Tech Brew Ride Home - Thu. 12/28 – Will 2024 Be The Year Apple Gets Serious About Gaming On Macs?

Episode Date: December 28, 2023

Researchers have found a gnarly zero-click, zero-day iMessage hack that has been exploited. Apple can sell watches again! What was the best performing tech stock of 2023? Will 2024 be the climax of the streaming wars? And will 2024 be the year Apple finally gets serious about gaming on the Mac? Links: 4-year campaign backdoored iPhones using possibly the most advanced exploit ever (ArsTechnica) Apple can temporarily sell smartwatches after US appeals court win (Reuters) The Late-Night Email to Tim Cook That Set the Apple Watch Saga in Motion (Bloomberg) Seattle’s Zulily will ‘wind down’ its business and liquidate its assets (Seattle Times) Affirm’s stock quintupled this year, beating all tech peers, on buy now, pay later boom (CNBC) ‘Shakeout has begun’ after $5bn streaming loss for Netflix rivals (FT) Inside Apple's Massive Push To Transform The Mac Into A Gaming Paradise (Inverse) 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, December 28th, 2023. I'm Brian McCullough today. Researchers have found a gnarly zero-click zero-day iMessage hack that has been exploited. Apple can sell watches again. What was the best-performing

tech stock of 2023? Will 2024 be the climax of the streaming wars? And will 2024 be the year Apple finally gets serious about gaming on the Mac? Here's what you miss today in the world of tech. Researchers have found a zero-click iMessage attack that for over four years used four zero days to hack iPhones, including dozens belonging to Kaspersky employees. Quoting Ars Technica, chief among the discoveries the unknown attackers were able to achieve an unprecedented level of access by exploiting a vulnerability in an undocumented hardware feature that few, if anyone, outside of Apple and chip suppliers such as Arm Holdings, knew of. The exploit's sophistication and the feature's obscurity suggests the attackers had advanced

technical capabilities, Kasperski researcher Boris Laren wrote in an email. Our analysis hasn't revealed how they became aware of this feature, but we're exploring all possibilities, including accidental disclosure in past firmware or source code releases. They may also have stumbled upon it through hardware reverse engineering, end quote. Other questions remain unanswered, wrote Lauren, even after about 12 months of intensive investigation. Besides how the attackers learned of the hardware feature, the researchers still don't know what precisely its purpose is. Also unknown is if the feature is a native part of the iPhone or embedded by a third part, party hardware components such as Arms CoreSight. The mass backdooring campaign, which according to

Russian officials also infected the iPhones of thousands of people working inside diplomatic missions and embassies in Russia, according to Russian government officials, came to light in June. Over a span of at least four years, Kaspersky said the infections were delivered in iMessage texts that installed malware through a complex exploit chain without requiring the receiver to take any action. With that, the devices were infected with full-featured spyware that, Among other things, transmitted microphone recordings, photos, geolocation, and other sensitive data to attacker-controlled servers. Although infections didn't survive a reboot, the unknown attacker kept their campaign alive simply by sending devices a new malicious iMessage text shortly after the devices were restarted. Besides affecting iPhones, these critical zero days and the secret hardware function resided in Macs, iPods, iPads, Apple TVs, and Apple Watches.

What's more, the exploits Kaspersky recovered, were intentionally developed to work, on those devices as well. Apple has patched those platforms. Apple declined to comment for this article, end quote. Part of me hesitates to do the day-by-day tick-tack on this, but you should know that a U.S. appeals court has paused the ITC's Apple Watch Series 9 and Ultra 2 import ban over those Massimo patents we told you about. Apple resumed Apple Watch sales of those particular devices in some physical U.S. stores yesterday. Online sales are set to resume today, December 28th, by 3 p.m. Eastern Time, quoting Reuters. The tech giant had filed an emergency request asking for the U.S. Court of Appeals for the Federal Circuit to halt the order from the U.S. International Trade Commission,

which had ruled that Apple had infringed on the patents of Irvine, California-based Massimo. A final decision could cost either company millions of dollars and potentially force a settlement or some kind of technological workaround by Apple, analysts said. Ultimately, though, any financial hit for Apple is likely to be dwarfed by the bad publicity the lawsuit is generating, they said. Massimo has accused Apple of hiring away its employees, stealing its pulse oxymetry technology, and incorporating it into Apple watches. Apple has countersued, calling Massimo's legal actions a, quote, maneuver to clear a path for its own competing smartwatch, end quote. Yes, but on that hiring away employees thing, Mark German has more details on maybe how this whole brouhaha came about.

apparently it all came down to a single hire. Stanford PhD Marcelo Lamego, who was the CTO of Massimo spin-off, Circa Corps. At about 1 a.m. California time in 2013, a scientist emailed Apple chief executive officer Tim Cook with an irresistible pitch. Quote, I strongly believe that we can develop the new wave of technology that will make Apple the number one brand in the medical fitness and wellness market. He wrote in the email, which was later included in legal documents. some 10 hours after the message was sent and Apple recruiter was in touch.

And just weeks after that, the engineer was working at the tech company on a smartwatch with health sensors. A flurry of activity began. Within a few months at Apple, the employee asked the company to file about a dozen patents related to sensors and algorithms for determining a person's blood oxygen level from a wearable device. But this wasn't just any engineer. He had been the chief technology officer of Serca Corps Laboratories, the sister company of Massimo, which went on to get the U.S. to ban the Apple watch.

Massimo, a relatively obscure maker of medical devices based in Irvine, California, argues that Lamego seized its prized asset, the ability to non-invasively and accurately capture the level of oxygen in a person's blood and took it to Apple. The feature ultimately helped turn the watch into more of a health device, solidifying its status as the wearable industry's best-selling product. Lawyers for Massimo say that Lamego lacked prior knowledge about how to develop the blood oxygen feature. His previous studies were about neural interfaces rather than health sensors.

He learned how to build the technology at Caney's companies and delivered it to Apple, they said. Lamego then resigned from Apple in July 2014 just months after joining. Massimo argues that he left after Apple got what it needed. The reality, according to longtime Apple executive Steve hoteling, is that Lamego didn't fit in at the company. He clashed with managers, demanded multi-million dollar budgets, and wanted the ability to hire his own engineers without approval. hoteling said in a deposition that was part of a court fight between the companies. After weeks of discussions, Lamego left Apple, end quote. Seattle-based e-commerce website Zulili, which was once valued at around $7 billion back in 2014,

is winding down its business. In a recent lawsuit, Zulili accused Amazon of stifling its business, quoting the Seattle Times. Once an e-commerce star online retailer, Zulili, will liquidate its inventory to pay its creditors as it winds down. The company based in Seattle, started to shut down its operations earlier this month, after a 13-year run that briefly dazzled the tech industry before fizzling in the face of stiff competition from Amazon and other e-commerce platforms. Days before announcing a final sale, Zooli laid off more than 800 employees, including 292 in the Seattle area. On Friday, Zulili agreed to, quote, conduct an orderly wind-down of the business, according to a note that now fills the company's

website. Zulili entered into an assignment for the benefit of creditors, or ABC, which means a third-party fiduciary will complete the liquidation and work to maximize value for Zooli's creditors. Douglas Wilson companies, a San Diego-based business services firm, will act as the assignee, manage the windown, and liquidate Zulili's assets. The ABC is an alternative to filing for bankruptcy, but can be cheaper and more streamlined, said Douglas Wilson, the CEO and chairperson of the eponymous company. In Zulili's case, quote, it's happening because there's nothing left, he said. Zulili placed the blame for its slide on its e-commerce rival and neighbor Amazon, according to a lawsuit filed against the tech and retail giant days after it started its final sale.

Zooli accused Amazon of using anti-competitive tactics to stifle its business by pushing merchants off Zooli's platform and preventing Zulili from offering consumers prices lower than those on Amazon.com. The allegations mirror those made by the Federal Trade Commission in a sweeping antitrust lawsuit filed against Amazon in September. Amazon has disputed the allegations by both Zooli and the FTC, end quote. A couple of year-end stories here right now, and this first one speaks to the year of the tech turnaround that we've been talking about in recent weeks. Quick, what has been the best-performing tech stock of 2023? Would it surprise you to learn that it was by now pay later company a firm whose stock grew

430 percent, outperforming all U.S. tech companies worth more than $5 billion this year, and rebounding from a 90 percent fall last year? Quoting CNBC. The next best performer was Coinbase, which shot up 423 percent, large. because of Bitcoin's rebound. With the Federal Reserve setting the stage for interest rate cuts in the year ahead and more retailers signing on to a firm's buy-now pay-later offerings or BNPL, fear of a doomsday scenario for the company has faded. Shares of a firm got a big boost in November after the company inked in an expanded partnership with Amazon and buy-now pay-later purchases hit an all-time

high on Cyber Monday. The expectation was the consumer was going to be toast. Unemployment was going to pick up and higher interest rates would destroy everything. And the exact opposite has happened on all fronts, said Tom Hayes, chairman at Great Hill Capital, which doesn't have a position in the stock. So that's why you have a scenario where a firm can start to perform, end quote. Created in 2012 by PayPal co-founder Max Levichin, a firm is competing with companies including Klarna, blocks afterpay and zip in the burgeoning BNPL market. Shoppers who choose to pay with BNPL service split their purchases into four or more installments, typically over a period of three months to a year, often without accruing compounding interest. The lenders make money from

interest payments and by charging merchants' fees to offer their lending services. A firm shares started climbing higher in August after the company's fiscal fourth quarter earnings report. The company picked up new merchant deals in sectors beyond retail such as travel, wireless, ticketing, and health care. The stock has more than doubled in the fourth quarter, boosted by an announcement last week that a firm would offer BNPL loans at Walmart's self-checkout kiosks. Even after their dramatic bounce, of firms shares are about 70% below their high in November 2021, end quote. And second, the streaming wars. This is more a look into next year, but after losing more

than $5 billion collectively trying to compete with Netflix, all of the parent companies of the streaming services who aren't Netflix are facing a year of reckoning in 2024. Yes, I feel like we've been saying consolidation is coming in the streaming wars for years now, but next year, it really is coming. Quoting the Financial Times. Disney Warner Brothers Discovery, Comcast, and Paramount, U.S. entertainment conglomerates that have been growing ever larger for decades, are facing pressure to shrink or sell legacy businesses, scale-back production and slash costs following billions in losses from their digital platforms. Beyond their streaming losses, the traditional media groups are facing a weak advertising market, declining television revenues, and higher production costs

following the Hollywood strikes. Rich Greenfield, an analyst at Lightshed partners, said Paramount's deal discussions recently were a reflection of the complete and utter panic in the industry. TV advertising is falling far short. Cord cutting is continuing to accelerate. Sports costs are going up, and the movie business is not performing, he said. Everything is going wrong, that can go wrong. The only thing the companies know how to do to survive is try to merge and cut costs, end quote. But as the traditional media owner's struggle Netflix, the tech group that pioneered the

streaming model over a decade ago, has emerged as the winner of the battle to reshape video distribution. For much of the past four years, the entertainment industry spent money like drunken sailors to fight the first salvos of the streaming wars, analysts Michael Nathanson wrote in November, now we are finally starting to feel the hangover and the weight of the unpaid bar bill. For companies that have been trying to compete with Netflix, Nathanson added, the shakeout has begun. After a bumpy 2020, Netflix has set itself apart from rivals, most notably by being profitable. earnings for its most recent quarter soared past Wall Street's expectations as it added nine million new subscribers the strongest rise since early 2020 when COVID-19 lockdowns led to a jump.

Netflix has pulled away, says John Martin, co-founder of Pugilist Capital and former chief executive of Turner Broadcasting. For its rivals, he said, the question is, quote, how do you create a viable streaming service with a viable business model because they're not working? End quote, the leading streaming services aggressively raised prices in 2023. Now analysts, investors and executives predict that consolidation could be ahead next year as some of the smaller services combine or bow out of the streaming wars, end quote. As we've discussed recently, the most likely to consolidate would be probably Warner Brothers and Paramount. And if they were to combine forces, analysts say they could likely save something in the neighborhood of $1 billion

in synergies. And finally today, remember earlier in the year when Apple made noises about getting the Mac into gaming in a big way? Well, Raymond Wong at Inverse says, That's coming to, quote, Max with Apple Silicon really are performant computers that can play some of the latest PC and console games. In three generations of desktop class chip design, Apple has created a platform with tens of millions of Apple Silicon Max, according to Keppel. That's tens of millions of Macs with monstrous CPU and GPU capabilities for running graphics-intensive games. Apple's upgrades to the GPUs on its silicon are especially impressive. The latest Apple Silicon, the M3 family of chips, supports hardware accelerated ray tracing,

and mesh shading features that only a few years ago didn't seem like they would ever be a priority, let alone ones that are built into the entire spectrum of MacBook Pros. This unified hardware platform approach is similar to what you get with a console like the PlayStation 5 or Xbox Series SX. With the same architecture, there's a guarantee that every Mac with a certain chip set generation can run a certain game at optimal settings right out of the box, as opposed to leaving it to gamers to figure out whether their PC specs are enough. Much like consoles, Brooks says that it's all in service to the experience that users have when they fire up a game.

My own testing supports the efficiency, 3D games like Lies of P and Resident Evil 4, run just as well on a MacBook Pro's battery as they do when plugged in. The same can't be said for gaming laptops that often lose a sizable amount of performance on battery. And while Mac users can go and fiddle with game settings to their heart's content just like they can on PC, not having to think about them is best suited for most players. all, developers don't need to do any extra work to get the benefits of dynamic caching because it's built right into the silicon. At the end of the day, consumers don't care about any of these changes happening mostly in the background. They only care whether or not the games they want to play are available on the platform of their choice. Apple is betting that expanding the library

of games on the Mac isn't a matter of if but when. The hardware is powerful enough. It's providing developers with the necessary tools to bring their games to the Mac. The software optimizations in MacOS are happening. There's even the ability to be able to be able to be able to to play on multiple Apple devices. It's spinning all of the necessary gears. Releasing games months or even years after their launch on other platforms helps pat out the Mac's library, but the real test is going to be whether or not Apple can bring in the new hits. And it can't just be a handful of AAA titles every year. There's no way around it. Apple needs to roll up its sleeves and start schmoozing developers and publishers, or maybe even

buy some game makers a la Microsoft buying Activision Blizzard. One game that could single-handedly give Apple a gaming edge is Grand Theft Auto 6. Rockstar's sixth installment of its immensely popular open-world game is currently slated for a release on PS5 and Xbox Series S-slash-X in 2025. Assuming the PC version will launch between one and a half and two years after, like it did for GTA 5, we could calculate that a Mac version would either release simultaneously or shortly after sometime by 2027. More than a decade after its release, GTA 5 is still not available for MacOS. If by the end of the 2020s, GTA6 is not on the Mac, then something will have gone horribly wrong. The gaming industry is projected to be worth $389 billion by 2028. It's Apple's

market to lose, and the company will have let another generation of gaming slip out of its hands. If it fails to capture the flag this time, it might not get another chance to redeem itself with gamers. Nothing for you today. You know the drill.