Because Scrivener is 32-bit, some of our users have reported frequent crashes when Scrivener is used after updating OS X to 10.11 El Capitan. These crashes often occur when Scrivener is launched, but sometimes they may occur while it is in use.

The fix involves a little twiddling in the Terminal. Included because if you’re doing writing of any sort, you should use Scrivener. Also available on Windows.
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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.

Start up: Apple Music for Android enters beta, how many Ubuntu phones?, Samsung’s dead Milk, and more

If only it were as simple as this for phones. Photo by Bradford Timeline 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.

Google brings you closer to your customers in the moments that matter » Inside AdWords blog

Sridhar Ramaswamy, Senior Vice President, Ads and Commerce:

Customer Match allows you to upload a list of email addresses, which can be matched to signed-in users on Google in a secure and privacy-safe way. From there, you can build campaigns and ads specifically designed to reach your audience.

Let’s say you’re a travel brand. You can now reach people who have joined your rewards program as they plan their next trip. For example, when these rewards members search for “non-stop flights to new york” on, you can show relevant ads at the top of their search results on any device right when they’re looking to fly to New York. And when those members are watching their favorite videos on YouTube or catching up on Gmail, you can show ads that inspire them to plan their next trip.

Using Customer Match, you can also generate Similar Audiences to reach new customers on YouTube and Gmail who are likely to be interested in your products and services. For example, you can drive awareness on YouTube for new non-stop flights by showing TrueView ads to prospective customers who have similar interests and characteristics to your rewards members.

The quest for “relevant ads” must be pursued continuously. (Facebook already has a similar system.)
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Bringing the Internet to more Indians—starting with 10 million rail passengers a day » Official Google Blog

Sundar Pichai, Google CEO:

on the occasion of Indian Prime Minister Narendra Modi’s visit to our U.S. headquarters, and in line with his Digital India initiative, we announced a new project to provide high-speed public Wi-Fi in 400 train stations across India.
Working with Indian Railways, which operates one of the world’s largest railway networks, and RailTel, which provides Internet services as RailWire via its extensive fiber network along many of these railway lines, our Access & Energy team plans to bring the first stations online in the coming months. The network will expand quickly to cover 100 of the busiest stations in India before the end of 2016, with the remaining stations following in quick succession.

Even with just the first 100 stations online, this project will make Wi-Fi available for the more than 10 million people who pass through every day.

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Microsoft announces changes to financial reporting structure » Yahoo Finance

Beginning in fiscal year 2016, the company will report revenue and operating income based on three operating segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.   

The Productivity and Business Processes segment includes results from Office and Office 365 for commercial and consumer customers, as well as Dynamics and Dynamics CRM Online. 

The Intelligent Cloud segment includes results from public, private and hybrid server products and services such as Windows Server, SQL Server, System Center, Azure, and Enterprise Services. 

The More Personal Computing segment includes results from licensing of the Windows operating system, devices such as Surface and phones, gaming including Xbox consoles, and search.

This is surely going to obfuscate things more than ever; the latest scheme, which had seven reporting segments, had only been in place for three years – replacing one with six segments. The fewer reporting buckets, the less help it is trying to understand what is and isn’t working at the company.
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Apple Music for Android beta invites spotted in the wild » Techaeris

Justin Jelinek:

The e-mail comes from a service called Betabound, a site that allows users to request access to different varieties of beta programs. In this instance though, it’s a doozy. The notice — in its entirety below — simply states:

We’re excited to invite you to come test Apple Music for Android. If you’re a current Android user that would like to join the beta for the new music streaming service, you won’t want to miss this opportunity. To learn more and apply, click the link below. Best of luck! The Betabound team.

Once you follow the link, you’ll be hit with a series of music related questions, some of which are real head-scratchers.  For example:

If you could only listen to 5 albums for the rest of your life, what would they be and why?

How do you even answer that? I’d be hard pressed to come up with an answer, though if the successful completion would get me into the Apple Music for Android beta I’m sure I could come up with something.

If you want to try your luck and see if you can get into the beta, you can sign up on Betabound’s website.

Yup, it’s really there. Big questions:
• will it follow Android’s Material design, or look like an iOS app?
• Will it try to integrate iTunes content, or just offer streaming/DRM downloads?
• How will it avoid the relentless one-star trolling of Android fans that greeted the “Move to iOS” app?

And now…
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Apple Music’s functionality failure » Lefsetz Letter

Bob Lefsetz is an acerbic viewer of what’s happening in the music business, and he doesn’t like how Apple is handling its own shift:

this is death in tech. If you’re not willing to destroy the old business model on the way to the new, you’re gonna lose in the long run.

Yes, Apple has zillions of credit card numbers. Yes, Apple is the world’s most valuable company, a juggernaut. But IBM is a shadow of what it once was, as is Microsoft. Nothing is forever. When the great disruption comes you’ve got to sacrifice what once was, however profitable it might be, or you will die in the future.

The problem with streaming in the United States is that most people just don’t see the need to subscribe. Furthermore, they don’t see the need to experiment. Getting someone to try something is the hardest part. And when they do try something and they get less functionality than before, they’re out.

This is what’s happening with Apple Music, and this hurts not only Apple, but the music business at large.

It’d be like having a CD player that spins vinyl. Actually, they tried this. Needless to say, it failed.

As for streaming sound quality, Clayton Christensen went on to say that the new solution may not equal the quality of the old, but it’s good enough and it’s cheap. If you’re an iTunes customer you’re going to go to streaming, you just don’t know it yet. Because streaming is cheaper if you’re a heavy buyer, and owning nothing you can gain improvement along the way.

His argument that you want different apps for music you “own” and for “streams” feels right. Apple’s problem though would be how do you make people start to use the “streams” one? There must have been big fights over this internally. The present system feels like a compromise that hasn’t quite worked.
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Samsung’s Milk Video to be shut down November 20 » Variety

Janko Roettgers:

Samsung is shuttering its Milk Video service in November. The company announced the shut-down on Google Play Monday, writing: “While we remain committed to providing premium entertainment services, we have decided to end support for the Samsung Milk Video app as of November 20, 2015.”

A Samsung spokesperson declined to comment on how the closure will affect Milk Video staff.

The closure comes almost to the day a year after Samsung launched Milk Video as a mobile-focused service focusing on short-form video content. Samsung at one point envisioned Milk Video as part of a larger suite of content-focused apps for mobile devices, which also includes the company’s Pandora-like Milk Music service.

Samsung struck some deals with Vice, Funny or Die and others for exclusive short-form content, and complemented these clips with aggregated videos from YouTube, Vevo and other sources.

Roettgers wrote about layoffs in those units back in May. Is this the end of Samsung’s content strategy?
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The Apple Watch is perfect. On paper. »

Wes Miller (who generally likes his Apple stuff) is taking his Apple Watch back, after a week, because he can’t find anything really relevant that it does for him:

The former product manager (and former development manager) in me sees how we arrived at this point. The Apple Watch team was established long ago, and started on their project. At one point, pressure from above, from outside, from investors, who knows… forced Apple to push up a launch date. The hardware was reasonably ready. But the software was a hot mess.

Traditionally, Apple excelled when they discarded features that weren’t ready, even if competitors already did them in a half-assed way – winning over consumers by delivering those features later when they’re actually ready. Unfortunately, you often get a product manager in the mix that pushes for a feature, even if it can’t really be implemented well or reliably. The Apple Watch feels like this. It offers a mix of checkbox features that, yes, you can argue, kind of work. But they don’t have the finish that they should. The software doesn’t respect the hardware. In fact, it’s giving a middle finger to the hardware. Even WatchOS 2 fails to deliver adequate finish. The list of features that the Watch promises sound nifty. But actually living with the Watch is disappointing.

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Apple iPhone 6s vs iPhone 6s Plus Water Test! Is it secretly waterproof? A waterproof review » YouTube

If you don’t want to watch – he dunks the new phones in some bowls of water for an hour. They keep working. Apple has said nothing about the waterproofiness of the new iPhones.

Moving on…
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Sony changes stance on waterproof phones: do not use underwater » Xperia Blog

Sony Mobile has made a hugely controversial change to its advice around Xperia waterproof devices. Despite most recent Sony Xperia waterproof devices achieving an Ingress Protection rating of IP68 for water resistance, the highest possible, Sony now says that they should not be used underwater.

If you head over to Sony Mobile’s support page on water and dust protection, you will find several statements on Sony’s new policy including: “Remember not to use the device underwater” and “The IP rating of your device was achieved in laboratory conditions in standby mode, so you should not use the device underwater, such as taking pictures.”

Specifically: don’t put it in seawater or chlorinated water such as swimming pools. Or in juice. Distilled water might be OK. It’s not quite the selling point it used to be, is it? Especially as it had promotional campaigns showing the phones being used to take photos underwater. And people *do* use them to take photos underwater – and like them for that.

Kudos to the Xperia blog, which has pulled together a slew of ads where Sony has shown the phones in water to push that “waterproof” idea. Over to you, Sony.
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How many Ubuntu Phones are there? » RPadovani

Padovani, an Ubuntu contributor, does some maths:

As app developer, and mainly as big supporter of the project, it’s a question I ask myself often.

I don’t have the answer, but I can try to make a guess using a useful statistic I have: the number of times the Calculator App has been updated.

The statistic I have access is the number of unique users that have updated the calculator app at least once. The last update of calculator is from 8 Jun ‘15. So phones that have been sold later probably already included the update. Let’s say then the number of users I guess is updated to end of July ‘15.

This means the only market we consider is Europe. Russia, India, China and the rest of the world have started to have available the phones later this year.

His conclusion: probably about 25,000 by the end of September. Yes, twenty-five thousand. Remember when Ubuntu/Linux/Firefox OS was going to be the future third/fourth mobile ecosystem?
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CEO John Chen shows off the BlackBerry Priv, gets lost » SlashGear

JC Torres:

Just because BlackBerry has finally admitted that it does have an Android smartphone doesn’t mean everyone might be on board with the plan. And “not everyone” might even include CEO John Chen. The chief executive gave the Business News Network an exclusive glimpse at a working BlackBerry Priv, the company’s first “true” Android smartphone. But in trying to demo the smartphone that “runs Google”, Chen is visibly seen struggling to figure out how to actually use the device, as well as probably some hints of unresponsiveness with the touch screen.

In his defense, Chen is, after all, the CEO of BlackBerry, not of Samsung, of LG, or Motorola, or any other Android device maker.

That’s not a defence. Can you imagine any tech CEO struggling so badly as this with the device they hope to make money on? They haven’t even sorted out the naming: Chen pronounces it “Priv”, with a short “i” (as in “privet hedge”), and then talks about it offering “pryvacy” (with a long “i” as in “prying”). Can’t operate the phone, isn’t on top of the marketing. That’s bad. BBN took the original video down and offered it in a non-embeddable view on its site, hence this link to a YouTube re-upload.

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Start up: design for cars and Xbox 360s, the rural broadband row, is Huawei Samsung v2?, hacking OSX, and more

A magnetic wormhole! Really exists! Looks nothing like this! Photo by w4nd3rl0st on Flickr.

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

Google self-driving cars don’t need windshield wipers » Mashable

Chris Perkins:

When asked if the car had windshield wipers, a Google employee replied, “Yes, but not on the windshield. They’re on our sensors—our car’s ‘eyes.'” Essentially, the Google car doesn’t have windshield wipers because it doesn’t need them.

Let that sink in for a second.

The ultimate goal of an autonomous car is to be, well, fully autonomous. A self-driving car wouldn’t require any human input other than specifying a destination. A self-driving car wouldn’t require any human input other than specifying a destination. To that end, Google’s self-driving prototype doesn’t have windshield wipers because humans aren’t required to see out of it.

This brave new world of “cars” truly aren’t cars as we understand them. Yes, they have four wheels and take people from point A to point B, but the similarities end there. If humans don’t need to drive these cars, a very different approach to design is allowed.

Listened to John Gruber and Ben Thompson on the Talk Show earlier. Electric cars, one pointed out, are effectively computers on wheels; you no longer need expertise in pistons and cylinder heads to make a car. That changes the landscape.
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How the Red Ring of Death problem happened » Business Insider

Robbie Bach, formerly of Microsoft, has written a book about his time there. Ben Gilbert picks up what happened that led to a billion-dollar cost:

With the Xbox 360, Microsoft took a design-first approach. Here’s how Bach describes it:

We started with design at the front of the process, and we said, ‘This has to be designed with a designer’s sensibility.’ So the enclosure work we did was done relatively early. Not locked in stone, but we have a shell under which we want to fit. So then the engineering team goes and puts things in the shell.

More clearly: Microsoft designed the look of the Xbox 360 and then figured out how to fit the console’s guts inside, which can be risky. Though game consoles are designed to be pretty enough for a living room home theater, their design is also based on heat management. These things are basically computers. If you pack a computer in a tight box, it will eventually overheat.

Worse, it might loosen parts of the system’s internals or cause other havoc. 

Microsoft had run the console through various tests, from heat to longevity to cold to movement, and plenty of others, and the Red Ring of Death problem was apparently something they didn’t come across. It was only when consoles started coming in as returns that Microsoft began to see the scope of the issue.

“Design is how it works, not how it looks”, allegedly. Though Apple has had problems with iBooks in the past, where heat-related issues led to some failures. But not a billion dollars worth.
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June 2015: MPs set up rural broadband all-party Parliamentary group to tackle BT » ISPreview UK

Mark Jackson:

A group of MPs, primarily from Devon and Somerset in England’s South West, have established a new All-Party Parliamentary Group that will investigate the roll-out of superfast broadband (24Mbps+) services. The group also intends to “put pressure” on BT to stop the operators alleged “delaying antics” and be more transparent with their coverage plans.

It’s understood that the group’s formation was sparked last week after 50 MPs from the South West gathered to moan about progress in the Government’s Broadband Delivery UK programme, which aims to make fixed line superfast broadband services available to 95% of the UK by 2017/18.

The new group will be chaired by Ian Liddell-Grainger MP and has support from Rebecca Pow MP and Neil Parish MP among others. Unfortunately the Government’s register of APPG’s hasn’t been updated since March 2015 (here) and as such the details are still a bit thin on the ground.

Might there be some progress now MPs are about to come back into session?
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Why the smartwatch hype machine is running five years fast » Bloomberg Business

Amy Thomson:

Here’s why you probably want a smartwatch: You can use it to do cool stuff like open doors, pay for coffee, and start cars. Here’s why you probably won’t buy one for another five years or so: There still aren’t many doors, stores, or cars that your smartwatch will work with.

At the IFA electronics show in Berlin this week, Samsung Electronics, Lenovo Group and Huawei unveiled updated watches with upgraded features like tap-to-pay and the ability to interact with other devices ranging from your cell phone to your thermostat to your minivan.  

The stumbling block is that it will take several years before there are enough sensors in homes, businesses and vehicles to make it worth the trouble to strap on a smartwatch.

“For watches to become more popular and more mainstream, they have to deliver a number of capabilities to be relevant,” said Andy Griffiths, head of Samsung’s UK and Ireland division. “Our expected timeline is out to 2020.”

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Magnetic wormhole created for first time » UAB Barcelona

The researchers used metamaterials and metasurfaces to build the tunnel experimentally, so that the magnetic field from a source, such as a magnet or a an electromagnet, appears at the other end of the wormhole as an isolated magnetic monopole. This result is strange enough in itself, as magnetic monopoles – magnets with only one pole, whether north or south – do not exist in nature. The overall effect is that of a magnetic field that appears to travel from one point to another through a dimension that lies outside the conventional three dimensions.

The wormhole in this experiment is a sphere made of different layers: an external layer with a ferromagnetic surface, a second inner layer, made of superconducting material, and a ferromagnetic sheet rolled into a cylinder that crosses the sphere from one end to the other. The sphere is made in such a way as to be magnetically undetectable – invisible, in magnetic field terms – from the exterior.

The magnetic wormhole is an analogy of gravitational ones, as it “changes the topology of space, as if the inner region has been magnetically erased from space”, explains Àlvar Sánchez, the lead researcher.

That last sentence has a new use of the word “explains”. Potential applications already exist for MRIs etc.
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HTML5 deck of cards » Github

That’s it, really. Code available on Github. Neat.
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Huawei is the new Samsung » The Verge

As in it’s a “fast follower” (read: mimic), argues Vlad Savov. But he notes that it does it more subtly than Samsung did:

When Huawei takes risks on rumored new features, as it is doing with Force Touch, it does so in a limited manner. The Force Touch version of the Mate S will only be available in certain markets — mainly the ones where you can say “Force Touch” without being immediately slapped down by Apple’s lawyers — so whatever extra cost there is to adding it in can be borne even if it doesn’t stimulate any extra sales. But then, the Mate S has already stirred up hype and discussion by following Apple’s lead so closely and obviously. Even if you never buy a Force Touch Mate S, you’re now better aware of it because of that Apple analogy.

Samsung knew this better than anyone else: biting the heels of the top dog is a great way to get noticed. And if you happen to have a well-priced, technically appealing product, you can convert that hype into sales. Huawei has been chasing the hype with unquenchable thirst, and by grabbing all the best ideas it sees in the market, it’s been delivering those technically proficient devices to make it prosperous. It’s no accident that Huawei is the third-biggest smartphone vendor in the world. The Chinese company combines the best of what’s available and sells it at a lower price — which it can afford to do because it only needs to spend on engineering. The innovative ideas are already out there waiting to be plucked. It might not be fair, but it sure is effective.

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Researchers discover new keychain vulnerability in OSX » CSO Online

Steve Ragan:

The command creates a situation where, instead of asking for a user’s Keychain password, Keychain will prompt them to click an allow button instead. The two researchers then took their theory further and developed a proof-of-concept exploit that triggers the command and simulates a user mouse click in the exact location where the allow button would appear.

This process happens in milliseconds (less than 200ms to be exact), right in front of the user, who wouldn’t notice a thing.

“The ‘allow’ button appears 10% to the right of the centre of the screen and 7% below it,” Jebara said in an email.

“We noticed that the only issue that could affect the location of this ‘allow’ button is the size of the dock, so we also issue a command that hides the dock for 500ms in order for us to successfully press the ‘allow’ button.”

After the allow button is pressed, the password is intercepted and sent via SMS to the attacker’s phone. However, SMS could be replaced by any delivery system, including exfiltration to a C&C server, or it could be stored locally for later retrieval.

This seems to use the Accessibility API – but I didn’t think that was automatically enabled on OSX. A subtle and dangerous flaw.
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Sony – Plethora of pixels » Radio Free Mobile

Richard Windsor on Sony’s 806 pixels-per-inch Xperia Z5 Premium:

the 4K is screen is, in my opinion, fairly useless for a number of reasons.
• First. In order to see the difference between this screen and a 1080p device the user will have to hold the device between 5-8 inches from his eyes. The viewing distance of most smartphones is around 9-12 inches meaning that in most use cases, users will not be able to tell the difference.
• Second. There is no content available for it meaning that everything has to be up-scaled by a graphics processor to display correctly on the screen. Historically, the Japanese companies have been by far the best at upscaling technologies, but there is still a significant risk that most content and apps will not display optimally.
• Third. Even compressed using VP9 or H.265, 4K video takes up far more space than 1080p and requires up to 4x the bandwidth to be transmitted.

Consequently, users will be able to store less content on their devices and incur up to 4x the cost and 4x the wait to view content that in most cases will look no better than 1080p.
However, despite the practical limitations of a 4K smartphone, it is well known that pointless gimmicks sell phones.

Not so sure about that last point. This is a classic spec-war move; Sony is constrained in what it can do with software, so it has a meaningless spec. (And there’s no suggestion so far of using it in VR, unlike the Note 4, though Sony does have a VR project called Morpheus.)
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Why Sony might pull out of smartphones: it’s trying to raise prices in a falling market

A message for Sony? Photo by LendingMemo on Flickr.

After my look at the first-quarter performance of various high-end handset vendors – Samsung, Sony, LG, HTC, Apple – plus Microsoft and BlackBerry, it’s time to focus more tightly. First up: Sony, which I think is most likely to pull out of the smartphone business among those presently in it.

Why not LG, HTC, Microsoft or BlackBerry? (Samsung we can be sure will stick with smartphones. Apple, ditto.)

• LG is a rarity: a company that has pulled itself out of the lossmaking mire to come back to success. In part this is because it’s a conglomerate, so it can afford to pile money into its handset division, because (like Samsung) when the handset division does well, it pulls the rest along.

• HTC somehow stutters along. It’s a minor player now, but doesn’t look imperilled as it did last year, when it was posting losses as though it enjoyed it. With cash in the bank, it looks safe for now (though we’ll have to see how the M9 and associated handsets sell).

• Microsoft can bear the losses from handsets pretty much endlessly, and they’re useful for other research.

• BlackBerry has horrendous problems with handset profitability, but handsets are essential to its existence while it doesn’t have a completely solid business in mobile device management; they also lend it a USP, so it’s likely to stick with them even though they don’t make money. Then again, let’s check back when it announces its next set of results in June.

Last man standing

Sony is the one I think is most likely to pull out of this market. It’s in the middle of a huge struggle with its identity, where the only divisions that are performing up to snuff are its image sensor manufacturing and games, while music and films tick over. The mobile side? Not so much.

Here’s how it has been doing – plus its stated ambitions for the coming financial year, outlined in red.

Sony's smartphone aims for 2016

What Sony wants from its smartphones: sell fewer at higher prices, smaller losses.

Sony is aiming to get the average selling price (ASP) of its phones to rise, according to its forecast for next year:

Sony's forecast for smartphone revenues and profits. Well, loss.

Sony’s forecast for smartphone revenues and profits. Well, loss.

Sony presentation: smartphone sales/profit

Extract from Sony’s financial review of 2014 and forecast to March 2015

Specifically, it says it’s going to sell fewer handsets but keep revenue about the same. The figures imply raising handset ASPs from around the $300 mark to over $400.

I don’t think that will work. None of Samsung, LG or HTC has an ASP over $400; for all, the figure has been generally trending down for some time. Apple has a high ASP – over $600 – but it claim all sorts of unique selling points (notably, its brand). Sony is competing with other high-end Android phone makers where it hasn’t been able to stand out.

Also, compare Sony’s ASPs and profitability with LG’s:

Comparing Sony and LG smartphone ASP and profit

Sony’s profit wobbles all over the place – but its ambitions for ASP look wild

They’re both on the same scales: ASP on the left axis, profit per handset on the right. (I ignored Sony’s intangibles writedown for the latest quarter.) LG sells on average for less, but does a lot better from it. Sony swings around wildly – a manifestation of its internal problems. Note also how both firms are seeing falling ASPs (ignoring Sony’s forecast).

The problem for Android handset makers is that the ASP is being driven down relentlessly: entrants such as Xiaomi and big players like Huawei are prepared to set low price expectations, which then make it hard for pricier offerings.

But but but! you say. Sony has a world-famous brand, and it has differentiation from Samsung and LG: its phones are waterproof, you can add SD cards (well, that differentiates them from the top-end Samsung flagship now, at least), and.. hmm.

Not so easy to think of features that really distinguish Sony phones from the others jostling for the top end, is it? Which means that in its aim to push up ASPs while selling fewer phones in turns means concentrating even more on the top-end market. There it is going to bump right into LG, Samsung, HTC and Apple, of which at least two have more powerful brands in this field. While 30m isn’t an ambitious target, the price is.

Not that Sony’s admitting that; it has “financial targets” for the fiscal year to March 2018, where it wants the mobile business to have revenues of between ¥1,000 and 1,250bn ($8.32bn and $10.40bn) with operating income margins of 3% and 5%, which translates to between $416m (lowest revenue, lowest profit) and $520m (highest).

Goals are nice, but Sony’s brand isn’t strong enough in smartphones: I think its strategy may take it in the same direction as PCs, where it fought at the high end (competing, notably, with Apple), making devices that were well-regarded critically but which didn’t sell in sufficient volume to make the business worthwhile. It then threw in the towel as losses grew.

The smartphone business is similar: once you lose scale (as has happened to HTC), it’s really hard to regain it. Sony is aiming to sell half as many phones as LG did in 2014, and only 50% more than HTC did. The incremental sales of camera sensors and phone screens will be nice, but it doesn’t have its own CPU or memory foundry as Samsung does; those factors all help drive Samsung’s profitability. I suspect this will be more like PCs than LG’s smartphone business.

How soon? That rather depends on the smartphone market, and how tolerant Sony’s management are if the strategy doesn’t go according to plan. Give it a few quarters. Then we’ll see if Sony really has the guts for this.

But it also raises a key question. What is the differentiating feature to boost sales for an Android handset today? Waterproofing? SD cards? Removable battery? Great camera? Or is it just price? Sony will have to hope it’s not that.

Android (and Apple, and BlackBerry, and Microsoft Mobile) handset profitability – the Q1 scorecard (updated)

Quality. Profitable. Photo by Thomas Hawk on Flickr.

At the end of January, I drew together the figures from the fourth quarter of 2014 to look at how profitable making smartphones was for companies including Apple, Samsung, HTC, LG, and Sony. The approximate answer was: not very, unless you were Samsung or Apple.

Another quarter gone: time again to see if anyone is faring any better. As a bonus I’m also throwing in Microsoft Mobile and BlackBerry.

Proceed with caution

A few words first on procedure. I look at the companies’ financial statements and information about the smartphone shipments, revenues and operating margin of their handset divisions. In some cases they don’t give this explicitly, or they give some but not all of the numbers, which have to be estimated or wrangled by triangulating with analysts’ data. (I tend to use IDC and/or CounterPoint, who I’ve found to be reliable.)

Some people have wondered why I use operating margin rather than gross profit to calculate these numbers. There’s an important difference. “Gross profit” is what you have left over after subtracting the cost of the goods in the product, and the cost of making it, and the cost of getting it to the customer. It’s a number that flatters a business because it doesn’t take into account all the other costs involved in running that business – such as paying sales, general and administrative [SG&A] staff, marketing, R+D (which comes out of your current cash, and is an investment in the future of the business), and all the other things you think of as “keeping the lights on”. If selling your products doesn’t cover all those costs, then you don’t actually have a viable business.

The Motorola finesse

This was why it used to bug me when Motorola Mobility’s people would say that it “made money on each handset it sold” selling its low-priced devices while owned by Google. Sure – it made money on gross margin. It wasn’t a lie, but it was economical with the truth, a comment made perhaps in the knowledge that most journalists wouldn’t ask “you mean on gross margin or operating margin?”

Motorola Mobility was fabulously unprofitable; its losses, once you included SG&A and R&D, were dramatic. Between the second quarter of 2012 (when Google took it over) and the first quarter of 2014, Motorola’s total revenues were $10.98bn. Its losses, once you took account of those costs, were $1.9bn, or 17 cents for every dollar of sales. Motorola never had a profitable quarter while inside Google. In fact if you take its entire life after being spun off from the larger organisation at the start of 2010 to the start of 2014, over 17 quarters just two showed operating profit, totalling $160m. Total operating losses, including those profits: $2.47bn on revenues of $30.6bn. Now it has been swallowed by Lenovo, which promises to make it profitable. We’ll see.

So don’t let glib answers fool you. There are lots of way to talk about “profit”. Here’s mine. (“ASP” is average selling price, across the company’s whole portfolio of smartphones.)

So how was Q1 for you?

With the numbers now in from all the top-line handset makers (who you’d expect would be the profitable ones), here are the numbers. (An asterisk means the number isn’t absolute, and the reason for each is explained below the table.)

OEM Handset
US$ (approx)
Operating profit US$m Operating
margin %
handsets shipped Implied ASP per phone Implied profit per phone
HTC $1.35bn $0.89m 0.06% 5.0m $270 $0.18
Sony $2.28bn –$461m -20.2% 7.9m $288.70 –$58.40
LG $3.25bn $79.85m 2.46% 15.4m $210.79 $5.18
Samsung $22.53bn $2.47bn* 10.96% 83.3m* $250.88 $29.65
Total for top-end Android $29.41bn $2.09bn 7.1% 111.6m $263.50 $18.73
Lenovo $2.82bn* -$218m -7.7% 18.7m $150.80* -$10.28
Top-end Android inc Lenovo $32.23bn $1.87bn 5.80% 130.3m $247.35 $14.35
Apple $40.28bn $11.27bn (at 28% margin) 28% (est) 61.17m $658.53 $184.20
Microsoft Mobile $1.03bn –$369m -35.8% 8.6m $119.70 –$54.00
BlackBerry $274m –$156.88m -57.2% 1.3m $210.77 –$120.68

HTC: I’ve assumed that all the first-quarter revenue is for HTC phones – which isn’t true, given that it also now offers the HTC Re and made the Nexus 9 tablet sold by Google. (Sales were likely pretty small, since it didn’t show up in IDC’s tablets category where the smallest number was about 1m, and you’d expect that Amazon sold more. I understand Nexus 9 shipments in Q4 were just 70,000; the number would be substantially smaller in Q1.)
The 5m phones number comes from one of the big analysis companies that tracks smartphone shipments. (Not sure I have their permission to say who, but they’re very reliable.)
The operating margin isn’t a mistake – it really is $890,000 after conversion. HTC truly lives on the edge; and has been spending on R+D for its virtual reality headset. The phones are probably more profitable than this suggests; the Nexus 9 and Re probably aren’t, but it’s unlikely they contribute much to revenue.

Sony: Currency converted using the yen rate for the quarter cited in Sony’s results presentation. The huge operating loss is a puzzler: Sony’s explanation in its financials is that besides the dollar’s appreciation hitting costs, it was due to “the recording of intellectual property related reserves in the current quarter”. I don’t know what the IP-related issues are; is Sony gearing up for a court fight with someone? (Microsoft, over Android licensing?)

LG: Currency converted from Korean won using the same conversion rate as Samsung.

Samsung: the company doesn’t give exact figures for its smartphone shipments; it coyly said in its investor call it had shipped 99m mobile phones including featurephones and that smartphones were in the “mid-80s percent”. This is IDC’s number.
Its smartphone revenues calculated on the prevailing won-dollar exchange rate on 31 March, and the basis that those 15.7m featurephones had a shipping price of $15, and that the “about nine million” (quote from the earnings call) tablets had a shipping price of $175.
Samsung gives operating profit for its entire “IM” division, which includes its PC divison. I’m assuming these make zero profit, or not enough to perturb the figures. If any of its PCs, tablets or featurephones makes a profit, that reduces the per-handset smartphone profit.

Lenovo: now owns Motorola, which is dragging down its results, as it does everywhere. Assumptions: the 2.5m tablets it sold went for an ASP of $100 and made zero profit; a higher tablet ASP and profit means the smartphone business did worse. Another assumption: Moto360 smartwatch sales didn’t add materially to revenues, and didn’t lose money. (You can argue about this. It reduces the smartphone revenue, but boosts profitability if the Moto360 sold well at what was probably a loss or breakeven.)

Lenovo is odd in that its smartphone business is now partitioned into two – there’s the Lenovo brand, which sells almost entirely in China (and recently in India, a little), and the Motorola brand, which sells much more widely. The Lenovo brand phones have really low ASPs – historically, around the $100 mark. The Motorola ones have much higher ASPs – about $230 in the most recent quarter. None of it is profitable, though; even before Motorola the mobile business was losing money, and there are various unspecified writeoffs of unspecified amounts in the latest quarter that make the losses even worse. Lenovo says it’s aiming to get Motorola profitable within 4-6 quarters of acquisition. So that’s by the middle of 2016.

Trouble for Lenovo is that it hasn’t made a profit with low ASP phones, and it’s not making one with Motorola’s high ASP ones. Perhaps it hopes the profit will come with scale (or the departure of rivals?).

Top-end Android cumulatively: clearly, Samsung dominates: it has 30 times more profit than its nearest rival (LG) on about 5 times as many phones.

Apple: we have to assume Apple’s iPhone operating profit margin at 28%, because it doesn’t break out divisional profits; all costs are assigned across the company. (You could estimate it by taking iPhone revenues as a percentage of the total, and assigning that percentage of all other costs to it.)

Microsoft Mobile: I previously set out all the calculations used here (which exclude writedowns on intangibles). Specific assumptions: its featurephones have an ASP of $15 and make $5 profit per handset; sales and marketing was $300m per quarter. Mobile is a terrible business for Microsoft, but it has to stick with it.

BlackBerry: these are the figures for its quarter to the end of February. I looked at those in detail, and found that services and software have consistent gross profit margins of about 82%. Subtract that from the gross profit, and you get a total gross profit for handsets of $21.20m. Now we have to subtract operating expenses from that; assuming those are proportional to the revenues from each slice of its business (hardware, software, services) we take away 42%x $424m = $178.08m to get the operating profit for BB’s handsets. It’s negative.
Handsets are an even worse business for BlackBerry than for Microsoft – and BlackBerry can’t bear the losses like Microsoft can. Tick tock.

Questions you’re asking:

1) Where’s Lenovo (including Motorola)?
Hasn’t reported yet; calendar Q1 is the end of its financial year, and it takes an age putting together its results. Might have them some time in, who knows, June. (It seems to have shipped 18.8m phones in the quarter, down year-on-year from the 19.1m Lenovo and Motorola shipped when separate.)

There, it’s now included.

2) What about Xiaomi/Huawei?
Though they’re big players in shipments (15.3m and 17m respectively), Xiaomi doesn’t publish numbers anywhere I can find (pointers welcome), and Huawei doesn’t break out any detail from its mobile division – though a year ago it said it was operating just ahead of break-even.


Sequential quarter comparisons are usually odious, especially if you look from the Christmas quarter to the new year one; shipments fall, revenues fall and stuff gets cheaper as companies try to shift unsold stock and get ready for New Things. Bearing that in mind, looking back at the Q4 figures, we find that:
• HTC’s margins worsened quite a lot; handset ASP stayed fairly steady.
• Sony’s ASP dropped a lot, from $305 to $288.70.
• LG actually improved its operating margin, kept revenues and shipments up, and saw only a slight dip in ASP
• Samsung kept revenues up while increasing shipments – hence a big drop in ASP, from $306 to $250.88 – and improved operating margins and profit
• Apple saw shipments fall (as expected), a slight fall in ASP but per-handset profit remained almost the same. And it’s still taking all the money.

Coming up…

In a followup post, I’ll look at ASP trends for these companies, and what they suggest about the challenges facing these companies – particularly Sony – and also the question of whether Samsung might withdraw from the PC business altogether. (It pulled out of Europe last year.) Stay tuned.

Start up: Nintendo’s mobile money, Nest misses summer, the non-voice phone, why Tidal will fail, and more

Carphone Warehouse: not the place to look for an Apple Watch. Photo by morebyless on Flickr.

A selection of 10 links for you. None is a leftover April Fool’s. I’m charlesarthur on Twitter. Observations and links welcome.

DeNA, in Nintendo pact, aims for games bringing in over $25m/month » Reuters

Japanese online game maker DeNA Co Ltd on Wednesday said it wants its new partnership with gaming giant Nintendo Co Ltd to yield titles that bring in over 3bn yen ($25.02m) a month.

The alliance, announced on March 17, will bring Nintendo characters such as Super Mario and Donkey Kong to smartphones, and see their jointly developed games available through phones and tablets as well as Nintendo’s Wii U and 3DS consoles.

DeNA Chief Executive Isao Moriyasu said the partners would release their first game later this year, but was coy on which character from Nintendo’s trove of intellectual property (IP) would be featured.

“We want to create games that will be played by hundreds of millions of people,” Moriyasu told Reuters in an interview. “We want to create multiple hit games rather than aiming to succeed with just one powerful IP element.”

Ambitious, but should be feasible. Nintendo takes in roughly 25bn yen per month in software sales at present.

With the Galaxy S6 and S6 Edge, Samsung tries to regain its footing »

Farhad Manjoo:

In the international market for phones, Samsung’s Galaxys are relatively expensive. They sell for about the same price as Apple’s latest devices, $199 and up with a two-year contract, or more than $650 without a contract. But powerful phones made by low-priced Chinese sellers, like the OnePlus One, often sell for less than half the price of high-end Samsung and Apple devices.

If you pay the premium price to Apple, you get a phone with a well-designed operating system, no overlapping preloaded apps, and a host of services that often work very well, like iMessage, Apple Pay and expanding compatibilities with Apple’s personal computers and devices like the Apple TV and, soon, the Apple Watch. You can criticize Apple’s sticky ecosystem as a form of consumer lock-in, but Apple sure has built a luxurious prison, and customers are willing to pay extra for it.

If you pay that premium to Samsung, you don’t get a whole lot more than you can get on, say, a phone made by Xiaomi, OnePlus or any of a dozen smaller players.

That, indeed, is the problem.

Voice out of vogue for UK mobile phone users » eMarketer

In December 2014 polling from multichannel solutions provider Oxygen8 Group, voice didn’t even make the top 10 list of mobile services used by mobile phone users. Communication needs are more likely being met by other data-led services. For example, according to the survey, the most popular service was messaging, cited by 90.0% of respondents. Email and social media, with respective response rates of 83.0% and 77.6%, also fared well.

Energy companies around the world infected by newly discovered malware » Ars Technica

Dan Goodin:

The United Arab Emirates was the country most targeted by the attackers, followed by Saudi Arabia, Pakistan, and Kuwait.

Computers are initially infected with Laziok through spam e-mails coming from the moneytrans[.]eu domain. The e-mails contain a malicious attachment that exploits a Microsoft Windows vulnerability that was patched in 2012. The same vulnerability has been exploited in other attack espionage campaigns, including one that used the Red October malware platform to infect diplomatic, governmental, and scientific organizations in at least 39 countries. The Laziok exploit typically came in the form of an Excel file.

Patched in 2012, but not patched. The state of security today.

Tidal and the future of music » stratechery

Ben Thompson:

even if Jay-Z and company were truly independent, they would be heavily incentivized to avoid exclusivity as well: remember that music has high fixed costs but (especially on the Internet) zero marginal costs. That means the best way to make money is to sell as many units as possible in order to spread out those fixed costs. That, by extension, means the optimal strategy for whoever owns the music is making it available in as many places as possible – the exact opposite of an exclusive.

This ultimately is why Tidal will fail: it’s nice that Jay-Z and company would prefer to garner Spotify’s (minuscule) share of streaming revenue, but there is zero reason to expect Tidal to win in the market. Tidal doesn’t have Spotify’s head-start or free tier, it doesn’t have Apple’s distribution might and bank account, and it doesn’t have any meaningful exclusives3 — and to be successful, you need a lot of exclusives; it’s too easy and guilt-free to pirate (or simply skip) one or two songs.

And now stay tuned…

Apple’s music strategy looks increasingly risky » Above Avalon

Neil Cybart:

Apple’s strategy with music streaming continues to be a work in progress, but from what we know, curation and discovery will be two main tenets of a service that uses music exclusives as a carrot to entice users. In what could be a major negative, Jimmy Iovine reportedly was unable to get the cost for this music streaming service down to $5/month, with record labels demanding Apple remain steady at the “me-too” $9.99/month price. The primary problem with this chain of events is that music executives are hardly in a position to be dictating pricing and business strategy in an industry that may be fundamentally broken, yet again, by technology.

Music streaming is split into free and paid and there is risk that without a free offering, Apple may not reach enough scale to force consolidation among streaming services. A $5/monthly price was thought to alleviate some of this risk, but with Apple possibly needing to ship at $9.99/month, one has to wonder if management is pleased with how the product is shaping up.

One theme that permeates this discussion is Apple’s forced hand. With iTunes Radio, a seemingly “me-too” product compared to Pandora, Apple has seen moderate levels of success, but nothing that would jump out to an observer as ground-breaking. Apple risks a very similar fate with a paid music streaming service: garnering enough success to warrant respect with the endeavor (mostly because the bar is set so low), yet unable to capture the music industry like it was 2005 again. In essence, Apple would be stuck in catch-up mode.

Without a $5-per-month tier, the music industry is never going to break YouTube’s grip – which is essentially ad-supported streaming where the labels don’t get the same cut as they would from a paid service.

Nest confused by BST » Nest Community

Britain switched to “summer time” (equivalent to US’s Daylight Savings) at the weekend, going an hour ahead of GMT. Seems that Nest didn’t get the message:

The switch to BST seems to have confused my Nest! I have a manual schedule setup, auto schedule is disabled and the Nest didn’t come on at the new time this morning!

Only UK affected, said Nest. (Well, duh.) Puny humans and their clock-changing. (Apple was caught out for years by DST changes, which its alarms didn’t keep up with.)

IEEE waves through controversial FRAND patent policy » EE Times

John Walko, in February:

IEEE’s new standard on patents that lowers royalty fees is making some members angry.

The IEEE’s decision to approve a bitterly contested change to its patent policy, has, perhaps unsurprisingly, caused bitter divisions among its members. The revised rules would see the royalty fees large vendors have to pay reduced significantly, particularly in the wireless sector.

Compensation for a company’s IPR would now be based on a percentage of component price rather than the whole device, as is generally the norm.

Another consequence of the revised approach to royalties is a more realistic definition of what represents Fair, Reasonable and Non-Discriminatory (FRAND) when it comes to valuing a company’s standards-essential patents (SEP) such that the inventors get a fair return on sometimes huge investments into developing innovations, while at the same time not building barriers to entry for new products and new suppliers.

I missed this at the time; but it’s pretty dramatic. Lots of lawsuits have previously involved demands for royalties on finished products, which – if you think about it – is daft: if an essential patent only affects some tiny part of the operation of a device (eg Wi-Fi on the Xbox 360, as an example) why should Microsoft have to pay a proportion of the finished price?

This doesn’t have “non-practising entities”, aka patent trolls, pleased. Here’s Bill Merritt of Interdigital (an NPE) fulminating about it – and saying it won’t play ball.

Seems minimal, but this could have big long-term effects.

Sony Mobile aims to ship 38 million smartphones in FY2015, say sources » Digitimes

Daniel Shen and Steve Shen:

Sony Mobile Communications aims to ship 38m smartphones in fiscal 2015 (April 2015-March 2016), down slightly from 39.2m units shipped in the previous fiscal year, according to sources at Taiwan’s handset supply chain.

The lower shipment target comes as the Japan-based vendor is still overhauling its handset business and has also shifted its focus to the mid-range to high-end segment, said the sources.

Despite the absence of new orders from Sony Mobile since the fourth quarter of 2014, Taiwan’s ODMs have begun shipping some new models to the Japan-based vendor recently, including the Xperia E4 from Arima Communications, Xperia E4g from Compal Electronics and Xperia M4 Aqua from Foxconn/FIH Mobile.

Sony seems to be keeping focus on waterproofing, removable batteries and SD cards – unlike Samsung. How’s this going to play out?

Carphone Warehouse cut off from Apple Watch launch » Telegraph

Chris Williams:

Carphone’s UK chief executive, Graham Stapleton, said that the 800-strong high street chain will not be part of the launch next month.

He added: “We would love to be able to stock the Apple Watch. I’ve got to be careful what I say but I think they are just going another way with it. We have not been given the opportunity.”
Instead of selling its smartwatch thorough the same channels as the iPhone, Apple will court high-end fashion shoppers in more exclusive locations, as it charges prices as high as £13,500 for the top-of-the-range model. Window displays at Selfridges’ flagship Oxford Street store, for instance, were concealed behind Apple-branded hoardings on Tuesday in preparation for the launch.

Colour me totally unsurprised that Apple isn’t selling the Watch through CPW – which, for American readers, is like Best Buy for phones.

Start up: Azure’s machine learning, explaining Apple’s taxes, Sony v Samsung, EC v Google redux, and more

Image recognition reckons this could be a cardigan. Photo by jdlasica on Flickr.

A selection of 8 links for you. Spread liberally. I’m charlesarthur on Twitter. Observations and links welcome.

Announcing the general availability of Azure Machine Learning » Microsoft TechNet Blogs

Joseph Sirosh:

We built Azure Machine Learning to democratize machine learning. We wanted to eliminate the heavy lifting involved in building and deploying machine learning technology and make it accessible to everybody. Supporting open source innovation and enabling breakthrough learning capabilities with big data were important. So were supporting community-driven development and the ability for developers to easily create and monetize cloud-hosted APIs and applications. Most importantly, we wanted our customers to easily leverage future advancements in data science. 

And now that future is taking shape. Today, at Strata + Hadoop World, we are announcing the general availability release of Azure Machine Learning, a fully-managed, fully-supported service in the cloud. No software to download, no servers to manage – all you need to start doing data science is a browser and internet connectivity.

Smart – and also clever: I bet it will be difficult to export the “learning”. Already has some big-name customers. Machine learning is going to be a boom area in a couple of years – and this will help.

YouTube and its alternatives » Beyond Devices

Jan Dawson sees a threat to YouTube by its own hand:

YouTube, with moves such as those Digiday covered today, is actually making it tougher for content creators to monetize on YouTube in the way they see fit. Videos on YouTube generate tiny amounts of money per view for content creators, and one of the ways they’ve overcome this challenge is through sponsorships. That’ll now be banned under YouTube’s new terms of service regarding advertising. At the same time, Vessel, AOL and others are targeting YouTube content creators with an emphasis on better monetization of their viewership. I’ve been skeptical of these efforts, but YouTube is playing right into their hands with some of these moves, which makes me more open to the idea that it might actually start to suffer as a result of competitive inroads from Facebook but also these smaller platforms.

EU probe into Apple’s taxes: It’s NOT to do with double-Dutch-Irish anything sandwiches • The Register

From June 2014, Tim Worstall digs in on all the rows about Apple’s giant cash hoard in Ireland:

Stripped of all of the legal complexity and jargon, the way that Apple operates outside the US is this: the main company is an Irish subsidiary of Apple. This buys all of the parts for all iKit, makes the contracts with the factories that assembles it, ships it all on (there’s all sorts of fun stages in Singapore and so on but they’re irrelevant for our purposes) and then sells it to the various Apple country operating companies. To Apple UK, Apple AG, Apple Oz and so on.

Clearly, the price at which Apple Ireland (recall, the company with all those lovely deals like the Double Dutch and so on) sells to those Apple country companies is going to determine where the profits get booked. Sell at a low price and Apple UK will, heaven forfend, make a good profit to be taxed by Osborne. Sell at a high price and the profit will be in where no one seems to think very much about taxing it. And the price at which such sales take place, the entire subject of those prices, is called “transfer pricing”…

…In practice, Apple tends to sell from into the other national subsidiaries at a price where those national companies just about scrape a profit but not very much. They can cover their retail and wholesale, their marketing costs, wages and so on, but leave only a lean slice of extra cash that gets taxed. Almost all of the profits end up in Ireland.

This isn’t, however cute we might think it is, illegal nor even naughty in a tax sense.

This is remarkably (and valuably) clear explanation of what transfer pricing is all about. Recommended, even (especially?) if you hate what Apple and others do with their profits.

Sony’s Challenges and the Future of Samsung » Tech.pinions

Ben Bajarin after Sony’s announcement that it’s going to organise itself into silos, some profitable (making things like camera sensors, Playstations and financing things), some less so (TVs and mobile):

Sony is still an innovative company. However, it may be their future is in empowering others to commercialize their innovations rather than their own product brands.

All of this makes me wonder if Sony’s struggles foreshadow a fate for Samsung. Many of the same fundamental issues surrounding Sony also surround Samsung. Their branded products are facing rapid commoditization. Samsung has been able to fend off issues that hit Sony thanks to a massive marketing budget. They are mostly out of selling PCs for similar reasons as Sony. Their mobile unit continues to see steep declines as competing with smartphones with similar specs and lower prices becomes extremely difficult. Their TV business remains a top seller but you have to wonder how long that can last, particularly if the Chinese enter the US market with good quality 4k and then 8k, and then 4k and 8k OLED TVs at extremely low cost.

The emptiness at the heart of both Samsung and Sony – both control their hardware design language, but not the software that runs it – is surprisingly similar.

EU competition chief Vestager speaks on Gazprom, Google and tax » WSJ

The EC has asked complainants in the Google antitrust case to reiterate their points to its new competition chief, explain Tom Fairless and Stephen Fidler:

WSJ: What is the second round of questions about in the Google case? Why would you need more information?

Margrethe Vestager: When you discuss commitments for a time then the case information gets outdated. And therefore I found that for me to take the case forward, I needed an updated file. And what we see is that we sent out requests for information just before Christmas with a deadline at the end of January. And people have been very forthcoming in the information that we get. But that of course sometimes raises new questions, and therefore we just had a second round in order to get the full picture… I would like to take some of the mystery out of meeting complainants. Because they do not come here with flying [flags], they come here very calmly, stating their case, trying to underpin it with the facts of the world as they see it. So even though there is a lot going on about the case as such, when we do the casework here, it is very much boiled down to the facts that can support your views, how things are being seen. I think that is very important. Talking about speed, the stronger a case you have, the less risk it will end up in endless court proceedings. And that in any case time is an issue. Any business involved in an antitrust investigation would like us to be as fast as possible.

WSJ: Any sense how long it will take to come to a decision on Google?

MV: It’s too early to say.

Here’s a putative timetable: statement of objections by summer, some sort of settlement in autumn. Might get more complicated if Android gets rolled in; Vestager’s team is also investigating whether Google’s conditions there are anticompetitive, and has demanded a lot of information from Android phone OEMs, slightly to their discomfort.

We asked some of the smartest computers to identify this picture » Bloomberg Business

Jack Clark:

Within the past half-decade, AI research and development has been supercharged, thanks partly to academics at Stanford University, New York University, and the University of Toronto, and researchers at Google, IBM, and various startups. They’ve accomplished things in computer vision that were unimaginable years ago, but the results of our computer eye exam show that, although machines are getting very good at some things, they still come up with strange or nonsensical answers every now and again.

Where these systems fail tells us a lot about why computers won’t be replacing us for general image recognition tasks anytime soon.

Identifying Mark Zuckerberg as “cardigan” does seem obtuse.

Mainstream use of bitcoin may be plateauing at a low level » MIT Technology Review

Mike Orcutt:

The design of Bitcoin and the blockchain, its public transaction ledger, make it challenging to distinguish specific types of transactions. Nonetheless, researchers from the U.S. Federal Reserve determined in a recent analysis that the currency is “still barely used for payments for goods and services.” Last week, nearly 200,000 bitcoins changed hands each day, on average. But fewer than 5,000 bitcoins per day (worth roughly $1.2m) are being used for retail transactions, according to estimates by Tim Swanson, head of business development at Melotic, a Hong Kong-based cryptocurrency technology company. After some growth in 2013, retail volume in 2014 was mostly flat, says Swanson.

If only 2.5% of activity is in retail (or at least, legal retail) that’s still not a currency – it’s a speculative item. The blockchain still seems like the innovation with the most promise, not bitcoin itself.

How a single email can badly break your Android email app » Graham Cluley

Graham Cluley explains how Hector Marco has discovered a problem affecting the Email app on Android (potentially, only on Samsung devices – though that’s quite a lot of devices) which makes them crash continually due to a malformed email header:

Fortunately, there is an easy solution. The most obvious is to log into the web version of your email and delete the offending email there. Your Android mail app will no longer attempt to download the email (because it has been zapped) and so won’t see any offending email headers that might cause it to trip over itself.

Of course, that’s quite a nuisance if someone keeps emailing you malicious emails designed to crash your mail app.

But the permanent solution should be even simpler. If you can, update your email app to version or higher.

Unfortunately, as Marco explains, that may not be possible for everybody because of the hairy nature of software updates on the Android platform.

Start up: Douglas Adams’s living video game, Sony cuts, Microsoft’s future, haunted empires and more

How To Train Your Dragon was a success for Dreamworks, but other films aren’t. Picture by donielle on Flickr.

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

Samsung patents home-screen backup and transfer solution » Phandroid

No major smartphone manufacturer has yet to create a solution for copying home screen setups from one device to another. It’s a feature we’ve been hoping to see in Android from Google’s own ingenuity for quite some time, but someone seems to have beaten them to the punch.

Samsung’s latest patent details a software solution that would allow a user to configure a home-screen and copy it to another remote device. The details in the patent are very specific about the process, but an abstract look at the thing reveals a few different possible scenarios…

Umm, “no major smartphone manufacturer”? Apple has had this backup thing called iCloud since 2011 which lets you create a phone that clones your previous layout, apps, settings, everything. Commenters also mention an app called Nova – and say that Lollipop does it anyway.

Sony to cut 1,000 jobs in smartphone business, says Nikkei » Re/code

Sony plans to cut another 1,000 jobs in its smartphone division, mainly in Europe and China, the Nikkei business daily reported.

The cuts are in addition to the 1,000 jobs Sony said it would eliminate in its mobile unit in October, the Nikkei said.

Overall, Sony’s mobile division workforce will shrink by about 30% to 5,000 by the end of the fiscal year ending March 2016, the report said.

Can’t remember when I saw a report of Sony expanding a division. (Maybe the PlayStation division does it quietly.) Of course, contract manufacturing means you don’t need a gigantic dedicated workforce to make a lot of phones. Just the right workforce.

My thesis on Microsoft » Beyond Devices

Jan Dawson:

I see a downward trajectory over time in sales of Windows in total, even accounting for the many different form factors Windows runs on. As such, last quarter’s poor performance in Windows sales is much more indicative of the longer-term trend than short-term headwinds. I see Windows 10 slowing the decline a little, but I actually think the free upgrades could stall or postpone new device purchases for some users, which may be counterproductive in the short term. I don’t see Windows 10 solving any of the fundamental challenges I just outlined.

Software sales to consumers will shrink to zero

To my mind, the other major question about Microsoft’s future is its ability to continue to sell software to consumers for a price. I’ve talked for some time now about the fact that, in Microsoft’s two major software categories (OS and productivity), its two major competitors and essentially every other company now give their software away for free.

Hard to argue with any part of this. The downward pressure on Microsoft is inescapable. Strange that at a time when software is eating the world, the ability to charge for it is vanishing.

Haunted Empire » Asymco

Horace Dediu:

I’ve often said that corporate governance is medieval, or pre-scientific in its approach to understanding causality. That may be too generous. As far as the reward/punishment system (also known as Human Resources) it’s probably pre-neolithic. The luxuries and extravagance which we heap upon the leader provide abundant evidence. Leaders insist on these ironic “pay packages” and boards approve them because they know they can and will be ritualistically sacrificed if and when the mobs turn against them.

A manager would be a fool to accept even generous pay given the risk, actually near certainty, of ritualistic slaughter. They demand and are unquestionably given absurd pay that has no relationship to performance. Such pay has no relationship to performance because it isn’t designed to reward performance but to account for the risk of arbitrary and very public sacrifice. Boards (and hence shareholders) are deliberately hiring a scapegoat for sins as yet unknown. Luxury and violence are thus finely balanced in what is called “Executive Search”.

A finely-judged thumb in the eye for a lot of management speak, and for a book about Apple.. oh, what was the name…

How DreamWorks Animation can claw its way back » The Hollywood Reporter

The maker of Shrek is in financial trouble:

And while the film unit is clearly troubled — four of the last six movies have resulted in write-downs (Rise of the Guardians, Mr. Peabody & Sherman, Turbo and Penguins of Madagascar) — Katzenberg has put new co-presidents (Bonnie Arnold and Mireille Soria) in charge of filmmaking and is making good on his 2013 promise to diversify “from an animated feature film company into a multifaceted, branded-entertainment company.” For its most recent quarter, DWA reported a $46.4m loss, but its television segment showed a $2.3m profit and consumer products posted a $4.2m profit.

There also are signs that its digital acquisition AwesomenessTV is profitable (DWA reported a $1.2m profit attributed to “other items,” which consists largely of Awesomeness). DWA paid $33m for Awesomeness in 2013 with a potential earn-out of another $115m. Instead, DWA settled the earn-out last year for $80m then sold 25% of Awesomeness to Hearst Corp. for $81.3m. The net result is that DWA paid about $33m for a 75% stake in a fast-growing, potentially highly profitable digital asset that has a perceived value of more than $300m.

But by focusing on expansion and diversification, Katzenberg acknowledges he might have been distracted from job No. 1: making profitable movies.

Contrast with Pixar, bought by Disney and still turning out successful films – yet always focussing on the story, and not just churning them out. Pixar, of course, was made successful by Steve Jobs. And it retains its focus.

The Apple Watch: The next big thing or living on borrowed time? » Harvard Business School

From September 2014:

Q Do you think the Apple Watch will fundamentally change our lives in a similar way the iPhone and iPad did?

Ryan Raffaelli, Harvard Business School assistant professor: We often define radical innovations as “competency- destroying,” meaning that they render all related products and services in the same market category obsolete. While the Apple Watch is certainly the most advanced smartwatch on the market today, I’m not sure it fits the traditional definition of a “radical” innovation. For instance, it is unlikely the Apple Watch will have the same transformative effect on society as other life-changing innovations throughout history – think about the steamship’s impact on the sailing industry, how the personal computer ended the use of typewriters, or how electronic fuel injection systems replaced carburettors.

The news that the Apple Watch isn’t as radical as the steamship or fuel injection will, surely, persuade Jony Ive once and for all that it’s time to give it up and head off into the sunset.

BlackPwn: BlackPhone SilentText type confusion vulnerability » Azimuth Security

In the phone market, one of the premier products to be released in recent years is undoubtedly the BlackPhone (, which has been cited numerous times in tech publications as being one of the best available defences against mass surveillance, as it provides full end-to-end encryption facilities for voice calls and text/MMS messaging.

While exploring my recently purchased BlackPhone, I discovered that the messaging application contains a serious memory corruption vulnerability that can be triggered remotely by an attacker.  If exploited successfully, this flaw could be used to gain remote arbitrary code execution on the target’s handset. The code run by the attacker will have the privileges of the messaging application, which is a standard Android application with some additional privileges. Specifically, it is possible to:

• decrypt messages / commandeer SilentCircle account
• gather location information
• read contacts
• write to external storage
• run additional code of the attacker’s choosing (such as a privilege escalation exploit aimed at gaining root or kernel-mode access, thus taking complete control of the phone)

How surprising that people would believe a claim made by a company about having excellent security.

The secret Douglas Adams RPG people have been playing for 15 years » Kotaku

Fantastic tale from Lewis Packwood:

Yoz [Grahame] then quickly forgot all about the employee forum, but six months later he happened to take a quick peek. And there were ten thousand posts in there.

Bearing in mind that the forum was buried deep within the website and was (just about) password secured, this was a phenomenal result. But even more fascinatingly, the forum had evolved into an extension of the game itself.

Visitors to the forum had created fictional employees and passengers on the Starship Titanic and begun role playing as them. Someone would make up an implausible, Adams-esque scenario, and everyone else would react to it in character, resulting in some enormously complex storylines and in-jokes that developed and diversified over years. And this strange fictional world had appeared entirely spontaneously, without any input from Douglas Adams or The Digital Village. Indeed, Yoz was as surprised as anyone when he stumbled across it: “It was like ignoring the vegetable drawer of your fridge for a year, then opening it to find a bunch of very grateful sentient tomatoes busily working on their third opera,” he says.

I loved Starship Titanic. Not least because there were two alternative endings, diametrically opposed in their result.

A pirated version of the Assassin’s Creed application for Android is bundled with malware » 0xicf


The Trojanized variety of the Assassin’s Creed application has the potential to be quite potent, because when a user downloads it, what he or she is actually downloading is malware. The malware in turn downloads a fully functional, pirated version of the actual application. The gaming app works as advertised, so the standard mobile gamer is going to have a tough time realizing that the package they’ve downloaded is malicious…

…The malicious application is capable of sending multi-part text messages, harvesting text messages from a victim’s device, and sending stolen information to a remote Command & Control (C2) server. We were able to locate phone numbers belonging to Russian bank “Volga-Vyatka Bank of Sberbank of Russia” in the malicious application code for which SMS messages are being intercepted to steal sensitive information.