Tech Brew Ride Home - Tue. 12/22 – Why I Think The Apple Car Is For Real

Starting point is 00:00:00 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 Tuesday, December 22nd, 2020. I'm Brian McCullough today. See, I had a feeling. Reuters says Apple really is revealing an Apple car soon. More details on that suit charging Facebook and Google allegedly agreed to divvy up the ad market. The third biggest cryptocurrency says the

Starting point is 00:00:54 SEC is coming after it. And the crazy story behind those sexy butt-flap pajama ads you've been seeing all over the internet this month. Here's what you missed today in the world of tech. So I don't know why I had a feeling about that Apple car rumor at the end of yesterday's show, but I just did have a feeling. And now suddenly I look like a genius. Because all night the top of tech meme was a big story from Reuters saying sources have told them that Apple is indeed planning to manufacture a car by 2024, which may or may

Starting point is 00:01:29 not include self-driving tech, but will probably include what is being described as, quote, breakthrough technology for batteries, quoting the piece. Apple has progressed enough that it now aims to build a vehicle for consumers, two people familiar with the effort said, asking not to be named because Apple's plans are not public. Apple's goal of building a personal vehicle for the mass market contrasts with rivals such as Alphabet's Waymo, which has built robotaxies to carry passengers for a driverless ride hailing service. to Apple's strategy is a new battery design that could, quote, radically reduce the cost of batteries and increase the vehicle's range, according to a third person who has seen Apple's battery design.

Starting point is 00:02:11 Making a vehicle represents a supply chain challenge even for Apple, a company with deep pockets that makes hundreds of millions of electronics products each year with parts from around the world, but has never made a car. It took Elon Musk's Tesla 17 years before it finally turned a sustained profit-making cars. Quote, if there is one company, on the planet that has the resources to do that, it's probably Apple. But at the same time, it's not a cell phone, said a person who worked on Project Titan. It remains unclear who would assemble an Apple-branded car, but sources have said they expect the company to rely on a manufacturing partner to build vehicles. Apple's car might feature multiple LiDAR sensors for scanning

Starting point is 00:02:50 different distances, another person said. Some sensors could be derived from Apple's internally developed LiDAR units, that person said. Apple's iPhone 12, Pro and iPad Pro models released this year, both feature LiDAR sensors. As for the car's battery, Apple plans to use a unique mono-cell design that balks up the individual cells in the battery and frees up space inside the battery pack by eliminating pouches and modules that hold battery materials, one of the people said. Apple's design means that more active material can be packed inside the battery, giving the car a potentially longer range.

Starting point is 00:03:26 Apple is also examining a chemistry for the battery called LFP or lithium iron phosphate, the person said, which is inherently less likely to overheat and is thus safer than other types of lithium ion batteries. Quote, it's next level, the person said of Apple's battery technology, quote, like the first time you saw the iPhone, end quote. So again, that would really be something, right? I think it's worth pointing out that the piece kind of hints or suggests that Apple might release a car without self-driving technology, at least at first. Although that doesn't mean that they might not release self-driving cars somewhere down the road once they've got some experience just releasing regular electric cars. Now, takes on this are all over the place, and some people are absolutely enraged, absolutely sure this is vaporware, and we'll never actually see an Apple car, see the light of day. but if you want my two cents, here's why an Apple car has kind of always made sense to me. What is the greatest business in the world? It's currently selling $1,000 pocketable computers,

Starting point is 00:04:37 i.e. smartphones, to billions of people every year at a healthy margin. People generally upgrade their phones every few years, so billions of people send Apple thousands of dollars on a regular cadence. But do you know what was the best business in the world before that, before smartphones? It was getting billions of people to pay you tens of thousands of dollars every five to seven years for a car. There's a reason why there was that famous phrase, what's good for GM is good for America, because for most of the 20th century, the car business was the biggest, the best, the most powerful business in the world. So why wouldn't Apple be at least tempted to marry these two best business? businesses. Automobiles are the only other hardware business that is on the scale of the smartphone

Starting point is 00:05:28 business, i.e. your addressable market is every human being, or at least household, in the developed world, and there is a regular product refresh cadence, just like in smartphones, i.e., people pay you tens of thousands of dollars every half a decade or so. But Brian, the car business is a low-margin business, notoriously so. Even the best carmaker in the world, Toyota only has 6% margins. Most car companies have 3% margins. Well, gee, that reminds me of the smartphone business, which has murderously thin margins for everyone except Checks Notes, Apple. But Brian, that's why Waymo is making self-driving taxis. Once self-driving takes over, no one will need to ever own a car again. You'll just pay a monthly subscription fee for your

Starting point is 00:06:17 transportation needs. Well, that sounds like checking notes again. Apple's recent moves towards services and subscriptions in search of growth. But Brian, cars are a crazy different business than computers, and well, let me stop you right there because 15 years ago, Apple was cautioned that phones were a completely different business than it was used to, different than computers, and there was no way that Apple could just waltz right in and nail phones, except for the fact that, Yeah, you know how that went. And also something, something, everything is computers now, right? Cars are computers now. And we were just talking about how with their own silicon, their own modems, the only thing Apple doesn't do itself for smartphones is the battery. And if they ever made a big proprietary breakthrough there, wouldn't that be earth-shattering? So can you see the angle here?

Starting point is 00:07:09 How doing an electric car would be a big research and development project that might also have the added benefit. of benefiting their iPhone business as well if they learn to be best in the world in batteries all of a sudden. Also, Apple, they love software and hardware and marrying the two. Don't you think that designing for a car would be right up their alley, especially if they could put all sorts of cool software inside it? And also because isn't designing for cars like the ultimate dream for design heads? So yeah, read all the snark about this story. Think of it as vaporware and call me crazy, but something tells me that we will probably see an Apple car sometime in some form in the next five years. Ripple's CEO says the SEC is filing a lawsuit against it over the alleged sale of

Starting point is 00:08:05 unlicensed securities. If you're not familiar with Ripple, it is one of the oldest and biggest cryptocurrencies, at least by market cap. It's also technically a company, which is why I say CEO, quoting Fortune. Ripple, one of the most important companies in the cryptocurrency industry, said Monday evening that the Securities and Exchange Commission is poised to file a bombshell lawsuit against the company over the alleged sale of unlicensed securities. The lawsuit will also name Ripple CEO Brad Garlinghouse and co-founder Chris Larson as defendants, according to Garlinghouse, who told Fortune the agency will file the case in the near future. If the agency does sue Ripple,

Starting point is 00:08:44 the action will follow years of debate between the company and the agency about whether XRP, a digital currency associated with Ripple is a security, like a share of stock, which must be registered with the agency, or is instead a currency and thus beyond the SEC's purview. XRP is the third most valuable cryptocurrency and currently has a market cap of $23 billion. Ripple's decision to announce that it's about to be sued is an unusual one. Garlinghouse has predicted the incoming Biden administration may be friendlier to the cryptocurrency industry than the Trump administration has been, suggesting that Ripple's preemptive announcement may have a political component. Garlinghouse also blasted the SEC's decision to sue

Starting point is 00:09:25 right before the holidays and said Ripple will fight the case. Quote, it's not just grinchworthy, it's shocking, said Garlinghouse. It's an attack on the entire crypto industry and American innovation, end quote. Remember last week when those 10 states filed one of those antitrust suits against Google, it was heavily redacted. But also there was the suggestion that Facebook and Google were somehow in an allegedly illegal sort of cahoots. Well, the Wall Street Journal has seen an unredacted draft version of the lawsuit and quoting the journal. Facebook and Alphabet's Google agreed to, quote, cooperate and assist one another if they ever faced an investigation into their pact to work together in online advertising. Google used language from Star Wars as a code name

Starting point is 00:10:18 for the deal, according to the lawsuit, which redacted the actual name, the draft version of the suit says it was known as Jedi Blue. The lawsuit itself said Google and Facebook were aware that their agreement could trigger antitrust investigations and discussed how to deal with them in a passage that is followed by significant redactions. The draft version spells out some of the contracts provisions which state that the companies will, quote, cooperate and assist each other in responding to any antitrust action, end quote, and quote, promptly and fully inform the other party of any governmental communication related to the agreement, end quote. In the company, contract, the word redacted is mentioned no fewer than 20 times. The lawsuit says the unredacted

Starting point is 00:10:59 draft fills in that word. It is antitrust. The redacted lawsuit filed last week makes no mention of Facebook chief operating officer Cheryl Sandberg. According to the draft version, Ms. Sandberg signed the deal with Google. The draft version also cites an email where she told CEO Mark Zuckerberg and other executives, quote, this is a big deal strategically, end quote. So there's that. and also this morning there's this. Sources are telling the Washington Post that in the early stages of the U.S. antitrust investigation into Facebook, Facebook offered to help build a social networking competitor

Starting point is 00:11:36 using its own network and code. In other words, in order to make the government go away, Facebook offered to build a competitor to itself. Quote, in an attempt to illustrate its commitment to competition, the company's top lawyers signal that they would, be open to changing some of its business practices, according to three people familiar with the matter. One of the ideas Facebook floated would have allowed another firm or developer to license access to its powerful code and its user's intricate web of relationships so that they could more easily

Starting point is 00:12:07 create their own version of a social network, said the individuals who spoke on the condition of anonymity to describe a non-public law enforcement inquiry. But the investigators ultimately rejected the idea believing Facebook's proposal, part of a vague early menu of remedies the tech giant presented this year, failed to fully address their competition concerns. In the end, the Federal Trade Commission and nearly every state's Attorney General, led by New York's Lettisha James, filed twin lawsuits this month that seek to break Facebook apart. Facebook's tense last-minute negotiations in the final days of the state and federal probes illustrate the urgency with which the company has sought to rebuff the government's charges and foreshadow the aggressive tactics it is expected to deploy in the fight to come,

Starting point is 00:12:49 end quote. I'm going to do an omnibus segment here so I can squeeze in a whole bunch of stories real quickly. First, we've got an interesting raise. India-based Versailles Innovation is the company behind the wildly popular daily news app Daily Hunt, as well as the short video app Josh. Versailles has raised around $100 million at greater than a $1 billion valuation, and listen to these investors, cutting them a check, Google and Microsoft, among others. Then we've got SPAC news. LIDAR manufacturer, Oster, says it will go public through a SPAC, raising up to $200 million at evaluation of around $1.9 billion.

Starting point is 00:13:34 Remember how we first started talking about SPACs this year because seemingly all of the automotive startups were using them to access public markets. Yeah, well, Oster is now the fifth LIDAR manufacturer to SPACify themselves. And if you thought Massa San could resist getting in on the SPAC action, you'd be wrong. SoftBank has filed to do a SPAC itself to raise $525 million. Quoting CNBC, our SPAC will bridge softbank's private and public investing strategies by enabling us to partner with a fast-growing IPO-ready technology company. We believe that we have access to a wide range of compelling investment opportunities through our broad international presence and

Starting point is 00:14:15 deep local networks, the company said in a securities filing, end quote. Rumor on the street is, by the way, that SoftBank might even do a couple of additional spacks on top of this one, if this one fairs well. And finally for the segment, IAC says it plans to spin out its full stake in video software company Vimeo, making Vimeo an independent publicly traded company as soon as Q2 of next year. Quoting CNBC again, the planned spinoff comes as software-as-a-service stocks are soaring, boosted in part by the COVID-19 pandemic. Vimeo has reported strong user growth in the past year with subscribers up 24% in November. Vimeo, which previously focused on streaming entertainment, especially from independent filmmakers, pivoted its plan a few years ago to

Starting point is 00:15:03 provide video services for businesses, end quote. And finally today, maybe you've seen this, if you've been on the web at all this month, but have you seen those ads for that sexy buttflap onesie that have seemingly taken over the entire internet? If you read that article in L online about the journalist who fell in love with Martin Shikrelli while covering his trial this weekend that everyone was talking about. That was the only ad you saw reading that article. You saw it like two dozen times or something. What's the deal with that? Well, Business Insider has you covered. See what I did there. Quote, after talking with six experts in advertising, retail and e-commerce, I was able to mostly solve the case of the butt-flap pajama ad.

Starting point is 00:15:54 The butt-flap PJs managed to take over the internet through a combination of wonky brand safety measures, a few marketing strategies including provocative sexual imagery, and a good amount of luck. Ivy Rose appears to be a fast fashion brand backed by a Chinese manufacturer, aiming to cash in by selling directly to consumers, according to the experts. Ivy Rose appears to be one of a number of nearly identical fast-fashioned brands. owned by the same company. Shanghai Jigau, Information Technology Company Limited, according to the brand's Facebook page. Other brands such as Sheikmi and Joy Shuteek are selling the same clothing items with the same model at the same price point. Quote, these are what I would call

Starting point is 00:16:38 opportunity brands that have a very short lifespan, said Stitcher ads co-founder Conor Ryan. They can set up the, quote, business in a week and tear it down just as quickly. They are not trying to establish a long-term brand. They are trying to rapidly sell low-quality products at really high margins, end quote. According to Sanders, Ivy Rose is likely one of many brands that are backed by a Chinese manufacturer aiming to cash in on selling directly to consumers. Experts say that the ad for the PJs feels like it is everywhere all of a sudden because of a mix of brand safety miscalculations, retargeting marketing strategies, and the fact that the strange and sexual ad tends to stick with you. quote, the reality is we all see the same weird ads all the time, but they don't capture our

Starting point is 00:17:22 attention like this one, Stitcher ads Ryan said. Ivy Rose uses 18 ad trackers, sets nine third-party cookies, and uses ad tech services from companies including TikTok owner BiteDance, Twitter, Facebook, and Google. In Adelitics blog posts posted on Monday, the post also noted that new Chrome profiles and people who clear all third-party cookies do not see the Ivy Rose onesie ad, even on the L website. Quote, it is therefore likely that Google or some other ad tech company is classifying the L.com article as being related to adult content or subjects and is targeting users who visit articles like this one with adult-like content, including the Ivy Rose ad, the post

Starting point is 00:18:09 wrote. If you saw the Ivy Rose ad, the writer of the blog post told me, you likely did something online that made Google or some other tech company believe that you're seeking out adult content. It seems to be very broad targeting, the blogger said, but it is targeting all the same, end quote. That's all for today. Talk to you tomorrow.

Tech Brew Ride Home - Tue. 12/22 – Why I Think The Apple Car Is For Real

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