Tech Brew Ride Home - Mon. 11/05 - iPad Pro Reviews Are Mixed

Episode Date: November 5, 2018

Has Amazon decided on the location of its new HQ? What do people think of the new iPad Pros? Why are recently IPO’d tech companies hoarding cash? And why you might want to think twice about taking a selfie in the voting booth tomorrow. Links: Amazon in Late-Stage Talks With Cities Including Crystal City, Va., Dallas, New York City for HQ2 (WSJ) Amazon waives $25 minimum spend to offer free Christmas deliveries for all U.S. customers (Venture Beat) APPLE IPAD PRO REVIEW 2018: THE FASTEST IPAD IS STILL AN IPAD (The Verge) Apple’s first 5G iPhone will arrive in 2020 (Fast Company) YOU TOO CAN BUILD YOUR OWN CHIP – FOR ONLY $30 MILLION (Digits to Dollars) Newly Public Tech Firms Race Back to Market as IPO Frenzy Continues (WSJ) Did You Vote? Now Your Friends May Know (and Nag You) (NYTimes) You can't take a 'ballot selfie' in Illinois, Florida, or 25 other states — see where it's illegal to take a photo in the voting booth (Business Insider) 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 from Monday, November 5th, 2018. I'm Brian McCullough. Today, has Amazon decided on the location of its new HQ?

What do people think of the new iPad pros? Why are recently IPO tech companies hoarding cash and why you might want to think twice about taking a selfie in the voting booth tomorrow? Here's what you miss today in the world of tech. Over the weekend, there was some serious chatter that Amazon was in heated late stage talk. with several cities still in the running for its so-called HQ2, the new headquarters.

It's been shopping around to various municipalities for a while now. According to various outlets, various sources, those still in the running include Dallas and New York City, though other contenders such as Atlanta, Denver, and Toronto have, quote, cooled. A lot of the chatter, at least on Saturday, surrounded Crystal City, Virginia, which is outside of Washington, D.C., where Jeff Bezos has a house and where, of course, his Washington Post newspaper is based. According to the journal, quote,

negotiations with the top candidates are likely in slightly different phases, according to the knowledgeable people. In Northern Virginia, Amazon is negotiating with government officials on incentives, while it's also talking with JBG Smith Properties, a publicly traded real estate investment trust, about the Crystal City real estate it owns, according to people familiar with the matter. Part of the negotiations involve

nailing down the investment targets Amazon would have to meet to qualify for incentives, one of the people said, end quote. The journal says that even if a city loses out on this Amazon headquarters sweepstakes, it might still be in the running as a potential home for smaller

operations. But back to those Crystal City rumors, they prompted a tweet on Saturday from Mike Grella, Amazon's director of Economic Development, who said, quote, memo to the genius leaking info about Crystal City, Virginia as hashtag HQ2 selection. You're not doing Crystal City, Virginia, any favors, and stop treating the NDA you signed like a used napkin, end quote. To which Jay Hancock tweeted, this Amazon executive is absolutely right.

Virginia voters and taxpayers who are financing what will probably be a multi-billion dollar giveaway to his company should know as little as possible. about the deal until it's too late to do anything about it, end quote. And Tom Skaka tweeted, Wow, looks like your company's planning on being a really respectful corporate citizen wherever it ends up, rather than coming in and throwing its weight around, end quote. Coincidentally, Jeff Bezos was in New York City on Thursday to speak at a conference where he said this about the HQ2 sweepstakes. Quote, ultimately, the decision will be made with Interimpses.

tuition after gathering and studying a lot of data. For a decision like that, as far as I know, the best way to make it is you collect as much data as you can. You immerse yourself in that data, but then you make the decision with your heart, end quote. Speaking of Amazon, between now and Christmas, they're going to waive the $25 minimum spend requirement in order to get free shipping for all U.S. customers. It's worth noting that Target recently announced free two-day shipping on certain items with no minimum purchase required until Christmas, and Walmart just offered free shipping with a minimum spend of $35. So Amazon is seemingly aggressively rising to the moves the competition is making. I didn't know this since I've been a prime subscriber for many

years now, but Amazon has actually been fiddling with the free shipping threshold for quite some time. Quoting from Venture Beat, away from prime memberships, the e-commerce giant has dabbled with various minimum spend thresholds over the years in terms of how consumers can qualify for free shipping. The figure was previously pegged at $25, but in 2013, Amazon raised it to $35 before bumping it up to $49 in 2016, and then dropping it back to $35 the following year. Three months later, in May 2017, Amazon cut the minimum spend threshold back down to $25 where it remains today, end quote. What's for sure is that aside from matching the moves of their competitors, Amazon no doubt sees this move as a convenient way to market prime memberships to more people.

See how great it was to get your package shipped free in only two days? Can I interest you in this shiny membership program I've got over here? The iPad Pro Review embargo broke early this morning, and as usual, I'll give you a sampling of what everyone had to say. but really, I think the general consensus can be summed up by Nelai Patel's couple of graphs from his review in The Verge. Nelai says he would love to use all the power that's inherent in these new iPad pros. He'd love to finally and definitively use it as a laptop replacement. However, limitations keep popping up for the device,

for the operating system, for the peripheral strategy, and frankly, there's no longer any good reason for that. quote, Apple seems to one at both ways with the iPad Pro. It loves to tout the iPad's laptop-dorffing sales figures and industry-leading performance. But when pushed on the iPad's limitations, the company insists that the iPad is still an ongoing attempt to build the future of computing, not a laptop replacement. But after eight years, this double-sided argument is no longer tenable. Unlike virtually every other computer, the iPad is a product of Apple's singular vision. The company designs the display, the processor, the operating system, and the limits of the applications and accessories that plug into it.

And after all this time, it's clear that whatever roadblocks and frustrations exist in using the iPad Pro are there because Apple wants them there. There just aren't that many excuses left, end quote. In TechCrunch, Matthew Panzerino says that the new pencil is one of Apple's most impressive version two devices. ever, and the new smart keyboard is much more stable, making it better for, you know, using it on your lap. Still, he ended with a slightly similar conclusion, quote, if Apple is able to let go a bit and execute better on making sure the software feels as flexible and advanced as the hardware, the iPad Pro has legs. If it isn't able to do that, then the iPad will remain a dead end. But I have hope, in the shape of an expensive-ass pencil, end quote.

Others were more generous focusing on the ways that the iPad Pro is maturing toward full computing potential. I mean, this is a device that will likely benchmark favorably to any laptop out there in terms of processing and graphics. We can do serious work with full-featured apps like Photoshop now. In I'more, René Richie says, the new iPad Pro is, quote, the biggest step forward since the original. Bigger than iPad 2 and iPad Air. bigger than the original pro, end quote. And in Engadgett, Chris Velasco concludes that, quote, this new generation of the iPad Pro feels more capable than any other I've tested.

And it seems to advance the idea that an iPad could, under certain circumstances, be a person's primary computing machine. We'll be able to tell how big a step forward it is, only after more testing, though. So stick around for the full verdict in the next few days. and interestingly, they will likely go with Intel's 8161 5G modem chip. I say that this is interesting because lots of sources have been telling us lately that Apple is not exactly pleased with Intel at the moment for a variety of reasons.

But quoting Fast Company here, our source says Apple's current issues with Intel are not serious enough to cause Apple to reopen conversations with Qualcomm about supplying 5G modems. Apple has held conversations with another chipmaker, media tech about potentially supplying 5G modem chips, but our sources believe that is a distant plan B, end quote. So a couple things to note. This year's lineup of iPhones is the first to use Intel modems exclusively,

and I guess Apple might have problems with Intel, but they really, really seem to have problems with Qualcomm. The blog Digits to Dollars has a really interesting analysis up, looking at what it takes to design your own custom silicon in-house, as, of course, famously Apple does. Lots of companies are moving towards designing their own chips in-house, because lately the costs have come down so far that to do so, as the piece notes, can be hugely profitable if you can afford the upfront cost, and crucially, if you have enough volume to make the numbers work out.

Quote, chip gross margins for high-value. digital products are in the range of 70% plus or minus. That means for a $100 chip, $70 is captured by the vendor. By moving to in-house designs, customers can recapture that amount. But to cover the OPEX, it would require the in-house design team to replace around $71 million in parts that they would have to otherwise purchase from a merchant vendor, $50 million equating to 70% in his calculations. going back to that $100 part, a customer designing their own chip would need to consume 700,000 units to break even on the design investment. By comparison, if the design team is 500 people and license fees are double, that works out to 2 million units to break even on the investment.

Based on this math, this looks like a good move for many companies. Apple's design team is probably massive. Thousands of people as their A series of applications processor is an immense. complicated and impressive chip, but they ship 100 million plus iPhones a year, so the economics are very compelling. And we have not even factored in the competitive advantage they are building with that chip or the synergies with other parts of their business. Hint, by this math, replacing Intel in the Mac computers, looks very appealing economically, end quote. Amazon, among others, is apparently designing its own line of chips for its Alexa devices,

but then it could also use those chips in its AWS hardware as well. So between the last segment and this one, it seems like Intel continues to be a company caught in the middle these days. And another piece that gets into the economics behind the tech business these days, the Wall Street Journal reports on the slew of recent tech companies that have IPOed in recent years and how they're all racing to take advantage of the current stock market relative health to sell additional follow-on shares.

Quote, as their shares outperform newly public tech companies have been returning to the market to sell more stock at a nearly unprecedented clip, about 44% of the so-called follow-on stock offerings from U.S. listed technology companies in the first 10 months of the year have come within 180 days of an initial public offering. That would be the second highest yearly percentage since Deal Logic began collecting data in 1995. Overall, proceeds from share sales this year by already public tech companies are the highest they have been since 2000. But the speed with which newly public companies have been able to return to the trough at higher prices shows how ravenous investors have been for new offerings from Silicon Valley and the outsized business growth potential the IPOs bring, end quote. A couple of examples of the journal highlights are DocuSign, which went public in April.

it achieved a much better than expected public market valuation at its IPO of $4.5 billion. But by September, that valuation had nearly doubled to $8.7 billion. So key investors sold another round of stock for $443 million. SendGrid went public in 2017, got a $672 million valuation. Less than six months later, it was valued at around $1.05 billion. So the company sold an additional $180 million of stock to public investors. And then last month, SendGrid agreed to a $2 billion acquisition from Twilio. So I'm highlighting this to make two completely contradictory points.

It's super healthy for venture-back tech companies when going public is the best possible exit you can achieve. If you IPO at the valuation that you want, that you've been dreaming of for years, and then a year later you're worth double that? That's really the best possible outcome. But at the same time, you can read companies stockpiling cash while the getting's good as a cautionary tale. Maybe the companies feel they won't have the chance

to do such a thing in the near future. What might these companies be seeing that the markets aren't? Finally today, as I'm sure even our non-U.S. listeners are aware. here in the states we have a big election coming up tomorrow. So a couple of stories related to that to end today with. First, you might have been hearing lately about these two apps. One is called Vote With Me and the other is Outvote. They're designed to prod your friends and family to get out and vote, social network style.

But they do that by letting you look up your friends on public voting records. So you can see how many of your friends are. are, say, registered Republicans or Democrats or neither, and how recently they voted or didn't. Then you're encouraged to text them to vote tomorrow. So this is introducing a weird new dynamic, wherein I could find out, say, that my dentist hasn't voted since 2018. And who would feel comfortable being inadvertently outed

for their party affiliation by friends or family who might not otherwise know? quote, I don't want this to come off like we're shaming our friends into voting, Nassim Makaya, the chief executive of outvote told the New York Times. I think a lot of people might vote just because they're frankly worried that their friends will find out they didn't, end quote. Yeah, I want everyone to vote too, but is that really the best way to motivate people? Well, one way to stave off public peer pressure and shaming would be to maybe take a selfie of yourself voting tomorrow, right? Except you probably shouldn't do that in the voting booth because, as Business Insider notes,

it is actually illegal to take a ballot selfie in voting booths in 27 states. In the link in the show notes, Business Insider has a helpful map showing you where taking a photo in a polling location is legal and where it could actually earn you a fine or even jail time. So, Mutant Podcast Army, thanks for the reviews. of the book on Amazon. We've crossed the 30 review mark, inching closer to that magic 50 review number. But I have one more request for you, and then I won't bother you about the book anymore. As you know, I've been doing a lot of press and promo for the book the last couple weeks,

and while I was commuting to one such appearance over the weekend, I was listening to a recent episode of the Joe Rogan podcast. I sort of knew this about Joe because I'm a fan of his show, but I was listening to him talk about the tech industry, and it really struck me how little Joe actually knows about tech. I mean, tech in the way that we talk about it, the companies and the people, and how the whole industry works and trends and things like that. It made me really want to go on his show and educate him, politely, of course, as a fan.

I can talk AI, the singularity and the Fermi paradox and all that other good stuff that he likes to talk about. But also, I just want him to be a little more plugged in about tech generally and not treat it like some G-Wiz thing that only wizards understand. That's why I do things like the book and this podcast, because I think tech is worth understanding. It's so impactful to our lives these days, and you need to understand how it's doing that. So, since I don't know how to reach out to Joe otherwise, although I have emailed him, podcast Army. If you were so inclined, please tweet at Joe Rogan and tell him that he should have the author of how the internet happened on his podcast to talk about tech. Mutant Podcast Army assemble for one last caper.

Thanks in advance.