Tech Brew Ride Home - Thu. 05/02 - How Much Apple Actually Had to Pay Qualcomm

Episode Date: May 2, 2019

Facebook might get a federally appointed privacy official, Google lets you set a time-limit on what it tracks about you, what Apple had to pay Qualcomm, Russia might effectively leave the open web, a Wikipedia competitor, and is the low-hanging fruit gone for the big tech oligarchs? Sponsors: ReMars.amazon.com PixelUnion.net Links: Exclusive: New privacy oversight on the table for Facebook, Zuckerberg (Politico) Google can now automatically delete your location, app, and search activity data (VentureBeat) Qualcomm to record $4B revenue from Apple settlement (Axios) Putin signs law to isolate Russian internet (Financial Times) Spotify launches voice-enabled ads on mobile devices in a limited US test (TechCrunch) Tesla is raising up to $1.5 billion through convertible note and share sale (TechCrunch) Golden unveils a Wikipedia alternative focused on emerging tech and startups (TechCrunch) Airbnb Spawned an Ecosystem of Startups That Sweat the Details so Owners Don’t Have to (Bloomberg) Support the show! Ad free feed! Signup right in your podcast app! Right here! 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 ride home for Thursday, May 2nd, 2019. I'm Brian McCullough today. Facebook might actually get a federally appointed privacy official. Google lets you set a time limit on what it tracks about you.

What Apple had to pay Qualcomm, Russia might effectively leave the open web, a Wikipedia competitor, and is the low-hanging fruit gone for the big tech oligarchs? Here's all the news you missed today in the world of tech. Politico is reporting that sources. are telling it that the FTC and Facebook are negotiating a settlement to their consent decree and privacy issues wherein Facebook might be required to a point a federally approved privacy official and create a privacy oversight committee. Now the article says the oversight committee would be in quotes independent but may include Facebook board members. There also might be a dedicated

compliance officer and whom might the compliance officer turn out to be, quoting Politico, Separately, Facebook chairman and CEO Mark Zuckerberg would take the role of designated compliance officer responsible for carrying out the company's privacy policies, the person said. That would make him personally accountable for Facebook's handling of the issue. Under the proposed Facebook settlement, the source said the FTC would essentially have veto power over the choice of the federally approved privacy executive called an assessor and said the new privacy oversight committee would meet quarterly and issue periodic reports on the company's privacy practices. is. Such changes to Facebook's structure would be in addition to paying a record-setting fine of $3 billion to $5 billion, end quote.

As Kadeem Schuber tweeted, quote, I mean as the chairman, chief executive and controlling shareholder, Zuckerberg's personally accountable whether you designate him so or not, end quote. Google is rolling out a new tool that will let you limit how long it keeps location, search, and browsing data on you. Your choices in terms of limiting their data storage range from three months to 18 months, quoting Venture Beat. From within the Google account dashboard on mobile and the web, a drop-down option will allow users to select one of two windows, three months or 18 months, specifying how long they'd like the company to retain data.

The control will also cover web and app activity, for example, things searched and browsed in Google services like Discover on Android, Maps, search, Google Play, and Google says that any older data will be deleted on an ongoing basis, end quote. Peresh Dave tweeted, quote, Google introducing auto-delete controls for location history and web activity data. Options are auto-delete after three months or 18 months. Google says these two options were preferred by users during research. Any add conspiracy to the options, end quote.

Well, yes, Peresh. I would say that the most recent three months are likely to be the only sort of data that has any actual value to Google or else they wouldn't be giving it away. Obviously, anything 18 months and out is beyond worthless to them, though it's nice to see them avoid the impulse just to hoard it in case and introduce the automatic delete capability. As Jerry Gamblin tweeted, quote, don't you love when companies roll out basic privacy tools and act like they are amazing innovations, end quote. Qualcomm released earnings and yada, yada, yada, revenues down 4.6% year over year, but profits more than doubling, but also lackluster guidance for the next several quarters, because what else? Weak smartphone demand in China, but also maybe globally. But that's not what was interesting. What was interesting is that Qualcomm had to basically reveal the money it is getting paid from that settlement deal with Apple.

Remember, Apple basically capitulated in its long legal tussle with Qualcomm because it was backed into a corner oversourcing of 5G modems. Welp, Qualcomm said it would record $4.5 to $4.7 billion in revenue this coming quarter from direct payments from Apple. Several analysts I've read today said this basically was just the royalty payments Apple had been. withholding over the past several years while the legal dispute was ongoing, suggesting there was little in the way of punitive money in the settlement. So it looks like Apple got off easy, maybe because Qualcomm has an eye on future business. Russian President Vladimir Putin signed a bill yesterday that intends to give Russia a so-called sovereign internet. The bill could effectively see Russia disconnect from the wider web, in a sense, quoting from the financial

times. Moscow says the move is to, quote, ensure the safe and sustainable functioning of Russia's internet in the event that hostile powers attempt to switch it off from abroad. But critics say the move is intended to further clamp down on dissent amid already tightening restrictions on freedom of speech. The bill, which goes into force on November 1st, requires internet service providers to filter all traffic through special nodes under the control of Roscomnasor, the Kremlin's internet sensor. The Kremlin will compel ISPs and other communication services to test the system at an unspecified time later this year. Though it remains largely unclear how or even whether the disconnect would work in practice, the move would theoretically make it easier for, man, this is a real

Russian word again, Roskommnadsor, to enforce its highly inefficient blocks of banned websites, messaging app, telegram, and non-compliant VPN services. end quote. Spotify has launched voice-enabled ads, which will encourage the listener to speak a command to take action on that ads content. So you know how clicking on an ad in the context of the web can be useful to show advertisers engagement with their ads? It never occurred to me that that was possible with audio ads, but here we are.

Quoting Sarah Perez and TechCrunch, some of the first voice ads being tested come from Unilever's Axe and Spotify Studios. One ad starting today will direct users to the Spotify original podcast, Stay Free, the Story of the Clash. Another will promote a branded playlist on Spotify related to a Unilever Axe ad campaign later this month. For now, Spotify is only focused on content promotion within its own service, not anything outside its app. These voice ads will only be available to a subset of Spotify's free mobile listeners in the U.S. during the test period, and only to those who have already enabled Spotify's voice controls. These may have already been turned on.

In those cases where the user uses Spotify's in-app voice assistant technology to search for music and podcasts, end quote. Remember the worries about Tesla's cash burn. Well, right on cue, it looks like Tesla is raising up to $1.5 billion through a convertible note and share sale. Quote, the documents outline that Tesla will sell up to $1.35 billion in convertible senior notes. The number could increase further. Tesla is giving underwriters the chance to buy a further 202.5 million for over allotments. In share numbers, that's an initial 2,723,198 shares that could expand to 3,131,67 shares. The notes are due in 2024, and already Tesla founder and CEO Elon Musk is committed to buying $10 million in the offering.

That's 41,000 shares. As is often the case in such offerings, the plans for the funds raised are fairly vague at this point, end quote. Well, not really. Losing $700 million in your most recent quarter and having only $2.2 billion in cash left on hand, I'm not sure there's anything vague about what the cash will be used for here. There have been various Wikipedia competitors over the years, though none of them have gotten traction, of course. Golden is a new one that is trying to build a wiki authority. using a mix of AI and human intelligence. It just raised a $5 million seed round from A16Z and others.

Why do we need a Wikipedia competitor? Because, believe it or not, Wikipedia doesn't have everything on it. There is, in fact, a somewhat arbitrary notability threshold on Wikipedia. So some entries are deleted if they're considered too obscure, and some never even get posted for the same reason. Golden founder Jude Gomilla says that was fine when Wikipedia was young and infrastructure costs were higher, but that shouldn't be an issue these days. And in the age of AI, when you never know what sort of corpus of data points will prove useful for providing answers to questions, it also means the overall utility of Wikipedia is being held back. Gamilla wants absolutely every single thing in the world to be on Golden. Do you exist? then there should be an entry on you. On the human angle of things,

Google will have a what you see is what you get style editor that will make it easier to create entries than Wikipedia's still arcane methods. And quoting Anthony Ha at TechCrunch, there's also an emphasis on transparency, which includes features like high-resolution citations, i.e. citations that make it extra clear which statement you're trying to provide evidence for,

and the fact that golden account names are tied to your real identity, In other words, you're supposed to edit pages under your own name. Gamilla said the site backs this up with bot detection and various protection mechanisms designed to ensure that users aren't pretending to be someone they're not. I'm sure there will always be trolls up to their usual tricks, but they will be on the losing side, he told me, end quote. Golden launched earlier this week and is free to use and, for now at least, ad free as well. Sometimes you can measure the success of a startup by the wake it kicks up, by the ancillary businesses or markets that spring up around it, either to operate on its ecosystem or because it's there, or just to fill the gaps in its product offerings. According to some new research, that certainly seems to be the case with Airbnb, quoting from Bloomberg.

Over the past decade, Airbnb has transformed the travel sector by persuading millions of people to open up their homes to complete. strangers. As the company grew amassing more than 6 million listings in about 191 countries, it has spawned a whole ecosystem of startups that seek a piece of the booming market for private accommodations by helping to fill in the gaps that Airbnb and the others can't or don't address, like automating the check-in process and providing keyless entry around the clock. Some sell software that promises to calculate the perfect listing price or updates a property's availability instantly. One company helps owners decorate. from furniture to bedding to create that unique vacation rental unit vibe.

Everybody is sort of trying to solve a pain point, said Simon Lehman, who has worked in the travel industry and now runs A.J.L. Consulting, quote, we have seen a massive amount of startups in this industry, massive verticalization, lots of money pouring in, end quote. Indeed, since 2008, investors have poured about $14.6 billion into digital travel startups, excluding the funding that went to Airbnb, according to a 2018 report by FocusRite, which accounts data through the first half of last year. The travel research company has identified almost 1,800 startups in the industry, end quote. Finally today, larger narrative to take note of.

Listening to CNBC and stock market podcasts all this week, I noticed that a conventional wisdom has very much taken hold among investors that I think we should be aware of. all of the big tech oligarchs have gotten huge over the last decade, writing and catalyzing and strip mining, the long-term trends of the world basically going fully digital. But they are almost to accompany, with the possible exception of Microsoft, all facing the same wall now. Facebook's basically connected everybody in the world to everyone else. For Apple and others, basically smartphones have hit their peak and can only grow. with population. Google can only cram so many ads into a screen until there is diminishing returns. Amazon is basically saturated on e-commerce. It's just lucky for them. They fortunately have AWS as a buttress. In short, the easy money for all of the big tech players might have been made. Going forward,

folks are going to have to get creative to get growth. Ben Thompson said something along these lines in his Straterey note just this morning, and as Ben's a smarter dude than I am, let me just leave you with how he put it. Quote, there is a theme emerging here. There is reasonable doubt about just how much low-hanging fruit is left for the largest tech companies. Apple has sold the world iPhones. Google has stuffed mobile search, and now Amazon has seized the obvious parts of e-commerce.

What comes next is much more difficult and expensive. Consider Amazon's big announcement. Future prime shipments will be delivered in one day. not two. It's a 50% improvement in quality, but is there any expectation this will lead to a 50% increase in sales? That seems unlikely, which is a problem, given that e-commerce is still only around 10% of U.S. retail sales, of which Amazon has about half. To be sure, Amazon is hardly in trouble. AWS continues to be a phenomenal business, growing both in terms of revenue and margin. The consumer-facing parts of the company, though, appear to be facing the same headwinds that Google and Apple are.

Perhaps the fervor to regulate all of them should be tempered at least a tad, end quote. Now, I might not go that far, but still point worth considering. What comes next when you've basically won? By the way, I'm pretty sure I said the wrong date at the top of yesterday's episode, and none of you all harassed me about it on Twitter. You're slipping, people. That is all for today. pretty sure I got the date right this time. I've been your host, Brian McCullough. You can follow me

on Twitter at Brian MCC. Our show subreddit is our slash ride home. Our sister show in its third week is the primary ride home covering all the news from the campaign trail. And if you want to support the show directly and get rid of the ads in the process, link to the premium ad-free show is in the last link in the show notes. Talk to you tomorrow.