Tech Brew Ride Home - Fri. 04/28 – Microsoft Gets Out Of The Mice Business

Episode Date: April 28, 2023

More signs that vital communications infrastructure is abandoning Twitter. Reddit is testing Discord-like chat channels. Big layoffs at Clubhouse. Microsoft exits the peripherals business after 40 years. And, of course, the Weekend Longreads suggestions. Sponsors: Bloomberg.com/careers Miro.com/podcast Links: New York City Subway Ends Twitter Service Alerts After Musk Raises Price (Bloomberg) Reddit is testing Discord-like channels for community chat (TechCrunch) Once-Hot Chat Startup Clubhouse Is Cutting Half of Staff (Bloomberg) Pinterest announces multiyear ads partnership with Amazon alongside earnings beat (TechCrunch) Microsoft’s mice, keyboards, and webcams are being discontinued in favor of Surface accessories (The Verge) Weekend Longreads Suggestions: Apple’s Siri Chief Struggles With Turf Wars as New AI Era Begins (The Information) ASML, Europe’s Most Valuable Tech Firm, Is at the Heart of the US-China Chip War (Bloomberg) The Unexpected Reason Apple Is Dominating the U.S. Smartphone Market (WSJ) 35 Ways Real People Are Using A.I. Right Now (NYTimes) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme right home for Friday, April 28th, 2023. I'm Brian McCullough today. More signs that vital communications infrastructure is abandoning Twitter. Reddit is testing Discord like chat channels, big layoffs at Clubhouse. Microsoft exits the peripherals business after 40 years, and of course, the weekend long-read suggestions. Here's what you miss today in the world of tech. Bit of local news, but this points to an issue we've been talking about that could be a larger problem going forward. It's interesting the way that Twitter is sort of, of baked in as a somewhat important piece of societal infrastructure. The MTA here in New York City

is officially ending its Twitter service alerts saying the platform is no longer reliable and that Twitter demanded $50,000 per month for API access. So no more getting alerts that the F train is down, I guess. Quoting Bloomberg. I don't see it would be the best use of resources, especially when we have these other features and functions that are internal and homegrown, are reliable that we want our customers to use. Shanifa Riera, MTA's acting chief customer officer and senior advisor said in a telephone interview, we want to communicate with our customers through all platforms, but we need a platform that is reliant and consistent and up to date, end quote.

MTA's Twitter accounts that offered real-time service updates to writers, including at NYCT subway, NYCT bus, at LIRR, and at Metro North will no longer be used to push out communication like service alerts to writers, according to the transit system. Transit system employees will still monitor those handles and respond to social media messages. There's no plan to change to the ATMTA account. The MTA has a $60 million budget deficit this year that's set to grow to $3 billion in 2025 as federal pandemic aid runs out. The state agency is hoping that a plan by New York Governor Cathy Hoshal and state legislatures

will help curb the system's financial challenges. riders on subways, buses, and commuter rails can still get real-time service information on MTA's phone apps, my MTA, and train time, its website, and on WhatsApp, end quote. I also want to note that over the last 48 hours, at least if my timeline and the people I follow is any indication, basically everybody has signed up for Blue Sky all of a sudden. I'm on there too, but I just got on there this week, so no, I don't have any invites yet. But remember, I promise to tell you when the people I follow to produce the show maybe start to leave Twitter? Well, we don't know if they've left yet, and it remains to be seen how

sticky any activity on Blue Sky will be, but a bunch of people announced their Blue Sky handles over the last 48 hours. This is the biggest activity I've seen yet, again, amongst folks who I follow for the purposes of this podcast. Reddit has begun testing Discord-like chat channels with 25 volunteer subredits that have under 100,000 members, and the plan is to give moderators control in managing these chats, quoting TechCrunch. Reddit said that channels will be persistent on the community navigation bar so members can revisit them frequently. The company mentioned that it has learned from previous chat products like the community chat rooms feature, which was discontinued in 2020. In particular, it plans to give more control to moderators. The new feature will have a dedicated

channel for moderators to chat about managing the subreddit, plus they will be able to decide if they want to enable this feature for their community in the first place. Additionally, the platform is giving moderators' tools like the ability to choose who can participate in the chat, manage the chat queue, and moderate reported messages in a conversation. In the R-slash-Mod News subreddit, the social network announced that it plans to introduce features for channels, including threading, pinned messages, user mentions with push notifications, and messaging editing for the sender in the future. The social network is also accepting applications for moderators of subredits that want to try out the chat channels feature for their community. When users push back on the post-announcing channels,

a moderator said that the company is launching this experiment to provide more ways for community members to converse with each other. A number of communities on Reddit rely on external real-time chat services like Telegram, Discord, or IRC to facilitate conversations between members. The introduction of channels might incentivize communities to stay on the platform more. The platform has tried out different ways for live interactions like its now deprecated clubhouse clone called Reddit Talk and Live Chat, posts within a community, end quote. Speaking of Clubhouse, that company announced plans to lay off more than 50% of its employees and reset the company in their words, despite claiming to have years of runway left from its monster fundraising rounds. Clubhouse had around 100 staff back in October of 2022, quoting Bloomberg. Clubhouse was a hit at the height of the COVID-19 pandemic, drawing celebrities like Oprah and Elon Musk into long audio conversations with hundreds of people on the app. In 2021, it discussed a $4 billion valuation with investors.

But once lockdowns eased, user numbers fell quickly and the startup shifted its strategy. As the world has opened up post-COVID, it's become harder for many people to find their friends on Clubhouse and to fit long conversations into their daily lives. Clubhouse co-founders Davidson and Rohan Seth wrote in the post, To find its role in the world, the product needs to evolve. This requires a period of change, end quote. They also said that the startup would allow laid off employees to keep their company issued lap, laptops and would pay four months of severance. Clubhouse co-founder Davidson has long been obsessed with making social apps that use new technology tools like real-time location or live audio broadcasting

to connect people with one another. Past creations of his like highlight similarly spiked in interest before cooling quickly, end quote. Amazon reported earnings yesterday and there wasn't really anything that we should probably delve deep into. Revenue was up 9% and they reported $3.2 billion in net income versus a $3.8 billion net loss. a year ago. There was one big, interesting detail to report, though, Amazon made a little over $10 billion in ads revenue in Q1. So to put that in context, Twitter, Pinterest, and Snap together barely crossed $2 billion in ads revenue in Q1, which is maybe why this. Pinterest announced a multi-year strategic ad partnership with Amazon, its first ads partner

to bring more brands and relevant products to that social network. Goating Tech The partnership is a step in a new direction for the image sharing and social media site, which has been working to adjust to consumers changing interests around product discovery in recent years. As demand for video platforms like TikTok and Reels grew, Pinterest's image pinboard began to feel dated, leading it to launch its video-first idea pins and increase its investment in creator content. But some of those creator efforts were recently wound down ahead of Pinterest's last quarter miss on revenue, where the company warned also of low first-quarter sales, sending its shares. down. By comparison, Amazon's digital ads unit in the same quarter did well, jumping 19% to $11.6 billion.

Like other tech companies, Pinterest has been struggling with the macroeconomic forces impacting its business, but promised it was working to adapt to the changing environment. The company also laid off 150 employees in February as it tried to reduce expenses. While Pinterest has for years worked to connect product inspiration to purchases, the Amazon Ads Partnership could potentially offer consumers a more seamless buying experience. Unlike on some, Some e-commerce websites, Amazon shoppers may not have to fiddle with filling out forms, as most have their payment information already on file with the company leading to faster checkouts. When users encounter an Amazon ad on Pinterest, they'll be taken directly to Amazon to make

the purchase, Pinterest says. The company noted the implementation of the Amazon Ads integrations will take place over multiple quarters starting later this year. Pinterest can't say yet where the ads will appear to end users, and it's not making any near-term forecast related to revenue impacts, noting it may not see meaningful impact until next year, end quote. Microsoft has discontinued Microsoft-branded mice, keyboards, and webcams to focus instead on its surface brand for PC accessories. Microsoft's first mouse debuted all the way back in 1983. People forget how big a player Microsoft was in the peripherals business back in the day, quoting The Verge.

NICA first reported earlier today that Microsoft would no longer make standalone keyboards under the Surface brand also, but that's not the case. Microsoft's statement makes it clear the company is actually focusing on the Surface going forward instead of its Microsoft branded accessories. While Microsoft will still manufacture Surface-based keyboards and mice, these are typically sold at a premium price, and it's not clear whether any low-cost Microsoft branded accessories will now make their way over to the Surface line or not. Microsoft also doesn't offer a Surface webcam right now with the only thing close being a $799 smart surface camera that's designed for conference rooms. Surface Chief Panos Panos Panay has hinted at Surface-branded webcams in the past, but Microsoft went on to release a Microsoft modern webcam for $69 in 2021. This also means that Microsoft's well-regarded ergonomic keyboards might be going away.

Microsoft does offer a Surface-branded ergonomic keyboard, but at a retail price of $129. It's more than double the regular Microsoft ergonomic keyboard at $59. Microsoft isn't commenting on its plans here. News of Microsoft's PC accessories shift comes months after the company said it had changed, its hardware portfolio amid 10,000 job cuts. The PC market is suffering right now, and Microsoft's devices revenue, which includes surface PC accessories and HoloLens, dropped by 30% year-over-year in its recent fiscal Q3 results, end quote. Time for the weekend long read suggestions. First up, and I know this is behind the paywall of the information, but in all this talk of

AI and chapout revolutions, have you noticed the degree to which one name never comes up? Apple. I guess we've discussed before. about how Siri is still seemingly so worthless a decade on, but sources in this piece detail how alleged organizational dysfunction and a lack of ambition have reportedly bogged down Apple's AI and ML efforts, including the work of the group responsible for Siri. Quote, inside Apple, Siri remains widely derided for its lack of functionality and improvement since Gianrea took over, say multiple former Siri employees. For example, the team building Apple's mixed reality headset, including its leader Mike Rockwell, have expressed disappointment in

the demonstrations the Siri team created to showcase how the voice assistant could control the headset, according to two people familiar with the matter. At one point, Rockwell's team considered building alternative methods for controlling the device using voice commands. The people said the headset team ultimately ditched that idea. So far, its lack of AI progress doesn't seem to have seriously hurt Apple, which remains the most valuable company in the world with a $2.6 trillion market cap. But the advent of large language models, such as the one chat GPT uses, could represent a watershed moment in tech, one that will fundamentally change how people interact with the online world and create everything from movies to computer programs to slide presentations. Companies that

don't embrace the technology in their products could be at a serious disadvantage. The most useful devices of the future will use large language models, said Richard Schoker, CEO of You.com, an AI-powered search engine. Strong natural language understanding is going to be a selling point for devices, end quote. While Apple's biggest rivals, including Microsoft, Google, Amazon, and meta platforms have announced plans for products based on LLMs, the iPhone maker has remained mum on the subject. That is likely to change eventually. According to a person familiar with the matter, Apple engineers are proposing a collection of improvements to Siri relying on LLMs that they hope will be ready for a major release of the iPhone operating system next year. Still, Apple is likely to be

far more cautious than its competitors are in embracing the latest AI technologies. No other company is more sensitive to maintaining its image and brand than Apple is, leaving little room for the kinds of bizarre, sometimes hostile behavior and errors, Googles, and Microsoft's chatbots have displayed. Another challenge for Apple is its uncompromising stance on privacy, which CEO Tim Cook has championed as a defining feature of its devices over the past decade. For example, Apple has spent the last few years moving many Siri functions such as volume control and the opening of apps, setting of alarms, and dictation of notes, so they're executed entirely on the company's devices, which limits the number of user queries Siri transmits to the cloud. For now,

LLMs, especially those that power sophisticated services like chat GPT, currently operate in the cloud, and it's unclear how long it will take to make them capable of running on mobile phones, end quote. Then, have any of you read that recent book, Chip War? It's a fascinating read. I recommend it as maybe a must read if you want to understand the tech industry. But even before I read that book, I was fascinated by ASML, the single company that is basically the bottleneck for the entire tech industry. From Bloomberg, quote, In 1984, Martin Vandenbrink, a young Dutch engineer joined a newly created venture in a quiet corner of the Netherlands. Little did he know that about 40 years on, the company would be so crucial to the $580 billion semiconductor industry

that it would be the epicenter of a U.S.-China chip war. ASML holding NV, where Vandenbrink is now the chief technology officer, practically owns the market for a critical piece of equipment needed to produce the brains of everything that makes modern life possible, from cars and smartphones to computers, microwaves, and airplanes. With the company's high-end machines churning out chips that can also go into state-of-the-art weapons and artificial intelligence devices, ASML is effectively being treated as critical infrastructure for U.S. national security and has become a target for industrial espionage for China. I never expected to be where we are today, said Van Brink.

Over his nearly four decades at the company, ASML, has gone from a bit player competing with the likes of Nikon, Canon, and Ultratech to the world's only maker of very high-end semiconductor lithography equipment. Its ascent has made it Europe's most valuable technology company with a market capitalization of over $247 billion, more than twice that of its customer, Intel. In an industry where devices typically cost $10 million, $1ML commands about $180 million for its current top-end machine. And although the chip market has softened recently, ASML is still growing and its long-term

outlook seems intact, thanks to the insatiable demand for computing power. This is a company that the world can't exist without, said John Bathgate, a fund manager at NZS Capital LLC in Denver, which has about $2 billion under management with ASML as one of its biggest holdings. They've got a 20-year head start. Investors have clearly realized how important ASML is as a company and how difficult it would be to replicate. It's a natural monopoly with secular growth wins. That's unique, end quote. Then there have been several articles recently about how Apple is gobbling up market share by going down market with cheaper smartphones. And as this piece by friend of the show Chris Mims points out in the Wall Street Journal, a big reason for that

is because Apple supports older models as well as refurbished devices, which has allowed this market expansion to happen. Quote, what's enabled this new channel for not-so-new smartphones is that the iPhones in particular are lasting longer, and new models are often nearly indistinguishable from previous ones. Phones are, in other words, rather like vehicles, expensive and durable, and for most people, older models are more than good enough. The iPhone's staying power is linked in no small part to Apple supporting software upgrades for devices that came out as early as 2017. As a result, these phones have a considerable afterlife, cycling through second and even third owners before being cast aside. And with network carriers offering discounts on new phones when people trade in an old one,

another parallel with the auto market, there are ample devices available for bargain hunters. The impact of this is huge and making a big winner out of Apple. It now seems likely that the overwhelming majority of smartphones in use in the U.S. will eventually be iPhones, the result of a steady climb in its share of the U.S. market, end quote. And finally, just for fun, from the New York Times, 35 ways real people are using generative AI right now in their daily lives and daily work. So if you've been hearing all the AI hype, but not sure how it could be useful to you, here you go, 35 thought starters.

So last week's Internet History podcast, bonus episodes that I shared with you with two of the three hosts from that podcast All In, someone pointed out something I forgot. The name of their show is All In, right? and that's an oblique reference to the weekly poker game that Jayshan, Chimath, and Sacks, and other folks held regularly and still might hold for all I know. And I believe that the poker game is referenced in one or both of those episodes because it was going on that night. Or maybe it was discussed off air. I don't know.

But there you go. Origin Stories for one of the biggest podcasts in the world. Anyway, those bonus episodes got an unusually good response from y'all, so I'm going to share two more. Mike Slade was Steve Jobs' concierge back in the late 90s and early 2000s. So he was there when Jobs returned to Apple through the launch of the iPod. I interviewed Mike twice, and there are some great Steve Jobs stories in there. And these were recorded online, so the audio quality is going to be better than those in-person episodes I shared last week. I'm not going to make a habit of this, because, I mean, the Internet History Podcast exists online.

So if you've been liking these, you can check out, what, 200-plus episodes that can contain lots of little nuggets of tech history gold like these. Anyway, those are two bonus episodes for you this weekend, though. Steve Jobs Stories with Mike Slade. Talk to you on Monday.