Tech Brew Ride Home - Thu. 10/26 – A Complete AirPods Revamp

Episode Date: October 26, 2023

Meta earnings from yesterday. Apple seems to be planning a complete revamp of the AirPods lineup. Spotify plans major changes to how it does royalties. X rolls out video and audio calls. And a look at how those new gesture controls work on the Apple Watch. Sponsors: Masterworks.art/techmeme Miro.com/podcast Links: Zuckerberg says Threads has almost 100 million monthly users (The Verge) Apple Plans AirPods Overhaul With New Low- and High-End Models, USB-C Headphones (Bloomberg) Apple TV+, Apple Arcade, and Apple News+ Receiving Price Increases (MacRumors) SPOTIFY IS CHANGING ITS ROYALTY MODEL TO CRUSH STREAMING FRAUD AND INTRODUCE A MINIMUM PAYMENT THRESHOLD. ITS PLAN? TO SHIFT $1 BILLION IN PAYOUTS TOWARDS ‘WORKING ARTISTS’ OVER THE NEXT 5 YEARS. (MusicBusinessWorldwide) X is officially rolling out audio and video calls (The Verge) The Apple Watch’s double tap gesture points at a new way to use wearables (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 Thursday, October 26, 2023. I'm Brian McCullough today. Meta earnings from yesterday. Apple seems to be planning a complete revamp of the AirPods lineup. Spotify plans major changes to how it does royalties, X rolls out video and audio calls, and a look at how these new gesture controls work on the Apple Watch. Here's what you missed today in the world of tech. Yesterday afternoon, Meta reported Q3 revenue was up 23% year-over-year to $34.15 billion. Net income was up 164% year-over-year to $11.58 billion.

And the family of apps' daily active people metric was up 7% to 3.14 billion people, at least for September of 2023. Investors seem to be a bit mixed about this. Meta's shares were trading ever so slightly down in pre-market trading this morning. Maybe because this little detail has to be mentioned, meta's reality labs where all of the VR and Metaverse work lives reported Q3 revenue down 26% to $210 million versus almost $300 million, which was estimated. And operating losses were up 2% to $3.74 billion versus a $3.9 billion estimate. So even if Zuck doesn't shout about the Metaverse all the time anymore,

meta is still investing heavily there. One more little nugget. On the conference call, Mark Zuckerberg said that Threads has hit, quote, just under 100 million monthly users since Instagram released the app in early July, quoting the verge. I've thought for a long time there should be a billion-person public conversation app that is a bit more positive, Zuckerberg said on Wednesday's call. I think that if we keep at this for a few more years, and I think we have a good chance of achieving our vision there, end quote. Met us CFO Susan Lee shared some optimism to, quote, Threads also remains a compelling long-term opportunity, and we're excited to build on the strong product momentum we have going into next year, she said during the call.

In a Threads post on Wednesday, Instagram Chief Adam Masseri said that, quote, I'm hoping we can land support for Europe, early Fediverse progress, better Instagram integrations, and trends in the next few months, end quote. As part of its third quarter earnings report, Meta said that it earned $34 billion in revenue up 23% from the same quarter last year. However, it's still burning cash with its Reality Labs division. The company expects its operating losses there to increase, quote, meaningfully year over year, end quote. Mark German's sources say that Apple plans to completely overhaul its AirPods lineup, releasing AirPods Max and two redesigned fourth generation AirPods with USBC in 2024 and AirPods Pro with a new chip and new design in 2025. quoteing Bloomberg. The changes will include a revamped version of Apple's entry-level AirPods in 24 and a new pro model the following year, according to people familiar with the plan.

The company is updating the product's earbud design, the look of the cases, and audio quality. The new version of the AirPods Max headphones are coming in 2024 as well, said the people who ask not to be identified because the information is private. The third-generation AirPods haven't sold particularly well for Apple. many buyers either opt to save money and purchase the second-generation version, or they spring for the high-end model, which comes with noise cancellation. The mid-tier product doesn't offer much more than the $129 model, so some consumers don't see a reason to pay the extra $40. With that in mind, Apple plans to phase out both the second-generation and third-generation AirPods later next year,

according to the people familiar with the matter. They'll be replaced with two fourth-generation AirPods that are priced similarly to the current versions but are more differentiated. The two models will feature a new design that looks like a blend of the third-generation AirPods and the pro model. They'll both have short stems, the part that hangs out of a user's ear. Apple will differentiate the two options by including noise cancellation in the higher-end version. That model will also get an updated charging case that includes speakers for Find My alerts matching the current AirPods Pro. Those alerts make it easier for users to find their case when it gets lost. Both new low-end models will offer an improved fit, but it's unlikely that

either will include replacement tips like the AirPods Pro. The fourth-generation AirPods will also switch to USBC for their charging cases, continuing a shift that began with the AirPods Pro. The company dropped lightning from its iPhones this year, part of an effort to comply with regulations from the European Union, and its accessories are following suit. Apple is planning an update to the AirPods Max around the end of next year that also switches its charging port to USBC. The headphones will come in new colors but won't see many other changes. The AirPods Pro, meanwhile, are expected to get a new design and chip in 2025, and the company is working on health features for that device tied to hearing, end quote.

I do want to real quickly note that Apple has also raised the monthly US price of Apple TV Plus from $699 a month to $999. Also, News Plus is going from $9.99 a month to 1299. Arcade is going from 499 a month to 699 and Apple 1 from 1695 to 1995, quoting Mac rumors. The price increases take effect immediately for new subscribers and in 30 days from today for existing subscribers on their next renewal date after that grace period. Apple should send out emails to existing subscribers notifying them about the changes over time, as it did following price increases to some services last year. In the U.S., these are the first ever price increase. increases for Apple Arcade and Apple News Plus since the services launched in November 2019,

while Apple TV Plus had its first price increase from $499 per month to $699 per month in October 2022. In a statement shared with Mac rumors, Apple said it is, quote, focused on delivering the best experience as possible for our customers by consistently adding high-quality entertainment content and innovative features to our services, end quote. There are no price increases for Apple Music and Apple Fitness Plus today, end quote. Sources say Spotify is planning major changes to its royalty model in the first quarter of next year, including a new threshold of minimum annual streams before a track starts generating royalties, quoting music business world.

Spotify has been discussing details of its blueprint for the new royalty model with various music rights holders in recent weeks. Sources involved in those talks have now confirmed to MBW that although Spotify will continue with its pro rata royalty system, a.k.a. Stream share, it plans to make three specific major changes to its model. As one source put it, Spotify is planning to execute these changes in an attempt to, quote, combat three drains on the royalty pool, all of which are currently stopping money from getting to working artists, end quote. MBW has confirmed that starting in Q1, 2024, each track on Spotify under the DSP's new plans, will have to reach a minimum number of annual streams before it starts generating royalties. Our sources weren't willing to specify the exact number of streams that will inform this threshold,

but we were told by one source involved in recent talks that the move is, quote, designed to demonetize a population of tracks that today, on average, earn less than five cents per month. Some back-of-the-napkin economics. Industry sources suggest that each play on Spotify in the U.S. in terms of recorded music royalties currently generates somewhere around 0.003 U.S.D. per month. This would suggest that for these tracks to generate five cents per month in royalties, they would need to generate 17 plays a month or around 200 plays a year. Spotify says tracks that currently represent 99.5% of stream share

will continue to monetize after these changes confirmed one well-placed source. So why is Spotify specifically targeting a relatively tiny portion of tracks on its service that are very low popularity and very low revenue generating? Because when you're talking about an industry where 100,000 tracks or more are being uploaded, to streaming platforms daily. The amount of money being paid out to these tracks cumulatively results in a substantial sum. In aggregate, the tracks Spotify is targeting here generate royalties that add up to tens of millions of dollars a year, and that number is only growing, one source told MBW. Next year, without taking this action, Spotify thinks they would have generated

around $40 million, end quote. Warning that X has begun rolling out audio and video calling to some users with options to select who you're comfortable using it with or disable the feature altogether. I say warning because you might want to double check that it is switched off if you don't want to use it. Quoting the Verge. Several users on the platform, including some of us here at the Verge, have received a notification when opening the app stating audio and video calls are here. There's also a new enable audio and video calling toggle within the app settings, which says you can, quote, turn the feature on and then select who you're comfortable using it with. It includes options to allow audio and video calls from only people in your address book,

people you follow, verified users are all three. You can then make a call by opening a DM with another user, selecting the phone icon in the top right corner of the screen, and choosing audio or video call. In a post on X, Elon Musk confirms the rollout of audio and video calls, adding that it's an early version of the feature. Musk has long hinted at adding audio and video calls to the platform as part of his goals to make it the everything app. Musk recently said the feature would be available on iOS, Android, Mac, and PC with, quote, no phone number needed. It's still not clear how widely X's launched audio and video calls, or if non-premium users can use it. Last month, hashtag Inventor and open source advocate,

Chris Messina found that X's code suggested that users would have to sign up for X's premium subscription to use it. X didn't immediately respond to the Verges' request for comment, end quote, end quote. Finally today, a look at Apple's double tap gesture, which is rolling out in WatchOS 10.1, which allows Series 9 and Apple Watch Ultra 2 users to interact with their watch without using its touchscreen, basically without needing to touch it at all. From the verge, double tap isn't designed to help you navigate anything. The best way I can describe it is assistive touch is like the mouse to your computer. It scrolls, it's select, and it's highly programmable. Double-tap is more like the double-click portion of using a mouse.

You use it solely to perform the main action of an app. And to do that, Apple had to spend a lot of time researching what people wanted or expected a single double-tap to do. And when double-tap performs as intended, it does feel a bit like the watch can read my mind. It's genuinely cool to see double-tap work with not just my index finger, but the rest of them as well. To my surprise, it feels less gimmicky than I expected. But despite Apple's effort, It doesn't take long to run into double-taps limitations. Media controls are a good example. Should a double-tap either pause or play your music?

Or should it let you skip to the next track? If you're someone who uses your smartwatch to control playback on smart speakers, the former makes more sense. If you're a runner and the wrong song pops up on your playlist, the latter is more useful. I've run into this in various scenarios, but this happens to be one of only two instances where you can choose what double-tap does. For me, I've set Double Tap to skip to the next track. That lack of choice is also apparent in third-party apps. My email app lets me double-tap to start a quick reply using Siri. But even in 2023, I am not dictating my emails. Apps like Spotify and PocketCast don't work with Double Tap either. Most third-party apps that do work with Double Tap just let you dismiss notifications. That's helpful, but still limiting. With WatchOS 10, apps like fitness and weather have been redesigned to be more glanceable instead of one of one.

long screen that you scroll endlessly through, information is divided into more digestible chunks. You still scroll, but there's less of it. This is great, except I often want to use double-tap to navigate through menus instead of the digital crown, and I can't. You can scroll through the new widget smart stack, but if I want to select a widget and open it, I still have to use my other hand. If I want to select a widget, I can customize it to do that, but it only ever selects the top widget. You just have to trust that Apple's algorithms will surface the right widget. multitasking is another area where double tap can fall short if I want to pause a timer, but I've navigated away from that app, I have to either use my other hand or use Siri.

Otherwise, I can wait for the timer to go off and use double tap to end the timer. More customization would be the obvious answer here, but it's one that Apple was wary of for this first iteration of double tap. It doesn't always work that seamlessly. There are times when the primary action isn't what I want to do, or eventually I get to the point where I have to use my other hand. In the above example, once I ask Siri to open the app, I may have to scroll with the digital crown to reach the information I need. But it's not hard to imagine future iterations of double-tap

that can both scroll and select, something that's not quite as comprehensive as assistive touch, but strikes a finer balance between simplicity and customizable, without relying too much on Apple trying to figure out what it is you want to do. Even now, with Double Taps existing limitations, I can do more while on the go and without my phone. I find myself reaching for it much less, or when I do, it's for much more intentional purposes like reading, shopping, or watching a video. The past few weeks with Double Tap have felt like a glimpse into a smartwatch future that's independent of phones, devices that instead of triaging notifications and calls, handle them entirely, end quote. Several of you asked me why I didn't mention Pebble shutting down yesterday. Pebble is that

Twitter alternative that Ride Home Fund invested in earlier this year when it was known as T2. I don't have any unique insight on the situation other than to say that, you know, Pebble missed its window. These things can happen in startups and investing. All of the best to the Pebble team. Talk to you tomorrow.