Tech Brew Ride Home - Wed. 01/22 - The Bezos Phone Hacking Thing

Episode Date: January 22, 2020

The whole Jeff Bezos phone-got-hacked thing blows up into something crazy. That rumored “cheap” iPhone might be mere weeks away. Is Amazon Music almost as big as Apple Music? Cruise unveils the Origin self-driving car. And the first test of voting via smartphone in the US. Sponsors: DoubleUp.agency Capterra.com/ride Links: Jeff Bezos hack: Amazon boss's phone 'hacked by Saudi crown prince' (The Guardian) Saudi’s MBS implicated in hacking of Jeff Bezos’s phone (Financial Times) UN calls for investigation into alleged Saudi crown prince involvement in Bezos phone hack (CNBC) New Low-Cost iPhone to Enter Mass Production in February (Bloomberg) Amazon Music subscriber numbers close in on Apple (Financial Times) Exclusive: Seattle-Area Voters To Vote By Smartphone In 1st For U.S. Elections (NPR) EXCLUSIVE LOOK AT CRUISE’S FIRST DRIVERLESS CAR WITHOUT A STEERING WHEEL OR PEDALS (The Verge) Netflix says Disney and Baby Yoda may have cut into the streaming service’s growth (Recode) 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 ride home for Wednesday, January 22nd, 2020. I'm Brian McCullough today. The whole Jeff Bezos' phone got hacked thing blows up into something crazy. That rumored cheap iPhone might be mere weeks away.

Is Amazon music almost as big as Apple music? Cruise unveils the origin, self-driving car, and the first test of voting via smartphone in the U.S. Here's what you missed today in the world of tech. My nearly two years doing this podcast, there has not been a single story that has been crazier than this one, and it just keeps getting crazier. You've probably heard it already, but all I can do is really just quote from the Guardian piece that broke this news last night, quote, The Amazon billionaire Jeff Bezos had his mobile phone hacked in 2018 after receiving a WhatsApp message that had apparently been sent from the personal account of the crown prince of Saudi Arabia. sources have told the Guardian. The encrypted message from the number used by Mohammed bin Salman is believed to have included a malicious file that infiltrated the phone of the world's richest

man, according to the results of a digital forensic analysis. This analysis found it, quote, highly probable, end quote, that the intrusion into the phone was triggered by an infected video file sent from the account of the Saudi Air to Bezos, the owner of the Washington Post. The two men had been having a seemingly friendly WhatsApp exchange when, on the 1st of May that year, the unsolicited file was sent, according to sources who spoke to the guardian on the condition of anonymity. Large amounts of data were exfiltrated from Bezos's phone within hours, according to a person familiar with the matter.

The Guardian has no knowledge of what was taken from the phone or how it was used, end quote. So the forensic work in question was done on behalf of Bezos by the firm FTI Consulting. The Financial Times has more details, quote. The forensic report commissioned by Mr. Bezos said Prince Mohammed contacted the Amazon founder unexpectedly via WhatsApp on two occasions after the video file had been sent in a way that suggested that the Crown Prince had prior knowledge of the businessman's private discussions. Mr. Bezos had already ceased all communications with Prince Mohammed in the wake of the Khashoggi murder. But in February 2019, two days after the billionaire was briefed via his phone about the extent of the Saudi online campaign against him, He received another message from the WhatsApp account used by the Prince. It said, quote, all what you hear or told to, it's not true, and it's a matter of time will tell you know the truth.

There is nothing against you or Amazon from me or Saudi Arabia, end quote. Now, I think it's worth underlining that the forensic report does stop short of identifying the spyware used, although several people online and subsequent reporting is pointing the finger at the NSO group that israeli firm that people have implicated in high-profile device hacking before. Aki Peritz tweeted this, quote, Jeff Bezos's obvious move is to sue the firms that provided this tech to the Saudis into the ground in every jurisdiction, show there are serious financial consequences to hacking private citizens. Burn these companies to the ground with your infinite wealth.

end quote. To which former Facebook security chief, Alex Stamos, tweeted, the irony is that NSO Group uses Amazon Web Services to interact with WhatsApp's APIs. So if NSO was behind the intrusion, then some of the key evidence is available to Bezos's excellent AWS security team, end quote. Something tells me there will be plenty more shoes to drop around this story at some point. In fact, as I was writing the same, up this morning. This popped up on CNBC, quote, the UN has called for an immediate investigation into the possible involvement of Saudi Crown Prince Mohammed bin Salman in the hacking of Amazon CEO Jeff Bezos's iPhone in 2018, UN experts said in a statement Wednesday, end quote. It's a Debbie Wu, Mark

Mark German, Apple Scoop Wednesday as the pair are reporting that the rumored low-cost iPhone, the successor to the iPhone SE that people have been talking about for a few months now, will actually enter production in February and may be announced as early as March. Quoting the pair in Bloomberg. This will be the first lower cost iPhone model since the iPhone SE. It will look similar to the iPhone 8 from 2017 and include a 4.7-inch screen, Bloomberg News has previously reported. The iPhone 8 is still on the market, currently selling for $449, whereas Apple sold the iPhone SE for $399 when that handset launched in 2016. The new 414,000. The new phone is expected to have touch ID built into the home button, reusing established Apple technology

instead of opting for an in-display fingerprint sensor like most modern Android rivals. It will not have Apple's face ID biometric authentication, but it will feature the same processor as Apple's current flagship device, the iPhone 11, end quote. So the assumption that most folks are making here is that this lower-end model will help Apple compete in developing markets, especially India, where, coincidentally, Apple manufacturing partner Wistron recently brought a third iPhone assembly plant online, building iPhone 6S and iPhone SE models specifically for the Indian market. Foxconn also builds the iPhone 10R in India. Could it be that Amazon music is quietly a bigger player in the streaming music space than anyone

thought? Could it be that Amazon music is almost as big as Apple music? It certainly looks that way from a certain angle, as Amazon says that Amazon music has 55 million users across its six different pricing tiers. Now, those six tiers do include the free pricing tier, but Amazon says nearly all of those 55 million users are paying subscribers, quoting the Financial Times. Amazon doesn't talk numbers that much, said Steve Boom, head of Amazon music. We felt like getting to this level of scale was something worth talking about, end quote. At 55 million users, Amazon is edging closer to Apple's market share in music streaming. Apple last summer said it had 60 million subscribers to Apple Music.

Spotify remains the market leader by a wide margin, with 113 million paying subscribers and 248 million total monthly users. September, end quote. Now, again, it's probably worth parsing those tiers a bit, quoting the Financial Times again. Amazon Music sells its core premium music service, which offers the same on-demand catalog as Spotify and Apple, for $10 a month. But that cost falls to $8 a month for members of Amazon's Prime shipping program, and $4 a month for people who listen only on an echo speaker. The result is that subscriptions to Amazon's core premium music service grew by more than 50% year over year in 2019, according to the company, end quote. Still, I don't know.

I'm not suggesting here that Amazon is fudging the numbers, really, but how much are they waiting that free tier? I mean, I know all the time when I ask ALEXA to play a song on Spotify, half the time she defaults to playing it on Amazon music. So does that count? Am I part of this $55 million and I don't even know it? In a first for the United States, a district encompassing greater Seattle will let 1.2 million voters cast their votes via smartphone in an upcoming February 11th election. Quoting NPR, the new technology will be used for a board of supervisors election, and ballots will be accepted from Wednesday through election day on February 11th. Quote, this is the most fundamentally transformative reform you can do in democracy, said Bradley Tusk, the founder. and CEO of Tusk Philanthropies, a nonprofit aimed at expanding mobile voting that is funding the King County pilot. The Board of Supervisors' election in the King Conservation District,

for example, in past years, has drawn less than 1% of the eligible population to the ballot box. Tusk says low turnout contributes to dysfunction in government because candidates aren't forced to craft positions that represent the entire population. Quote, if you can use technology to exponentially increase turnout, then that will ultimately dictate how politicians behave on every issue, he said, end quote. Subscription revenue is all the rage these days, right? We've talked about that on this show extensively, ARR, annual recurring revenue. Subscription revenue is less time-consuming and crucially way more predictable and reliable as a business model than relying on ads or

strip mining your users for data. Double up is the agency that helps businesses, content creators, and influencers get into the subscription business model. Sponsors and advertisers can come and go like the wind, but subscription revenue is reliable like the seasons. And creating a freemium model tied to upselling subscriptions sure has worked for the likes of Spotify, Dropbox, Slack. Your audience, your customers want you to do this. Nobody likes ads. No one wants you to surveil them and make money by selling their data. Let Double Up show you how to create a business based on a solid foundation of subscription revenue

that will also let you sleep well at night. Check them out at Double Up Agency. That's Double Up. Dot Agency on the web. And when you get in touch with them, tell them Brian sent you. Big driverless car news. GM's cruise subsidiary has unveiled Origin. The company's first ever attempt to build a fully autonomous car from the ground up. The origin has no steering wheel, no pedals, there's no hood, no side view, no driver or passenger side windows. In fact, it's not entirely clear when you look at this thing if it even has a front or a back orientation at all.

I highly recommend clicking through to the Verge article for Picks and video about this. The Verge's Andrew J. Hawkins got a literal hands-on look at the origin. So when you want to get into the vehicle, you first have to put in a code on its keypad. It's on the door on the outside, and it sort of opens as if it's a minivan that opens from both sides. You get in and you have a very spacious interior of the vehicle.

And that's obvious because there's no steering wheel. There's no pedals. There's no gear shaft. There's not even really a dashboard or any infotainment system. There's just two bench seats facing each other in this sort of vast space in between them. It's designed to be comfortable if it's shared, but if it's just you, you've got so much space in here, you can really like stretch out. It's pretty great.

And so I think it's a good experience, whether it's just you or a lot of. You can do yoga in here, probably. Absolutely, you can do yoga. Well, as long as your seatbelts on. I don't know how that works. Andrew is talking to Kyle Vogt there, the co-founder and chief technology officer of Cruz. He also had details to share like this, quote, We built this car around the idea of not having a driver and specifically being used in a rideshare fleet, Vote says.

This vehicle is engineered to last a million miles, and all the interior components are replaceable. The compute is replaceable. are replaceable. And what that does is it drives the cost per mile down way lower than you could ever reach if you took a regular car and tried to retrofit it. The replacement cost and the upkeep of that would just kill you from a business standpoint, end quote. This is quoting from Andrew's piece again, quote, I don't typically hear AV companies talk about unit economics and profitability, but that's going to creep up sooner than a lot of people realize, Vote says. Experts estimate that each self-driving car could cost upwards of $300 to $400,000 when taking it into account the expensive sensors and

computing software needed to allow the vehicles to drive themselves. Recouping those costs will be enormously challenging, and Cruz is trying to address that by building a car with more staying power than most personally owned vehicles, end quote. The sensor suite on the origin is what you would expect, radar, lightar, cameras. It has a hard drive in the trunk that is cooled by the car's battery system. The company didn't say when it expects the origin to hit roads, because with that lack of steering wheel, among other things, it would need to file a petition with the National Highway Traffic Safety Administration just to get this thing out there. And Cruz has missed its own self-set deadline for starting

an autonomous taxi service by the end of 2019. Nonetheless, Cruz did say it would be sharing its production plans at some point in the future. Finally today, tech earning season is upon us once again, and as always, Netflix is leading the parade. Yesterday evening, Netflix reported Q4 revenue of $5.46 billion, which was up 31% year-over-year, and net income of $587 million. Global paid additions, which means the number of new customers, was $8.8 million. And for the first time ever, Netflix surpassed 100 million paid memberships outside of the United States. this morning Netflix stock opened down around 2%.

So in a way, you could read this as a bit of a miss in terms of the earnings numbers, but Netflix did beat analyst estimates for subscribers by 1 million. The interesting thing is, though, Netflix, for the first time, seems to be changing the shade and color that it's adding to its guidance going forward. First of all, Netflix wants you to focus on the growth overseas, right? Why? because Netflix now has competition domestically, as we all know. And overseas, Netflix still has the game to themselves for the foreseeable future. As Peter Kafka noted on the earnings call, this may be the first time Reed Hastings has blamed competition for Netflix's overall performance. The quote in question was, our low membership growth in the U.S. and Canada is probably due to our recent price changes and to U.S. competitive launches, end quote.

quoting Kafka in his piece in Recode. It's significant that Netflix not only acknowledged the elephants in the room, the big-budget marketing blitzes from two very big new competitors, and the competition they're about to see as HBO Max and NBC's Peacock launched later this spring, but also that it acknowledged that having elephants in the room might not be ideal. You can also expect to hear a lot more about that in the years to come, which is why Netflix also took pains to tell investors that it thinks it's going to be just fine, even as Disney sends Baby Yoda their way, and Apple sends Reese Witherspoon and Jennifer Aniston, end quote.

Netflix touted Witcher, which it said got 76 million views in its launch month, which if you do a kind of apples to apples comparison to the assumed viewership of the Disney Plus offering and thus the Mandalorian is pretty competitive and impressive. But again, Disney Plus is not yet available around the world. and, by the way, Netflix is now counting two minutes of viewing time for any show as a view. So if you try a show for just two minutes, it says that you've watched it, which the company itself acknowledged kind of gooses its self-reported viewing numbers by around 35%. So what does it say that Netflix has pivoted from claiming to be unafraid of any competition to suddenly calling the competition out as competition by name? going from not reporting viewership numbers ever to sort of doing Facebook video style viewership funny math to put a shine on their numbers. One more data point from Netflix.

They now have 1,211 original shows and have been adding at least one show a day on average for the past eight months. Speaking of that Netflix show, Witcher, can we talk about that for a second? Is it any good? because I watched the first episode and I found it pretty good. Good enough that I intended to binge a couple more episodes, but then the second episode was just so confusing and boring and kind of bad. So I don't know.

Should I give it another try? I know that Witcher is this whole worldwide popular piece of IP, but it's not something that I've ever plugged into before. Is Witcher generally a series worth investing time in? like the whole story, the mythos, the books, all that stuff. Like, I kind of just don't know what's going on on the show, so I don't even know if I want to try to commit to finding out. So if you're a Witcher reader, not a Witcher game player,

let me know. Should I take the plunge? Worthwhile or not? Talk to you tomorrow.