Tech Brew Ride Home - Mon. 08/07 – Is Apple Facing An iPhone Recession?

Episode Date: August 7, 2023

In earnings last week, Apple was forced to admit softness in iPhone sales. But the big question is, will the iPhone 15 be enough to turn things around? A stablecoin from PayPal. What the world being flooded with cheap AI-produced content already means in the real world. And a review of the Samsung Galaxy Z Flip 5. Sponsors: Kolide.com/ride Collective.com/ride Links: Apple Admits There Is a Smartphone Slowdown Ahead of iPhone 15 Debut (Bloomberg) PayPal Launches a Stablecoin in Latest Crypto Payments Push (Bloomberg) New acoustic attack steals data from keystrokes with 95% accuracy (BleepingComputer) A New Frontier for Travel Scammers: A.I.-Generated Guidebooks (NyTimes) Samsung Galaxy Z Flip 5 review: the flip phone we’ve been waiting for (The Verge) 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 Monday, August 7th, 2023. I'm Brian McCullough today. In earnings last week, Apple was forced to admit softness in iPhone sales, but the big question is, will the iPhone 15 be enough to turn things around? A stable coin from PayPal, what the world being

flooded with cheap AI produced content already means in the real world, and a review of the Samsung Galaxy Z Flip 5. Here's what you missed today in the world of tech. I wanted to pick up on something from Apple's earnings at the end of last. last week. Apple acknowledged for the first time what the whole industry owned up to a long time ago, i.e. that the U.S. smartphone market has been in decline for the last couple of quarters. Now, that's going to be an issue because while this new iPhone release next month should be timed for a sort of cycle upgrade, will there be enough new in the iPhone 15 to turn things around at least sales-wise? Quoting Mark German and Bloomberg. The sales prospects of the new iPhone

won't hinge on features alone. Apple will have to work harder to coax shoppers into opening their wallets. A key theme of its post-earnings conference call Thursday was the slowdown. Sales of the iPhone slid $2.4% to $39.7 billion last quarter coming in just below Wall Street estimates. The device has had earlier blips, including a rough patch in China in early 2019, a COVID-related launch delay in 2020 and supply chain problems in 2022, but the iPhone doesn't usually suffer sales declines. Apple blamed currency headwinds for hurting results, but also admitted that U.S. shoppers aren't spending on its products the way they used to. Sales in Apple's home country paled in comparison with China, which Chief Executive Officer Tim Cook called out as a highlight of the

quarter. Apple expects the iPhone performance to improve in the current period. That means it will be better than a 2.4 percent decline. Perhaps it will even grow. But the company warned that overall revenue will probably stay in the same range as the past quarter when it fell. In fact, Apple is poised to suffer its fourth straight quarterly sales decrease, something that hasn't happened since 2001. That's a tough backdrop for the iPhone 15, which I'm told will go on sale around September 22nd following an event plan for either September 12th or 13th. The timing means Apple will get about a week of iPhone 15 sales in its fiscal fourth quarter, which runs through September. The real test for Apple will be the holiday quarter, its sales period extending from

October through December. That's invariably the company's biggest time of year. One thing going in Apple's favor, this holiday season should have a favorable comparison with the same stretch of 2022. Last year, the iPhone 14 Pro and Pro Max ran into a pandemic-related production stoppage at Foxcon Technology Group plants in China. That dragged down the iPhone's performance during the season. So it shouldn't be hard for the iPhone 15 to show healthy year-over-year growth, assuming it doesn't run into its own production problems. If Apple can't manage that, the smartphone slowdown could be even worse than feared, end quote. PayPal this morning announced PiUSD, or PYUSD, a stablecoin issued by Paxos, and fully backed by U.S. dollars, short-term treasuries, and cash equivalents, rolling out to U.S. customers gradually.

Quoting Bloomberg, PayPal Holdings is rolling out a stable coin, the first by a large financial company, and a potentially significant boost to the sluggish adoption of digital tokens for payments. PayPal USD, PiUSD, is issued by Paxos Trust, and fully backed by U.S. dollar deposit, short-term treasuries and similar cash equivalents, the San Jose-California-based payments company said on Monday. It's pegged to the dollar and will be gradually available to PayPal's customers in the U.S. With PiUSD, Chief Executive Officer Dan Shulman is seeking to cement PayPal's dominance in digital payments by leaning on technology that enables instant and lower-cost transfers without a central intermediary. PayPal shares have slumped more than 35% in the past 12 months, the sixth worst performer on the NASDAQ 100 index as the pandemic-era surge in online payments abated. The vision over time is that this becomes

a part of the overall payments infrastructure, Schulman, who's preparing to step down in coming months said in an interview. Stablecoins, crypto tokens that are pegged to an asset like the dollar, have been around for almost a decade, but they're mostly used by traders to move digital assets between exchanges and have made limited inroads into consumer payments. There's roughly $126 billion worth of stable coins in circulation, according to Coin Gecko, the biggest by far being Tether Holdings USDT. The company now believes the regulatory environment is, quote, progressing toward more clarity and sees rising demand for an alternative stable coin because of how concentrated the market is. Jose Fernandez-Depante, head of PayPal's blockchain and digital currencies team, said in an interview,

PiUSD is designed to be redeemable for dollars at all times and can be exchanged for other cryptocurrencies available on PayPal's network. It can be used to fund purchases and will soon be available on PayPal's popular payments app Venmo. Users will eventually be able to send their token holdings between a PayPal and a Venmo wallet. The coin can also be moved to compatible third-party wallets outside the PayPal network, end quote. Back to the AI Beat. UK researchers have apparently trained a deep learning model that can steal data from keyboard keystrokes recorded using a microphone with 95% accuracy.

And when you just use Zoom, it has 93% accuracy, quoting bleeping computer. When Zoom was used for training the sound classification algorithm, the prediction accuracy dropped to 93%, which is still dangerously high and a record for that medium. Such an attack severely affects the target's data security as it could leak people's passwords, discussions, messages, or other sensitive information to malicious third parties. Moreover, contrary to other side channel attacks that require special conditions and are subject to data rate and distance limitations, acoustic attacks have become much simpler due to the abundance of microphone-bearing devices that can achieve high-quality audio captures. This, combined with the rapid advancements in machine learning, makes sound-based side-channel attacks feasible and a lot more dangerous than previously anticipated.

The first step of the attack is to record keystrokes on the target's keyboard as that data is required for training the prediction algorithm. This can be achieved via a nearby microphone or the target's phone that might have been infected by malware that has access to its microphone. alternatively, keystrokes can be recorded through a Zoom call where a rogue meeting participant makes correlations between messages typed by the target and their sound recording. The researchers gathered training data by pressing 36 keys on a modern MacBook Pro 25 times each and recording the sound produced by each press. Then they produced waveforms and spectrograms from the recordings that visualize identifiable differences for each key and perform specific data processing steps to augment the signals that can be used for identifying keystrokes. In their experiments, the researchers use the same laptop whose keyboard has been used in all Apple laptops for the past two years, an iPhone 13 Mini placed 17 centimeters away from the target, and Zoom.

For users who are overly worried about acoustic side channel attacks, the paper suggests that they may try altering their typing styles or using randomized passwords. Other potential defense measures include using software to reproduce keystroke sounds, white noise, or software-based keystroke audio filters. Remember, the attack model proved highly effective even against a very silent keyboard, so adding sound dampeners on mechanical keyboards or switching to membrane-based keyboards is unlikely to help, end quote. So when people say they're worried about AI-generated content flooding the world, they're often talking about dangerous misinformation, you know, altering political opinions, changing elections, the like. But what if that's not the immediate threat? What if we should be worried right now about low-level garbage content? Forget software eating the world. This would be spam eating the world. Already happening. The New York Times has a look at shoddy self-published guidebooks, which appear to be compiled with the help of generative AI and promoted via deceptive reviews that are now, right now proliferating on Amazon. Quote, the books are the result of a swirling mix of modern tools, AI apps that can produce text and fake portraits, websites with a seemingly endless array of stock photos and graphics, self-publishing platforms like Amazon's Kindle Direct Publishing, with few guardrails against the use of AI, and the ability to solicit purchase and post-phony online reviews, which runs counter to Amazon's policies and may soon face increased regulation from the Federal Trade Commission.

The use of these tools in tandem has allowed the books to rise near the top of Amazon's search results and sometimes garner Amazon endorsements such as Number One Travel Guide on Alaska. A recent Amazon search for the phrase Paris Travel Guide 2023, for example, yielded dozens of guides with that exact title, one whose author is listed, as Stuart Hartley boasts ungrammatically that it is everything you need to know before plan a trip to Paris. The book itself has no further information about the author or publisher. It has no photographs or maps, though many of its competitors have art and photography easily traceable to stock photo sites. More than 10 other guidebooks attributed to Stuart Hartley have appeared on Amazon in recent months

that rely on the same cookie cutter design and use similar promotional language. The Times also found similar books on a much broader range of topics, including cooking, programming, gardening, business crafts, medicine, religion, and mathematics, as well as self-help books and novels, among many other categories, end quote. They actually got in touch with Rick Steves to comment on this, since, you know, this is about travel guides. And he was like, there's no way you can write a good travel guidebook without doing the literal legwork of going to these places and talking to people and trying stuff out. But that's the point, Steve. As anyone in digital media for the last 20 years can tell you, good content becomes less meaningful in a sea of zero marginal cost content. Finally today, a review of

the Samsung Galaxy Z Flip 5. The Verge says the cover screen and widgets are useful. IPX8 and five years of patches are great, but they warn of a so-so battery, tricky covers apps, and unknown durability, which is kind of true for all flip phones at this point. Quote, being able to declare an absolute category winner is rare in the smartphone space, but in the case of the Samsung Galaxy Z Flip 5, it's actually quite easy. This is the best Flipstyle folding phone you can buy. It's a small category, so that helps. It's even smaller if you're looking for options available in the U.S. since your choices are basically the Flip 5 or Motorola's Razor Plus. They have a lot in common, including the fact that they both offer a much bigger, much more useful

cover screen than their predecessors. They share the same $999 price tag, too. But Samsung's flip phone is more durable. Its cover screen widgets are more useful, and its camera system is better overall. That's not to say that the Flip 5 is the perfect flip-style phone or the best phone you can buy for $1,000. It's durable for a foldable, but that big X in its IPX-8 rating means there's no guarantee against dust intrusion. And dust in a folding phone spells real trouble. You'll find better camera hardware on most other $999 slab-style phones, including a telephoto lens, and you'll struggle to get through a full day of heavy use with the flip 5 on a single battery charge.

If any of the above is a major concern, then a flip-style phone might not be for you. But if you are willing to put up with these trade-offs, then the Galaxy Z Flip 5 is an excellent device. The Flip Form Factor is particularly good for someone who wants to get more of the basic chores done on their phone without getting sucked into mindlessly checking app notifications and scrolling through big news feeds unintentionally. The bigger improved cover screen on the Flip 5 makes it possible to respond to a text quickly, glance at walking directions or check the weather without coming face-to-face with absolutely everything on your phone. It's a powerful tool in the fight for your attention, and the Z Flip 5 is hands down the best option in its class. Let's start with the main attraction, that 3.4-inch cover screen, excuse me, flex window, according to Samsung.

That may not sound like much, but it's more than 3.5 times bigger than the 1.9-inch screen, on the Z Flip 4. It's like getting out of a smart car and into a sedan. Buckle up because you can go places now. Rather than just checking notifications, you can use a full QWERTY keyboard to respond to text. You can see your daily schedule alongside a monthly calendar in the same view. Samsung provides a bunch of handy widgets you can enable, disable, and rearrange to your liking. They're excellent and take great advantage of the available screen real estate. The weather widget shows you current conditions at a glance and you can scroll down for the next week's forecast. Tapping on a calendar event brings up all the details. It's all as the good lord intended,

and a much better experience than on the Motorola Razor Plus. In no particular order, here are some things I use the cover screen to do in the past week. Respond to text messages. Sign my kid out of daycare. Check arrival times at my bus stop and note that I am definitely missing the next bus. Read my threads notifications, all four of them. Dismiss approximately 2,000 spam calls. Widgets are great, but part of the appeal of a flip-fell. phone, at least for me, is the ability to run certain apps on the cover screen. You need a bit of a sense of adventure here because lots of apps are unequivocally awful on a small screen, but I've discovered a few of the apps I use for Quick Tasks are actually fine on the cover

display. It's a hassle many Flip5 owners probably won't want to go through, but for the adventurous few, it's a big benefit to owning a flip phone. For reasons mentioned above, Samsung makes it very difficult to run just any old app on the cover screen. You can enable a handful of pre-selected apps through the Labs menu. But for anything outside of messaging apps, Google Maps, or YouTube, you need to download Goodlock and an additional module called Multistar from the Galaxy App Store. Then you can add additional apps to the cover screen, end quote. Then from the conclusion of the review, quoting again, there are plenty of ways that the Galaxy Z Flip 5 could be a better flip phone. The cameras could use an upgrade. I'd like to run apps more easily on the cover screen.

And dustproofing would be a welcome addition. It's a bit sleeker with the new Fold Flip. hinge, but still a chunky device that would benefit from some trimming down. Even though it could be better, it's easily the best widely available flip phone option right now. For the same price as the Motorola Razor Plus, you get a more consistent camera, robust water resistance versus splash resistance, an extra year of software updates and much better cover screen widgets. That's really no contest. The Oppo Find N2 Flip is another option outside the US, but its cover screen is smaller and less useful and its durability is uncertain since it lacks any kind of IP rating. If you're considering jumping from a traditional slab-style phone to a flip phone, the Z-flip-5

is a great entry point. The cover screen isn't just a neat party trick. It's a genuinely useful tool that made my life a little easier in numerous ways while using the phone. It's a device best suited for someone with a sense of adventure and curiosity when it comes to technology, someone willing to try a new way of doing things and able to roll with it when you inevitably hit a snag. For that kind of person, the Z-Flipp 5 is a truly rewarding experience, end quote. So this weekend, I finally had the alpha testers take a crack at my AI experiment, and as I feared, we are nowhere near ready for beta testing. And here's the thing, the developer I hired to get me this far, needs to beg off the project we knew. Going into this,

working together was temporary because he was going to get a new permanent gig this month. We just had hoped to be further along the path by the time he had to move on. I'd say the project is only 40% of the way there at this point. If there are any developers out there looking for a side gig for the next two months to get my remaining 60% of the way there, a lot of the key components are in place. We just need to refine so I can get to the point where I can buy some Google ads, some insta ads, and test the actual product in the marketplace.

So the plan would be to pay a flat fee to get me to that beta testing phase, and then if I prove there's a market for this product, I will eventually need someone on a permanent basis, so if you're interested in a side gig with the possibility of something full-time later on, hit me up at brianattechmeme.com, put developer in the subject line and we'll talk. If you share your GitHub details, I'll share the repo with you so you can poke around at where the code is at right now

and get a sense of where we're at in terms of overall development. It's, by the way, NextJS for the front end and back end. neon database for auth and user data, Prisma for interacting with the database Versel for analytics and hosting, Stripe for payments, open AI for the AI APIs. If you're a developer

who knows this stuff, who's interested, again, Brian at Techmeme.com and put developer in the subject line. Talk to you tomorrow.