Tech Brew Ride Home - Thursday, Apr. 26, 2018 - Snap's Spectacles 2.0

Episode Date: April 26, 2018

It’s an earnings bonanza! Amazon, Microsoft, Facebook… and what might Samsung’s earnings mean for Apple’s? Also, new Snapchat Spectacles, a look behind the scenes at Nintendo, a possible Sonos IPO and Digg finds a new home. Stories from: @maureenmfarrell, @CaseyNewton Tweets: @lexnfx Links:Snap’s second-generation Spectacles are more grown up — and more expensive (The Verge)Inside Nintendo's secretive creative process (The Guardian)Sonos Prepares for IPO as Soon as June (WSJ) Credits: Produced by @brianmcc and the @techmeme staff Music by @jpschwinghamer 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 Ride Home for Thursday, April 26, 2018. Today, it's an earnings bonanza, Amazon, Microsoft, Facebook, and what might Samsung's earnings mean for Apple? Also, new Snapchat spectacles, a look behind the scenes at Nintendo, a possible Sonos IPO, and Dig finds a new home.

Here's what you miss today in the world of tech. earnings for Amazon came in just a minute ago. Analysts were expecting revenue of $49.78 billion and earnings per share of $1.26. Well, Q1 revenue came in at $51.04 billion, representing 40% growth. These revenue numbers include sales from Whole Foods now, of course. Earnings per share came in at $3.27. That represents profits of $1.6. billion and marks the 12th straight profitable quarter for Amazon. What investors were really

clued into were the AWS numbers, revenues for which came in at 5.44 billion versus 5.25 billion estimated. That means AWS sales grew 49% year over year, generating 1.4 billion in operating income representing 73% of Amazon's total operating income. At the time of this recording, 4.30 p.m. Eastern Time, Amazon's stock was hitting new all-time highs up around 6%. Microsoft also reported earnings, but this was Microsoft's quarter three revenues, and they were a beat as well. Revenue came in at 26.8 billion, up 16% year over year. Profits were 7.4 billion up 35% year over year. Earnings per share were 95 cents a share.

Analysts were expecting 85 cents a share, but at the time of this recording, Microsoft shares were trading down after hours more than 2%. Obviously earnings calls are forthcoming, so check with Techmeme.com all evening to figure out how this all shakes out in the end. Oh, and this little nugget just dropped, apropos of nothing. Square announced it is acquiring website building service Webley for $365 million in cash and stock. More on that tomorrow, of course. Let's step away from earnings news for just a minute before we'll inevitably have to come back.

How about a product announcement instead? Snapchat today launched Spectacles version 2.0. The new wearable cameras are slimmer. come in three colors, onyx black, ruby red, and sapphire blue, are now water-resistant, are capable of taking photos and videos, and are available today at spectacles.com. You can now even order spectacles with prescription and polarized lenses. Now for the caveats, beginning with the fact that at $150, the new spectacles are $20 more than the old ones. And if you're familiar with version one of the Spectacles product, you'll know that.

they were a bit of a bust. Snapchat only sold about 150,000 of them, and according to Business Insider, most users had stopped using Spectacles regularly only a month after buying them. Snap eventually had to write down nearly $40 million in unsold Spectacles inventory. So a lot of people were wondering

if the product line itself might be dead. Well, it seems that Snap thinks that it learned lessons from Spectacles 1.0 and literally recycled parts of the unsold inventory of the first generation of Spectacles to build these new ones. So maybe that $40 million wasn't all down the drain. But one of the big problems a lot of people had with Version 1 was the difficulty in getting pictures off the glasses and onto your smartphone.

You had to open memories in the Snapchat app, pair your phone to the Spectacles' Wi-Fi network, and then wait for them to download. It seems that things have only slightly improved with this new version. Here's how Casey Newton described the process at the verge, quote, the good news is the download speeds are now three to four times faster, Snap says. The bad news is that the rest of the process down to the awkward connection to a Spectacle's Wi-Fi network remains the same.

In a world where your camera roll uploads automatically to iCloud or Google Photos, Spectacles approach still feels annoyingly clumsy. But over at TechCrunch, Josh Konsteen had the opposite impression, quote, after two days of use, I think Spectacles Version 2 cross the threshold from clumsy novelty to creative tool accessible to the mainstream, end quote. But he also acknowledged the awkwardness of actually sharing photos taken on Spectacles,

quote, if Snap wants to be a hardware giant, it can't just build accompaniments to its own app. And hardware really does seem to be the future Snap is grasping for. Yesterday, Snap's CEO Evan Spiegel told Wired's Jesse Hempel that Snapchat wants to piece together a next-generation computing platform from the bottom up, and that means developing hardware and software on parallel but separate tracks. Quote, we decouple them so that they're all allowed to develop on their own until they come together, Spiegel said.

Over the next decade or so, the way that these pieces fit together will probably be what defines our company. So in the aftermath of Facebook's earnings numbers, there really have been no surprises, aside from the fact that a nearly $500 billion market cap company is somehow able to grow revenue at nearly 50% year over year, which is fairly insane. Facebook shares opened up nearly 8% this morning, but are still down significantly from the all-time highs they were at pre-Cambridge Analytica scandal.

A few nuggets you might find interesting, Facebook is buying back an additional $9 billion worth of its own shares on top of a previously announced $6 billion share buyback program. WhatsApp status has apparently become the most popular of Facebook's Snapchat Stories clones. WhatsApp status has 300 million daily users, according to Facebook, which is close to what Instagram Stories was reporting the last time that number was reported by Facebook. 91% of all Facebook ad revenue came from mobile. Average revenue per user reached $5.53.

up 30% year over year. And as Business Insiders Alexi Oriskovic pointed out on Twitter, growth in sales and marketing spending outpaced research and development spending at Facebook for the first time in at least the last four quarters. Until now, Facebook's R&D expense growth was always slightly above sales and marketing spending growth. In Q1, though, R&D expenses were up 22% year over year,

while sales and marketing spending jumped 51%. As ever, I'm turning to Ben Thompson at Strateree for smart analysis. Ben writes about his impressions listening in on the investor conference call yesterday, quote, it was striking just how confident CEO Mark Zuckerberg, C.O. Cheryl Sandberg, and CFO Dave Wenner, appeared to be on the earnings call. They sounded like, well, to be specific, the transcript reads as if,

a group that had gone through the fire and came out the other side having realized it wasn't nearly as bad as they feared. The results certainly suggest that was the case. There were some interesting tea leaves to read out of Samsung's earnings report, and not just for Samsung. Samsung reported $14.4 billion in profit in its quarter one with a 20% jump in revenue and a 58% increase in profits, driven largely by memory chip demand, which was up 58% year over year. Forrester analyst Frank Gillett told CNET, quote, The main business driver is the component business with memory chips and new opportunities related to software, connected devices,

and artificial intelligence slash Internet of Things platforms. But Samsung also warned that profits from its display business were, quote, affected by slow demand for flexible OLED panels, end quote. The display division sales rose 3.4%, compared with that 20% growth, number for Samsung as a whole. So, Samsung is the exclusive supplier of the iPhone 10's OLED display screens. So this might be referring to the stagnant sales of Samsung's own Galaxy S-9 smartphone line, or it could also be an instance of yet another Apple supplier hinting that iPhone 10 sales might have been a bit weaker than we all expected. As Bloomberg

reporter Mark German tweeted, this is another not-so-great sign ahead of Apple's own earnings. earnings, which it is scheduled to report next Tuesday, May 1st. It's interesting to note, though, that Samsung supplies the iPhone 10 screens, but LG Display makes a lot of the LCD screens used in other Apple phones like the iPhone 8. And on Wednesday, LG Display reported a 32% decline in its sales. Of course, that would encompass sales of LCD television screens, as well as smartphone displays. One more earnings story, but only because it will allow me to seg into recommending an interesting piece for you to read. Nintendo reported operating profit last year of $1.62 billion, a staggering 505% year-over-year increase.

Revenue was up 116% to $9.66 billion. This is all due to the somewhat unexpected success of the Switch console, which has now sold 15 million units worldwide. only initially hoped to ship 10 million units. Nintendo now says it thinks that over the next year, it could sell 20 million Switch consoles, as well as, of course, untold hundreds of millions of copies of the attendant games like Zelda, Mario Kart, and Splatoon.

Nintendo had been struggling in recent years after its Wii U console suffered from disappointing sales, but that all seems to have turned around completely. And going forward, Nintendo hopes to broaden the appeal of the Switch with initiatives like its Nintendo Labo, which uses the switch as the core and brains behind cardboard models that gamers can construct to create interactive toys. The Guardian has a piece up, which I'll link to in the show notes,

about the creative team behind Nintendo's recent turnaround in fortunes and its creative philosophy going forward. The piece profiles one key member of that team, Shinya Takahashi, Nintendo's GM of Development, who's been called Nintendo's Conductor. Says Takahashi in the piece, quote, We want to make new and surprising things,

so we always keep an eye on new technology. That said, in order for us to create surprising things, we also look at older technologies to see if we can leverage them in new ways. New technologies tend to be a bit too advanced. We always try to find ways to make technology more approachable. The Wall Street Journal is reporting that the granddaddy of connected speakers, Sonos, is preparing to file for an IPO, which could come as early as June or July,

and which one source said would value the company at between $2.5 and $3 billion. According to the journal, just this week, Sonos invited analysts to a powwow where it outlined its financials. If it comes, an IPO has been a long time coming for Sonos. A lot of people don't know that Sonos was founded all the way back in 2002,

long before Alexa was even a gleam in Jeff Bezos's eye, and thus it seems logical that the money Sonos could raise from a public offering would be useful in contending with the modern universe of speakers that are not just connected but are also smart and populated with smart personal assistance. Sonos has raised $110 million in funding over its lifetime, and the journal estimates that its yearly revenues are now around about a billion dollars. In related Sonos news, the company announced that it is bringing support for Apple's Airplay 2 to its playbase, play 5, and Sonos 1 speakers. But even if you, like me, have older Sonos models, you're not going to be missing out. Sonos says AirPlay 2 will work on any speakers grouped with an Airplay 2 compatible model. So long as one of your rooms is a new Sonos model, it doesn't matter if the rest of your house is populated with older Sonos play ones, for example.

In Bittersweet but also potentially hopeful news, Fast Company is reporting that Dig, which was formerly owned by Betaworks, has recently been sold to the ad tech company Buy Sell Ads. Terms of the sale were not disclosed, but the deal reportedly encompassed Diggs assets and editorial and revenue teams. If you weren't around to remember, dig was one of the darlings of the very early Web 2.0 moment. Before there were like this and tweet this buttons all over the web, millions of blogs and web pages sported Dig This buttons

because DIG was one of the first of the modern generation of web traffic firehoses. By 2008, Dig was attracting 236 million unique visitors, which was insane for those days. Then the Dig product stagnated, followed by an ill-advised and poorly received site redesign in 2010, and Dig never really recovered its mojo. It's popularly believed that the reason Reddit was able to capture the self-proclaimed mantle of front page of the Internet is because Reddit was able to, by and large, capture Dig's disgruntled community. Buy-sell ads, CEO Todd Garland, told Fast Company, quote, We feel it's a great property.

It attracts a crowd that is like an internet subculture in a way. Our plan with Dig is not to screw it up, end quote. Given Dig's troubled history, the Verges T.C. Sautek pointed out on Twitter, that last sentence is somewhat ironic. One final super quick and super local news item. New York listeners, the website Gothamist is. back. It relaunched today. Gothamus was purchased recently by WNYC after tragically going dark for a time, but eight former staff members have rejoined the site. I really have no news

angle on this except to say that you really don't know how much you need a reliable local news source until you lose it. So I just wanted New Yorkers to be aware that Gothamus is back so that everyone will read it and hopefully Gothamist will never go away again. Thank you. Hey, remember a couple days ago when I asked you guys to get our Apple podcast reviews over the 100 review mark? Well, you did it. Thanks so much, everyone. At the time of this recording, we're sitting at 102 reviews. You guys really came through.

At the risk of seeming greedy, though, it made me think. It's a kind of super villain style about what else I could get y'all to do. And I thought of a thing. I know this is dumb of me, but I just found out that you can share what podcasts you're listening to when you're in the overcast. app. If my analytics can be believed, about a third of you listen to this show on Overcast. So if you're listening on Overcast right now, look at that little share icon on the top right of your screen. Share this episode. Facebook or email if you have to, but if you're on Twitter, share the episode in a tweet. I'm pretty sure that's how Marco decides which podcasts are

recommended in Overcast. So if enough of you tweeted this episode, maybe we'd be recommended in Marco's technology category. Plus, it would be fun for me to go on Twitter tonight and see 100 or so tweets of the show. This is the last time I'll try to activate you guys as my mutant podcast army for a little while, but if you like the show, please help us out by sharing it on Overcast.

I've been your host today, Brian McCullough. Once again, it's tech earnings rainy season. So check TechMeem.com all evening to find out the latest on the Amazon, Microsoft, and Intel Earnie. earnings announcements. Talk to you all tomorrow.