FBI vs. Apple escalates and the weekly roundup in tech and retail

News and commentaries

It is getting ugly between US prosecutors and Apple.

[T]he FBI cannot itself modify the software on Farook’s iPhone without access to the source code and Apple’s private electronic signature. The government did not seek to compel Apple to turn those over because it believed such a request would be less palatable to Apple. If Apple would prefer that course, however, that may provide an alternative that requires less labor by Apple programmers.

In the latest reply from the US Department of Justice to Apple’s formal motion to vacate the original order, the prosecutors are basically saying that the other option is to demand access to the source code and Apple’s private electronic signature. In DoJ’s perspective, asking Apple to unlock the San Bernardino iPhone by creating a new iOS is the lesser of two evils.

In the same filing, the DoJ has also called out Apple’s stance as “false” and “corrosive.”

Apple’s rhetoric is not only false, but also corrosive of the very institutions that are best able to safeguard our liberty and our rights: the courts, the Fourth Amendment, long-standing precedent and venerable laws, and the democratically elected branches of government

For most people, it’s probably quite confusing as to why Apple is digging its heels in. What we have to remember, more than the pros/cons of each side, is that Apple at the very core is fighting a precedent. According to Apple (emphasis is mine):

Law enforcement agents around the country have already said they have hundreds of iPhones they want Apple to unlock if the FBI wins this case… Again, we strongly believe the only way to guarantee that such a powerful tool isn’t abused and doesn’t fall into the wrong hands is to never create it.

Here are this week’s most relevant news in tech and retail:

In tech:

  1. Malicious hacks: How a hacker’s typo helped stop a billion dollar bank heist; First OS X ransomware detected in the wild, will maliciously encrypt hard drives on infected Macs
  2. Researchers created a flexible ‘skin’ that could give robots a sense of touch
  3. Alphabet: AI scores landmark victory, defeating legendary Go player in historic match; Google’s Robots Are Learning How To Pick Things Up
  4. FBI vs. Apple: Justice Department: Apple obligated to assist FBI; Security Pros React To Apple VP Federighi’s Op-Ed On Dispute With FBI
  5. General Motors acquires self-driving car startup Cruise Automation, reportedly for $1B+

In retail:

  1. Amazon to lease 20 Boeing aircraft for cargo delivery
  2. Yoox Net-a-Porter turns to IBM to propel its luxury e-commerce experience
  3. Urban Outfitters jumps after merchandise sales boost profit
  4. Zara parent Inditex slows store expansion as online sales grow
  5. Avametric raises $10.5M to further develop its virtual fitting room tech
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FBI vs. Apple: a summary and the weekly roundup in tech and retail

News and commentaries

On Tuesday, Apple’s CEO Tim Cook published a customer letter in response to a court order. A federal judge is ordering the company to provide technical assistance to the FBI to help unlock an iPhone 5c from one of the gunmen from the San Bernardino, CA  attack. Apple is resisting this order and has been given until February 26 to respond formally in court.

What does the FBI want Apple to do?

Just to clear things up, Apple is not being asked to decrypt the iPhone 5c. The court order is also specific in stating that this concerns only this particular iPhone 5c, called “subject device”. In fact, it also clearly states that the “hack” will happen within Apple to ensure that the software created will stay within Apple.

Here’s the request, verbatim via the court order:

  • [Apple] it will bypass or disable the auto-erase function whether or not it has been enabled;
  • it will enable the FBI to submit passcodes to the subject device for testing electronically via the physical device port, bluetooth, WiFi or other protocol available on the subject device;
  • it will ensure that when the FBI submits passcodes to the subject device, software running on the device will not purposely introduce any additional delay between passcode attempts beyond what is incurred by Apple hardware.

Is it technically possible for Apple to comply?

Again, let’s be clear that the order is not for Apple to decrypt data in this particular iPhone. The order is to allow the FBI to use brute force to “guess” the PIN/passcode in order to gain access into the phone. In this case, it is technically possible. Here’s a great post on how this can be done.

Why is Apple resisting?

Apple argues that once created for this one phone, there is no absolute certainty that the same technique will not reused for other iPhones.

In the wrong hands, this software — which does not exist today — would have the potential to unlock any iPhone in someone’s physical possession.

The government suggests this tool could only be used once, on one phone. But that’s simply not true. Once created, the technique could be used over and over again, on any number of devices. In the physical world, it would be the equivalent of a master key, capable of opening hundreds of millions of locks — from restaurants and banks to stores and homes. No reasonable person would find that acceptable. (Tim Cook)

The important word here is “precedence”. If Apple complies or if the FBI wins the court order, it creates a dangerous precedence where compelling tech companies to create access to otherwise inaccessible data will be as simple as having a court order.

So what now?

Apple has until February 26 to formally respond in court. Law experts think that Apple will argue that the court places “unreasonable burden” on Apple. The order states:

To the extent that Apple believes that compliance with this Order would be unreasonably burdensome, it may take an application to this court for relief within five business days of the receipt of this order.

For more in depth view of the laws involved:

Here’s a few more links regarding this:

This issue has yet to play itself out. But as privacy concerns war with curbing acts of terror, it would be interesting to see how public discussions such as this will affect the nomination of the next Supreme Court justice after the unexpected death of Justice Scalia this week. Even more interesting is with the Senate’s plan to block any nomination from Obama until the next President, will this case reach a court of 8 instead of 9?

Here are this week’s most relevant news in tech and retail.

In tech:

  1. Space: China uprooting thousands to build telescope searching for aliens; Virgin Galactic will unveil its new SpaceShipTwo today; Google this: Israeli scientists eye $20M moon race prize
  2. A $7 smartphone is about to change the game in India
  3. Google Translate now supports 103 languages, covering 99% of Internet users
  4. Uber losing $1 billion a year to compete in China
  5. IBM buys Truven Health for $2.6B

In retail:

  1. Wal-Mart, reporting slower e-commerce growth, makes plans to expand number of products available online
  2. China Lunar New Year holiday retail sales up 11.2% year-on-year
  3. Deliveries: Amazon taking on Uber with its on-demand delivery service; Google launches fresh-grocery deliveries
  4. Kering lifted by euro and Gucci sales
  5. Nordstrom tumbles as holiday sales miss analysts’ estimates

Clickbait part two and the weekly roundup in tech and retail

News and commentaries

I have talked before of how much I dislike clickbait (so much so that this will have the same title) and sensational headlines. At the same time, I can’t help but click on said ridiculous headlines because I just have to know. This week, I saw two that led the pack.

Google was in the news a lot this week due to disclosures from its five-year battle against Oracle. According to a lawyer for Oracle, Google’s Android operating system has generated $31B in revenues and $22B in profit for Google. Thus the first clickbait above. Not only are iPhones (hardware) and the Android OS (mobile operating system) in entirely different categories, they also differ in how profit margins are generated. Apple sells the iPhone 6 for $649, while only costing $200 in components and manufacturing. Google develops Android as a platform, gives the code for free and makes money from ads supplied by Google on Android phones and via the Google Play Store.

The comparison is so egregious (I have to use a fancy word here because it is that appalling) and unfortunately these days, people glance at headlines like these and wisely nod their heads, “Oh yeah, of course, that completely makes sense.”

The second headline on the other hand is a cry for attention to Tesla to say, “We’re sorry we made a mistake, here’s a Tesla for you at the price we initially agreed with.” Elon Musk did not actually steal the car, rather a car from the test fleet was mistakenly offered for sale.

I get it. There’s so much noise out there that in order to be heard, you have to shout a little louder. It’s like when they tell you, don’t cry “help” to get people’s attention. Scream “fire” instead because people might ignore the former but rarely would they ignore the latter. Unfortunately, it’s up to us readers to discern the facts from sensationalism.

Here are this week’s most relevant news in tech and retail:

In tech:

      1. New prime number discovery breaks record at 22 million digits
      2. Facebook is opening an Oculus research office in Pittsburgh
      3. Google: Google paid Apple $1 billion to be the search engine on your iPhone; Google launches free Wi-Fi service in India with Mumbai Central Station; Google just published a free, three-month course on deep learning
      4. Auto: Apple opening R&D facility in hotbed for driverless car research; Tesla sues German supplier over failed Model X falcon doors; Uber hails victory after Transport for London drops restrictions
      5. Space: 9th planet http://m.caltech.edu/news/caltech-researchers-find-evidence-real-ninth-planet-49523; Successful drone ship landing proves elusive for SpaceX

In retail:

      1. China: Meituan-Dianping, China’s Largest Group Deals Site, Closes Massive $3.3B Round At $18B Valuation; Alibaba teams up with Nvidia in $1B bet on cloud computing
      2. Walmart: Walmart’s E-Commerce Push: It’s Among Top Companies Posting Jobs For Software Developers; Walmart wants to sell Suburbia clothing chain in Mexico; Walmart to give pay raises to most of its workers
      3. Apple applies to open stores in India
      4. Amazon: Amazon Offering Refunds on Sales of All Two-Wheeled Hoverboards; Amazon exec: Our drones will deliver in 30 minutes or less; Amazon steps up recruitment as it expands in Europe; Amazon veers into labor law fight zone for hurried deliveries
      5. Avon soars after discussing overseas growth, vowing to cut costs

Trying on the Apple Watch and the weekly roundup in tech and retail

News and commentaries

So, I did try on the Apple Watch. Contrary to cities like San Francisco where appointment times were fully booked, Miami’s Apple Stores had some slots available. Courtesy of my sister’s overnight babysitting, I made it to the crowded Apple store at 9:30 PM on launch day, April 10.

I have to hand it to Apple for making Apple Watch would-be buyers feel special. The watches were available to touch and to play with around the store but trying them on was limited in a cordoned-off area within the store. I can only guess that the Gold Edition was to be tried on somewhere else.

image

Unfortunately, the functionality of the watch was not really apparent. The watch that you try on is in a pre-installed loop of Apple apps. You can dial the crown and tap on the demo watches but it was hard to tell just how well the watch will perform in real life. There was quite a bit of a lag which could either be software-related or a result of an overburdened wireless network. Siri responded to my query of giving me directions to the nearest Shake Shack – with some lag but again it could have been due to connectivity. Some of the watches I tried on were also a little hot to the touch but I’m not sure if that will be a problem with real-life use. Not much to report on its functionality then.

But. It is a beautiful watch. Let me rephrase that – the Apple Watch selection of bands are beautiful. The Sport Edition is so-so and makes the watch look cheap but everything else is beautifully designed. The Milanese Loop felt really good to wear and surprisingly light. Apple’s idea of using magnetic closures make the watches very convenient to put on.

So, my verdict? If Apple set out to make a watch that will appeal to the fashion crowd and overcome the nerdy factor of buying a wearable, then they have succeeded. Because functionalities aside, people will buy it for the looks. The bands alone made me want to switch back to iOS, that’s how beautiful it was and I’m not alone. The watch was sold out in 6 hours, pushing the delivery date to June. Reportedly, 1M units have been sold but Apple hasn’t released the official sales figures yet.

Here are the most relevant news in tech and retail this week:

In tech:

  1. The European Union formally accuses Google of antitrust violations, fines could reach $6.4B; Google releases a blog post in response to allegations; great summary of the case here
  2. IBM and partners (including Apple) launches Watson Health Cloud, will provide a cloud platform and analytics for Apple’s HealthKit and ResearchKit
  3. Space: NASA’s Curiosity rover has found salty, liquid water on Mars; SpaceX’s sixth official mission to resupply space station a success but drone ship landing was “too hard for survival”
  4. Nokia confirms buy of rival Alcatel-Lucent for $16.6 billion; acquisition to complete in first half of 2016
  5. Chinese social networking company Renren led a $70M investment in San Francisco-based peer-to-peer mortgage startup LendingHome

In retail:

  1. U.S. retail sales rebound, post largest gain in a year at 0.9%
  2. Online handcrafts marketplace Etsy IPO’s at Nasdaq, shares double on debut, valuing company at $3.88B
  3. LVMH reports jump in Q1 sales, boosted by weak euro
  4. China e-commerce company JD.com opens cross-border online shopping platform JD Worldwide in challenge to Alibaba
  5. Mobile shopping app Spring raises $25M at valuation of $90M

Apple Watch is on pre-order today and the weekly roundup in tech and retail

News and commentaries

Most of the snark and fanboy/girl-ism is here as Apple Watch goes on pre-order and appointments can be had to try it on. As someone who has predicted that despite the snark, people will still buy it (and they have, at least in China where the Gold Edition is sold out), I have an interest in how it performs. So despite my being a Google fangirl, I made an appointment to try on the Apple Watch Sport tonight. On that same note, when my husband read my post here about the iPhone 6 still having the best camera on a smartphone, he became convinced that I should put up my Nexus 6 for sale on eBay and get myself an iPhone instead. For a few minutes, I let myself imagine being back in iOS and then I snapped back to reality and said – no, absolutely not. I share, post, take notes across several apps (photo editing, social, productivity, messaging) and Android lets me do that with no problems. In fact, I was able to upload the Android screenshot below to this post in WordPress within the photo app while I had to open the Gmail app and attach the iOS screenshot to send to myself so I can upload to this post. I mention it because I’m pretty sure that once we’re there trying the Apple Watch, I will salivate over the iPhone camera. This is sort of a reminder to myself of how painful so many other things are on iOS. Btw, you might want to hold off on that iOS 8.3 update (new emojis!) for now – the update breaks Touch ID purchasing for some users.

wpid-screenshot_2015-04-10-11-02-08.png

Sharing a photo on Android (with even more apps below screen)

 

IMG_0159

Sharing a photo on iOS

Here are the most relevant news in tech and retail this week:

In tech:

  1. Professional social network LinkedIn to buy online training platform Lynda.com for $1.5B; 52% cash payout and 48% stock
  2. Apple acquisitions that recently came to light: startup Ottocat that organizes apps on the app store and now powers the “explore” tab; and startup Dryft that develops keyboard apps
  3. Ride-hailing service Uber launches cash-only rickshaw service in Indian capital, New Delhi
  4. Facebook is facing a privacy class action lawsuit in Europe, with 25,000 claimants
  5. HBO Now launches on iOS, Apple TV and online ahead of Game of Thrones new season; no need for cable

In retail:

  1. Apple Watch news: Purchases are online-only at launch; you can make appointments here; the Gold Edition is sold out in China; in less than 6 hours of pre-orders, shipping times slip to June for all models (original shipping time was on April 24)
  2. Amazon is now officially allowed by the FAA to test delivery drones in the US; company also acquired startup Shoefitr to improve how it sells shoes online
  3. Chinese e-commerce site JD.com stock rises after announcing warehousing and delivery agreement with Japanese clothing brand Uniqlo; Uniqlo now has flagship store in JD.com
  4. India’s biggest e-commerce company Flipkart partners with Mumbai’s lunchbox delivery men, “dabbawalas”, for last mile deliveries
  5. After Chanel’s announcement of a future e-commerce launch, the company tests e-commerce in partnership with luxury e-commerce site Net-a-Porter

Apple Watch and the continuing cult of Mac/iOS

News and commentaries, Technology

A few years ago in early 2013, I had a discussion with one of my MBA professors at Hult. We were both agreeing on the fact that Apple’s innovation pipeline is drying up – especially after the death of its visionary leader, Steve Jobs. I don’t know exactly what he meant but for my part, I was referring to Apple’s innovation pipeline in terms of its iOS and that users will eventually get tired of it. I was an Apple fangirl – having converted to Mac OS in 2005 when the cult of Mac was reaching the masses. I had a MacBook Pro (still do), an iPad and the iPhone 4S. I’ve been holding on to my iPhone 4s and was looking forward to the launch of the iPhone 5.

The launch came in September 2012 and it was such a disappointment in so many ways – both in hardware and in software. The screen, which was supposed to be bigger in the face of rising competition from Samsung’s bigger devices, was bigger but far from satisfying. The iOS was faster but there was just nothing more remarkable about it. I switched to Google’s Nexus right after that, betting on the Android platform. It was frustrating at first, the interface was not as intuitive and it did crash on me a few times. But once I got over that, I was able to do a lot more on my phone – I was no longer constrained by Apple’s walled garden.

However, I underestimated a few things: the ongoing marketing genius of Apple, the loyalty of Apple fans, and the devices’ easy, intuitive interface.

Marketing genius
This is probably most apparent in the launch of the Apple Watch. As I watched Apple’s live event on Monday, despite knowing what I know, I was almost swayed by the blitz. The phrase – “in a way that has never been done before” – almost got to me. Every. Single. Time. In some instances, it was true (eg. being able to call and receive calls via the watch) but in a lot of cases, it was just not true. The most egregious is by implying that the Apple Watch is the first of its kind. I can imagine the Pebble Watch and the Android Wear teams groaning and hurling epithets on their screens.

Early reviews are mixedNegative reviews in general point to a lack of a compelling use case for the watch. Furthermore, there does seem something douche-baggy about the Apple Watch Gold Edition, which starts at $10,000. It also says, “mug me.” But, in the end, do these negative reviews really matter? It’s not like conspicuous consumption is so out of fashion as to render the Ferraris and Hermés of this world out of business. It’s just another in a long line of status symbols.

As for a use case*, I have argued here that people will still buy the watch. Marketers call it the “halo effect”. In this case, potential buyers who already own an iPhone and who happen to like the experience, will most likely buy the Apple Watch. Furthermore, the Apple Watch can even be a gateway product – if you want to buy one, you will need to get the iPhone 6/Plus as well. It’s actually great – if you’re interested in wearables, you get the Apple Watch + iPhone 6 and if you have the iPhone 6, you’re going to be very curious about that Apple Watch.

The loyalty of Apple fans
It is so hard to believe now, but seeing an Apple product was like seeing a unicorn. Apple’s market share in consumer electronics was so marginal that one had to search wide to find someone owning an Apple computer. In the Philippines, they were practically non-existent in the 80s, 90s and even early 2000s. My first introduction was a desktop Macintosh – the interface of which was so foreign to me but the owner’s enthusiasm stayed with me. It was this encounter that guided my decision to buy my first MacBook.

It is such Apple owners’ enthusiasm that is perhaps the most compelling. Apple may have the marketing genius but it is the company’s ability to recognize customers as marketing  evangelists that continues to fuel Apple products adoption. A 2014 survey among 2,000 iPhone users found 60% of respondents to having “blind loyalty” to Apple.  Call them iSheep if you will but that loyalty has translated to healthy profits for the company and a rise in smartphone market share.

From: Statista.com

Easy and intuitive interface
My sister is not the most technologically savvy of electronics users. More than that, she has a healthy suspicion for expensive and fancy-schmancy devices. And yet, a few years ago, she finally got herself an iPhone and an iPad. She will likely upgrade to yet another iPhone/iPad soon. I mention this because the laggards in smartphone adoption – the holdouts and the older generation – simply find Apple’s mobile devices easier to navigate than Android’s. Even my 1 year old daughter has a much better time understanding Apple’s home button than my Nexus’ side home button. To be fair, that “home button” is patented so even if its utility has been proven, no other company can copy it even if they want to.

(Side note: One of the things that confused me about the Android OS when I first used it was: “Where are my apps?” On iOS, all the installed apps are at the “home” screen, even if that turns out to be several “pages” of “home.” On Android, there’s the home screen where (other than Google’s or the manufacturer’s default apps) you manually add your apps. Then there’s “all the other apps” that you can access by clicking sort of above the “home” button on the glass interface. I find that even hard to explain. Needless to say, the Android interface is definitely not for those who don’t want to spend time learning it.)

Furthermore, Apple devices simply have a much better camera than Android phones. This is actually not always a question of hardware. Most of the time, it’s just that Apple focused on relatively quick access, understanding that users just want something that will literally point and shoot. They focused on that first, sacrificing photo quality over speed. And then, they came up to speed with the hardware part. Now, the iPhone 6/Plus are on par with other phones in terms of image quality. I want to echo this article’s point and also fervently say:

I don’t want an iPhone, but dammit, I want the effortlessness of the iPhone’s camera

And with all the sharing happening on Facebook, Instagram, Snapchat, Meerkat, etc., the quick and effortless composition of pictures and videos could be the driving force for a smartphone purchase.

Although, it is yet to be determined whether the Apple Watch and it’s newly-patented “crown” have the same ease of use as the iPhone/iPad, brand loyalty and marketing will definitely propel Apple Watch way ahead of the competition. Despite the initial protests, people who happen to be Apple users and who pride themselves on being early adopters, will buy the Apple Watch. They will become the watch’s evangelists and the cycle begins yet again for the profit machine that is Apple.

*By the way, there was not much use case for the first iPhone either. There weren’t that many apps, Internet browsing was so slow and for that price, who really needed it? Yet, look where we are now.

THE Apple Event* and the weekly roundup in tech and retail

News and commentaries

I wanted to preface this week’s news roundup with a commentary on the new Apple Watch but that commentary has ballooned into a full-blown post which I will most likely finish in the next few days. But that’s an Apple event for you, we can’t really stop at a few words to comment about it. At least for me anyway. But I also can’t let this week go by without saying anything about Apple’s newest products: the Apple Watch and the new MacBook.

First, the Apple Watch. Starting at $349 for the sport edition and starting at $10,000 for the Gold Edition (whaat?), reactions have ranged from excitement to contempt but the consensus seems to be that people will still most likely buy it.

But, enough about the watch for now though, I’ll save that for my full post. What about that Macbook? Only Apple could get away with sticking one port on a laptop with a $1299 price tag and then charge another $80 for each dongle for all other peripherals. Well, actually, we should probably be thankful. They could easily have gone with zero port, charge at least $200 for a wireless station for charging and make the laptop only work with Apple screens, Apple printers, Apple mouse, etc. But the most remarkable thing about this move? A new category of devices: a hybrid between a tablet and a laptop – tabtop?

Here are the most relevant news in tech and retail:

In tech:

  1. Valuations/Investments: Snapchat is now worth $15B after Alibaba‘s $200M investment; Lyft valuation at $3B after raising a new $530M round led by Japanese e-commerce giant, Rakuten
  2. Earnings: Intel slashes almost $1B from Q1 revenue forecast as desktop demand weakens; Box first earnings report since IPO beats revenue expectations but earnings miss hit share price, down nearly 14.71% on Wednesday
  3. Acquisitions: Amazon acquires Internet of Things startup 2lemetry; Google in talks to buy Indian mobile advertising startup InMobi
  4. Genetic testing startup 23andMe Inc. will now use its repository of genetic data to develop drugs
  5. Alibaba and China’s largest car maker by sales, SAIC Motor set up a $160M fund to develop Internet-connected cars

In retail:

  1. Apple Watch Event: Apple goes defensive in advertising purchase with Twitter to prevent social media hijacking during Monday’s keynote; Apple stores remove Jawbone UP24, Nike Fuelband from their shelves to make way for Apple Watch’s arrival on April 24
  2. Senators bring back online sales tax bill, the Marketplace Fairness Act
  3. Earnings: Urban Outfitters reports 12% increase in Q4 sales led by Free People and Anthropologie; Italian fashion house Valentino reports 36% gain in revenues, 57% increase in earnings for 2014
  4. Europe’s largest online fashion retailer, Zalando, is selling 7.3% stake valued at €434M ($465M)
  5. US largest shopping mall operator Simon Property Group in a $22.4B hostile bid for rival Macerich; deal will combine two of US’ three largest shopping mall operators

*If you have been a reader of this blog, you would know that when it comes to Apple products, I do veer between admiration and incredulous disgust quite a bit so needless to say, this title has a hint of irony to it.

Apple Watch, gold and the weekly roundup in tech and retail

News and commentaries

With the release of Apple invitations to a March 9 event – most likely for the Apple Watch – smart watches have been in the forefront of news lately. I have said in the past that I would jump on buying the Moto360 watch from Google/Motorola. But I really do have tiny wrists such that they simply looked ridiculous on me when I tried them on. It brings to mind, who would really buy these newfangled devices anyway? Apple is betting that with its focus on fashion (taking out a 12-page ad in Vogue magazine for example) will change people’s negative perceptions on smartwatches. Never mind that the Apple Watch will be very expensive and with fewer features than first announced, it will lead the pack in the current wearables market. I’ve talked at length about it here and why I would still stick to Android wear (just waiting for the slimmer models). So, you might hem and haw for now and skeptics will abound but if you own an iPhone, chances are, you will end up buying it at some point. Which, apparently, is not good for the global supply of gold. According to some reports, Apple plans to sell 1 million units of the gold edition per month. If demand reaches that month, it will use up a third of the world’s supply of gold. Maybe, it’s time to invest in gold futures or gold-mining companies.

Here are this week’s most relevant news in tech and retail:

In tech:

  1. The Federal Communications Commission (FCC) approves net neutrality policy by 3-2 vote; ensuring: no blocking, no throttling and no paid prioritization of online content
  2. Ericson to sue Apple Inc. for patent infringement on tech used in iPhones and iPads after Apple refuses to renew licensing agreement with Ericson
  3. Google acquisitions/deals: acquires Facebook marketing startup Toro for undisclosed amount; acquires technology and patents from mobile-wallet service Softcard; strikes a deal with wireless carriers (AT&T Mobility, T-Mobile USA, Verizon Wireless) for the Google Wallet app to come pre-installed on Android phones sold by the carriers; invests $300M into Elon Musk’s SolarCity to finance ~25,000 residential solar projects
  4. Other Google news: launches Android for Work to keep work-related accounts/apps separate from personal info; newly-acquired Deep Mind has trained an AI to play 49 different video games
  5. Hyperloop Transportation Technologies, inspired by Elon Musk’s hyperloop idea, will build a 5-mile test track in central California

In retail:

  1. Gap Inc. warns that US West Coast port dispute will cut current year earnings by ~4 percentage points (Financial Times paywall/sign-in required)
  2. New Pebble smartwatch, Pebble Time, raises $1M on Kickstarter in record time
  3. Earnings: Victoria’s Secret owner L Brands poster full-year forecast that miss analysts’ estimatesPrada SpA reported full-year sales that missed estimates as Chinese spending slows
  4. Online retailer Nasty Gal closes $12.7M in funding
  5. Amazon greenlights 21 titles from Kindle Scout, a crowd-sourced publishing platform that allows readers to vote for unpublished authors to get published

Apple car and the weekly roundup in tech and retail

News and commentaries

I was driving from Miami to North Lauderdale on Wednesday (a 45-minute ride), my one-year old sleeping in the back when I suddenly wished really hard for a self-driving car. As my daughter gets older, she resists naps more and more – the only times that I can really have uninterrupted work. But the movement of the car almost, always puts her to sleep but then I’m occupied with driving. What is interesting is that of all the activities I can think of, most of them would require me to be connected to the Internet either via smartphone, tablet or laptop.

It should then perhaps comfort me to know that the big tech companies, starting with Google’s publicized ambitions for self-driving cars, are no longer content to get our eyeballs for most of our waking moments, they want in on our commutes as well. According to the Census Bureau, 10.8 million Americans travel more than an hour each way to work. Out of this, 600,000 have “megacommutes” – at least 90 minutes each way. The average travel time to work is 25.4 minutes (you can find average travel time in your zip code with the same link). In aggregate, these numbers would be staggering and these are the times that millions of people could also spend online. Of course, some people do that already to the peril of themselves and other commuters around them.

Apple is the latest tech company rumored to have ambitions for self driving cars, with possible production by 2020. The company was also rumored to be in acquisition talks with Tesla last year. Recently, angel investor, Jason Calacanis made a bold prediction in a Medium post that Apple will buy Tesla for $75B in 18 months. Whatever happens, the automotive industry should be on guard for more disruptions. Even though most car companies already offer some autonomous driving features (lane keeping, automatic braking, self-parking) and connectivity, tech companies are in a much better position (talent-wise and money-wise) to innovate. So, the race is on. If we are to predict the winner based on who has the deepest pockets, Apple will most likely win. But, let’s also keep in mind that software is a lot more complicated than hardware.*

Here are this week’s most relevant news in tech and retail:

In tech:

  1. Lenovo finally admits to preloading laptops with Superfish adware, turns it off after customer complaints
  2. Valuations: Ephemeral messaging app Snapchat is seeking new round of financing that could value the company at $19B; ride-hailing service Uber expands Series E round by $1B, company valuation at $40B; online scrapbooking site, Pinterest is seeking to raise $500M at a valuation of $11B
  3. Whistleblower Edward Snowden released documents alleging that American and British spies hacked Gemalto’s systems, world’s largest maker of SIM cards
  4. Tim Cook confirms Apple Watch release date in April, shipment to start at 5 million units
  5. Online real estate site Zillow closes $2.5B Trulia acquisition, will cut 350 jobs

In retail:

  1. Amazon Prime 1-hour delivery is now live in all Manhattan zip codes
  2. Fossil Group and Kate Spade announce global licensing deal for Kate Spade watches
  3. Pandora, maker of jewelry charms, reports Q4 2014 profit surge 36%, beating estimates
  4. Kering Group revenues rose 8.7% in last quarter of 2014 on strong sales at Bottega Veneta and Yves Saint Laurent, Puma and Gucci are still struggling
  5. Financing: Online luxury retailer Moda Operandi secures $60M in Series E round; online retailer Gilt Group raises $50M investment 

*I still think of Apple as a hardware company with an amazing marketing team. Although, with that much money, Apple can easily acqui-hire software developers any time they want. So, they might very well become a great software company as well.

iOS vs. Android and why I shop less on Android

News and commentaries, Technology

IBM and Adobe recently released some numbers for Black Friday and Cyber Monday online sales in the US. Here are some highlights from the IBM report and Adobe report:

  • Overall Thanksgiving online sales were up 14.3% compared to 2013 (IBM)
  • Total online spend on Thanksgiving day reached $1.33B (Adobe)
  • Thanksgiving day mobile traffic accounted for more than half of all online traffic (IBM)
  • Black Friday online sales were up 9.5% YoY (IBM)
  • Black Friday mobile traffic increased by 25% over 2013, accounting for 49.6% of all online traffic while mobile sales accounted for 27.9% of total online sales (IBM)
  • Total online spend on Black Friday reached $2.4B (Adobe)
  • Cyber Monday sales were up by 8.5% compared to 2013 (IBM)
  • Cyber Monday mobile traffic accounted for 41.2% of all online traffic while mobile sales accounted for 22% of online sales (IBM)

With the historic numbers related to the use of mobile devices, there is a lot of focus on iOS vs. Android shoppers. Simply put, iOS users use their mobile devices more for online shopping and more importantly, buy more than Android users – in this case, four times more. This comparison is not new. Historically, iOS users spend more on apps than Android users. With these recent numbers, there’s again a lot of talk on how these affects future app development. Developers will almost always develop for iOS first and may even forego developing for Android.

As an Android user, it irks me to have to hold on to my iPad because some apps are simply not available on Android but I understand why. It further irked me when I saw this quote from Jay Henderson, director of IBM Smarter Commerce:

iPhone and iPad buyers tend to be slightly more affluent and more comfortable with technology.

Affluent, I can agree but more comfortable? The iOS’ value proposition is its simplicity – don’t offer too many choices on how something is done and the user will just get it. This is why, even your most un-tech savvy friend or family member has an iPhone/iPad. Go to an Android and the learning curve is a little steeper (but once you’re there, you can do so much more productive things on an Android). But I digress, this post is not about pitting iOS and Android users’ tech-savviness. This post is to poke some holes on those mobile spend numbers because as an Android and iOS user who happens to *love* shopping, I have experienced firsthand as to why I browse/buy less on my Android.

Why I browse and buy less on my Android vs. iOS

  • There are fewer shopping apps for Android. Thankfully, most sites are now mobile-friendly but they are far from perfect. Case in point is Net-a-Porter: I was filtering for dresses in size S. But after sorting for low-high prices, it resets the size. This only happens in the sale section which is what Black Friday and Cyber Monday are all about.

net_a_porter

Incidentally, browsing the sale section at Barney’s mobile site is limited to filtering between “Men”, “Women”, “Home”, “Kids”, etc. There are no filters for size and sub-categories so results number to 12,000 items which can test the patience of even the most avid shopper.

Based on sites that I use, here’s a sample of shopping apps for iOS and Android:

iOS_Android_apps

*Recently launched on November 24, 2014

  • Even when shopping apps exist, they can be buggy. During Black Friday when Zara, site-wide was 30%, the bugginess of the app was very pronounced in my Android. While the iOS experience remained smooth, I saw blank spaces where images of items should be when I scrolled down. This happens all the time but during big sale periods, the blank space stays longer (minimum 5 seconds) and the app crashes constantly.

zara_blank

Google’s ambitions for Android are not focused on the users’ immediate dollar value
As more and more metrics pit the dollar value of Android users vs. iOS users, it will only perpetrate the cycle: developers will focus less on making the Android experience more robust; Android users spend less money; iOS users are more valuable – and so on. In this case, I sometimes get frustrated with Google for not marketing the Android platform better to developers. I understand that they have ambitions beyond users spending money within their devices but at some point, will Apple’s easy/seamless ecosystem trump Android adoption globally? But then again, Google’s currency, to put simply, is information and large amounts of it. Even if Android dominance falters in North America, there’s billions in the rest of the world who will not be able to afford iOS devices (especially if Apple continues to act like a Veblen good*) and will most certainly adopt the Android platform. And that’s several billions of users using a platform that Google controls. Scared yet?