Tech Brew Ride Home - Mon. 12/21 – Big Day For Real Estate Tech

Episode Date: December 21, 2020

Huge day for Real Estate tech with Opendoor going public to a soaring valuation and RealPage getting bought for a ton of money. Microsoft might design its own custom silicon, cause, why not (to quote Vincent Hanna)? Is the first under the display selfie camera basically a fail? And could we actually see the Apple Car debut as soon as next year? Sponsors: GetArmorLock.com Hawthorne.co promocode: techmeme Links: Opendoor Rides SPAC Deal to Lofty $18 Billion Valuation at Market Debut (The Information) Real estate software and data analytics company RealPage to be acquired for $10.2 billion (VentureBeat) Russia’s Hacking Frenzy Is a Reckoning (Wired) Microsoft Designing Its Own Chips for Servers, Surface PCs (Bloomberg) U.S. States Weighs New Google Suit Over App Store Fees (Bloomberg) THE WORLD’S FIRST UNDER-DISPLAY SELFIE CAMERA ISN’T VERY GOOD (The Verge) Sketchy Report Says Apple Car is Years Ahead of Schedule, Will Debut Next Year (MacRumors) 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 TechMeme right home for Monday, December 21st, 2020. I'm Brian McCullough today. It's a huge day for real estate tech with open door going public to a soaring valuation and Real Page getting bought for a ton of money. Microsoft might design its own custom silicon

because why not, to quote Vincent Hanna, is the first under the display selfie camera basically a fail and could we actually see the Apple car debut as soon as next year? Here's what you missed today in the world of tech. Big day for real estate tech. First, real estate startup open door has gone public via a SPAC deal and achieved an $18 billion valuation, which is notable because when this deal was first announced back in September, it was valued at $6.3 billion.

So this is another sort of tech IPA. that is just soaring once it reaches the public markets. This deal was also notable because it was one of the first SPACs announced. Spacks, remember, are those blank check companies. And this one was launched by noted investor Chimath Pallihappatia. His previous SPAC is how Virgin Galactic is public, quoting the information. Open Door took an unusual path to its public debut. In addition to raising money from well-known VC firms, Open Door over the years has attracted interest from Wall Street banks, willing to lend it billions of dollars to buy homes it would ultimately resell. And despite a difficult start to the year when the pandemic temporarily stalled the real estate market, the SPAC merger has helped Open Door replenish

its balance sheet. Pete Flint, a real estate tech investor who co-founded Homelisting Site Trulia and has followed Open Door over the years, said the firm was wise to go public during an era of exuberance over tech and real estate stocks. Quote, the timing here is impeccable. To be early on SPACs to list in December 2020, who knows what's going to happen to the stock market, he said. Open Doors listing represents a stark turnaround from just months ago when the arrival of the pandemic put the breaks on its business. In April, Open Door laid off 35% of its staff and unloaded purchased homes at a faster-than-normal clip. The cuts helped trim losses at a company that is far from profitable. It lost $339 million last year. Then the real estate market came roaring back more quickly

than anticipated, fueled in part by low interest rates. Public investors have plowed money into publicly traded real estate firms that compete with Open Door, including Zillow Group and Redfin. Open Door started buying houses again, taking its usual 6 to 8% cut of the sale, but still expects revenue to fall by about half this year. Open Door has told investors it will be generating nearly $10 billion in revenue by 2023 up from $4.7 billion last year, and we'll go from losing hundreds of millions of dollars a year to having positive earnings before interest, taxes, depreciation, and amortization, and other expenses, end quote. And real estate, software, and data analytics company Real Page is getting acquired by

private equity investment firm, Toma Bravo, in an all-cash deal worth $10.2 billion. $Venture Beat. Founded out of Texas in 1998, RealPage targets companies operating in the multifamily rental real estate realm, serving them many of the technologies needed to manage their myriad properties from accounting to marketing and business intelligence. This includes insights into trends across broad portfolios and key performance indicators or KPIs at individual properties at a time when property managers, owners, and investors across the real estate realm may be concerned about rent defaults due to job losses and the broader impact of the global pandemic, having access to data and custom reporting can help identify risks and opportunities.

Moreover, this acquisition serves as further evidence that cloud computing and software-as-a-service companies have fared well in the global pandemic. Real Page, which went public a little more than 10 years ago, has seen its share value sore of late, growing by nearly a quarter through 2020 and hitting an all-time high of $69 a share in early December. Toma Bravo's bid offers Real Pages shareholders a premium of 30.8% on Friday's closing price of $67.83, end quote. The Solar Winds hack is probably a story that will begin to fade into the background a bit in the coming weeks, because there probably won't be a whole ton of new news to make headlines. But I highly recommend that we keep this story top of mind because I'll remind you

this is ongoing. This hack is still live and happening. It's the biggest cyber warfare event maybe ever. Certainly the biggest ever to occur to the U.S. This is, I would say, the cyber war equivalent of Pearl Harbor. And it could take a Y2K-style massive years-long effort just to clean up the damage. To that end, Wired has an interesting piece up that says, despite years of warnings, the U.S. still has no good answers to combat the type of attack we saw here, a supply chain attack in this case, though that might not be our fault. There simply might be no good way to detect and prevent this sort of thing, quoting Wired. The U.S. has invested heavily in threat detection. A multi-billion dollar system known as Einstein patrols the federal government.

networks for malware and indications of attack. But as a 2018 government accountability office report detailed, Einstein is effective at identifying known threats. It's like a bouncer who keeps out everyone on their list, but turns a blind eye to names they don't recognize. That made Einstein inadequate in the face of a sophisticated attack like rushes. The attackers used their solar winds Orion backdoor to gain access to target networks. They then sat quietly for up to two weeks before very carefully and intentionally moving within victim networks to gain deeper control and exfiltrate data. Even in that potentially more visible phase of the attacks, they worked diligently to conceal their actions. This is a reckoning for sure, says Jake Williams, a former NSA hacker and founder of

the security firm Rendition Infosec. It's inherently so hard to address because supply chain attacks are ridiculously difficult to detect. It's like the attacker teleports in there out of nowhere, end quote. There are some paths to improve supply chain security, the basic due diligence that the GAO outlines, prioritizing audits of ubiquitous IT platforms, more comprehensive network monitoring at scale, but experts say there are no easy answers to combat the threat. One potential path would be to build highly segmented networks with zero trust, so attackers can't gain very much even if they do penetrate some systems, but it's proven difficult in practice to get large organizations to commit to that model. It was not easy to determine what happened here. This is an extremely capable,

advanced actor that takes great steps to cover their tracks and compartmentalize their operations, says John Holtquist, Vice President of Intelligence Analysis at Firewire. Quote, we were fortunate to get to the bottom of it, frankly, end quote. More antitrust cases coming down the pike, possibly. Bloomberg says the Attorney's General of Utah, North Carolina, and New York, among other states, are preparing a completely new lawsuit against Google over the cut that Google takes from app developers in its Play Store. This new lawsuit could be filed as soon as next month, and yeah, that would be an interesting new angle against Google. What would that be the fourth separate case Google is now facing? Quote, the investigation into Google's app store practices

is examining the 30% cut that its Google Play Store takes from developers for in-app purchases. That's the feature that allows users to subscribe to services or buy upgrades within apps. Google's 30% cut drops down to 15% for users that subscribe to an app for longer than a year. Apple has the same policy. Quote, Android has always allowed people to get apps from multiple app stores. Samir Samat, Vice President of Android and Google Play, said in a statement, quote, each store is able to decide its own business model and consumer features. This openness means that even if a developer and Google do not agree on business terms,

the developer can still distribute on the Android platform, end quote. Google has long-sought apps to give the company that cut, but several apps and services, including Netflix and Spotify, have been exempt. In September, Google decided that it will step up efforts to take the fees and eventually remove apps from its store that don't implement Google's payment system that gives the company the percentage it's set, end quote. Hey, why not? Everyone else is doing it. So why not Microsoft? Sources are telling Bloomberg that Microsoft is working on in-house designs for chips to run its cloud servers and maybe also its Surface PCs, quote, the world's largest software maker is using arm designs to produce a processor

that will be used in its data centers, according to people familiar with the plans. It's also exploring using another chip that would power some of its surface lineup of personal computers. Microsoft's efforts are more likely to result in a server chip than one for its surface devices, though the latter is possible, said one of the people. The company's chip design unit reports to Jason Zander, head of the Azure cloud business, rather than Panos-Pen-A, who oversees Surface products. Representatives of Microsoft and Arm declined to comment on whether Microsoft is working on server and PC processors. Customers such as Microsoft have increasingly turned to alternative solutions to make sense of the mountain of data that cloud computing and smartphones

generate. The adoption of artificial intelligence to automate that process has sparked a flood of new chip designs. The biggest concern for owners of the giant data centers behind services like Office 365 has become the cost of providing electricity to their growing hardware footprint. Arm-based chips are often more energy efficient, end quote. So back to harping on Intel again. It would be one thing for Intel. if they lose Macs, which they've done, it would be another thing, but still not the end of the world if all the PCs moved to risk chips. But Intel still controls 90% of the market for chips inside machines that run internet and corporate networks, as well as the exploding cloud

computing field. So if Intel's say Zeon chips were no longer in as much demand because everyone in the cloud business just decides to do their own custom silicon to improve performance, Well, there would go Intel's most profitable source of revenue. That would be something else entirely. Again, if you're Microsoft or Google or anyone else really, Apple has shown you that doing your own silicon that is designed for your own software could tee up generational improvements in computing performance, and that's computing power as well as efficiency. So why not do it? Especially if seemingly the only one that can't get you the improvements you need is Intel. Remember when I told you about that coming ZTE phone that was going to deliver the first under-the-screen selfie camera in a smartphone available to consumers?

Well, it's here. It's called the ZTE-AXon 25G, and the Verge got a hands-on with it, and their initial impressions are not good. Apparently putting the camera underneath the display presents, well, presents exactly the sort of problems that you would maybe expect. quote, the under display integration is extremely noticeable on light backgrounds, like what you tend to see on setting screens. There's a square patch of the screen that exhibits a clear dithering effect, making it appear much lower res than the rest of the panel. I will just say right now that I think it looks worse than having a notch.

In more general use, it's harder to notice. If you're viewing photos or full-color wallpaper, you can see the lower resolution area if you look closely, but it isn't quite as distracting. Of course, the next obvious question is how the camera actually performs. The news here is not great either. I don't want to diminish the technical achievement of getting a halfway functional camera under an OLED screen at all. It involves new types of transparent materials, pixel filters, and demosaking algorithms to make sense of the light that hits the 32 megapixel sensor. but the result, unfortunately, is a bad selfie camera. In good light, the Axon 25G's selfie camera takes hazy, soft photos with weak colors and blown out highlights. The disparity is just as stark in low light, with a ton of noise and obliterated detail. I turned off the Pixel 5's night mode here to make it more

of a fair fight, and it still crushed the Axon 25G. This under-display selfie camera is merely functional, and that's being generous. It can capture images through the screen, yes, which is indeed a minor miracle, but you probably won't want anyone else to see them, end quote. Click through on the link in the show notes to this piece to see side-by-side comparisons of the images yourself. Finally, today I'm going to go with a segment that is more speculative than I'm usually willing to do, because I don't know how reliable the source is, but the information is so tantalizing, I can't resist. Taiwan's Economic Daily News says that not only is Apple still doing a car, not only are they full speed ahead on the project,

but the car is actually years ahead of schedule, and we could see it debut as soon as next year. Now, that would be an Apple event I'd kill to attend, quoting Mac rumors. The report claims that Taiwan, These manufacturers are preparing to ramp up for production of Apple car components as soon as the second quarter of next year, adding that Apple has been secretly testing dozens of prototype vehicles on the road in California. Apple received a permit from California's DMV to test self-driving vehicles in 2017, and it was spotted using Lexus SUVs rigged with LIDAR equipment that year. While many sources have claimed the Apple car will be released between 2023 and 2025, including analysts Ming Chi-Quo,

The report cites an unnamed director at a major Taiwanese manufacturer who said Apple is targeting a September 2021 launch. While anything is possible, the earlier time frame is questionable, especially due to the impact of the pandemic. Earlier this month, a Digitimes report claimed that Apple was in, quote, preliminary negotiations with automotive electronics suppliers, suggesting that its vehicle project still remains in the fairly early stages. That report added that Apple's chipmaking partner, TSMC, is reportedly working with Apple

on a self-driving chip. Given that automakers often announce all new vehicles years in advance, one possibility is that the Apple car will be previewed in late 2021, but not released. For now, though, the report should be treated with a healthy dose of skepticism. Economic Daily News has a mixed track record with Apple rumors. The publication accurately revealed that Apple would be releasing a repurpose iPhone 8 in March 2020, nearly a year before the second-generation iPhone SE was unveiled, and it also nailed down the 11-inch iPad Pro. On the contrary, the publication inaccurately reported that a high-end gaming Mac would debut at WWDC 2020, and that AirPods Pro would come in several colors, end quote. Yeah, but those are quibbling tiny little rumor details compared to the huge honking detail and rumor of a

full-fledged Apple car. So I don't know, take it all with all the grains of salt, but putting this on your radar for 2021. We'll see if there's more rumor smoke around this in the coming months. That's all for today. Talk to you tomorrow.