Tech Brew Ride Home - Thursday, June 21, 2018 - Whatever Happened to Apple's AirPower?

Episode Date: June 21, 2018

Intel’s CEO steps down, an update on Apple’s AirPower wireless charger, a Supreme Court ruling will have a big impact on e-commerce, and Amazon Fire TV Cube reviews. Stories from: @jessiwrites, @chrisvelazco Tweets: @kevinctofel Links: Why Apple’s AirPower Wireless Charger Is Taking So Long to Make (Bloomberg)AMAZON FIRE TV CUBE REVIEW: A SMARTER STREAMING BOX (The Verge)Google turns on ‘Continued Conversation’ in the Google Assistant (Search Engine Land)WHY LYFT IS TRYING TO BECOME THE NEXT SUBSCRIPTION BUSINESS (Wired) 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 Beam Ride Home for Thursday, June 21st, 2018. I'm Brian McCullough. Today, Intel's CEO steps down, an update on Apple's airpower wireless charger,

a Supreme Court ruling that will have a big impact on e-commerce, and Amazon Fire TV Cube reviews are in. Here's what you missed today in the world of tech. Intel CEO Brian Krizanich is stepping down from the company, following an investigation into a consensual relationship he had with an Intel employee. Chief Financial Officer Robert Swan will step in as interim Intel CEO, effective immediately. Krasanich is also stepping down from Intel's board, which is already beginning the search for a permanent CEO replacement. In a statement, Intel said, quote,

An ongoing investigation by internal and external counsel has confirmed a violation of Intel's non-fraternization policy, which applies to all managers. Given the expectation that all employees will respect Intel's values and adhere to the company's code of conduct, the board has accepted Mr. Krasanich's resignation, end quote. Intel apparently has a policy that managers cannot have relationships with people who report to them, either directly or indirectly. People familiar with the matter said the relationship took place, quote,

some time back and had already come to an end. Krizanich was named CEO of Intel in May of 2013, and Intel's stock has risen 120% during his tenure. His total compensation last year was just north of $21 million. Interestingly, Krizanich was just on the cover of Forbes, touting Intel as the number one company on just capital's just-100 rankings of America's most just companies. As user Yev-P on Twitter said,

always read your HR manual. Intel chairman Andy Bryant said in a statement, quote, the board believes strongly in Intel strategy and we are confident in Bob Swan's ability to lead the company as we conduct a robust search for our next CEO. Bob has been instrumental to the development and execution of Intel strategy, and we know the company will continue to smoothly execute. We appreciate Brian's many contributions to Intel, end quote.

Bloomberg's Mark German has been checking the backs of milk, and he's finally gotten us an update on Apple's mysterious missing airpower wireless charging pad. So here's the deal. Apple engineers have had to deal with a whole range of engineering and supply chain issues. Apple had hoped to have the product ready to launch this month, but now Apple is hoping for September, essentially a full year after the air power device was originally announced. The engineering challenges have to do with Apple's ambitious aim to have to have to have. have the pad power multiple devices simultaneously, iPhone, AirPods, and Apple Watch. Quoting from German's piece,

Apple also wants users to be able to place any of their devices anywhere on the charging mat to begin a charge. That ambitious goal requires the company to pack the air power with multiple charging sensors, a process that has proven difficult, the people said. The charger is based on custom charging technology, which it intends to integrate with the key charging standard, the company said last year. The multi-device charging mechanism is challenging to build because it likely requires different sized charging components for the three types of devices which would overlap across the mat, end quote. So it seems that with complexity like that, Apple's engineers are just having a hard time keeping the pad from overheating. Also problematic is the custom chip that Apple is putting inside the device that will run a stripped-down version of iOS itself.

This chip has proven to be buggy. German ends his piece by noting that every first generation of a new Apple product that the company has announced in recent years has had one sort of delay or another. The Apple Watch was announced in 2014 and was supposed to go on sale in early 2015, but was supply constrained until the middle of that summer. AirPods were launched in 2016 and were slated to come out that October. But if you'll recall, they didn't go on sale until right before Christmas, and there were seemingly six-week shipping delays for,

several months. And the HomePod announced June 2017, slated for release in December 2017, it ended up going on sale just this past February. Pretty huge ruling from the U.S. Supreme Court today. In a five to four decision, the justices overturned a 1992 Supreme Court precedent that barred states from requiring businesses with no physical presence in that state to collect sales taxes. In other words, this is a ruling that will primarily affect e-commerce companies, which might now have to collect sales taxes in whatever jurisdiction has them. So there are several ways to think about this. It's a win for states and local governments because this should turn on a new revenue tap that will be increasingly important as more and

more commerce moves online. The plaintiff in this case, South Dakota, estimates it could take in an additional $50 million a year if it can now tax out-of-state merchants. It can be thought of as a win for brick and mortar retailers because it takes away a competitive advantage that online merchants have enjoyed over the entire period that commerce on the web has even been possible. On Twitter, many have been saying that this is a triumph against Amazon, although that's a little bit of closing the barn door after the horses have already escaped sort of thing. As Warrior Cop said on Twitter, too bad Amazon already got a free ride for a few decades and got to unstoppable black hole size, end quote.

And it should be noted that Amazon has been paying state sales taxes for several years now, but Amazon can afford to collect and pay sales tax in the 45 states that have them. Things won't be quite so easy for smaller e-merchants. Think of the person who's selling T-shirts on eBay, for example. It would be extremely complicated for small organizations to do business on the web if have to conform with 45 different state tax laws. One of the advantages of having a federal system of government is not having to deal with so many different tax regimes.

So perhaps it's not coincidental that shares in Etsy were down as much as 4.4% in trading today after the news broke. As Axios notes, it's likely that Congress will have to, quote, create national standards around interstate commerce to avoid a patchwork of state sales tax laws that could be difficult for retailers, especially small businesses, end quote. But from a big picture tech angle, you could also think of this as the Supreme Court actually catching up with the modern realities and changes that technology has wrought on society. So from that perspective, maybe this is a bit of progress. A group called the Car Connectivity Consortium announced yesterday what it is calling Digital Key

Release 1.0, a standard for NFC-enabled digital car. keys on mobile devices. In other words, this is an open standard that will ensure interoperability between your smartphone and your car so that you could say lock or unlock the door, start the engine and even share access to your car with others all through your device. So no need to hand someone your spare keys, they could just borrow your car with their phone. Might make for entirely new types of car sharing schemes. And while certain cars are already let you unlock your car with your phone, Tesla's, for example. If you get a new phone or a new car, there's no guarantee that either one will still work with the other.

That's exactly what this standard is attempting to solve. Apple is a key member of the consortium, as is LG Electronics, Panasonic, Samsung, and Qualcomm. On the automaker side are Audi, BMW, General Motors, Hyundai, and Volkswagen. Interesting to note that Google is not a part of this consortium, though its major Android partners are. And as Kevin Toffle pointed out on Twitter, quote, surprise Blackberry is absent as well, given their QNX platform is in 120 million autos. So the Amazon Fire TV cubes are out. Mine actually just got delivered while I was recording that last segment. And that means that the reviews are out as well.

So let's take a quick lap around some of the reviews and see what people think. At the verge, Dan Seafurt says, quote, In my experience of testing the Fire TV Cube over the past few days, its Alexa-based voice control system works more often than it doesn't. But I'm not throwing my remotes in the garbage just yet, end quote. Seifert gave the Fire TV Cube an 8 out of 10 ratings, saying, adding Alexa to your entertainment system is a plus, as it can control more than just your TV,

and it supports 4K HDR content. But he says that the device has problems with certain other devices, such as set-top boxes from some cable companies. And he didn't like the fact that the device still lacks a YouTube app, just like the existing Fire TV 4K does. Because of the various incompatibility issues with the universe of devices that you might have inside your TV cabinet, Seafurt says, quote,

all of those limitations mean you still have to use remotes. and use them often. Volume controls through Alexa aren't particularly granular and can be tedious to use, so I often picked up my soundbars remote to fine tune, end quote. And over at Wired, Lauren Good similarly felt that this is no remote control killer. Let me just read from the very lead of her review.

If you're thinking of buying the Amazon Fire TV Cube because you're delighted by the idea of having an Amazon Echo and a Fire TV device mashed into one device, let me stop you right there. Alexa on a TV interface demands a level of conversation like no other streaming TV product I've used before. Alexa, show more.

Alexa, show more. Alexa, select option one. Alexa, go back. Alexa, scroll right. Alexa, go home. After a few nights of using the cube, I began to hate the sound of my own voice. Maybe you'll still be delighted by the cube

at first if you buy one. Maybe if you'll be delighted by the cube. Maybe if you have kids, they'll love shouting at the TV to get their cartoon fix. But there's a good chance you'll end up doing what I did, going back to the fuddy-duddy Fire TV remote, because that's the easiest way to scroll through multiple media options, end quote. Good gave it a rating of six out of ten. Over at Engadgett, Chris Velasco said, quote, In general, Alexa handled the thankless task of helping me sift through a sea of content, surprisingly well,

but it becomes clear after a little while that this whole thing could use a little more fine-tuning, end quote. So I guess caveat mTOR to all of us first-generation buying early adopters. Slightly tangential story, Google Today began rolling out what it calls continued conversations to its Google Assistant ecosystem, which is designed to prevent you from having to say,

hey Google, over and over again when you're interacting with the assistant. Search Engine Land described the changes this way. It appears that users will be able to keep asking or talking with the assistant for an extended period as long as there isn't an extended pause. It's not entirely clear how many follow-ups you can ask. Google also says that the assistant will recognize when you're talking to it versus someone else such as a family member in the same room. The company says continued conversation will be available on Google Home, Google Home Mini, and Google Home Max. But it doesn't appear it's a family member in the same room.

available yet for Android handsets, end quote. It should be noted that to actually start talking to the assistant, you still have to trigger it by saying, OK, Google, or hey, Google. And also, you have to be in the U.S. for this to work, and you have to enable it, which you can do by going to settings, then preferences, then continued conversations. Finally, today, over at Wired, Jesse Hempel has a piece up that pulls at several of the threads that we've been talking about in recent weeks. It's titled,

why Lyft is trying to become the next subscription business. As we've been saying, Lyft is trying to incorporate public transportation, bike sharing, any option you can think of in order to become your one comprehensive transportation solution app. Need to go somewhere, like Ben Thompson says, Uber and Lyft at all,

want to be your one app for that. And Hempel discusses that through an interesting lens, the subscription. plans that both Lyft and Uber are testing, though in her piece it seems that Lyft is possibly more serious about subscriptions. For example, did you know that Lyft has an all-access plan? For $299 a month, you can get 30 rides up to $15. If a ride costs more than $15, you simply pay the difference. They also have a commute plan. For $3.99 a month, you get 45 Lyft rides between work and your home based on the personal cost of that distance.

When Hemple visited Lyft headquarters, co-founder John Zimmer told her, quote, you'll subscribe to a Lyft plan like you would subscribe to Netflix or a Spotify premium plan, end quote. So this is what I mean by all sorts of tech trends sort of converging in this one piece. Everyone wants to be the one app that you use to do X,

the one app for food, the one app for shopping, the one app for exercise, etc., etc. But everyone in tech also increasingly wants to hook you on the subscription business model as well. It would be super if the one app to do X also got you to pay X dollars every single month over and over guaranteed. Why? Well, because subscriptions are manageable. They're reliable revenue and they're often very high margin revenue as long as you stick around for a long time. And Wall Street really loves that. why has Salesforce.com been such a high flyer in recent years?

It was clearly a pioneer in Software as a Service, sure. But what is the definition of software as a service? It's subscriptions and subscription revenue. Another example is Adobe's stock, which has been on a tear, ever since it switched from selling software and shrink-wrapped boxes to getting you to pay yearly for over-the-air updates. Same with Microsoft, as it's done similar things. things with Office 365.

See, people are jealous of subscription-based companies because they get these wild valuations on Wall Street because Wall Street values companies with subscription business models differently. Instead of boring old EBITDA, SaaS-like businesses tend to get valued on a price-to-sales basis instead of the usual price-to-earnings basis. Again, using Salesforce.com as an example, it's trading at nine times sales. Workday is currently valued at about 12 and a half times sales. Subscription businesses are sticky. Once you have a subscriber, once you get them to stick around,

it can be so profitable over the lifetime of that customer relationship that is just like printing money, but reliable money, high margin money. So especially in software, companies have noticed that by shifting your business to a subscription model, you can basically juice your stock price. Since Adobe went to a SaaS model, Adobe's price to sales ratio, went from about four times sales to about 14.5 times sales. Microsoft, before Satcha Nadella took over and started really pushing subscriptions for things like Office, Microsoft had a 3.3x price to sales ratio.

Today, the price to sales ratio is 6.9x, and the stock price has tripled. Is it any wonder why Apple has started really emphasizing their subscription revenue recently? Apple's stock price has done pretty well recently, and its price to sales ratio has nearly doubled. So just for fun, think of a company like, I don't know, Disney. Disney trades at 2.7 times sales. Now, we know that it wants to launch a strong OTT streaming service, mainly to compete with Netflix, right?

But funny enough, what is that? It's a subscription business, of course. And what is Disney racing to replace? Basically, it's trying to replace all the revenue it's been making over the last several years via the most successful consumer subscription business of the last 30 years. The cable bundle.

The cable companies convinced us all to pay upwards of $200 a month for years and years and years, years of monthly, reliable income. So yeah, what if Disney becomes, as Eric Jackson likes to call it, Disney as a service? What if one day you could pay a monthly fee, obviously to get their streaming video, but what if you paid a little more,

and you also got, I don't know, first run movies streamed to you first, so while everyone else was waiting to watch Black Panther 4, you got it opening day? What if you paid a little more, and every month Disney sent you a crate of cool Disney loot and swag? And what if there was, I don't know,

a Disney Prime tier, where for your higher monthly fee, you get all of this, and super cheap tickets to Disney theme parks or Disney cruises a certain number of times per year? What might happen to Disney's price to sales ratio if Wall Street started to think of it as a SaaS-like subscription business? So you see where this is going, of course. Lyft wants to be the one app that you think of for transportation because that would drive customer loyalty and repeat use.

But if it could do that and also create a loyal subscription base, then serendipity. It would also be creating exactly the sort of business that Wall Street tends to love and might give. give a SaaS-like valuation to. That could be pretty useful for a company looking to go public in the near future. In Hempel's piece, Daniel Ives, the head of technology research for GHB Insights, calls subscription businesses, quote, the golden business model, saying, this is something that, as the company goes from private to public, would be looked on very favorably, end quote. So yeah, definitely check out the piece why Lyft is trying to become the next subscription business in Wired.

There's also a link in the show. show notes. So a lot of my thinking in that last segment was influenced by EMJ Capital's Eric Jackson, as I said. So credit where credit is due, you can follow Eric on Twitter at Eric Jackson, and he also has the excellent Eric Jackson podcast. That's Eric, E-R-I-C. I've been your host, as always, Brian McCullough. Follow me on Twitter at Brian MCC. That's Brian MCC, B-R-R-E-R-E-R-E-R-E-R-E-R-E-R-E-R-E. I've been your host, as always, Brian McCullough. our I-A-N. Ryan's with a Y, our fakesters. I'm sorry.

Talk to you all tomorrow.