Tech Brew Ride Home - Wed. 08/28 - Apple Walks Back the Siri Thing

Episode Date: August 28, 2019

Apple walks back the Siri grading program, Peloton’s S-1 reveals an interesting company, Fitbit’s interesting new smartwatch, don’t travel if you use social media at all, and another new service enters the Google Graveyard. Sponsors: Castro Jobs At WillowTreeApps.com: bit.ly/swiftjob Links: Apple is turning Siri audio clip review off by default and bringing it in house (TechCrunch) Peloton (Finally) Drops Its S-1, Revealing Sharply Rising Revenue And Net Losses (Crunchbase News) Fitbit Versa 2 hands-on: Alexa makes a good smartwatch better (Engadget) The Fitbit Versa 2 Chases Apple's Dominance (Gizmodo) Fitbit’s new premium subscription service hopes to sway you with personalized data, challenges, and more (The Verge) US border officials are increasingly denying entry to travelers over others' social media (TechCrunch) Incoming Harvard Freshman Deported After Visa Revoked (Harvard Crimson) Microsoft's lead EU data watchdog is looking into fresh Windows 10 privacy concerns (TechCrunch) Google will shut down Google Hire in 2020 (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 right home for Wednesday, August 28th, 2019. I'm Brian McCullough today. Apple walks back the Siri grading program. Peloton's S-1 reveals an interesting company. Fitbit's interesting new smartwatch. Don't travel if you use social media at all. And another new service enters the Google Graveyard. Here's what you miss today in the world of tech. Apple has announced changes to its Siri audio clip review process, making the Google. that process opt-in for users for the first time with so-called Siri grading also turned off by default. And Apple is bringing the work of transcribing and checking the accuracy of Siri responses

in-house, no longer using contractors who were all laid off recently on mass. Apple also says it won't retain any of the Siri recordings permanently, quoting Matthew Panzerino in TechCrunch. The top line news is that Apple is making changes to the way that Siri audio review or grading works across all of its devices. First, it is making audio review an explicitly opt-in process in an upcoming software update. This will be applicable for every current and future user of Siri. Second, only Apple employees, not contractors, will review any of this opt-in audio in an effort to bring any process that uses private data closer to the company's core process. end quote. As we said when this all broke, it turns out they all do it, even the erstwhile privacy as a feature company Apple. Still, that didn't exactly fit with Apple's overall corporate

image, right? A point which Apple straight up admitted in a blog post announcing this change, quote, as a result of our review, we realize we haven't been fully living up to our high ideals and for that we apologize. As we previously announced, we halted the Siri grading program. We plan to resume later this fall when software updates are released to our users, but only after making the following changes. First, by default, we will no longer retain audio recordings of Siri interactions. We will continue to use computer-generated transcripts to help Siri improve. Second, users will be able to opt in to help Siri improve by learning from the audio samples of their requests. We hope that many people will choose to help Siri get better,

knowing that Apple respects their data and has strong privacy controls in place. Those who choose to participate will be able to opt out at any time. Third, when customers opt in, only Apple employees will be allowed to listen to audio samples of the Siri interactions. Our team will work to delete any recording which is determined to be an inadvertent trigger of Siri, end quote. I do want to point out that in a meaningful way, Apple is walking the walk here because by bringing the work in-house, Apple is thereby assuming the liability for any future abuse of

data or recordings or whatever. Never forget that Silicon Valley's love affair with outsourcing is not just about lower labor costs, but also about having a legal firewall. But I will also put Marco Arment's tweet here, quote, Apple's Siri grading changes are good, but I'd like to see them go a bit further. Saving audio should be opt-in and is, but saving transcripts is still mandatory if you want to use Siri at all. On by default is fine, but it should have an opt out, end quote. Our year of Unicorn IPOs is winding down, but there's still a couple still to debut that are worth keeping an eye on. Tech-enhanced home bicycle and treadmill company Peloton has filed to go public and their S-1 has revealed a company with

revenue of $915 million in fiscal 2019 up 110% year-over-year, and an annualized subscriber growth rate of around 144% year-over-year, hitting a grand total of 511,000 subscribers by June of this year. Over the course of its life, Peloton has raised a total of $995 million in funding, beginning with the $307,000 it raised in a Kickstarter campaign in July of 2013. which made me wonder, does this make Peloton the first Kickstarter company to go public? My Googling on that this morning was inconclusive. Quoting CrunchBase. Metrics disclosed in the company's S-1 indicate that Peloton users are becoming more engaged

with the connected subscription service as well. In the fiscal year ending June 30th, Peloton subscribers logged an average of 11.5 workouts per month compared to an average of 7.5 workouts per month in the year ending June 30th, 2017. This could indicate that Peloton's investments in cultivating a network of fitness instructors and the content they create has paid off, end quote. But Peloton also had to report a net loss of $195.6 million in fiscal 2019 up from a net loss of $47.9 million in 2018, which is unfortunate because Peloton CEO John Foley was once famously quoted as saying Peloton was, quote, weirdly profitable, unquote. Specifically fully told CNBC, quote, we are profitable, weirdly. It's a

beautiful business model. Our investors are happy, end quote. Well, the SEC does not allow you to do your accounting weirdly. So I guess this is how the math actually worked out. Peloton has been spending a ton on marketing lately, which, to be fair, is not at all unusual at this stage in a company's life when it's growing at the rate Peloton is growing. And hey, wouldn't be a unicorn without some losses, right? Snark aside, people seem to think there is an interesting business here. I found these observations from folks on Twitter interesting. Dan Premack noted that of that $900 million in revenue, only 181 million of that is for

subscribers. The rest of Peloton's revenue comes from the hardware sales. But he also noted that churn was essentially non-existent. And Eugene Kim tweeted, quote, Peloton's subscription biz has 43% gross margins, lower than the 75% software-as-a-service companies typically see. Obviously not in enterprise play, but cost of running subscriptions biz is not as cheap, mostly content costs, end quote. And user Vili tweeted, Peloton S-1 is out. My first thought was, eh, the majority of the revenue is one-time 50% hardware revenue,

and the subscription revenue is quite small. This is partially correct, which is why the multiple on it will be lower than a pure SaaS company. But on second thought, there is a different way to think about it. The gross margin on the hardware covers almost the entire customer acquisition cost, which means you break even on a customer day one and you acquire a subscription revenue stream at $0. That is a good business, end quote. The Dutch data protection agency says it has found Windows 10 may still be unlawfully collecting user data and has referred Microsoft to the EU privacy regulator in Ireland.

Wait a minute. Google, Facebook, we know about, but how is Microsoft running a foul of this stuff all of a sudden? Well, it turns out it's not actually a new thing, quoting TechCrunch. Back in 2017, the Privacy Watchdog found Microsoft's platform to be in breach of local privacy laws on account of how it collects telemetry metadata. After some back and forth with the regulator, Microsoft made changes to how the software operates in April last year. And it was in the course of testing those changes that the Dutch agency found fresh reasons for concern, discovering what it calls in a press release, quote, new potentially unlawful instances of personal data processing, end quote.

And of course, in the meantime since 2017, GDPR became the law of the European land. So if the investigation bears out, Microsoft would now potentially be liable for those fines of up to 4% of a company's global turnover that GDPR has. Something tells me it won't come to that, but interesting news nonetheless. Fitbit has announced the Fitbit Versa 2, a new smartwatch that has Alexa built in, Spotify built in, an Amelad screen, and is available to order on September 15th for $200. There's also a better processor, better battery life. Fitbit says you can get more than five days of usage on a single charge. And there are improvements to the sleep tracking features, quoting Gizmodo. Fitbit also added an estimated oxygen variation graph, which is planning to launch at a later date on the Versa 2. The idea is it will measure the oxygen levels in your bloodstream and note variances that require medical attention. That could be great for sufferers of sleep apnea if it works.

as described. The most contentious addition to the Versa 2 is Amazon's Alexa voice assistant. Instead of tapping into Siri or Google Assistant, the Versa will allow you to activate Alexa. Press and hold the single button on the Versa and Alexa will prompt you to engage. It feels like a punchline, right? Oh, a non-Apple or Google product just tossing in Alexa, but on a smartwatch where you don't have a keyboard for typing, a voice assistant can be useful. While we might have concerns about Amazon's business and privacy practices, it's hard to deny the effectiveness of Alexa, particularly versus Apple's much dumber Siri, end quote. Some folks have already gotten a hands-on with the new device, and I'm not going to do a full

review roundabout, but I will let Sherlin Lowe from Engadget speak for the pack real quick. The Versa 2 is a compelling upgrade over the original since the Alexa integration makes it much more useful. But if you're looking for a more affordable yet well-rounded fitness watch, it looks like Fitbit has dropped the price of last year's model to $170, making it a pretty good deal, end quote. Also worth noting, Fitbit has launched a new premium subscription service with detailed health reports, contextual advice, games, challenges, and more. Fitbit Premium will run you $9.99 a month and $79.99 a year, as the Verge points out, Fitbit isn't exactly new to subscription services. It launched its Fitbit coach alongside the original Versa in 2018 for $7.99 per month or $39.99 per year. Fitbit says premium subscribers will get complimentary access to coach, which consists of workout videos and audio coaching programs, and current coach subscribers will automatically be upgraded to premium for no extra cost.

premium looks to be aiming higher, and though Fitbit is primarily known as a hardware company, this new software is a way for Fitbit to squeeze some extra money out of customers. Similar to Apple's strategy of building services that are exclusive to owners of its hardware, Fitbit wants to build a service that keeps users loyal and paying for services long term. It's an especially relevant strategy for Fitbit's fitness trackers, which tend to offer more incremental updates that don't always push existing customers to shell out for new hardware, end quote. So you might have heard the story of the Palestinian college student, who was actually living in Lebanon, who got accepted to Harvard and flew to the U.S. to start his freshman year. At Boston's Logan Airport, U.S. Customs and Border Protection detained the student for eight hours and then denied him entry into the country and revoked his visa.

What people are focusing on in this incident is that the student, Ismail B. Yahweh, claims that he was deported because, when the border officials unlocked his phone, they found posts on social media by other people that were critical of the U.S., quoting the Harvard Crimson. Ayawa wrote that he told the officer he had not made any political posts and that he should not be held responsible for others' posts. Quote, I responded that I have no business with such posts and that I didn't like, share, or comment on them, and told her that I shouldn't be held responsible for what others post, he wrote. no single post on my timeline discussing politics, end quote. The officer then canceled

a Yahweh's visa, informed him he would be deported and allowed him a phone call to his parents, end quote. Well, TechCrunch is reporting that CBP searched 30,000 personal devices last year without a warrant, a number that is four times greater than three years ago. And apparently, this practice of denying entry to people because they follow other people on social media who might make political posts is not uncommon either. Quote, Abed Ayyob, legal and policy director at the American Arab Anti-Discrimination Committee, says he's had clients that have been turned away at the border for content found in their WhatsApp messages. Quote, it's probably the most popular app in the Middle East, he said,

because WhatsApp automatically downloads received messages and videos to a user's phone. Any questionable content, even sent unsolicitedly under a border official search, could be enough to deny the traveler entry, end quote. So it's not even if you follow controversial people on the socials. It's even if any controversial material at all pops up on your socials even completely unbidden. It's not just that you can arouse suspicion because of what you yourself write in a post. It's not just that you can arouse suspicion because of who you follow and what they write in posts. It's also that, hey, you just clicked on a link and opened a web page to something controversial.

That's a pretty slippery slope if I've ever heard one. Seems like I could do a regular podcast that just keeps track of the Google Graveyard because it's happened again. Google announced it is shutting down Google Hire, a job application tracking system for small to medium-sized businesses that it launched just two years ago. The shutdown will happen in September of next year. But as Corey Quinn tweeted, quote, imagine being the person who championed using Hire by Google at your company. You probably feel like an idiot at your org now. What are the chances that you'll ever recommend another Google product again?

That is the danger of Google's sunset policy, end quote. Indeed, this is what I've been harping on about. That's the risk to Google if it continues to play into this reputation for flakiness. No one will trust you enough to do business with you, but also eventually any new products you announced to great fanfare will all be dead on arrival because no one will trust you enough to try them out. Here's another tweet I found from Jason Horea, who, according to his profile, was the former head of behavioral science at Walmart.

Quote, just a couple months ago, Google salespeople gave us the hard sell on Google Hire and told us how they had an extensive roadmap for the product and how it would be improving over the coming years. Well, it turns out they lied, and they're not offering a refund, end quote. That's all for today. I've been Brian McCullough, and hopefully I will continue to be so when I talk to you again tomorrow.