Tech Brew Ride Home - Wed. 05/22 - The Huawei Mess Metastasizes

Episode Date: May 22, 2019

The Huawei mess metastasizes, the EU goes after Google again, Qualcomm loses to the FTC, and Comcast—of all people—is getting into health tech. Sponsors: AirTable.com/techmeme Tech.FidelityCareers.com The Castro Podcast App Links: Huawei: ARM memo tells staff to stop working with China’s tech giant (BBC News) Huawei Considers Rivals to Google's Android After U.S. Ban (Bloomberg) EU regulator launches probe into Google over data privacy (CNBC) Google says some G Suite user passwords were stored in plaintext since 2005 (TechCrunch) U.S. judge says Qualcomm violated antitrust law; appeal planned, shares plunge (Reuters) Microsoft kicks off the rollout of the Windows 10 May Update, version 1903 (ZDNet) Medium CEO Ev Williams Goes All-In on Building Subscription Business (Cheddar) Comcast is working on an in-home device to track people’s health (CNBC) Leak reveals Uber's $9.99 Unlimited delivery Eats Pass (TechCrunch) 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 Wednesday, May 22nd, 2019. I'm Brian McCullough. Today, the Huawei mess metastasizes. The EU goes after Google again. Qualcomm loses to the FTC and Comcast, of all people, is getting into health tech. Here's what you miss today in the world of tech. So I guess yesterday when I said maybe things were settling down around this Huawei madness, I might have spoken really, really prematurely. The BBC, got its hands on an internal memo at Arm, where the company is telling staff that they must suspend all business, including active contracts, support entitlements, and pending engagements

with Huawei. In a company memo, Arm said its designs contain U.S. origin technology. As a consequence, it believes it is affected by the Trump administration's ban. One analyst described the move, if it became long term, as an, quote, insurmountable blow to Huawei's business. He said it would greatly affect the firm's ability to develop its own chips, many of which are currently built with arms underlying technology for which it pays a license, end quote. Yes, it would be hard to see how Huawei could survive if it lost access to silicon. It can maybe work its way around the software ban, continue to hack away at the open source version

of Android that it uses in China, or build its own OS. Indeed, Bloomberg was reporting, quote, should Google's system no longer be available? Quote, then the alternative option will naturally come out either from Huawei or someone else. Abraham Lou, Huawei's representative to the European Union institutions said at an event in Brussels on Tuesday. Lou said Huawei had been working on its own operating system, but that he didn't have the details about when this would be ready. Huawei would do everything in its power to mitigate the impact of the U.S. decisions, Lou said, end quote. But again, this arm news, if it plays out, potential. cutting Huawei off from silicon sort of seems like a death sentence. Quoting Ben Thompson,

Huawei's homegrown system on a chip utilizes an unmodified arm design for its processor. This means that as long as these limitations are in place, Huawei cannot buy nor build anything beyond what they have designed to date. Moreover, even the open source version of Android is only designed for X86 and arm processors. This means that Huawei's Chinese business is under significant threat as well, end quote. So it does feel like things are really snowballing at the moment, and Huawei is just the tip of the iceberg, to really mix a metaphor, Microsoft has removed Huawei's Matebook X-Pro from its online store, but has stayed silent on whether it would prevent Huawei from obtaining Windows licenses. But beyond even that, Bloomberg is also

reporting that the U.S. is considering blacklisting as many as five Chinese video surveillance companies, including Hick Vision and Dawa technology, preventing them from buying U.S. tech as well. So if things are really spiraling out of control with this trade war business, it might be worth gaming out some possible next scenarios. As I hinted at earlier this week, China could easily pull the lever of making supply chain components more expensive for mostly U.S. tech-based companies. If this year's iPhone suddenly costs $300 more across the board, that would certainly get people's attention. But as Ben Thompson turned me on to, there's an even more drastic scenario. Quote, China has one other card to play, rare earth elements. These 17 elements are essential

for electronic components, and China dominates their production, accounting for over 90% of the world's supply. The country flexed its power in 2010, imposing export quotas, which were later ruled illegal by the WTO, that caused prices to skyrocket, at least for non-Chinese companies, giving Chinese companies an advantage. To that end, it is certainly not a coincidence that Chinese President Xi Jinping toured a rare earth mining and processing center yesterday accompanied by China's top trade negotiator, end quote.

Yeah, imagine what would happen if new smartphones couldn't even be produced because China banned the export of neodymium and dysprosium. Ireland's Data Protection Commission announced today an official investigation into Google's online advertising data collection. Quote, the Data Protection Commission, which acts as the lead supervisory authority for Google and the European Union said its probe would examine whether Google's processing of data

in advertising transactions breaches the block's privacy rules. A statutory inquiry pursuant to Section 110 of the Data Protection Act 2018 has been commenced in respect of Google Ireland Limited's processing of personal data in the context of its online ad exchange, the regulator said in a statement Wednesday, end quote. So this would be the first official EU investigation into Google under the GDPR regime, which is ironic, if that's the word, because the first anniversary of GDPR coming into effect is this Saturday. Google has fessed up to storing some G-suite passwords in plain text due to an error dating back to 2005. It also found another set of unhashed passwords earlier this year.

Quoting TechCrunch. The search giant disclosed the exposure Tuesday, but declined to say exactly how many enterprise customers were affected. We recently notified a subset of our Enterprise G Suite customers that some passwords were stored in our encrypted internal systems unhashed, said Google Vice President of Engineering Suzanne Frey. Passwords are typically scrambled using a hashing algorithm to prevent them from being read by humans.

G Suite administrators were able to manually upload, set, and recover new passwords for company users, which helps in situations where new employees are onboarded. But Google said it discovered in April that the way it implemented password setting and recovery for its enterprise offering in 2005 was faulty and improperly stored a copy of the password in plain text. Google has since removed the feature. No consumer Gmail accounts were affected by the security lapse, said Frey. To be clear, these passwords remained in our secure encrypted infrastructure, said Frey. This issue has been fixed, and we have seen no evidence of impromptive. access to or misuse of the affected passwords, end quote.

As for the other issue, it too has been fixed, and Google wants you to know that in that case, it is also found no evidence of improper access or misuse of the affected passwords and data. A federal judge has ruled in favor of the FTC in an antitrust case against Qualcomm, saying its licensing practices have strangled competition in the modem chip market. Judge Lucy H. Coe has ordered Qualcomm to. quote, renegotiate licensing agreements at reasonable prices without threatening to cut off supplies and ordered that it be monitored for seven years to ensure its compliance. Qualcomm said it will immediately ask Coe to put her decision on hold and also seek a quick appeal to the federal appeals

court in California. We strongly disagree with the judge's conclusions, her interpretation of the facts, and her application of the law, General Counsel Don Rosenberg said in a statement, end quote. This is, of course, separate from, but related to the issue that Apple had with Qualcomm, issues that were recently settled. So it turns out that Qualcomm stared down Apple successfully, but lost the overall argument, not to Apple, but to the U.S. government, though who knows what will happen on appeal? At the time of this writing, Qualcomm shares are trading down over 10%. Late yesterday, Microsoft officially rolled out the Windows 10 May 2019 update to Windows 10, which brings.

brings a slew of new features, including Windows sandbox and a unified search across Windows office, Bing, and more. Actually, I'm just going to let great Windows watcher Mary Jo Foley explain. Quote, Microsoft is adding the ability for home users to pause updates for up to 35 days. And thanks to a new download and install now option, users won't automatically be pushed to do a feature update just by the virtue of seeking. Starting with the May update, 1903 update, Microsoft has added a new download and install now option to Windows 10, 1803, and 1809 as well. If a user never selects the download and install now option, he or she will be able to delay deploying a Windows 10 feature update almost right up to the time that support for it expires.

We don't know exactly how many days before the support period ends that users will be pushed to upgrade. This feature update also includes a new reserved storage feature that is meant to improve the success rate of installation of feature updates on machines with limited storage by allocating about 7 gigabytes of storage specifically for updates. The May update includes a feature called Windows Sandbox, which allows pro enterprise and education users to run potentially risky software in isolation. The May update adds a new light desktop theme option, the ability to uninstall more built-in

apps, and a simpler default start menu on new accounts and PCs. It also separates Cortana from search and introduces a new unified search box, which Microsoft has been touting for a while now, end quote. One of the tech companies that isn't quite a unicorn, but has been kicking around for a while and has raised a ton of money that people love to speculate about and its prospects is medium. In an interview with Medium founder Ev Williams, Alex Heath at Cheddar, let drop a little nugget that I found interesting. You know that recent pivot to subscriptions that Medium did, that $50 a year that the company now charges you to read the majority of articles? Well, it might

already be generating at least $10 million a year in revenue for the company. Let me quote the relevant part of the interview here. Our view is that consumers want a lot of things for one subscription, William said. They're not going to subscribe to dozens of publications, and so we give them access to a highly personalized ad-free experience with tons of publishing partners and thousands of individual writers. And it's going very well. People are responding. People are subscribing in big numbers, end quote. Williams declined to say how many paying subscribers medium has, but a person familiar with the matter told Cheddar that the number is between 200,000 and 400,000. Williams said last year he was planning to raise more venture capital beyond the 132 million

that Medium has already raised, but on Tuesday he told Cheddar that he didn't currently need to raise any more money. We think that profitability could be in the near future if we focused on that, he said, but we think the opportunity is much bigger, end quote. In recent months, Medium has hired editors and journalists to produce stories for its platform. Williams says he plans to continue investing in original content to grow subscriptions. He looked at acquiring New York Magazine last year, but ultimately didn't buy the publisher, end quote. Great friend of the pod, Christina Farr, had a scoop yesterday in CNBC that came sort of

of out of left field. Of all the companies, Comcast is working on a smart home device, which maybe isn't that weird until you learn what it is. I'm not talking about a smart speaker, a smart assistant that you can ask to play music or turn on your smart lights, for example, because this is a smart home health device. The device will monitor people's basic health metrics using ambient sensors with a focus on whether someone is making frequent trips to the bathroom or spending more time than usual in bed. Comcast is also building tools for detecting falls, which are common and potentially fatal for seniors, the people said. Comcast plans to offer the device and related service to at-risk people,

including seniors and people with disabilities, but the timing, pricing, and rollout plan have not been finalized. It will start to experiment with pilots, which are not limited to Comcast customers, by the end of 2019 with potential commercial release in 2020, end quote. And Gizmodo's Matt Novak had even more details. He got confirmation of the product, but wrote, quote, Comcast's health monitoring device will primarily be used to detect motion within the homes of elderly people, picking up patterns on how the user moves and trying to spot anomalies that may be related to health issues. For instance, if an elderly person is getting up more frequently to use the bathroom, there may be an underlying health issue that needs to be addressed. Or an elderly person

is staying in bed for longer than usual. That may be another red flag for caregivers to address. These kinds of problems can often fly under the radar and self-reporting by the user, who either doesn't remember getting up to use the bathroom or doesn't want to admit that they're feeling tired and spending more time in bed. The device will also be on the lookout for falls, something that can be particularly difficult for elderly consumers. Comcast has no plans for a direct-to-consumer launch of the forthcoming product and will instead be partnering with a health care network to test the yet unnamed device, end quote. So Comcast getting into health tech did not see that one coming.

Finally today, Josh Constine says that Uber is testing its own food delivery subscription service. So imagine if you combined this with Uber's existing Ride Pass subscription, you'd basically have the first building blocks toward a sort of Uber Prime, master subscription. quote, Uber is preparing to launch the $9.99 per month Uber eats pass, according to code hidden in Uber's Android app. The subscription would waive Uber's service fee that's typically 15% of your order cost. Given that's often $5 or more, users stand to save a lot if they order in frequently. But Uber could still earn money on menu item markups, cover costs with a flat order fee that protects against someone ordering a single taco, and most importantly, build loyalty and scale at a time of intense food delivery competition.

At $9.99 per month, the Uber Eats Pass would cost the same and work similarly to Postmates Unlimited and DoorDash Dash Pass. If they all seem like good deals, you see why they're less about immediate revenue and more about customer lock-in. You're a lot less likely to order Grubhub or Caviar if you've already prepaid to cover your Uber Eats delivery costs. And whichever apps emerge from this battle will have instituted the scale and steady behavior to raise prices or just enjoy large lifetime value from each subscriber, end quote. Weird day today. Lots of legally stuff, lots of regulatory e stuff, lots of trade war stuff. Not a lot of straight tech news, just news about tech companies orthogonally. Anyway, those were the cards we were dealt, I guess.

Talk to you tomorrow.