Tech Brew Ride Home - Fri. 04/29 – Snap’s Pixy Drone Is A Flying Camera

Episode Date: April 29, 2022

Snap’s Pixy, is a new sort of done/camera hybrid. We wrap up tech earnings week with Apple and Amazon. I continue to wonder if the one click checkout space is all it’s cracked up to be. And of course, the Weekend Longreads Suggestions. Sponsors: Ortto.com Masterworks.io/ride Links: Snap announces a mini drone called Pixy (TechCrunch) Snap Pixy Review: Don’t Call It a Drone or a Selfie Stick—Even Though It’s Both (WSJ) Apple Reports Second Quarter Results (BusinessWire) The Twitter Thread With The Charts On Amazon (@juokaz) Bolt, a Checkout Startup Worth $11 Billion, Lost Customers as Revenue Stalled (The Information) The Weekend Longreads Suggestions ™ Elon's Giant Package (Margins Substack) Weather Prediction Startups Grow as More Volatile Storms Loom (Bloomberg) As Polaroid’s SX-70 turns 50, instant photography is booming (Fast Company) 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 29th, 2022. I'm Brian McCullough today. Snaps Pixie is a new sort of drone slash camera hybrid. We wrap up Tech Earnings Week with Apple and Amazon. I continue to wonder if the one-click checkout space is all it's cracked up to be.

And of course, the weekend long read suggestions. Here's what you miss today in the world of tech. I want to mix things up a bit, because sure, we can close out Tech Earnings Week in a second. We will. But first, let's talk about something completely different to end the week. Snap has announced Pixie, a $230 mini drone that can capture 2.7K videos and 12 megapixel photos. It syncs with Snapchat and it weighs just 101 grams. It's available right now for the U.S. and France only, quoting TechCrunch. It's a pocket-sized free-flying sidekick for adventures big and small, Snap CEO Evan Spiegel said during the Snap partner Summit Keynote. Pixie isn't your average drone as there's no controller and no SD card. It feels like

the company has optimized the device so that it's easy to pick up and get started. There's a button to activate the device and a camera dial to select the flying mode. There are four pre-configured flight paths. You can tell Pixie to float, orbit around you, or follow you as you walk or run. You select the right mode, press the button, and Pixie takes off from your hand. When you want to stop recording, you place your hand below the drone. Pixie will automatically. land in the palm of your hand. For readers who like specifications, Pixie captures 2.7K videos and 12 megapixel photos. It's very lightweight, as it only weighs 101 grams with the replaceable battery.

On a single charge, you can capture 5 to 8 flights. Once the drone is done shooting a video, you can open Snapchat on your phone. Videos from your flights are automatically transferred wirelessly to your phone. By default, they are stored in your Snapchat memories. Of course, you can then view these videos, edit them, send them, and share. them. If you're already familiar with Snapchat's editing features, you'll be able to use the same editing tools for your pixie videos. You can also apply some effects to your videos such as hyperspeed, bounce, orbit 3D, and jump cut. And that's about it. It's a neat little drone, and it seems like

the Snap team in charge of this project had a lot of fun developing it. It's not going to change the company's bottom line, but it's definitely cool, end quote. Here's how Joanna Stern ended her hands-on review of the Pixie in the Wall Street Journal. Quote, when I asked me, Mr. Spiegel, why I'd use a pixie versus my iPhone 13's great cameras, he replied, this gives you a totally different perspective. It includes you and the world. Having now captured some really fun pixie shots of me and my kids, I agree it does something a stationary camera can't, but generally I don't check wind speed when packing my family up for a trip to the park, and I stopped wearing a fanny pack full of batteries at least two iPhone generations ago.

The pixie may be the future of the selfie, but it needs to work on... selfie first, end quote. Okay, earnings. Apple reported Q2 revenue of $97.3 billion up 9% year over year, $25 billion in net income up from $23.6 billion year over year. Apple also authorized an additional $90 billion in share repurchases and heighted its dividend by 5%. Finer details here, $50.57 billion in revenue for the iPhone, up 5.5% year over year. $1.44 billion in revenue for the Mac, up 14%, 7.65 billion for the iPad, down 1.9%, and $8.8 billion from other products, which was up 12.4%. Services revenue grew 17% year over year to $19.8 billion, and Apple reported 825 million paying subscribers globally across all of its services up from 785 million

in Q1 of 2022. So basically, with Apple, nothing surprising in either direct. different story with Amazon. Amazon reported Q1 revenue up 7% year over year to $116.4 billion, but swung to a loss again, a $3.8 billion net loss versus $8.1 billion in net income a year ago, though AWS revenue was up 37% year over year. The stock is down today on both weak guidance for the coming quarters and the fact that basically Amazon's core commerce business has stopped growing, full stop. So the story here is AWS is once again saving the day for Amazon as its core commerce business seems to revert to the mean, quoting CNBC. Amazon's cloud unit grew 36.5% year over year in the first quarter a bit faster than analysts projected, but Amazon's

shares were down about 9% in after hours trading as investors focused on the e-commerce giant's $3.8 billion overall net loss. Amazon disclosed in its quarterly earnings announcement that AWS revenue totaled $18.44 billion in the quarter, above the $18.27 billion consensus among analysts pulled by street account. That works out to about 16% of Amazon's total revenue. And the cloud isn't just another quickly expanding business for Amazon. At Amazon, cloud means profit. AWS threw off $6.52 billion in operating income in the first quarter, up almost 57% and higher than the $5.62 billion street account consensus. Amazon's total operating income, was $3.67 billion in the quarter, meaning that the overall business would have lost even more money,

were it not for the profitable AWS? AWS's operating margins widened to 35.3% from 29.8% in the fourth quarter, end quote. So I want to pause here to make this point. Here's what we know, after this week, about the big tech platforms from their Q1 revenue reports. This is growth. Apple is currently growing 11% year over year. Amazon growing 7%. percent year-over-year. Alphabet still growing 22 percent year-over-year. Microsoft growing 18 percent year-over-year, but meta only growing 9 percent, and Netflix only growing 10 percent. So those still-growing numbers are still growing, but not growing as quickly as they were, say, two years ago. Let me give you two concrete examples of charts that use Amazon to illustrate this. They're from

Josos Casio Canis, and I really, really want you to click through to see the charts in the tweets, but, quoting from the tweets, it's as if COVID-19 had no effect on e-commerce at all. Amazon is up just 1.8% from the trend line it was on before the pandemic. By the end of 2022, it will likely fall below it. Amazon's growth slowed to a halt in Q1, zero percent growth for the first time ever. All that growth in 2020 wasn't a step change, end quote. And that's the point I want to make. Look at the charts. Amazon was tooling around for most of the time. of the decade in the 20 to 30% revenue growth range. Then the pandemic hits and growth surges to 40 to 50% for several quarters. Now we are, as we said, back to zero and maybe reverting so far as

to eventually undershoot the historical trend lines. So here's my overarching theory on all this. In COVID times, the theory that investors latched onto was that everything got pulled forward. Societal adoption of tech that would have happened over the course of a decade happened in about a year. And the assumption was that would just continue, just accelerated, and thus they bid up all the tech stocks accordingly, factoring in the belief that we had just fast-forwarded things to the earnings that we would have expected maybe five years from now. But that is not what is bearing out. Not only has all of that accelerated growth crashed down to earth, but there are signs that far from euphoria, there's a real hangover going on. It's like when you go to a party and you drink

all the drinks, you overdo it. Not only might you not. want to continue to do that the next day in the harsh cold light of day. The next day you might actually swear off drinking forever, or to use another analogy. It's like how you give yourself permission to have a chocolate cake on vacation, but when you get back to regular life, you go on a diet. What I think investors are internalizing right now about tech stocks is that maybe COVID times weren't the historical accelerant that was irreversible that they thought it was. Maybe it was a sugar high. And yeah, tech adoption will be better off because of that blip, but people might need some time to come down from the high. I continue to wonder if people really did the math on these

one-click checkout services, because according to the information, one-click checkout service, Bolt, has seen its revenue stall out and has actually been losing customers amid competition from PayPal and Shopify. Quote, revenue from transactions bolt process. grew around 10% to $28 million last year after it slashed the fees merchants pay for its services, according to an internal document viewed by the information. The dramatic slowdown shows Bolt is under significant competitive pressure from PayPal and Shopify, which have launched their own one-click checkout buttons for merchants. And while Bolt has touted efforts to work with more high-profile retailers, the number of merchants it works with has been hovering in the low 300

since 2020 and declined in the beginning of this year, the document showed. Previously, unreported figures shed light on the challenges facing Bolt, which had been a breakout star among a herd of startups and recently sought to raise around $400 million at a valuation of as high as $14 billion. That would have been a fast appreciation from the $11 billion private valuation it received following its $355 million Series E funding round, announced in January, which involved Black Rock and an Abu Dhabi government fund. Bolt's private valuation of nearly 400 times its annual transactions-based revenue puts it in rarefied company in the startup world, especially given its tepid revenue growth. Founded in 2014 as a crypto payments startup, Bolt began building software to power one-click checkout payments after Amazon's patent on the technology expired in 2017. Since changing course, the startup has focused on signing up large merchants for its service and counts Forever 21 and lucky brands among its customers.

It now has around 600 employees. But Bolt, was recently hit with a lawsuit by a key customer, authentic brands group, owner of a range of well-known brands, including Forever 21 Lucky Brand and Brooks Brothers. In a complaint initially filed under SEAL earlier this year and first reported by Bloomberg this week, ABG said Bolt had failed to deliver a new feature for shoppers on time and was misleading investors by overstating how many of ABG's brands actually use Bolt's technology. For instance, ABG said Bolt was promoting Brooks Brothers as having gone live on its platform, even though the brand had abandoned its launch due to technical issues. Bolt said in a filing that the claims were

meritless and that ABG was using the lawsuit as a way to renegotiate terms on warrants to buy Bolt's stock in ABG's favor. Behind the scenes, Bolt has been facing other issues. Its total number of merchant accounts fell to 316 as of the end of the first quarter compared to 328 in 2021 and 301 in 2020, the document showed. While small and absolute terms and still in line with the 300 merchants the company has previously said it has, the dip is notable given Bolt's emphasis on adding popular online stores to its network of seamless checkouts, end quote. So here's the thing that I've never understood about this whole space. These one-click checkout things, it's not just software that you install on the merchant side. You also have to get consumers

to sign up to use your one-click checkout service. If I don't sign up for Bolt, then the promised ease and speed of checkout never materializes for me or the merchant. you got to make me make Bolt a habit for it to be successful, something that I am converted to that I use in all of my online shopping. But until all of my favorite merchants use Bolt, what is my incentive to do that? And if the majority of my favorite merchants don't have Bolt as a consumer, I never see the promised efficiencies, and so never would be converted in the first place. It's a hell of a cold start problem, especially when, you know, folks like PayPal have had a two-decade head start on converting both the merchants and the consumers.

Time for the weekend long-reed suggestions, albeit an abbreviated one. There just weren't that many long-reeds that caught my eye this week. First, though, if you remember when the whole Elon Twitter thing went down, I reached out to one of my finance friends, Ranjan Roy, for clarity. So I thought I'd share with you his post, summing up his thoughts on the whole situation. Basically, his take is Elon Musk is buying Twitter to protect his ability to tweet, which is increasingly vital to his business interests. Also, he wanted to do battle with the SEC, and also because Tesla stock has stalled out. Quote,

A running theory of mine is that in January 2018, Tesla ceased to be an electric vehicle company and transformed itself into a financial vehicle of sorts. That's when Tesla's board announced a new pay package that was called audacious and breathtaking at the time. It's conventional wisdom that Musk's Twitter account transforms the unit economics of Tesla by allowing zero expenses on conventional brand marketing and PR. But the power of his tweeting also lowers his costs of capital, drives corporate partnerships muscles regulatory pressure, is a recruiting tool and touches every other element of Tesla, the business, not to mention every other business interests Elon owns. Elon understands his access to tweeting is existential to every element

of his business. It's the difference between him being Phil Knight or Michael Del Rich to becoming the richest person in the world in nine short months. There once was the possibility the SEC would become far more aggressive in controlling Musk's account. Judgments were being passed and things were getting hairier for Elon. If someone used their Twitter account to repeatedly break securities laws, it still doesn't strike me as a stretch regulators would revoke your access. After the past few weeks, however, can you imagine the public outcry if regulators tried imposing any limits at all? If Twitter is existential to his overall business interests and his account feels threatened in any way, $46 billion for Twitter is a bargain for maintaining and increasing

his $270 billion net worth. My mini-grand theory is that this entire sequence of events, the Twitter purchase, the SEC escalation, Tesla's blowout quarter, it's all about the next giant pay package for Musk. Musk saw an opportunity at the beginning of the year. Tesla's business was on a roll. His pay package was almost complete. The SEC was threatening his Twitter account and Tesla's stock had stalled out for six months. Every great entrepreneur understands the importance of momentum, and he decided to capitalize on this confluence of events. At first, I was skeptical. Musk was serious about buying Twitter, but I'm genuinely starting to believe it's part of a larger strategy. We're starting to see more pieces, the potential new

super company. He just raised a bunch of money for the boring company. Twitter is now both a potentially undervalued financial asset, a political asset, and a marketing tool. I think we'll soon also see something incredibly audacious and breathtaking pay package that is far more creative and corporate boundary crossing than what we saw in 2018, end quote. Then from Bloomberg, want to know a hot startup space, would you believe it's weather prediction? Quote, since 2017, there have been 86 weather-related disasters in the U.S. exceeding $1 billion in damage, a much faster pace than in previous years. 20 of those events were in 2021 alone.

Indeed, climate disasters last year cost the American economy $145 billion. a stunning amount, which, when accounting for inflation, is the third costliest year on record. While most private weather platforms still rely heavily on data from NOAA, they're increasingly supplementing it with their own, weather from intergovernmental agencies or private sources. The weather company, which was bought by IBM for $2.3 billion in 2016, reportedly accumulates up to 80 million observations each day through barometers and smartphones. Additionally, cheaper access to low-Earth orbit is enabling some companies to launch their own satellites and in turn provide data to NOAA. Private weather isn't new. In 2013, an article from the Wharton School

estimated that a global weather forecasting industry of around 350 companies was pulling in around $3 billion annually. In 2017, NOAA estimated that the sector in the U.S., which today encompasses everything from hourly road surface forecasts for long-haul truckers to drought forecasts for individual farms, was worth $7 billion. Report suggested it was growing at a rate of around 10 to 15 percent annually. And while the industry couldn't exist, at least not right now, without U.S. government data, NOAA is becoming increasingly reliant on the industry. Noah spokesperson Susan Buchanan said that while the agency's work is the foundation for private weather, it needs these new sources to create a weather-ready nation,

since NOAA alone can't address, quote, all the hyper-local vulnerabilities, end quote. And finally, Harry McCracken takes a look at the true antecedent of the smartphone camera, the Polaroid SX-70, which turns 50 years old this month. Much of the camera's magic was in the photo, especially the pod of chemicals that spread as it exited the camera, allowing a picture to develop without the benefit of a dark room or even the paper cover of previous Polaroids. But the camera itself was also new in virtually every possible way. encased in classy brown leather and chrome, it folded down into a one-inch-thick, unlike earlier Polaroid cameras, and was compact enough to fit in a pocket, well, at least a particularly roomy one. At Polaroid, rumor had it that Land was wearing a jacket tailored for the purpose.

Unfolded, its oversized viewfinder showed you exactly what the camera's lens saw, thanks to internals that bounced the image around to reach your eye. Land boasted of the electronics it packed to simplify picture-taking, a then-staggering 300 transistors. In short, if earlier Polaroid cameras had been Blackberries, the SX-70 was instant photography's iPhone. Actually, it's hard to think about the camera without drawing comparisons to Apple's greatest product launches, especially since Steve Jobs idolized Edwin Land and his approach to invention. Land was always focused on the consumer on making it simple, putting the complexity inside the product, says my friend Phil Baker, who worked on the SX-70 as a young Polaroid engineer,

and attended the annual meeting where it debuted, end quote. So our Twitter space last night was great and huge and coming at you Saturday. If you want a deep philosophical dissertation on how the web has evolved into where it is over the last 25 years or so, here you go. From about a dozen people who were there and tried to shape its direction in many ways, some that worked and some that didn't. And yes, we eventually channel all of that discussion in the end into asking what it might mean for Twitter now that Elon has it. Enjoy that. Talk to you on Monday.