Tech Brew Ride Home - Fri. 04/30 – The EU Brings The Hammer Down On Apple

Episode Date: April 30, 2021

The EU does indeed charge Apple with antitrust violations. Roku has indeed followed through on its threats to YouTube TV. Will the Magic Keyboard actually work with the new iPad Pros or not? And of course, the weekend longreads suggestions. Sponsors: Red-ID.com/brian AirMedCareNetwork.com/tech offer code TECH Links: EU Charges Apple With App Store Antitrust Violations in Spotify Case (Wall Street Jounal) YouTube TV removed from Roku channel store amid Google contract dispute (Axios) Apple says the new 12.9-inch iPad Pro will work with the old Magic Keyboard, but ‘may not precisely fit when closed’ (9to5 Mac) 'A Perfect Positive Storm’: Bonkers Dollars for Big Tech (New York Times) Weekend Longreads Suggestions: The new wave of crypto users: migrant workers (Rest of World) Europe Is Trying to Reclaim Its Lost Chipmaking Glory (Bloomberg) As Nintendo’s entertainment kingdom expands, it’s still about the games (Fast Company) Spotify’s Surprise (Stratechery) Artificial Intelligence Is Misreading Human Emotion (The Atlantic) mRNA vaccine technology (Peter Attia MD) How mRNA Technology Could Change the World (The Atlantic) Subscribe to the RideHome+ Feed at: tech.supercast.tech 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 30th, 2021. I'm Brian McCullough today. The EU does indeed charge Apple with antitrust violations. Roku does indeed follow through on its threats to YouTube TV. Will the magic keyboard actually work with the new iPad pros or not? And of course, the weekend long read suggestions. Here's what you missed today in the world of tech. A couple of big follow-through stories today. The EU has indeed charged Apple with antitrust violations. allegations alleging Apple squeezed rival music streaming apps by requiring them to use Apple's in-app payment system, quoting the Wall Street Journal. The European Commission, the EU's top

antitrust enforcer on Friday issued a charge sheet against Apple that says the iPhone maker squeezed rival music streaming apps by requiring them to use Apple's in-app payment system to sell digital content. The case stems from a complaint by Spotify, which competes with Apple's music streaming service. In addition, EU regulators say Apple, quote, distorted competition by limiting how app developers can inform users about cheaper ways to subscribe outside the app. Apple's in-app payment system imposes a 30% commission on purchases inside many of the most popular apps. Quote, this case is about the central role of app stores in the digital economy.

Margith Vestager, who is in charge of competition enforcement at the European Commission set at a press conference Friday. Quote, an app store can become a gatekeeper in particular if there is only one app store available in a mobile ecosystem, end quote. In response, Apple took it. aim at Spotify, saying the company has been successful even after removing paid subscriptions from its iOS app in order to avoid Apple's fees. Quote, at the core of this case is Spotify's demand they should be able to advertise alternative

deals on their iOS app, a practice that no store in the world allows. And Apple spokesman said, quote, the commission's argument on Spotify's behalf is the opposite of fair competition, end quote. Apple will have a chance to argue its case before the European Commission renders a decision. If found guilty, Apple could face a fine of up to 10% of its annual revenue and be forced to adjust its business practices, though it can also appeal any decision in court, end quote. I saw someone tweet this morning, and I'm sorry, I didn't fave, so I don't know who to credit, but the tweet was something along the lines of, how much is Apple eventually going to regret

even doing Apple music and also Apple books over the years? It could end up costing them so much in the end, which really did make me think. Especially Apple Music, you know, that's nice for Apple to have. But does Apple really, really need it in the end? Are some of these services more trouble than they're worth? And Roku has gone ahead and removed YouTube TV from its channel store after Roku and Google failed to come to a distribution agreement. Existing users will continue to have access, though, quoting Axios. Roku notified customers that YouTube TV may be forced off its platform. if it couldn't come to an agreement with Google over a distribution deal. Notably, the dispute between Google and Roku is not over financial terms. Roku and Google compete on a number of fronts, including smart TV hardware devices, smart TV operating systems, and smart TV content, as Axios has

previously noted. We are disappointed that Google has allowed our agreement for the distribution of YouTube TV to expire, Roku said in a press statement. Roku has not asked for $1 of additional financial consideration from Google to renew YouTube TV, end quote. In response, to Roku's initial allegations a few days ago, a YouTube TV spokesperson said, quote, unfortunately, Roku often engages in these types of tactics in their negotiations. We're disappointed that they chose to make baseless claims while we continue our ongoing negotiations, end quote. This is weird, and we haven't spoken about it, I don't think, but after the recent Apple event,

word started dribbling out that maybe the first-generation magic keyboard accessories, maybe they wouldn't work with the newly announced iPad pros because the new pros are slightly thicker than old ones. And that would suck because, you know, Magic keyboards are what, a year old and they're pretty darn expensive? Well, clarification now from Apple, quoting 9 to 5 Mac. In a new support document published today, Apple has clarified the situation around the Magic keyboard's compatibility with the new 12.9 inch iPad Pro. The company now says that the first generation Magic Keyboard is, quote, functionally compatible with the new 12.9-inch iPad Pro, but it may not, quote, precisely fit when closed, end quote. The new iPad Pro is half a millimeter

thicker than its predecessor due to the new mini-l-D display technology. As Apple explains, this difference in thickness is what makes the 12.9 inch iPad Pro not perfectly fit into the old magic keyboard. The company also cautions that screen protectors could further affect the fit. of the slight differences in dimensions. However, Apple writes in the support document that the original Magic Keyboard will be functionally compatible with all new iPad pros, end quote. Final tech earnings roundup of the week, Amazon absolutely smashed it, just like everybody else did. Amazon's revenue was up 44% year over year to $108.5 billion. Imagine growing 44% year over year at that level of dollar figure. Net income went, get this, from $2.5 billion to $8.1 billion,

so more than doubling your income. And AWS has become a $54 billion annual run rate business. It had Q1 revenue of $13.5 billion growing at 28%. Get this one, quarter over quarter. Continuing my yesterday thesis that far from representing maybe the culmination of their smashing COVID, year? What if this quarter actually represents a phase shift into a completely new paradigm of success for the tech companies? In The Times, Shirovide echoes this sort of noodling, quote, America's technology superpowers aren't making bonkers dollars in spite of the deadly coronavirus and its ripple effects through the global economy. They have grown even stronger because of the pandemic. It's both logical and slightly nuts. Big Tech's pandemic, big bucks have an understandable

root cause. We needed its services. People gravitated to Facebook's apps to stay in touch and entertained, and businesses wanted to pay Facebook and Google, which Alphabet owns, to help them find customers who were stuck at home. People preferred to buy diapers and deck chairs from Amazon rather than risk their health shopping and stores. Companies loaded up on software from Microsoft as their businesses and workforces went virtual. Apple's laptops and iPads became lifelines for office workers and school children. Before the pandemic, America's technology superpowers were already influential in how we communicated, worked, stayed entertained, and shopped. Now they are practically unavoidable.

Investors have scooped up big tech shares in a bet that these companies are now nearly invincible. They were already on the way up and had been for the best part of a decade and the pandemic was unique, said Thomas Philippon, a professor of finance at New York University, quote, for them, it was a perfect positive storm, end quote. Time for the weekend long read suggestions, and once again, I'm loving the new outlet, rest of world, for, you know, giving us a view of technology from the rest of the world. According to them, one of the original promises of crypto might be coming to pass, and again, might be doing so because of COVID times.

when traditional exchanges closed during the pandemic, many Latin American workers and migrants turned to crypto to send remittances home. The Mexican cryptocurrency exchange Bitso now has one million users across the region. The company's founder Pablo Gonzalez told rest of world that Mexico is ripe for crypto adoption, driven by the remittance economy. While in 2020, 88% of Mexican households had a smartphone, less than 50% had bank accounts. However, Gonzalez, Gonzalez does recognize that he was naive in his hopes for how quickly and widely adopted among ordinary Mexicans crypto would be. Neither is he ignorant of the fact that a large percentage of Bitsos' million users are just investors looking to make a profit. In 2020, Mexicans living in the United States sent over $40 billion to their families back home. The majority of these transactions were done via traditional transfer services, but BITSO is keen to capture a share of that market. By the company's own reckoning, it's already processing 2.5% of remittances going into Mexico over

$1 billion a year, end quote. Next, we've been talking about countries scrambling to have strategic access to silicon chip production, and we've mentioned the sort of crash projects that are being jinned up by the European Union, though it turns out it wasn't that long ago that Europe was actually one of the global centers of the silicon industry, quoting Bloomberg. It's a very different scene than a couple decades ago when Europe led the world in manufacturing semiconductors thanks in large part to a strong consumer electronics industry with first-generation cell phones from Nokia, Erickson, and Siemens. But as those devices fell out of favor, the chip production industry also shifted abroad. In 1990, Europe accounted for about 44% of

global semiconductor manufacturing. Now it's closer to 10% and Taiwan, South Korea, and Japan accounted for about 60% of production, according to a joint report by the Boston Consulting Group and the Semiconductor Industry Association. European chip designers, including NXP semiconductors and Infinion technologies now outsource most production to giants like TSM and other foundries, end quote. Nintendo still wants to do things

its way, despite investors clamoring for years for Nintendo to move more heavily into mobile games for smartphones or even licensing titles to other platforms. Nintendo is notorious for sticking to its guns and its own idiosyncratic way of doing things, but that doesn't mean they're not

expanding into new areas like movies, or you might have seen that theme park that opened recently in Japan, quoting Fast Company. However, post-pandemic life pans out, Nintendo's own vision of its future is not entirely dependent on keeping people glued to switch screens. For years, it's been quietly fleshing out a plan to extend core intellectual properties such as Mario, Animal Crossing, and the Legend of Zelda Beyond Games. The company defines its four new investment areas as merchandising expansion, mobile expansion, theme park activation, and visual content. Merchandiseise. as well, merch, not just kid-oriented stuff, such as Mario Hot Wheels sets and Zelda dolls,

but also collaborations with Levi's, Puma, Colour Pop, and other notable brands. Mobile is smartphone apps, as you'd expect. Theme parks are the company's Super Nintendo World areas at Universal Studios Parks, the first of which opened on March 18th in Osaka, though it closed again on April 25th as coronavirus cases surged in Japan. And visual content encompasses the Super Mario movie that Nintendo is currently working on with Minions Perveyor Illumination scheduled for release next year. Around a decade ago, the company decided to get serious about maximizing the creativity,

quality, and overall Nintendoness of its presence outside gaming. Among the first major signs of this initiative was its 2015 announcement of its collaboration with Universal Parks and Resorts. Universal Studios, Japan's Super Nintendo World reportedly costs as much as $578 million to build. Additional outposts are in the works for Universal Parks and Hollywood, Orlando, and Singapore, though, opening dates and other details are yet to be announced, end quote. If you want Ben Thompson's take on the whole Spotify, Apple podcast game, the free edition of his newsletter this week goes into all that, and he uses it as a jumping off point to argue that

Facebook, Twitter, and Apple should take a page out of the Spotify playbook. Quote, again, analyst Ben thinks this is smart, but shouldn't publisher Ben still be a bit nervous about an aggregator in my space? Not at all. In fact, Twitter and Facebook are great for Streetechery. If your business is based on word of mouth, then giving your readers a voice is nothing but upside. And while I have never advertised Stratory, Facebook and Twitter would be the obvious and most accessible choices if I did, and don't underrate LinkedIn. I would never use a Twitter or Facebook subscription product, see the part above about owning my users, but that's okay because the web is an open alternative.

And now that Spotify has fixed the openness problem, I see upside in their approach. It will actually be easier to have a mix of free and paid feeds than it is with custom private RSS feeds, which means a new customer acquisition channel, while the Spotify audience network might be the first podcast advertising product that is easily accessible for smaller podcasts. Facebook and Twitter would do well to reconsider their subscription plans to accommodate independent creators like Spotify has instead of trying to capture them and Apple 2, but I'm not holding out hope, end quote. In the Atlantic, Kate Crawford makes the provocative claim that, you know how AI proponents say AI can read human emotions by reading facial expressions? Kate says there's basically no good evidence that this is true, quote, today, effect recognition tools can be found in national security systems and at airports, in education and hiring startups in software that purports to detect psychiatric illness and policing programs that claim to predict violence. The claim that a person's interior state can be accurately assessed by analyzing that person's face is premised on shaky evidence. A 2019 systemic review of the scientific literature on

inferring emotions from facial movements led by the psychologist and neuroscientist Lisa Feldman Barrett found there is no reliable evidence that you can accurately predict someone's emotional state in this manner. It is not possible to confidently infer happiness from a smile, anger from a scowl or sadness from a frown, as much of current technology tries to do when applying what are mistakenly believed to be scientific facts, the study concludes. So why has the idea that there is a small set of universal emotions readily interpreted from a person's face becomes so accepted in the AI field? To understand that requires tracing the complex history and incentives behind how these ideas developed long before AI emotion detection tools were built into the

infrastructure of everyday life, end quote. And finally, I put the call out yesterday to get some long reads about MRNA technology and you delivered, especially thanks to you, John Mayer. If you want a quick five-minute version of the whole MRNA story, read the Peter Adia piece that I've linked to in the Long Reads show notes. But if you want the longer deal, read the Derek Thompson piece from the Atlantic. I don't know how I missed this piece, actually. I try to read everything Derek does, especially around coronavirus stuff. Derek says MRNA's story likely will not end with COVID-19 vaccines. Its potential stretches far beyond just this pandemic, quote.

This year, a team at Yale patented a similar RNA-based technology to vaccinate against malaria, perhaps the world's most devastating disease, because MRNA is so easy to edit. Pfizer says it is planning to use it against seasonal flu, which mutates constantly and kills hundreds of thousands of people around the world every year. The company that partnered with Pfizer last year, Biontech, is developing individualized therapies that would create on-demand proteins associated with specific tumors to teach the body to fight off advanced cancer. In mouse trials, synthetic MRNA therapies have been shown to slow and reverse the effects of multiple sclerosis. I'm fully convinced now, even more than before,

that MRNA can be broadly transformational. Oslum Turecki, Biontek's chief medical officer, told me, in principle, everything you can do with protein can be substituted by MRNA, end quote. In principle is the billion-dollar asterix there. MRNA's promise ranges from the expensive yet experimental to the glorious yet speculative, but the past year was a reminder that scientific progress may happen suddenly after long periods of gestation. Quote, this has been a coming-out party for MRNA for sure, says John Meskola, the director of vaccine research center at the National Institute.

of allergy and infectious diseases, quote, in the world of science, RNA technology could be the biggest story of the year. We didn't know if it worked, and now we do, end quote. So no ride home plus content this weekend. I cleared the decks this week to enjoy seeing my parents for the first time in a year and a half. But we do have one weekend bonus episode and maybe two available to everybody. We do for sure have a bull bear case bonus episode.

about Clubhouse. Joseph Flaherty took the bullside and Ed Zittron took the bear side. It's a normal interview episode split into two and it's very, very good. Both guys make excellent cases, I think. You'll get that on Saturday. Then we wanted to follow that up with a Twitter space with those two guys and a bunch of other voices around this topic, but, well, we ran into a perfect storm of technical issues. I do have a sound file. Chris has a sound file that he's sent over to me, but we don't know if even with those two combined will have a good episode or not. There were times when I was kicked out of the room and people couldn't hear me in times when that happened to Chris. Eventually, we just abandoned everything after about an hour because we were having so many

issues. So I have no idea if the audio is usable or not, or even if, say, a spare 20 minutes or so is salvageable because I haven't listened yet. So this is to say, once I get a chance to actually listen, if there's enough good stuff there to warrant a second episode, I'll release that on Sunday. But if you never see anything materialize in your feed, then just know this was unfortunately a lost cause. Anyway, talk to you on Monday.