A Blog by Jonathan Low


May 7, 2016

Cupertino's Mayor Says Apple 'Not Willing To Pay A Dime' In Taxes

Cupertino should really take the long view.

Once Apple goes out of business, its new 2.8 million square foot, $5 billion 'Spaceship' campus is going to make an awesome mixed-use museum (remember when people actually used physical handsets called iPhones? How cute!), recreation center (pretend you live in an era when people drove things called cars by themselves), shopping mall (buy the latest virtual Chinese communication devices).

Ya gotta think big. JL

Nick Statt reports in The Verge:

If adjusted to hold Apple accountable for money held overseas, the iPhone maker would owe around $59.2 billion in taxes.

The Caffeine Curse: Why Coffee Shops Have Always Signalled Urban Change

Leading indicators. JL

Robin Spinks reports in The Guardian:

Coffee shops take flak for being markers of gentrification. But they might not be so different now from the social and intellectual hubs of 350 years ago

New US Rules Make Foreign Goods A Better Deal For Online Shoppers

Because US retailers and manufacturers were already doing so well in the ecommerce era?

The reality is that a growing number of US merchants and their investors make more from being global than from focusing on domestic production. JL

Laura Stephens reports in the Wall Street Journal:

Since about a month ago, the government has allowed Americans to import up to $800 at a time of most foreign goods without having to pay import duties or tax. That’s quadruple the previous exemption of $200. The change is good news for online shoppers and package-delivery companies but presents another challenge to traditional retailers struggling to cope with e-commerce.

Facebook Users Spend 50 Minutes A Day On Site

That's a lot of potential time to sell to advertisers, politicians and anyone else who wants to create an impression. JL

James Stewart reports in the New York Times:

More than one-sixteenth of the average user’s waking time is spent on Facebook. YouTube users spent an average of 17 minutes a day. Users spent an average of nine minutes on all of Yahoo’s sites, two minutes on LinkedIn and just one minute on Twitter.

Robot Outperforms Human Surgeons

The inventors assure observers that robots will not replace human surgeons. Yet. JL

Will Knight reports in MIT Technology Review:
A robot surgeon has been taught to perform a delicate procedure—stitching soft tissue together with a needle and thread—more precisely and reliably than even the best human doctor. The robot  uses an advanced 3-D imaging system and very precise force sensing to apply stitches with submillimeter precision. a surgeon still oversees the robot’s work and will take over in an emergency,

Why That Salesperson Just Won't Stop Emailing You

Because, statistically, it works. JL

Price Economics reports:

When salespeople send follow up emails to people who haven’t responded yet, they win a lot more business. In fact, the data suggests that salespeople give up too quickly and should send you more emails—32% of the positive replies in the data came from leads responding to the 2nd, 3rd, 4th, or 5th cold email. 40% open the first email, and 26% open the fifth email.

May 6, 2016

When Gadgets Were King

When phones were for talking, cameras were for taking photos and radios were for playing music. That is, until...JL

Walt Mossberg comments in The Verge:

The golden age of gadgets, that glorious era of rough-edged experimentation, blossomed mainly in the 1990s. Equally exciting were the struggles to invent things we take for granted today — consumer digital cameras, portable digital music players, pocket-sized computers, decent smartphones, navigation devices, and even modems to get online.

Classic First World Problem Lawsuit? Customer Accuses Starbucks Of Putting Too Much Ice in Iced Coffee

While this suit seems comical on the face of it, the question it raises is whether the ever-expanding speed and convenience of digital commerce services, including delivery, has created a sense of entitlement that has bred unrealistic customer expectations.

So maybe there is such a thing as too much customer engagement...JL

Rachel Gross reports in Slate:

We live in a world of misaligned consumer expectations. Her class-action lawsuit accuses the coffee giant of false advertising, fraud, and unjust enrichment.  It calls for $5 million in damages on behalf of the millions of Americans who have purchased Starbucks iced coffee over the past 10 years. "Starbucks is advertising the size of its cups on its menu rather than the amount of fluid a customer will receive when they purchase a drink, deceiving customers in the process."

Apple Loses Exclusive Use of the iPhone Brand In China

For all the ostensible disdain business people often express about lawyers in the developed world, this case is a reminder of the benefits that the rule of law confers. JL

Andrew Griffin reports in The Independent and Bryan Clark reports in TNW:

The American company failed to prove the name was a ‘famous brand’, and so a Chinese firm can keep selling (leather) phone cases with  iphone on them. China remains a lucrative market for US companies, but it’s certainly not without its frustrations.

The US Navy Now Has An Unmanned Drone Warship. Can It Be Hacked At Sea?

The bigger idea, as the following article explains, may be in developing crewless merchant ships to carry goods around the world.

Aside from concerns about whether or not such vessels could be hacked and then hijacked for either destructive or purely financial reasons, there are the safety and environmental concerns about what happens if (when?) something goes wrong in the arctic or in crowded port cities. Either way, the march towards autonomous vehicles on land, sea and air appears unstoppable. The challenge is how to manage them. JL

Xeni Jardin reports in Boing Boing:

The full-size prototype could pave the way to developing crewless cargo vessels for  commercial shipping. Countries have been looking into developing fleets of unmanned ships to cut down on operating costs but the idea has sparked debate over whether it's possible to make robotic boats safe enough to run on their own far from land.

Uber Wants Merchant Rebates To Pay For Your Ride

Uber is using its ubiquity and brand aura to get merchants to pay for users rides in return for what amounts to promotions that lead to business referrals.

It is a brilliant take on Tom Sawyer's scam to trade favors to give his buddies the 'privilege' of painting Aunt Polly's fence. Or if that's too obscure a reference for you, let's just say that Uber is cashing in on its popularity by giving merchants the 'opportunity' to be associated with them, in return for which the merchants underwrite users' ride fees every time the user buys something from the merchant with Uber's site or from one of its cars.

Uber is monetizing its brand while increasing utilization, which will further strengthen the brand...and so forth. The margins don't get any better than that. JL

Josh Constine reports in Tech Crunch:

Pushing riders to make purchases could earn Uber referral fees that boost its profit per ride. It’s seeking loyalty by doling out free rides sponsored by local merchants where Uber could deliver users, or online stores where they shop mid-trip. Uber is obsessed with creating the “perfect ride”, where every step from request to drop-off is optimized. Leveraging what users buy during and after the ride, merchants (could) smooth over its biggest speed bump: the price.

Why the Tech Industry Cares If Artificial Intelligence Can Be Ethical

As devices and the software that drives them become increasingly integrated and interactive with humans, the transference of knowledge is not just limited to skills and tasks, but to values and norms.

The challenge in a multi-cultural world is determining whose values and whose norms.

This is important not just at a philosophical and existential level, but because decisions made now may affect the success of future relations between devices and humans, with all of the socio-economic implications for acceptance, growth - and profits - that suggests. JL

Peter Singer comments in Project Syndicate:

With driverless cars already on California roads, it is not too soon to ask whether we can program a machine to act ethically. But driverless cars are not superintelligent beings. Teaching ethics to a machine that is more intelligent than we are, in a wide range of fields, is a far more daunting task. The unpredictability of the environment may reveal a software error that has disastrous consequences.

May 5, 2016

Is the Tech Bubble Popping? Ping Pong Table Sales May Be A Leading Indicator

Follow the bouncing zeitgeist. JL

Zusha Elinson reports in the Wall Street Journal:

In the first quarter of 2016, table sales to companies fell 50% from the prior quarter. In that period, U.S. startup funding dropped 25%."If you don’t have a ping-pong table, you’re not a tech company. It’s equivalent to ‘we don’t wear suits.’ ”

IBM Introduces First Quantum Computer Cloud Service: Why That Matters

Most consumers - and even business leaders - could probably care less about the difference between a digital and quantum computer. Suffice it to say, as the following article explains, that the quantum can perform certain crucial tasks more efficiently and productively.

What may be most interesting about this announcement is that it confirms IBM's continued lead in large computerized applications, building on its earlier triumph with the Watson machine and going back to the glory days of mainframe 'Big Iron.' Whether the company can convert its more recent successes into a sustainable long term strategy could be its primary challenge - and opportunity. JL

Julie Bort reports in Business Insider:

A digital computer thinks in two states: zero and one. A quantum computer uses "combinations of zeroes and ones" to creates multiple states. Because quantum computers think differently, they can quickly solve tasks that regular computers can't do, such as working with billions of variables at the same time, like the interaction between molecules in chemistry. They are great for machine-learning tasks.

Do Smartphones Have A Place In the Classroom?

On the one hand, research shows that phones can be a distraction and that students who take notes by hand tend to retain more of the knowledge they are acquiring.

On the other, a vast majority of students have smartphones, use them dexterously and the devices could well provide enhanced educational prospects, especially for those with issues related to traditional learning. JL

Paul Barnwell reports in The Atlantic:

Most students bring a mini-supercomputer to school every day, a device with vast potential for learning. On the other hand, just how and if smartphones might help students learn remains a troubling question.

The Strategy Behind Fiat Chrysler's and Google's Self-Driving Vehicle Partnership

The minivan is the ultimate middle class mom car. What better way to defuse consumer - and regulatory - concerns about driverless vehicles?

It's about as non-threatening as an auto gets, it personifies the mass market and, as the following article explains, both Google and Fiat Chrysler gain tangible (and intangible) benefits from the alliance.

Smart move. JL

Tomasso Ebhardt reports in Bloomberg:

Google needs more cars to develop and test its autonomous technology, but doesn’t want to invest in factories to build them. The joint project meanwhile offers Fiat Chrysler a window into new technology and helps the company prepare for a time when self-driving cars may be a big part of the transportation business.

The Rise of Robots Is Sparking An Investment Boom

Anyone attempting to jump into this market now may already be too far behind the curve to really profit. JL

Richard Waters and Tim Bradshaw report in the Financial Times:

After growing at a compound rate of 17 per cent a year, the robot market will be worth $135bn by 2019. A boom in Asia is accounting for 69 per cent of all robot spending. Venture capital investments more than doubled last year to $587m

Are We Witnessing the End of the Online Advertising Bubble?

The convenience and efficiency of the online advertising dream - from view, to click to purchase - is bumping up against questions about quality, effectiveness and trust.

Advertising's allure has always depended on belief in the efficacy of the message and the messenger. But as the following article explains, in an era of big and bigger data, the evidence suggests that there is a growing gap between advertiser and consumer - and that the industry is not being entirely forthcoming about it.

The problems can be fixed. The question is whether those benefiting from the current state will do so - before circumstances - from criminality to ad-blocking -  force them. JL

Kalkis research reports:

The online advertising market is saturated. Online ad efficiency has been decreasing for years: companies have to spend more dollars for the same result. Placement has become more automated, obscure and complex, while intermediaries have multiplied, each taking a cut from the client's budget. A big chunk of ad spending is being stolen.Clients have no clue their ads are displayed on worsening quality websites. A growing proportion of  ads are not being seen at all.

May 4, 2016

Bots Don't Need To Pass The Turing Test, Just the Beer Test

As Edward Teller said, 'the science of today is the technology of tomorrow.' JL

Amir Shevat comments in Venture Beat:

The Turing test, developed by Alan Turing in 1950, (measures) a machine’s ability to exhibit intelligent behavior equivalent to that of a human. In addition to assessing tech and product skills, answer this question: “Would you go out for a beer with this person?”

Facebook's Mobile Success Is Paying Off

Facebook is riding its advantage in mobile the way Google is mining search and Amazon is dominating ecommerce.

Although the big tech companies are increasingly competing with each other, they have established strategically significant points of differentiation that give them additional resources with which to battle over more hotly contested segments of the digital economy.

The challenge for all of them, including Facebook, is not to become too dependent on any one factor as the technological era continues to shape shift. JL

Peter Eavis reports in the New York Times:

What you do when waiting for the bus or avoiding work goes a long way to explaining a tectonic shift in business and media.Users spent over 17 minutes on the social network in March, well ahead of the 9 minutes for Google. Facebook is in the enviable position of spending less to bring in revenue that is growing more quickly than Google’s.

Why Robots And Big Data Are Causing Employers To Replace Part-Timers With Full-Timers

The more information enterprises have, the more they are able to assess what - and who - is working and what or who is not.

And, as the following article explains, many are discovering that they may have pushed cost-saving part-time gigs to the point that they are negatively impacting important metrics like customer satisfaction, employee turnover and service quality. This is becoming especially crucial as artificial intelligence and robotization are computerizing many consumer interactions with business.

In light of our ability to operationalize knowledge, it would be ironic - but completely understandable - if technological advances led us back to the optimally organized and incentivized human work force. JL

Rachel Feintzeig reports in the Wall Street Journal:

Full-time workers result in better customer service, lower turnover and a more engaged workforce, which will lead to higher sales and profits. Full-timers might cost more at first, but are more reliable—27% of full-time workers leave their jobs per year, versus 68.7% of part-timers. For customers, a full-time employee “ builds a different feeling than the robot behind the counter.”

Amazon Finally Brings One Hour Delivery To the Web

Have whatever it is delivered in ways that obviate the need for you do to be hassled signing for it - like in the trunk of your car parked at work.

This seems like the ultimate first world indulgence, but if Amazon can get the price down, delivery to wherever the consumer is physically at any given moment may actually provide a useful solution in parts of the world where time and security are not as assured as people might wish they were. JL

Jason Del Rey reports in Re/code:

Prime members pay $7.99 for one-hour delivery through this service, and no delivery fee for two-hour delivery. The service specializes in selling health, beauty and household items and, increasingly, both fresh and packaged groceries as well. Amazon partners with local grocers in some markets, but also competes against them by selling the same products itself in some cases.

Judge Orders Woman To Provide Finger Print To Unlock Seized iPhone

Evidence, as it were, that the digital economy is continuing to evolve in ways for which the history and majesty of the law are not quite yet prepared. The issue is the time - and degree of change - it will require to catch up. JL

Cyrus Farivar reports in ars technica:

Under the Constitution, criminal defendants have the right not to testify against themselves—and providing a passcode could be considered testimonial. However, being compelled to give up something physiological or biometric (such as blood, DNA sample, fingerprint or otherwise), is not. A well-known Silicon Valley lawyer, concluded in a Wired op-ed that defendants may be subject to a weakened Fifth Amendment protection against self-incrimination:Demanding "personal thought processes" amounts to compelled self incrimination.

How The Internet Economy Is Dematerializing

People could be forgiven for thinking the evolution of the tangible - like steel mills - to the intangible - like software - was the endgame of the tech revolution.

After all, how much more dramatic does this need to be? Hard assets becoming fungible pawns in a global game of value migration while all that soft stuff that serious people once assigned to sons-in-law lacking advanced skills suddenly erupted in ways  that resulted in young dudes leading enterprises whose names you have trouble pronouncing making more money than hedge fund managers.

But, as the following article explains, this is just the beginning. Phase Two of whatever revolution we now think we are in is going to mandate the disappearance of all those little devices to which the industry has assured we are now hopelessly addicted. Because if technology has taught us anything, it is that middlemen are inefficient and, arguably, rather less convenient than the direct current of consumer to vendor interaction.

Siri and Echo may have seemed like cutesy appendages to the more serious business of selling stuff you can weigh and count. While you weren't looking, though, they are becoming the forces that tell you how, when and where to do so. Adapt or evaporate. JL

Chris Dixon reports in Medium:

The next big step will be for the “device” to fade away. The computer — whatever its form  will be an intelligent assistant. We will move from mobile first to an AI first world — which in most cases will mean voice interfaces — (as they) become the master routers of the internet economic loop, rendering many of the other layers interchangeable or irrelevant. Voice is a novelty today, but in technology the next big thing often starts out looking that way.

May 3, 2016

Advertising Contemplates The Rebranding of Pot

With legalization potentially creating a billion dollar industry, advertisers are beginning to explore the customer demographics.

The pizza delivery business alone could support this nascent industry. And demographic research, as the following article explains, suggests that contrary to popular perceptions, users tend to be educated, relatively affluent and engaged with the product. Young, gifted - and high. JL

Matt Krupnick reports in the New York Times:

It makes financial sense for prominent brands to advertise to cannabis users. The group’s most attractive attributes, according to market research: predominantly male, a range of ages, passionate about the product, social, educated and healthy.Younger users might be particularly receptive to an advertisement for snack foods or fast-food establishments.“Brands are trying to reach this audience of millennials that are so hard to reach.We reach them every day.”

Startup Life: I Would Say More. But I Signed An NDA

Perfection is elusive. JL

Anna Wiener comments in N+1:

All of the interviews are with men. I like men. I had a boyfriend; I have a brother. The men ask me questions like, “How would you describe the internet to a medieval farmer?”Over catered Afghan food, I meet the team, including a billionaire who made his fortune from a website that helps people feel close to celebrities and other strangers they’d hate in real life. He asks where I work. “Oh,” he says, not unkindly, snapping a piece of lavash in two, “I think I tried to buy you.”

How Finance Took Over the Economy

Finance has long been more profitable than other industries. And as the wealthy have become wealthier, with more assets to invest, finance has continued to capture an outsized percentage of the income those ever-bigger assets generated.

Which it has, in turn, reinvested in technology and political clout so as to protect those 'excess returns,' as economists are wont to call them. 

The challenge is how to channel those returns into uses more productive for the entire economy. JL

Noah Smith comments in Bloomberg:

The amount of wealth in the U.S. economy has soared since 1980 meaning that the middlemen in the finance industry have been taking their percentage fees out of a much larger pool of assets. That has increased finance’s share of national income.

How Unprepared Are We For the Robot Revolution?

The revolution is here. It has already impacted how businesses operate and how we live. Neither the most alarming pessimists nor the most naively Panglossian optimists have a logical solution for addressing the dislocation that has ensued.

The problem is that society seems unwilling to accept any notion of collective responsibility for optimizing the transition. Without which we will then collectively endure the consequences. JL

Martin Ford reports in the Financial Times:

The most important immediate challenge we face will be adjusting to the economic and social implications of a robotic revolution in the workplace. That disruption is already beginning to unfold, and one might reasonably argue that its impact can already be measured in terms of the political upheaval occurring in both the US and Europe.

Expedia CEO's Pay Makes Him First Among SP 500 CEOs. Google CEO Second

IPOs were one thing, but overtaking the rest of corporate America in terms of executive compensation demonstrates tech's long term economic dominance. This interweb thingy might have legs...JL

Drew FitGerald and Theo Francis report in the Wall Street Journal:

Expedia Inc. Chief Executive Dara Khosrowshahi’s total compensation ballooned to $94.6 million last year. The 46-year-old’s pay package places him at the top of S&P 500 CEOs so far this proxy season. Among the biggest U.S. companies, his compensation trails only Sundar Pichai, who received $100.5 million to run Alphabet Inc.’s Google.

Germany Introduces Electric Car Subsidy - But Excludes Tesla

The most expensive models offered by German automakers like Mercedes, Porsche and Audi may also be excluded.

The reason is that the subsidy program was attacked as a giveaway to the rich so the German government put a price limit on which cars qualify - currently only those costing under 60,000 euros or @ $67,000. Which is still a hefty price tag for most people.

Germany and the EU are pushing hard to reduce emissions and increase the use of more environmentally efficient or sustainably alternative transportation options. Meeting their goals, as the following article explains, is going to be a challenge. JL

Neil Winton reports in Forbes:

Only cars priced under 60,000 euros ($67,900) will qualify.Currently there are a total of about 30,000 electric vehicles on German roads. Thanks to the new scheme, maybe a total of 500,000 electric cars would be on German roads by 2020. Tesla is excluded because its vehicles are too expensive to qualify. The new Model 3 would qualify when it finally gets to Germany.

May 2, 2016

Strange Bedfellows: Why Airbnb Is Discussing An Alliance With One of the Largest US Labor Unions

The union gets support from Airbnb for $15 an hour minimum wage and additional union service jobs at Airbnb member rental dwellings.

And after years of contentious relations with cities and their citizens, who often claim the company's service is pricing people out of their rental apartments, Airbnb gets benefit of public support for its service from a staunchly liberal and heavily diverse labor union.

A bit cynical, on both sides, which is to say, it could work. JL

Elizabeth Dwoskin reports in the Washington Post:

Airbnb, which has previously been at odds with unions, will endorse the union’s Fight for $15 and encourage vendors who provide services to homeowners on the Airbnb platform to pay their staff at least $15 per hour. The platform will also direct Airbnb hosts to cleaners who have been given a seal of approval from SEIU. The cleaners will be trained, certified and provide green home cleaning services to Airbnb hosts.

Fashion Brands Turn To Crowd-Sourcing For Design

How better to enhance customer engagement than by inviting them to contribute to designs - and then fund them through pre-orders? JL

Christina Binkley reports in the Wall Street Journal:

Crowdfunding for fashion, where people place orders before an item is produced, and crowdsourcing, where the public weighs in on a product’s design, were initially explored by startup companies. The aim is to draw consumers closer to brands. Consumers will be more loyal once they’ve taken the time to help build a product or invest. The companies also seek to fine-tune inventories by not making duds, and smooth their cash flow by taking preorders.

No One Wants To Hear About Your Green Business. They Want Hear About Your Success

Customers, suppliers and investors may not share your passion.

But they will certainly want a piece of your successful growth - and given the cost trends vis a vis oil and gas - that trend is growing. It's a question of what factors you want them to know about. JL

Leigh Buchanan reports in Inc:

It's smart for green businesses to focus on the value angle. You have to explain how customers will save money or get higher quality or performance. Sustainability is an important macro-trend, but it helps if your business represents other macro-trends as well.

Job Crafting: Why Successful Companies Like Google Are Encouraging Employees To Create Their Own Tasks

Hiring smart, competent, technologically proficient individuals presents both opportunities and challenges. Given the cost and organizational disruption inherent in losing talent,  encouraging them to apply their skills to the design of work as well as to the work itself just makes sense. JL

Vivian Giang reports in Fast Company:

Our learning curve basically flattens after three years: people who can’t find new meaning in their work will often either leave or just stop creating. Job Crafting allows workers to redesign their jobs by creating "a flexible set of building blocks" instead of a fixed set of duties and tasks. It can make the whole organization run more effectively because people are assigned in a more adaptable way where they can add the most value.

Owning US Tech Shares Is No Longer a Quick Route To Big Returns

Cycles. Remember them? Tech is not immune, especially now that most of the world has bought in - literally and figuratively. JL

Nicole Bullock reports in the Financial Times:

The S&P 500 technology sector has fallen 3.8 per cent since the start of the year and is in danger of losing further momentum. For the broad market, the woes facing the tech sector matter, given its status as the largest sector of the S&P 500, representing a fifth of the benchmark.

Why Innovation is More Mental Than Physical

For all the talk of disruption as a virtue and change as an inevitable feature of our era, many leaders find it difficult to disrupt and change the most crucial element of the innovation journey - their own thought processes.

The challenge, as the following article explains, is overcoming our natural tendency to assume that success will lead to further successes. Rather than taking to heart Andy Grove's dictum that 'only the paranoid survive,' enterprises and the people who manage and/or invest in them tend to fear the uncertain and thus double down on what they know.

The physical and operational course of creating innovative products, services and processes flows less from the equipment and investment available than from the belief and the will. 

What great organizations - and the executives who run them - do to differentiate themselves first and foremost is to challenge the success factor over which they have the most control - their own mindsets. JL

Greg Satell comments in Digital Tonto:

Businesses (often) see their business models as a permanent facet of their DNA, so when their environment changes, they fail to adapt. Which is why 87% of the companies on Fortune’s original list of 500 top firms are no longer there. We fear losing what we have more than winning something we don’t. Most companies get better and better at things that people want less and less. We talk about disrupting markets and industries, but rarely disrupt ourselves.

May 1, 2016

How Tesla's Cult Following Mirrors Apple's

Rather than weaken bonds through a more affordable product, the proud Model 3 owners may strengthen the devotion of those who were there 'at the beginning.' JL

Johana Bhuiyan reports in Re/code:

Now the 100 Roadster Signature owners and 1,000 Model S signature owners are joined by the 400,000 Model 3 loyalists, in similar fashion to how Apple II and Mac owners from the 80s feel when they see people on their iPhones and iPads. "I was part of something important."

Facebook Isn't the Social Network Anymore: It's Much Bigger

Means to an end. But whose? JL

Will Oremus reports in Slate:

People are using Facebook as much as ever:1.6 billion active users, with more than 1 billion logging in each day. It’s just that fewer of those people are using it to actually socialize. Of the four social-media platforms that have done the most to chip away at Facebook’s preeminence, three—Instagram, WhatsApp, and Facebook Messenger—belong to Facebook. And it has tried like hell to buy the fourth one.

Have Millennials Become the Most Career-Minded Generation?

Yup, scarcity and necessity will do that to you. JL

Bouree Lam reports in The Atlantic:

55 percent of Baby Boomers felt making money was important, compared with 69 percent of Generation X  and 71 percent of Millennials. Those saying they were going to college to get a better job increased as well.

Why The Chinese Are Falling Out of Love With the iPhone

Ubiquity is the enemy of exclusivity. Especially in a market where a phone may be a statement about personal success and identity rather than merely a device.

Apple's problem in China is not dissimilar from that it faces elsewhere: given the smartphone market's saturation, owning the iPhone is no longer as distinctive as it once was, cutting to the very essence of the brand and the value it commands. JL

Paul Mozur reports in the New York Times:

China’s young, middle-class consumers are increasingly willing to try phones from the many competitors — including Huawei and Xiaomi — that compete with Apple on technical specifications and aesthetics but (sell for) a few hundred dollars cheaper. The iPhone’s weaker sales also reflect the broader slowdown in China’s enormous smartphone market, (expected) to grow only 4.7 percent in 2016. As recently as 2013, it was growing 50 percent annually.

Digital Devices Lock and Load: The Consequences of Data Transfer

Manufacturers and their business partners recognize that owning your data - as well as the algorithms that generate it - was the first step to then commanding what consumers who naively thought they were owners - could then do to repair or enhance the products they thought they had bought.

The fact that computerization now runs every device means that those who control those computers, control the machine, as well as their use. The issue is whether, given these control issues, is whether consumers are being overcharged for what amounts to a partial purchase and possibly even a lease rather than an actual purchase in the historical sense. JL

Cory Doctorow comments in the Electronic Frontier Foundation:

Every device has a computer, from cars to thermostats to lightbulbs. Manufacturers realized that by shellacking digital lock around these devices, they could enforce high-profit restrictions. First it was phones that would only run software from the manufacturer. Then it was cars that could only be diagnosed and repaired by authorized service centers that only used official parts. Then it was thermostats and lightbulbs, tractors and voting machines.And medical devices.

How Come Amazon Suddenly Reported Record Earnings Instead of Reinvesting All Its Profits ?

Something is stirring in Seattle. As the following article explains, for two decades Amazon disdained Wall Street's insatiable demand for profit growth in order to reinvest in its business.

Recently, though, the company has reported record profits. Much of this comes from its merchant cloud services, the business of leasing space and associated emoluments in its world-beating AWS (Amazon Web Services) cloud subsidiary. And it may just be that this is truly the future, avoiding the messy and relatively expensive interaction with evermore demanding customers.

But given the company's legacy in consumer-driven sales and its noted will to dominate, it may just be that Amazon is showing some financial muscle to keep the Wall Street activist wolves at bay while it prepares for the next phase of reinvestment in its campaign for global commercial omnipotence. JL

Marcel Weiss reports in Early Moves:

It is rather strange that, all of a sudden, Amazon starts reporting (growing) profits for four consecutive quarters, when the last 20 years were all about meticulously re-investing all profits to grow a large online retail business as fast as possible. It helps that AWS is providing staggeringly high growth in revenue and profit. (But) Amazon is preparing the company’s shareholders for a long period of very capital intensive investments in global logistics.