News You might have missed: Week of May 4th, 2018

Given how much was announced during Facebook developer conference F8, I thought I would share some thoughts on the major announcements.

Facebook Dating

Facebook announced it will be soon launching a dating feature. By clicking on a heart on the top right of your ur profile you will now be able to create a profile that’s only visible to non-friends who’ve also opted into the feature. Facebook will match you based on all its data, and messaging will happen in a dedicated inbox rather than Messenger.

  • As I pointed out in my article on Wed., this is a tough time for Facebook to be launching something as personal as a dating service given the recent privacy questions raised by the Cambridge Analytica breach.
  • Theoretically, the data Facebook has is quite valuable in creating a set of matches based on information shared on users profiles as long as of course people are being honest about what they post. I assume the algorithms used for the matchmaking will also be based on actual information volunteered by the individual.
  • Internet dating is not necessarily something you want to share with family, friend and coworkers, which is something Facebook thought of and addressed by not making the profile you create visible to your connections. That said, I do have to wonder if using the data you share coupled with location and events you attend would dramatically increase the chance to have your profile shared with someone you might know in real life.
  • Competition in this segment is quite strong with apps that show a higher level of sophistication. Yet, if I look at the sweet spot of the Facebook demographic I do wonder if the appeal will be mostly with older users who might feel comfortable with the platform precisely because they already use it and offer a simpler approach to dating.

Clear History

The company will soon launch a new privacy feature that will allow users to see and delete the data Facebook has collected from websites and apps that use its ads and analytics tool.

  • The exact availability of the feature was not announced, but Zuckerberg said such feature is under development and will launch soon. Clearly, this was done in response to some of the questions raised during the recent congressional hearing.
  • While actions should speak louder than words it was really how Zuckerberg talked about the feature that says a lot about his lack of belief this is the right thing to do.
  • Zuckerberg pointed out that the feature will make Facebook feel less personal but that this is what consumers were asking for. I thought such a wording was quite condescending and positioned the decision of rolling out the feature to be responsive to a consumer request he did not believe to be right.
  • Warning about a less personal Facebook is, by all means, a fair point but the proper focus of the statement should have been on the fact that giving consumer this option was the right thing to do.

Oculus Go and Oculus TV

The wire-free VR headset Oculus Go is now on sale at  $199 for the version with 32GB of onboard storage and $249 for the 64GB variety.

  • Most of the reviews I read so far can be summed up as decent but not ground-breaking. That said, I think the ease of use that comes from the combination of an easy setup and the lack of cable connections cannot be underestimated.
  • A short battery life is somewhat disappointing as this is one of the shortfalls of mobile solutions like Daydream and Galaxy Gear VR that drain the phone quite rapidly and overheats it making prolonged sessions difficult.
  • It would be interesting to see how quickly we will see the price point drop as this, for me, would be the best indication of how committed Facebook really is to drive adoption
  • Resolution is similar to what can be found with Daydream and Galaxy Gear VR. That coupled with three degrees of freedom rather than the six found in the upcoming Oculus Santa Fe. Basically, you can go side to side, and up and down, but you can’t move closer or further away from an object – and if you try, you’ll start to feel a little nauseous.
  • Together with the availability of Oculus Go, Facebook announced Oculus TV. The app puts a TV experience into your virtual environment with specially adapted on-screen controls, which turn the virtual screen in the virtual room into a sort of TV streaming Box experience. The streaming service available later this month will support Facebook Watch, Red Bull TV and Pluto TV directly integrated at launch.
  • Despite what Facebook said on stage about being currently working with networks to bring native integrations of Netflix, Hulu and Showtime I am just not sure what the incentives for these brands are as they already have standalone apps in the Oculus store.
  • VR in the consumer space remains a chicken and egg problem with content developers waiting for a bigger addressable market and potential buyers waiting for more content. Hopefully, Oculus Go will help broaden that base, although I remain concerned that while the price is more appealing the experience is still not good enough.

Artificial Intelligence

There were a few announcements around AI at F8:

On Wednesday, Facebook revealed that it has formed a special team and developed discrete software to ensure that its artificial intelligence systems make decisions as ethically as possible, without biases.

  • Facebook is not the first big company talking about the importance of ethics in AI but of course, this does not make it less important. As I will never get tired to say, the industry should prioritize ethics in AI because we cannot afford to train machines to be as biased as we are. Microsoft research organization established a Fairness Accountability Transparency and Ethics group over a year ago and last year Alphabet’s DeepMind Ai group formed an ethics and society team.
  • A couple of weeks ago I talked about how AI is not going to be Facebook’s magic wand to solve hate speech on the platform and this announcement is particularly relevant to the points I was making in my article.
  • Facebook also develop a piece of software called Fairness Flow, which is now integrated into Facebook’s FBLearner Flow.The software analyzes the data, taking its format into consideration, and then produces a report summarizing it.There are currently no plans to release Fairness Flow to the public but Facebook’s doesn’t plan to release the new Fairness Flow software to the public under an open-source license. However the team might publish academic papers documenting its findings, Facebook said.

Instagram’s hashtagged images help with machine learning

  • The idea makes a lot of sense. You take all the pictures tagged as #dog or #cat and you use those to train the machine rather than having to go through a set of pictures of animals to tag dogs and cats before showing those to a machine. Facebook used around 3.5 billion Instagram photos (from public accounts) and 17,000 hashtags to train a computer vision system that they say is the best one that they have created yet.
  • When humans tag pictures and then feed them to a machine the process is said to be “fully supervised” As you can imagine this system is pretty error proof but might be difficult to scale or might not be representative enough of the types of cats and dogs in the world.
  • The Instagram hashtagged pictures offer a “weakly supervised” process where machines can use users’ generated tags to be trained.
  • This “weakly supervised” training is much more “noisy” which creates some challenges on accuracy. For instance, you might have tagged a cat as a dog as a joke or you could have tagged a picture of you and your dog as “dog but you don’t see the dog. Computer vision lead at Facebook Manohar Paluri, said however that the results they achieved are very encouraging. Measured by one benchmark, the system—trained on those billions of Instagram pics—was on average about 85% accurate, he said.

Technology and Dating

Most of my friends know my husband, and I met over 18 years ago on a dating site. At the time, all my friends were in a relationship and not interested in going out much, plus the “bar scene” had failed to deliver anyone close to Mr. Right. The internet represented a great way to meet busy professionals looking for a relationship. Even then, of course, you had the odd fake profile or photoshopped picture, but by and large, people on the site were looking to meet someone they could date. If you equate online dating to online communication, I suppose, to today’s generation that has grown up on Tinder, Zoosk, and Grindr, what my husband and I used would look a lot like email: slower, more structured and not that different from the analog mail.

Technology is changing us

Technology changed us in many ways. Thanks to tech, our world got bigger and faster. Just think of how we shop and communicate with people. That fast and furious pace does not always do much for our social life, however. The app and service economy has impacted many aspects of our life from transportation to hospitality. So it should be no surprise that dating has been impacted by both the technology itself and how technology changed us.
We want to meet someone fast, we might not necessarily be looking for a long-term relationship, and apparently, we are quite happy to outsource a lot of the work that goes into attracting and getting to know someone. It seems that our busy lives leave little time for trial and error. As much as I sometimes found it uninspiring to read profiles and exchange some initial chit-chat with people I quickly find out I was not interested in, I would never have thought to delegate the process to someone else. That process helped me find out more about myself and what I truly wanted.

Assistant get me a Date!

Over the weekend I came across a terrific article by Chloe Rose Stuart-Ulin (@chloerosewrites) on Quartz that talked about her experience as a “Closer” for the service Virtual Dating Assistant (ViDA). The idea behind it is quite simple. If you are busy but want a date, ViDA takes care of all the chit-chat in the middle to get you a phone number of the prospect you are interested in. This is not, however, the case of saying your human secretary sending roses or a bottle of wine on your behalf to the woman or man you are trying to go out on a date like in any good romantic movie. This is impersonating you on Tinder and getting $1.75 for any phone number they can secure. All, of course, without the other person knowing they are not chatting with you but with a professional.

We are relying more and more on assistants so why not? Right? Well, the article establishes that the practice is legal in the US but raises questions of ethics which I totally wonder about too. That said the existence of the service and its success is not really what got me thinking. As I was reading the article and the mention of the training manual that Mrs. Stuart-Ulin was given I thought, once again, at the danger of bias in AI.

What Women want

The manual written by the company founder calls for an alpha male attitude and states as rule number one:

“Don’t make her think too hard,” the manual says. “When writing sales copy…the goal is to reduce her ‘cognitive load’ so she’s more likely to reach the end and still have energy to write out a reply.”

The undercover reporter, in her role as Closer, was reminded that her approach was too female and she was encouraged to:

“use shorter sentences, ask fewer questions, use fewer smileys, wait longer to reply, and set up dates before even asking if the woman is interested. If a woman doesn’t respond to our cheesy pick-up lines or cough up her number by the third message.. move on, as the match is no longer cost-effective”

In the ViDA case, it was “just a manual” but you could certainly imagine, as we move more and more into a world driven by AI that ViDA could move part of the process if not all to a bot trained with all the misogynistic understanding of what a woman wants. How terrifying is that idea if you think more broadly and go from dating into a work environment and you imagine a bot sharing the same beliefs is your first exchange with HR for a job interview? We have started to talk about bias in AI, but I really would like to hear more companies focus on this topic and making eradicating it a priority.

Dating and AI

The other thought I had after reading the article was about how technology could help enhance online dating services in a meaningful way. What if these services could access the huge amount of data we currently share on social media, of course with our permission, and any other information we would feel comfortable sharing. Then use that data to create your profile as well as to come up with better matches. I realize that I am making the big assumption that our social persona is actually true to reality which is not often the case, but I give people the benefit of the doubt.

Interestingly as I was getting ready to queue up this column for publication, Facebook announced at F8 it will soon launch a Dating feature not quite as I suggest but more focused around local events and activities you participate in. A tricky time to launch a feature that apparently has been in the works for years, given the current scrutiny Facebook is under and the lack of trust that some consumers now have.

If you want to push my idea further without getting too “Black Mirror” (watch the episode “Be Right Back” and you know what I am talking about), you can even think about a bot with access to all that information standing in for you through the initial portion of the connection. While not the same as doing that yourself, I would find it more ethical than paying a writer to impersonate you.

The bottom line: the limit to how good technology can be is us, humans, with our understanding or lack of-of what is needed, our biases and our inherent desire to cut corners. Hence I remain optimistic about the power technology has to improve our lives, but I remain highly skeptical that we will use our best judgment in deploying it.

Warning: The iPhone X Could Be A Problem For Analysts

WARNING: Angry critic of Apple’s critics ahead. Proceed with caution. You have been warned!

On April 30, 2018, Daniel Howley, wrote: “The iPhone X could be a problem for Apple.”

Rhetoric

First, let’s discuss the rhetorical device used both in the author’s headline and throughout the article. The author says the iPhone X “COULD” be a problem for Apple. Well, chocolate chips COULD be a problem for pancakes. Probably won’t be, of course. In fact, they’ll probably make the pancakes DELICIOUS. But they COULD BE a problem. So lets all panic right? Right?

Wrong. Here’s a new rule of thumb for all you aspiring Apple analysts. If you start your article with a headline that says that something “could be a problem”, that could be a problem, and you probably shouldn’t start your article.

Could

And since iPhone sales still make up the bulk of Apple’s revenue, any hit to that could be a problem for the tech giant.

“Could” again, huh? Not hedging our bets much, are we? Why don’t you just write an article that says: “Anything could be anything. We just don’t know.”

Correlation vs Causation

Apple’s stock price has taken a hit in recent weeks, as reports point to lower demand for the iPhone X.

You know who else’s stock price took a hit in recent weeks? Everybodys. The whole market dropped. So are we saying that lower demand for the iPhone X brought down the whole stock market? Or are we saying that the author of this article doesn’t understand the difference between correlation with causation?

The stock market predicts the future in the same way that a weather vane predicts the direction of the wind. So if you think you can tie Apple’s stock price to any one rumor, then you really, really, really need to keep your money out of the stock market.

Supply Chain Pain

Those reports come as Taiwan Semiconductor Manufacturing, which makes chips for iPhones, reported lower than expected guidance for the next quarter

Hmm. A report of lower than expected quantities being ordered from one of Apple’s suppliers. Well, THAT’s never happened before. Oh, wait. It happens all the time.

Lower than expected guidance could mean that Apple is seeing decreased demand for the iPhone X.

There’s that “could” word again. Lower than expected guidance from a single supplier of hardware “could” mean decreased demand. Or it “could” mean that Apple was shifting to a new supplier or using slightly different parts in their new iPhone models.

NAH, that’s just crazy talk!

Iteration

(T)he fact that the iPhone 8 and 8 Plus featured relatively few big changes from the iPhone 7 and 7 Plus, and you can begin to understand why analysts and investors are on edge.

Gee, where have I heard that the newest iPhone “featured relatively few big changes from” its predecessor? Oh, I  know. Every single year since the iPhone debuted.

iPhone iteration is like climbing a mountain. The uphill climb seems painfully slow, but when you look back, you realize that you’re a long, long way from where you started and that the device you’re now holding has scaled some pretty impressive technological heights.

I Don’t Think

“I don’t think the X is doing as well as [Apple] would have hoped,” explained Gartner personal technology analyst Tuong Nguyen.

Well, that’s cool and all, except that you don’t know what Apple’s expectations were, and you don’t yet know what the actual sales are, which makes your speculation, well, not really very cool at all.

Rumors

“The reason I believe that is based on a lot of the rumors I’ve been reading about what they’re planning for the next iteration [of the iPhone] later this year.

Oh, I heard a rumor. Now THAT’s some great reporting. Because rumors about Apple are ALWAYS true. So long as you define the word”always” as “almost never.”

The Price Is Right

Nguyen said he believes that while Apple has been able to steadily introduce new devices at slightly higher price points, $999 is too high for consumers to justify spending on a smartphone —especially one that doesn’t change the market as monumentally as the original iPhone did.

What? What? What?

Well, first off, NOTHING is going to change the market as monumentally as the original iPhone did. Asking Apple to come up with another iPhone every year — or any year — is like asking Ford to introduce the original Model-T every year. The iPhone was a major paradigm shift in technology. If you’re expecting Apple — or anyone — to come up with something as big as the original iPhone any time soon, then you seriously need to lay off the shrooms.

Secondly, consumers have ALREADY shown they’re willing to spend the kind of money Apple is asking for in order to buy an iPhone X. How do we know this? Because THEY BOUGHT THE PHONE X, that’s why. Were you not paying attention when Apple announced that it’s been their best selling iPhone since it was introduced? Just a suggestion here, but perhaps it’s not the best of ideas to write articles that say that customers are unwilling to do what customers have already willingly done.

You Can Never Go Home Again

(Apple) might be considering bringing back the Home button and lowering the price to make it more palatable.

(Spits coffee on screen).

Say what now? You think — for even one second — that Apple is going to bring back the home button? Okay, that’s it. Turn in your analyst cap, collect your severance pay at the door, and don’t let the facts hit you where the Good Lord split you on your way out the door.

Average Sales Price

The best way to determine how well Apple’s iPhone X is selling is to watch for the iPhone’s ASP. A higher average selling price could mean that consumers did indeed opt for the high-priced iPhone X. A lower average selling price, though, would mean that fewer consumers spent their money on the X and instead went for the iPhone 8, 8 Plus or previous generation models like the 7 and 7 Plus, 6s and 6s plus or SE.

This is the first bit of analysis in the article that actually makes sense (except for the “could” part). So — and I’m just spitballing here — how about we wait UNTIL THIS AFTERNOON to find out what the ASP is before writing what meandering stock market prices, unreliable supply chain changes, and unsupported rumors mean to Apple’s iPhone future?

Nah, who am I kidding? That’s never going to happen.

A Nice Problem To Have

Look, you don’t have to be a seer to see Apple’s future. All you have to do is to look at the iPhone X, talk to the people who actually own one and you’ll know that you’re already looking at the future. The iPhone X’s signature feature is its ability to recognize your face. It’s a wonderful feature, with endless potential and it will be YEARS before Apple’s competitors have anything like it.

While Daniel Howley — and so many like him — think that “The iPhone X could be a problem for Apple”, I’m predicting the iPhone X could be a problem for them. Why? Because there isn’t a company in the world that wouldn’t want a “problem” like the iPhone X, proving — once again — that when it comes to Apple, these naysayers haven’t got a clue.

News You might have missed: Week of April 27, 2018

Amazon.com Announces First Quarter Sales up 43% to $51.0 Billion

Net sales increased 43% to $51.0 billion in the first quarter, compared with $35.7 billion in first quarter 2017. Excluding the $1.6 billion favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 39% compared with first quarter 2017.

Operating income increased 92% to $1.9 billion in the first quarter, compared with operating income of $1.0 billion in first quarter 2017.

Net income was $1.6 billion in the first quarter, or $3.27 per diluted share, compared with net income of $724 million, or $1.48 per diluted share, in first quarter 2017.

Via Amazon

  • During the call, Amazon announced that from May 11 the price of Prime will go from $99 to $119. This is the first increase in four years and one that, although not popular with consumers, can be easily explained. Amazon has grown the number of items that can be delivered in two days as well as adding services such as same-day delivery and two-hour delivery all adding considerable logistic costs to the company.
  • In the most basic way, Prime is a great example of a service that continues to innovate. From the time of delivery to the different methods of delivery which this week added the ability to deliver to your car trunk to lockers and inside your home.
  • I would expect more innovation coming after the recent acquisition of Ring is fully integrated. The high attach rate of smart home items to Amazon Echo devices will also benefit from the Ring acquisition both in terms of revenue but also in terms of valuable data Amazon might acquire on deliveries.
  • AWS contributed around 11 percent to Amazon’s total revenue. AWS growth remained aligned with previous performance but despite the astonishing 49% growth, it also remained behind the growth that Microsoft and Google recorded.
  • It was an interesting coincidence, given the current situation with Facebook, that Amazon disclosed for the first time that its “other” sales, mostly comprised of its advertising revenue which grew 139%.
  • Despite Amazon’s progress, Google and Facebook still own more than half of the overall advertising revenue. Amazon generates most of its advertising revenue by selling product search results, allowing sellers to buy slots for “sponsored products.”
  • Amazon is currently the second-biggest company by market cap ($736 billion) behind Apple ($833 billion) and the recent business acquisitions, as well as the continued investment in video content, is leaving investors feeling positive about the future.
  • The one concern investors seem to share is government intervention in the US where President Trump has been very vocal about his dislike of the power Amazon has acquired. Concerns are also for international markets where Amazon’s growth might be spurring a higher level of scrutiny among regulators.

Microsoft Posts Strong Earnings and Guidance

Revenue in Productivity and Business Processes was $9.0 billion and increased 17% (up 14% in constant currency), with the following business highlights:

  • Office commercial products and cloud services revenue increased 14% driven by Office 365 commercial revenue growth of 42%
  • Office consumer products and cloud services revenue increased 12% and Office 365 consumer subscribers increased to 30.6 million
  • LinkedIn revenue increased 37% with continued acceleration in engagement highlighted by LinkedIn sessions growth of over 30%

Revenue in Intelligent Cloud was $7.9 billion and increased 17% (up 15% in constant currency), with the following business highlights:

  • Server products and cloud services revenue increased 20% driven by Azure revenue growth of 93%
  • Enterprise Services revenue increased 8%

Revenue in More Personal Computing was $9.9 billion and increased 13%, with the following business highlights:

  • Windows OEM revenue increased 4% driven by OEM Pro revenue growth of 11%
  • Windows commercial products and cloud services revenue increased 21% driven by an increased volume of multi-year agreements and the mix of products that carry higher in-quarter revenue recognition
  • Gaming revenue increased 18% driven by Xbox software and services revenue growth of 24% mainly from third-party title strength
  • Surface revenue increased 32% against a prior year comparable impacted by product end-of-life-cycle dynamics
  • Search advertising revenue excluding traffic acquisition costs increased 16% driven by higher revenue per search and search volume

Via Microsoft 

  • In terms of contribution to the overall business the above numbers can be easily bucketed in the following order:
    • More Personal Computing $9.92 billion in revenue
    • Productivity and Business Process $ 9.01 billion in revenue
    • Intelligent Cloud $7.90 billion in revenue
  • It is this last part of the business which is where Azure public cloud sits that might have contributed to Microsoft’s stock decline after earnings. In the segment where Microsoft competes with Amazon, growth decelerated during the quarter at 93% down from 98%. This remains, however, the biggest opportunity growth for Microsoft and stayed above Street expectations.
  • The recent reorg has led some people to think that Windows was not going to be a focus of investment going forward. As I explained before, the changes have to do more with weaving Windows into the fabric of the Microsoft offering to be part of a wider experience. This means that while we might hear less mention of Windows the importance of it is no less than it has been in the past.
  • It is interesting to see Office growth in consumer keeping up with commercial. I see this as a bigger opportunity for Microsoft going forward as they deliver more intelligence to Office and better cross-platform support especially with iOS.
  • Surface growth was strong this quarter when compared to the same period last year thanks to a better portfolio lineup. What is important in the result is the actual revenue number which this quarter returned to be close to the one billion mark that is so important to Microsoft and the Street
  • With Panos Panay now crowned Chief Product Officer I am expecting more focus on first party devices going forward both in terms of Surface refresh but also in consistency across products when it comes to launch timing, design and software integration.
  • With the focus on experience and cloud I am also expecting to see more ties between hardware and cloud and services. Gaming seems the one that might move in that direction first as rumors point to a cloud-based gaming service that goes beyond Xbox.
  • Another encouraging point for the future was LinkedIn and its 37% growth as investors seem to now have a reason to think that the initial investment in the social network might actually pay off.

Alexa, Who is Your Favorite Kid?

As of Saturday, thanks to Alexa Blueprints, when my daughter asked Alexa the question she got an answer she did not expect, one that made us chuckle and made her mad: “Either one of the dogs!” said Alexa in her cheerful voice.

Alexa Blueprints are personalized skills that any Echo user can now create thanks to a very easy to use set of templates covering different topics in the areas of storytelling, home automation, learning and knowledge and of course fun and games.

Creating a skill is very straightforward and does not require any coding. You are basically creating a script, and all the work is done in the background for you. It took me five minutes to create five family questions with some funny answers for temporary amusement. As soon you run the skill it becomes available to all your Echo devices.

Making it Personal

Alexa already built a close relationship with its users through her name and personality. Cementing that relationship by creating an even more personal bond is very important as other digital assistants will try and enter our homes.

While it might seem silly, our relationship with Alexa is no different than a relationship with a human being. Knowledge, familiarity, humor all play a role in making you feel comfortable with a person so that you feel you can rely on them. Amazon wants the same when it comes to Alexa and us.

Creating their own skills leaves users with a sense of control over the information they might not be necessarily happy to share with a third party skill but are comfortable entrusting Amazon with. At the end of the day, they have already let Amazon into their life. Third party skill developers might also not be interested in creating a skill that allows for bedtime stories or math quizzes that are for the one person you have in mind.

Making it Useful

The opportunity that Alexa Blueprints offer is more than cuteness of course. You take a look at the first templates Amazon designed, and you see how it is all about making Alexa part of the family. As she is more helpful in the home and sounds more personal, our trust and reliance will grow. Interestingly, it is also about growing awareness outside the family. You have an Echo in your home, so clearly you are interested in Alexa, but what about all those people who come into your home from your guests to your dog sitter or babysitter? Alexa can prove useful to them by giving hints about your Wi-Fi password or telling them where you keep your dog leash or having an emergency number ready. These might be people who have yet to experience Alexa and instead of having you explain what she can do, they experience first-hand how Alexa can be helpful. House guests can also see the fun side of Alexa by playing games with her at a party.

With Blueprints, you can also expand your knowledge on things you actually care about. There are many trivia skills already available for Echo, but they are supposed to entertain more so than they are supposed to grow your knowledge. The Blueprints template can be used to learn or revise a topic. I set up a set of flashcards to review my knowledge of American Government in preparation for my US Citizen test. It took a bit longer than for the family questions, and it also showed that complexity in what you want to do could escalate pretty quickly and, at least for now, these templates are not meant to deal with complicated questions.

We are planning to create revision tests for our kid for any upcoming tests. If we sit her down to ask questions it’s homework, if Alexa does it, it’s fun. Anything that will get our daughter to learn is welcome in our home, and of course, the fact that she can be entertained and learn without staring at a screen is a plus. I also see Blueprints as a hook for kids to get interested in creating content themselves. Clearly geared at kids who can read and type there is potential in letting them create their own sci-fi story or their own flashcards. Using the storytelling template, a child can let her/his creativity loose while learning about the actual structure of a story.

Wanting More

I enjoyed my initial experience with Blueprints, but I was left wanting more. Isn’t that human nature after all! I want more templates that I am sure will come, but mostly I want more intelligence. After I set up my revision test, I quickly found that there was no room for error in my answers. Alexa would not apply any intelligence in processing my answers and understand that what I said was close enough to the answer to make it right. This happens with third-party trivia skills I used, but it is more obvious here because I am the one who entered the answer.

On the family front, while Alexa can answer a question like “Who is the most annoying kid?” with “Grace has her moments!” She cannot say “You have your moments!” when it is my daughter asking that question. So all in all, while she is more part of the family you are still very much aware, she is not human.

While I see a big potential for Alexa Blueprints, the big question is of course, how many people will bother creating their own skills? Discovery, I think is the biggest hurdle here rather than usability. When you get into your Alexa app now, under skills, you can see skills you created so you might be curious to see what that is but if you click now, you get a high-level ad that does not really do justice to the experience. I hope to see Amazon start using some of the personalized skills in its ads to encourage more usage. I am convinced the return for both the user and Amazon will be worth the investment.

US Consumers Want More Transparency from Facebook

Mark Zuckerberg went on record to say that thus far the #DeleteFacebook meme did not have much impact. We, at Creative Strategies, wanted to see if that was the case and more importantly we wanted to understand more about how the general public felt after the Cambridge Analytica incident. We ran a study across 1000 Americans who are representative of the US population in gender and age.

It would seem impossible for people to have missed the Cambridge Analytica incident, given the extensive press coverage. But, we wanted to make sure people outside the tech bubble were aware of it, so we asked: 39% said to be very aware, and another 37% said to be somewhat aware of what happened. Awareness among men was higher with 48% saying they were very aware compared to 29% among women.

There is no Trust without Transparency

Once we established awareness, we wanted to understand what would take to gain users’ trust back if their trust was indeed impacted. What we found was quite interesting. First, 28% of the people we interviewed never trusted Facebook to begin with. This number grows to 35% among men. When it comes to gaining trust back, it seems the answer rests on understanding and power. More precisely, gaining a better understanding of what data is shared (41%) and exercising the power to decide whether or not we are ok with sharing such data (40%). One of the answer options we gave was about making it easier to manage the amount of personal information share but this was not as much of an ask for the panel with only 33% selecting it. It seems to me that what users are asking for is more transparency rather than more tools to manage their settings, which makes a lot of sense.

How can I manage my information if I don’t even understand what and how it is used? This was a point that several senators made during Mark Zuckerberg’s hearing highlighting how long the Facebook terms of service document is. Zuckerberg’s response was that things are not as complicated as they seem, Facebook users know that what they share can be used by Facebook. Unfortunately, it is not as simple as that as the ramifications of how the data users share is used is quite complicated and even if you understand the Facebook business model, you would be hard pushed to know how far your data goes.

Better management of toxic content is also an action point that would help with trust: 39%. Not surprisingly, this is a hot button for women (49%) more so than it is for men (31%). I say not surprisingly not because I experience it first-hand but because over the years, there have been several studies that have shown a higher number of harassment cases for women online. The Rad Campaign Online Harassment Survey in 2014 found that women are more likely to use social media than men. Sixty-two percent of people who reported harassment experienced it on Facebook, 24% Twitter, 20% via email and 18% YouTube. The Halt Abuse Cumulative 2000-2011 analyzed 11 years of online harassment and found that women made up 72% of victims and men 47.5% of perpetrators.

Only 15% of our panelists said there is nothing Facebook can do to regain trust as they are just ready to move on to something else. Of course, if this sentiment were to be similar across other countries 15% of 2 billion users is a sizable chunk of the installed base that would disappear. What is interesting is that the number grows to 18% among people who said to be very aware of the Cambridge Analytica incident. Our study ran before the new details on the number of people impacted by the Cambridge Analytica data breach was released and before AggregateIQ and CubeYou breaches were revealed. It would be fair to assume that this initial negative sentiment might indeed grow.

Lower Engagement is the real Risk for Facebook

Privacy matters to our panelists. Thirty-six percent said they are very concerned about it and another 41% saying they are somewhat concerned.

Their behavior on Facebook has somewhat changed due to their privacy concerns. Seventeen percent deleted their Facebook app from their phone, 11% deleted from other devices, and 9% deleted their account altogether. These numbers might not worry Facebook too much, but there are less drastic steps users are taking that should be worrying as they directly impact Facebook’s business model.

Most panelists (39%) say to be more careful not just with what they post but also what they like and react to brands and friends posts. Thirty-five percent said to be using it less than they used to and another 31% changed their settings. Twenty-one percent said they are planning to use Facebook much less in the future. Others, in the free format comments, pointed out that they will take a more voyeuristic stance, going on Facebook to look at what people post but not engage. This should be the real concern for Facebook, as unengaged users will prove less valuable to brands who are paying for Facebook’s services.

Connecting People

After reading through the data on privacy concerns and plans to lower engagement one wonders why people are on Facebook in the first place. Here is where Zuckerberg’s explanation of what he created rings true to users: connecting people. Fifty-three percent of our panelists are on Facebook to keep in touch with friends and loved ones who don’t live in the area. Forty-eight percent said they are on Facebook to keep up with friends they lost touch with. Messenger and Groups are the other two drivers to the platform attracting 19% and 16% of the panelists. For those panelists who are very concerned about privacy the opportunity to keep in touch with people is even a stronger driver and seems to be enough to make using Facebook worthwhile.

Twenty percent of the panel said they are on Facebook because they are bored. This datapoint deserves a whole separate discussion in my view on the role that social media play as the digital gossip magazine or the real-life soap opera channel.

Facebook was built to connect people Zuckerberg kept repeating to senators in Washington and 40% of our panelists who have been on the platform for more than seven years wish Facebook could go back to be how it was. Alas, I doubt that is an option for Zuckerberg who did say though a paid version of Facebook might be an option. When we asked our panelists if they would be interested in paying for a Facebook version without advertising and with stricter guarantees of privacy protection 59% said no.

Implementing changes to the platform so that privacy could be better protected is not trivial when it impacts the core business model. Some of the discussion in Washington was pointing to the monopoly Facebook has which could be the biggest factor in determining how forgiving users will be. What is clear, however, is that the size Facebook has reached makes this a global issue, not just a US issue.

My Five Simple Rules to Survive Social Media

So much happened over the past couple of weeks that led many to reassess their engagement on social media. The Facebook and Cambridge Analytica debacle might have been the straw that broke the camel’s back, but social media has been under scrutiny for quite some time. From Twitter’s problem with hate speech to Snapchat’s dubious advertizing, to Facebook, we have been reminded daily that social media is not a heavenly world.

Despite all that has been going on, however, I am not ready to pack everything up and walk away just yet. I have, though, reassessed how I use social media and realized that the following five simple rules might help me remain sane.

Invest time to figure out how things work

I am a strong advocate of taking matters into my own hands. When it comes to social media, you should not be expecting to have the platform you are using be explicit about what data they collect and who they share it with.

I believe that often in real life, and too often in our digital life, we give away personal information without thinking about who will eventually get their hands on it. If you are a parent and you have taken your kid to one of those jump/climb/play birthday parties you know that the liability form they ask you to fill in is just a way to have your address for advertising. I have learned from a friend to say no to any additional information other than my signature.  Why are we not that picky when it comes to social networks?

Of course, most sites don’t make it easy for you to find the information and when you do understanding all the ramifications requires a legal degree and the patience to read through it all. Many people don’t realize how Facebook works. They might know it is advertizing, and they might know they are using some personal information but they do not know how deep the link between these two is.

After the Cambridge Analytica news, I went into my Facebook settings and revoked access to all those apps I no longer use, or I could not even remember granting access to them in the first place. I stopped logging in with Facebook or Google to any new service, app or website, and instead, I create an account. Yes, it is painful, but in most cases, it is only a couple of minutes more. I am particularly careful with allowing access to my friends’ information. I might be ok with sharing, but I cannot make that decision for my friends.

Whether or not this is all a lost cause because there is plenty of data about us out in the wild does not really matter. The point is that some tools are available to us and while we should demand more from the platform owners, we should also start using what is already there.

Do Your Due Diligence on News

A big part of social media has to do with news. I know I use Twitter to get breaking news and analysis from my favorite tech reporters and commentators. The immediacy of social media is such that you feel like you have your hand on the pulse. Yet, that immediacy does not give enough time to vet the information being shared. Even relying on official sources might not be enough to avoid mistakes. I am not talking about fake news, I am just talking about news hot off the press that is being reported as it develops. If you are the kind of person who wants to follow news as it unfolds, make sure you validate the information especially before sharing. Yesterday shooting at YouTube HQ was a sad example of how people also try to take advantage of the situation to spread hate and misinformation, as the Twitter account of a person who was caught up in the incident was hacked.

When it comes to news you also need to be aware of your bubble. It is inevitable that you follow or befriend people you like and share interests with. This might cause you to have a very one-sided set of information even more so than it used to be when you bought your favorite newspaper or watched your favorite evening news show. It is on you to balance your sources.

Be Considerate

Be considerate to people you interact with and yourself. I never say something on social media that I would not say in person, and this applies both when I talk about people or brands. I do clean up my language more than I do in person only because I don’t know who is on the other side of my tweet or post. This is not different from not swearing in a room full of children or when you don’t know how people feel about it.

My digital me is also kinder than my real me. When you blast out an opinion or thought you don’t know every person you are going to reach. The number of people who will engage with you is probably a fraction of the people that you reach and might be affected by what you say.

I might be kinder and have a cleaner vocabulary, but I am always myself. All right, maybe on Facebook, I am also the happier side of myself! The point is that I stay true to what I care about and what I believe. This is why at times I would veer from my tech coverage on Twitter to talk about women, diversity, and education.

Also, remember to be kind to yourself. Mute, unfollow, report people who create a toxic environment. Don’t think for a second that just because they do not say it straight to your face, it won’t eventually affect you. In the same way, as you would stop talking to someone in real life or stop going to a place where everyone is obnoxious you should walk away from social.

The Pros must outweigh the Cons

For me today, the pros of being active on social media still outweigh the cons.

From a personal perspective, it gives me a way to keep in touch friends I still have in the UK and Italy that I don’t see often. I could call or write but the reality is that time is limited, and as much as you care about people it is hard to share details or your everyday life over email or even a call.

From a professional standpoint, social media does make things easier. Think about changing job before social media and how much harder it was for people who had a public profile to keep their contacts. Sure people could find you, but it was certainly not as easy. Now people can find me on Facebook, Messenger, Twitter even on LinkedIn. If they cannot find you, it really causes they don’t want to!

Fasting is Good for the Soul

I am always surprised how much time I can spend scrolling through Facebook and Twitter. Twitter, in particular, is a window to a ton of information if you follow the right people.

When I am less present on social, I do feel I am less aware of the latest news but at the same time, there is less anxiety. I might get the news at the end of the day or the following day, but those stories are more developed without having been through that fast pace that only increases my apprehension. This has been especially true since the American Election and Brexit as pretty much everybody in my feed started talking more openly about politics.

As you read this article, I will be enjoying a few days of exploring Washington DC with my daughter. I will have my Apple Watch set up to show breaking news, and I will check in probably at the start and the end of my day. For the rest of the time, though, I will try my best to be in the moment, to make memories with my kid knowing that I will not be missed much on social media and that everybody and everything will still be there when I get back.

 

 

 

Apple Renews its Love for Education not the Education Market

Forty years on from the first device that was ever targeted to education, Apple held an event in Chicago at the largest single building high-school in the country. Apple did this not to just introduce an iPad but to tell their story on education, to show the end-to-end solution they now have to help teachers to really transform their curriculum.

I came into this event hoping to see three things: hardware pricing, an improved productivity and collaboration suite and a bigger focus on managing the classroom. Apple addressed my three points but in true Apple fashion it did so in a way that was not obvious to me.

Pricing

I am sure, nobody was expecting Apple to hit Chromebooks pricing. Apple’s approach was to deliver more at the same price. So the new 9.7” iPad has a Retina display, a A10 Fusion chip support for Apple Pencil all for $329 to the consumer and $299 after education discount. It’s interesting that Apple continued to partner with Logitech for the rugged case and Crayon rather than designing their own. I understand why Apple would not try to do a rugged case after all not even Apple could make a rugged case that looks attractive. But I see the benefit of having something designed by Apple that was a companion to Pencil aimed at younger users. There would have been no cannibalization of the current Pencil. Of course, Apple could still do something for the consumer market where price elasticity is less of an issue than in education. I think of this in the same way I do Apple Watch bands, there is an opportunity to bring in color and design to accessorize with a more kid friendly stylus.

I know many will evaluate Apple’s opportunity only by considering the price of the new iPad, which is of course high when compared to most Chromebooks and especially once you add the case and Pencil or Crayon. But a way I think about it, is that with iPad you get more than a computing device. You get a camera, a video camera, music instruments and now a drawing board and support for AR. AR support in particular is interesting as it would allow schools to experiment with more immersive teaching without having to invest on a separate headset as it is the case with VR and Mixed Reality. In this way justifying the price is much easier. If you are investing in an iPad to continue to focus on traditional work with text, charts and slides you would be better served by a lower priced device with a good productivity suite.

Cost is not just about hardware, however. Total cost of ownership of hardware deployment and maintenance plays a big part and this is where Apple had made great progress. I had a chance to see Apple School Manager in action and it took only a few minutes to set up my classroom, my lessons and my books. For teachers to able to handle deployment and management helps to lower the overall TCO, something that Chromebooks have been very good at.

Productivity and Collaboration

Now that Pencil support goes across the entire iPad line, Apple has finally updated iWork to support it. I have not played with these apps much, but, from what I have seen, it will help create richer documents. I see how much my daughter uses the Pen with her Surface Pro and not just to draw but to interact with text on the web and in Word. Apple new Smart Annotation feature for Pages, now in beta, is also interesting, as it is not static but it changes as you update your document. I will be curious to play around with it more to see how useful it is in a real collaboration workflow.

Talking about collaboration, Apple also increased education storage to 200GB per Apple ID. This is key, as collaboration without cloud just does not happen. It is also key for using all the different media Apple is suggestions like video, photography, drawing and so on as project file sizes will grow considerably.

Interestingly, the Logitech Crayon also addresses collaboration within the classroom. With no pairing required it means that multiple kids can draw or write on the same iPad.

While I am not sure yet if these changes are enough for a consumer to switch from Microsoft Office or G-suite, I think they are welcome additions in education.

Classroom Management

This was for me the most important part of the day and what really shows that Apple now as a full solution rather than a series of features. There are different layers to it. First Classroom which has been available since 2016 and helps with managing iPads within the classroom. Then Apple School Manager that, as I explained helps with setting up IDs, lessons and books. And finally ClassKit that helps teachers get more out of the Apps they are using by delivering an assessment on the student interaction with the apps and their progress. The teacher not only gets a single app view but also an across the board view so they can get a more precise picture of how their students are doing. This last component is something that speaks to Apple wanting to make sure that apps are integrated in the curriculum in a way that is productive and rewarding for both teacher and student. It also pushes management from people and hardware to content which is as important if not more. Of course, Apple underlined how they do not see, nor they want to see any of that data.

After creating a curriculum for coding called “Everybody can code” Apple has now created one called “Everybody can create” focused on video, photography, drawing and music. This is another tool that Apple is giving teachers to help them think more out of the box and integrate the pillars of STEAM in their everyday teaching.

Apple has kept true to its core strength of the app ecosystem by providing tools for teachers to make their everyday job of selecting the apps they want to use and assess their effectiveness which I think will improve learning but it will also help with validating their teaching choices and ultimately justifying the investment in these tools.

My Big Takeaway

Back in 1996, Steve Jobs during an interview with Wired said:

“When you have kids you think, What exactly do I want them to learn? Most of the stuff they study in school is completely useless. But some incredibly valuable things you don’t learn until you’re older — yet you could learn them when you’re younger. And you start to think, What would I do if I set a curriculum for a school? God, how exciting that could be! But you can’t do it today. You’d be crazy to work in a school today. You don’t get to do what you want. You don’t get to pick your books, your curriculum. You get to teach one narrow specialization. Who would ever want to do that?”

Sadly, I think that what Steve Jobs said back 22 years ago is still relevant today. You have heard me before being very critical of the current school system where kids are measured on standardized tests and teachers teach in the same way they have done for the past several years. That is what Apple is setting up to change. The new tools in ClassKit allow to build a much more personalized teaching environment. Not all teachers might have the flexibility to build their own curriculum but they can take a more tailored approach to teaching based on what teaching method resonates best with a student. It might not be an approach that results in the biggest market share grab but it sure is strongly impactful.

There were many teachers at the Apple event today and seeing how much they bring subjects to life in school is exciting for me as a mom. At the end of the day, it is all about providing our kids with the right skills to be successful and for doing that we must provide teachers with the right tools to be successful.

Of course, in this process all the tech companies addressing education are trying to engage children as early as possible to hook them into their ecosystem so while there is deep care for education across the board there is also the realization that you are influencing the next generation of buyers and users. This is why ultimately in my view aiming at the user – teacher, student or parent – rather than the institution is the key to long term success.

Digital Assistants: When the Pretty Voice makes You forget about the Brains!

Since Digital assistants have entered our homes and settled more or less comfortably among us, there has been a discussion around whether or not they should be personified or if we were better off thinking of them as bots.

Brands have adopted different strategies in this area with Amazon clearly betting on personification with Alexa who not only has a name but a personality too. Apple and Siri, maybe a more abstract name and some personality. Samsung with Bixby another abstract name with not much of a personality. Microsoft and Cortana who to me seems like a cross between the game warrior and Helen Mirren. And of course, Google who just decided its endeavor in this space was not even worthy of a name albeit having personality.

Back in 2016, I was adamant that humanizing digital assistants was going to help cement the bond between the user and the agent.

 

“Personifying the assistant might also make it easier for some people to understand what exactly the role is it has in their life….Giving it a name allows for it to change shape and form like a genie in a bottle – one moment being in your home speaker, the next in your phone, the next in your car helping you with different tasks throughout the day. If the digital assistant is very successful, you might even forget who is powering it. Alexa might indeed become bigger than Amazon. 

It seems to me Google’s approach wants to make sure that, whatever I do, whatever I use, and whoever I use as a medium, especially on a non-Google product or service, I am very clear Google is the one making it possible… 

Yet, while I entrust my life to Google, I am still very aware it is a corporation I am dealing with. Building an emotional connection would be much harder. After the initial Echo set up, my eight-year-old daughter asked Alexa to play a song and, as soon as the song started, she said excitedly, “Oh mom! She is awesome! Can we keep her, please?” I very much doubt “Amazon” would get that level of bonding.”

Two years on I still think that digital assistants’ personification does indeed help with engagement, but I also start to believe this bond might make it difficult for brands to have us users go beyond the voice.

Digital Assistants are a Battle in the AI War

Digital Assistants have been the easiest way for brands to show off their smarts. The problem is that AI goes way beyond that voice that replies to you through your phone or speaker. There is intelligence impacting many aspects of the devices and services we use every day whether it is called out in marketing as “AI enabled” or if we just notice that some things are just easier to perform than they used to.

Our obsession with digital assistants, however, seem to make it harder for brands to just talk about the smarts and this is true for some more so than others.

Samsung struggled with positioning Bixby as an intelligent interface rather than an assistant. One that involves voice but that also AR. Giving it a name made it a personal assistant to some extent, which drove industry watchers and consumers into making direct comparisons with Alexa and Google Assistant even though what Samsung tried to accomplish, at least to start with, was slightly different.

In my column last week I talked about the latest “Make Google Do It” commercial and how:

“It is all about Google and the relationship you, as a user, have with Google….Interestingly, the commercial also cements the different approach Google is taking to the digital assistant by not personifying it. The assistant is a mean to get to Google a clear separation of voice and brains.”

In a way, Google separating the voice and the brains assures that users give credit to Google across the board. This means that Google can capitalize on AI even when Google Assistant is not involved, think about Google Photos for instance or Google Translate or Google Lens.

For Amazon, the dynamic is quite different. Amazon did not “own” an operating system nor controlled an ecosystem, so Alexa became all of those things. Alexa started as the point of engagement with the user and quickly developed into an ecosystem enabler in a similar way than iOS and Android have been for Apple and Google.

For Microsoft, AI is a much bigger game than Cortana has ever been. But truth be told, Cortana has not been given the attention it deserves by management. Maybe precisely to my previous point about Amazon, Microsoft does not see Cortana as an enabler but merely a feature of an operating system. While Cortana has been criticized for not being competitive with other digital assistants, it seems that most have written her off as a contender in the race. This does not seem to be hindering people’s perception of Microsoft in AI, which of course is good news for Microsoft. One has to wonder, however, if people’s believe that Cortana not standing a chance is rooted in the assumption that Microsoft does not stand a chance in the consumer market.

The Peculiar Case of iOS and Siri

Apple does not quite fit the mold of any of the companies I mention above. It rarely does, of course. Apple has a healthy and widely adopted operating system, iOS, as well as an ecosystem with highly engaged users.

Siri was born before any other digital assistant we have in our homes today. Siri was born under Apple’s believe that voice would play a role in the future of interfaces but not necessarily that voice would be a platform in itself. It was 2011 and if you go back and watch the iPhone 4s launch event when Siri made her debut you will hear a more robot voice but very much recognize the Siri of today. And for many this lies the issue: Siri has not changed much over the past seven years. While my statement might seem more perception than reality most would agree that, it feels that way when you compare the fast pace of innovation around Alexa.

Siri’s development pace, however, does not reflect the development we have seen on iOS especially since Apple has double down on machine learning and AI. The platform is getting smarter even though our exchanges with Siri do not seem to. What I think people do not seem to realize is that the brain that powers those iOS improvements is shared by Siri, but its reach goes way beyond it.

In a world where the digital assistant is not only personified but also the personification of intelligence is Apple running the risk to be perceived as being behind across the board? Siri has grown to mean more than a voice assistant. Siri is an “intelligent power” that impacts many aspects of our platform and ecosystem interactions.

Plenty of iOS users continue to be happy with their choice of phone or tablet but just decide not to engage with Siri. As Apple starts to talk about how Siri is behind some of the tasks we perform every day – like picking our favorite chill music – is the perception we have of her impacting our appreciation of other services and experiences?

It seems to me that for the industry overall advances in natural speech will take much longer to materialize than other AI-driven improvements around context, search, cameras, home automation and more. Trying to separate voice and brains might be a smart step to take, so brands make sure consumers look for intelligent solutions beyond the voice.

Why Smartphone Pre-orders are not a Good Barometer of Success in a Saturated Market

This week, two independent reports pointed to weak pre-order numbers for the new Samsung’s flagship models the Galaxy S9 and S9+.

First, a Korean publication called Yonhap News Agency reported a Samsung executive commenting that the preorders of the Galaxy S9 are similar or slightly lower to that of the Galaxy S8. He also reportedly blamed the dip in demand on the two-day gap between unveiling and pre-orders opening, compared to an eight-day delay for the Galaxy S8.

This first report was followed by a report by analyst Jeff Johnston of Arthur Wood Research. He said that  “the channel” that Galaxy S9 orders “are down ~50% over the Galaxy S8”.These pre-orders are “significantly underperforming pre-launch expectations of 10% to 15% growth,” he writes. Johnston deems it a reflection of people “upgrading a much slower pace as features are falling on deaf ears.” He writes that while this is not great for Samsung but it is worse for the industry as it suggests that smartphone sales are starting to decline at an accelerating rate.

While there is evidence that replacement cycles are slowing down in mature markets I am not sure I see the market quite in the same way as Jeff Johnston.

Let’s break it down:

  • The majority of buyers who jump onto pre-orders are highly loyal, highly engaged users who tend to update their device every year. Last year, in the US, around 22-25% of Samsung’s installed base had the previous year’s model (the Galaxy S7 and S7 Edge). This year around 15-18% of Samsung’s base owned last year’s model, the Galaxy S8, S8+ by the end of 4Q.
  • These numbers alone can explain why pre-orders volumes can be flat or slightly down compared to last year. This is based on the assumption that Samsung’s overall base has grown year over year but only marginally.
  • While the lower base of newer models can speak to replacement slowing down I am not sure I would say that the upgrade cycle slowdown is accelerating.
  • What is clear is that the real opportunity is in the much larger volume of users who have older devices. For those, the improvements delivered by the latest models are most likely both hardware related as well as UX related.
  • For the owners of last year’s model, the Galaxy S9 and S9 Plus might seem like a small increment which is why Samsung is clearly trying to incentivize last year’s upgrades with high trade-in value. This is a more attractive offer than bundling either another phone or another device as it makes the purchasing decision much easier plus it gives Samsung and carrier a phone they can refurbish and resell.
  • There is no doubt that for users of older models the improvement will be significant. The question, for these users, is really whether they will want to buy the latest model or invest at a lower price point of last year’s smartphone.
  • This dynamic will impact volumes as well as ASPs as we saw with Apple last quarter. Last year’s models helping the volume and the latest model increasing ASP.
  • From a market perspective, vendors will need to grow the proportion of their users who are on an annual upgrade program. Right now Apple has the most successful program with roughly 20% of its base in the US on it. For Samsung and Apple getting to 40% would guarantee a solid volume year over year.
  • Of course, hardware sales are also important to carriers and they could do something to incentivize annual upgrades. During the European Financial crisis of 2008, carriers were actually incentivizing users not to upgrade by giving them better tariffs or hard cash they could use towards their bills. This was when subsidies were still strong and the cost to the operators was adding up quickly. Carriers could now do the opposite giving incentives for upgrades not just in the price of the device but in the overall cost of ownership.
  • At Samsung’s disadvantage, there is also the fact that some Galaxy S8 and S8+ might be waiting for next year’s model which is meant to be Samsung’s real leap in hardware. The expectations for the 10 models are sure high.

What the Commercials aired during the Oscars say about Tech Brands

Like I do every year when the Super Bowl is on I watched the Oscars with an eye out for any exciting new ads from tech brands. This year was the 90th edition of the Academy Awards, and it took place in the midst of #MeToo and the Time’s Up movement. Some spoke out before the event about being tired of all the politics and the controversy calling for the ceremony to just be about movies. Needless to say, some brands might have preferred to take a pass when it came to running an ad during the broadcast of the show on ABC.

Preliminary Nielsen’s numbers show that the TV audience dropped 16% compared to 2017. This preliminary drop would suggest an overall viewership below 32 million which was the previous lowest point recorded in 2008. Nevertheless, the Oscars are expected to be the most watched non-sporting event on American TV.

As the ads rolled, I thought it was very interesting to so clearly see how they matched the most significant focus of the brands they were representing, mostly transcending one single product to highlight underlying enablers.

Samsung

This was not the first Academy Awards presence for Samsung. Aside from being the main sponsor they also ran a new ad featuring the Galaxy S9 as part of the “Do what you can’t” campaign. In the product placements during the red carpet, Samsung chose to highlight the slow-motion video feature of the S9 camera.

The commercial is full of celebrities and influencers and shows the clear target audience Samsung is trying to attract with its new smartphone: Gen-Z. Without being political, the “Make It Yours” commercial is helping highlight the work of women who are first for being nominated in their field.  Dee Rees, who directed and wrote the adapted screenplay for “Mudbound,” is the first black woman to be nominated for best-adapted screenplay and she directed the commercial. Rachel Morrison is the first woman ever to receive a nomination in cinematography and she was the cinematography for the campaign. Both women are also openly gay which is quite a forward pick for Samsung, a conservative brand thus far.

This is certainly a departure for Samsung from the traditional tech-focused or competition focused ads, and I have to say I like it a lot. The feeling you get is quite similar to the recent “what’s a computer” iPad ad, but it touches on more personal issues like having regrets, making mistakes and being passed over while also focusing on overcoming obstacles.

I always thought Samsung as a brand lacked a clear identity and I hope this ad is a first step in finding a different voice for a company that plays a significant role in the life of millions of people across the world. Especially for millennials and older Gen Z knowing what a brand stands for,  their values, their social responsibility is important and can make or break a brand.

Google

Google aired a star-ridden ad around its digital assistant capability with the words “Make Google Do it” appearing any time the person in the commercial was trying to do something from ordering some dope tape” to turning your lights on in the dark, remembering the alarm code or making an action list.

The commercial is cute, but I thought the choice of words was very telling. First, the assistant is not mentioned until the very end when on a white screen you see: “Get the Google Assistant and make Google do it.”

It is all about Google and the relationship you, as a user, have with Google. The ad could have said “Let Google do it,” but that would have implied some form of permission you as a user grant Google. Saying “make” implies a position of control for the user over Google. You are not letting Google do something that you could do; you make it do something like you would a subordinate person to you. I think that is very clever. It aims at shifting the perception that you are working for Google that many have when it comes to thinking that Google wants to know more and more about consumers to better monetize them.

Interestingly, the commercial also cements the different approach Google is taking to the digital assistant by not personifying it. The assistant is a mean to get to Google a clear separation of voice and brains.

Microsoft

Microsoft is a Super Bowl sponsor through its Surface and Xbox business and the company has run ads during the TV broadcast of the game. I do not seem to find any evidence that Microsoft has run an ad during the Oscars before this year.

Featuring Common, the ad is an ode to technology and Artificial Intelligence and what they empower. Empowerment is a common thread in Microsoft CEO, Satya Nadella’s presentations. He firmly believes that technology should enable humanity to do more, be better, fulfill its potential.

AI and Mixed Reality are two key areas for Microsoft in business. After missing mobile it was clear they did not want to miss out on any technology that will empower the next generation, and they moved in early with HoloLens. Their business-first approach, however, is limiting their exposure to consumers. This is particularly true about AI that, right or wrong, is often equated to digital assistant. Here, Microsoft’s Cortana is trailing in adoption compared to Alexa, Google Assistant, and Siri. The ad is raising awareness among a wide range of people that Microsoft is not only about Windows and PCs. The commercial alone, though, will not help consumers think there is a role for Microsoft AI in their life anymore so than they think there is one for IBM Watson. That is totally fine, of course, if Microsoft is not interested in the consumer market. But AI will touch every aspect of their portfolio including Windows which might be perceived as lagging compared to other platforms if consumers just do not know how it is made better by AI.

Twitter

This was Twitter first-ever TV commercial. The ad featured a poem written and performed by Denice Frohman, a New York City-born poet, over black and white static pictures of prominent media and marketing executives as well as filmmakers Ava DuVernay and Julie Dash, documentarian Jennifer Brea and “Insecure” director and actress Issa Rae. The commercial ended with the hashtag #HereWeAre, which first appeared in December when Twitter chief marketing officer Leslie Berland announced that a group of female leaders would appear during Twitter’s event at the CES technology show.

Twitter has been under fire for a long time about doing more to monitor and police those users who are engaging in hate speech and sexual harassment.  So it is no surprise that the response to the commercial was mixed. Some praised the poem for being powerful and appreciated the effort. Some gave the benefit of the doubt but saying they now want to see Twitter put their money where their mouth is and do more on the platform. Others just outright criticized the choice of investment pointing to the fact that the money spent on the commercial would have been better served on improving the platform itself either by hiring more engineers or considering new AI driven tech to help with the monitoring.

I was in the in-between group. I hope that the effort is more than a beautiful ad and I am sure Jack is very well aware that after that commercial the stakes are now even higher. There is no question in my mind that abuse can kill engagement.

 

There were more ads during the Academy Awards from T-Mobile, Walmart, GE, and Nest, but the ones I picked for this article are the ones that I thought best represented where the brand is in its business and brand identity. You can find them all here.

News You might have missed: Week of February 23, 2018

Google launched Android Enterprise Recommendation Program

Android Enterprise Recommended establishes best practices and common requirements for devices and services, backed by a thorough rigorous testing process conducted by Google. The program addresses the top concerns we’ve heard from customers: a need for frequent security updates, reliable and consistent software experiences, and simplified device selection. Many of the world’s top manufacturers are already involved in the program, including Blackberry, Huawei, LG, Motorola, Nokia, and Sony. Devices within the program meet a demanding set of specifications for organizations with challenging and diverse business requirements. Also, a benefit is the enhanced level of technical support and training enterprises receive from Google through the Android Academy.

Via Android

  • A long time coming, I say! I have been advocating for a long time that Google should take a much more proactive role with Android in the enterprise.
  • Samsung has been doing a lot of work with Knox developing what was initially an MDM solution into a fully fledged platform. This, of course, explains why, at least for now, Samsung has no products on the list of Android recommended products. However, if you are familiar with Knox you know Samsung covers all the requirements Google lists for the recommended smartphones.
  • Yet not all organizations want to standardize on one single vendor but offer employees choice which is where Google should have seen the opportunity long ago. I am guessing this has become more of a priority now that Google is pursuing hardware more aggressively as well as they see some vendors trying to differentiate more at a software/services layer.
  • Being able to pick the phone you want in a corporate world is only half the battle. The other half is in the ability to get updates when they become available which is not always that easy and this is precisely one of the point this new initiative addresses. While the user might care about support for the latest feature, IT managers care about regular security patches.
  • Another aspect that matters to enterprises is easy deployment which will be done in this case through a QR code. This is all about deployment though and not management. Google is making it easier for enterprises to pick phones that are closer to the true Android experience but IT departments will still depend on their own management tools in the same way they do today.
  • The current list of products seem to serve US and Europe quite well but not emerging markets so I am hoping to see more products come into the program below flagship price points.
  • Like I said, this is a good step from Google but they should be doing more. While their claim about Android volumes is correct, it would be very myopic of them not to address the fact that, like in the consumer space, Apple owns the valuable enterprise accounts and more so the decision makers within those accounts.

Apple said to be updating AirPods

Bloomberg reports that Apple is working on a new version for release as soon as this year with an upgraded wireless chip, the people said. A subsequent model for as early as next year is planned to be water resistant. The model coming as early as this year will let people call out for Siri without physically tapping the headphones by saying “Hey Siri.” The function will work similarly to how a user activates Siri on an iPhone or a HomePod speaker hands-free. The headphones, internally known as B288, will include an upgraded Apple-designed wireless chip for managing Bluetooth connections.

Via Bloomberg 

  • It should not come as a surprise that Apple will be updating AirPods, a well-received product that is as iconic as the original wired headphones.
  • Water resistance makes sense not because like the Apple Watch you might want to go swimming or use it in the shower but for accidental water contact due to a splash or in case of rain.
  • What is more interesting to me is being able to activate Siri without physically tapping on the headset. While the current set up works, you are performing an extra step that you might not always want to do. As tapping is more discrete than calling out Hey Siri, you could see why Apple might have thought that was a better option, especially knowing that many consumers still feel uncomfortable talking to a digital assistant in public. That said, as following the tapping you are still talking to Siri, adding that initial Hey Siri does not actually make much difference.
  • Another reason why Apple might be adding this capability going forward might be linked to HomePod and what they learned about how better prioritize devices when you invoke Siri. What would make for a poor experience would be to be calling out Hey Siri when wearing AirPods and having Apple Watch or iPhone respond.
  • While Bloomberg did not mention how Bluetooth connectivity would improve I do wonder if Apple will try and make AirPods better work with non-iOS devices to potentially use them as a hook into the ecosystem.

The Limitations of Windows 10 on ARM

Earlier this week, Microsoft inadvertently released a document that detailed the limitations of Windows on ARM. Among those, we read that 64-bit apps will not work on Windows 10 on Arm. Only 32-bit x86 desktop apps work. Games and apps that use a version of OpenGL later than version 1.1, or require hardware-accelerated OpenGL, don’t work. However, Arm does support x86 apps that use DirectX 9, DirectX 10, DirectX 11, and DirectX 12. Certain types of apps that customize the Windows experience may not work correctly because native OS components cannot load non-native components, it said. This limitation includes input method editors (IMEs) and assistive technologies. Also, cloud storage apps may not work because they often use shell extensions, such as icons in Explorer, which may fail. It also noted that only Arm64 drivers are supported, so while Windows 10 on Arm can emulate x86 applications, it doesn’t support drivers for other architectures such as x64 or x86. And finally, it said Microsoft’s Hyper-V isn’t supported , meaning any VMs using Microsoft’s hypervisor technology.

Via ZDNet

  • These limitations really should not come as a surprise if you think that the machines coming to market based on the Qualcomm processor will be running Windows 10 S.
  • Windows 10 S already limits apps to those in the store that are optimized for it.
  • For most buyers, these machines are about mobility, battery life and being able to do productivity and light entertainment on the go.
  • These are not meant to be core gaming machines or devices aimed at professionals that might have a lot of legacy apps.
  • All that said, to many this might sound too close to Windows RT to be trusted.
  • Microsoft should really invest more in the store so that consumers will find everything they might need there. It should also stop underlying the option of upgrading to Windows Pro as this only raises doubts in the buyer’s mind that what they are investing in is not capable enough.
  • There is certainly a market for these devices and the list of items that are not supported means nothing to average home PC users. In particular, if you are a PC user who is upgrading from Windows 7 you are already prepared to start fresh not just with your OS but with apps as well.

Wakandan Technology I Wish We Already Had

Like millions of other people throughout the US, this weekend, I went with my family to watch “Black Panther” the latest Marvel hero movie. I set through the two hours and fifteen minutes of this celebration of Black ingenuity, strength and power and I marveled – no pun intended – at some of the special effects that showcased the technology made in Wakanda.

If you are not familiar with the story I can share without spoilers that Wakanda is a reclusive kingdom in Africa with extraordinary technological power mostly by vibranium a material that absorbs kinetic energy rendering it virtually indestructible.  Master in command of most of the technology we see displayed in the movie is Princess Shuri, younger sister to King T’Challa, engineer and scientist extraordinaire and according to my daughter the most powerful woman in Wakanda. There was a lot of tech on display in the movie, but some stood out as something I wished I had access to.

Remote Transmission and Holograms

There are two scenes in the movie where remote transmission and holograms play a big role. One is a car chase in South Korea where Shuri is operating a real car from a holographic replica in her labs in Wakanda and the other is that of CIA Agent Ross taking a spaceship into battle from a holographic replica in the labs.

Let’s start with how cool it would be to be able to control cars and other moving objects that are miles away from you. In a world where we are getting excited about self-driving everything it might seem like we do not need this technology but when I saw the car scene the first thing that went through my head was: I bet there could be a “designated driver service” opportunity! And I am not just thinking about avoiding drunk-drivers but also about the ability to monitor drivers and take over a car for tired or incapacitated drivers. Of course, the complexity of being able to remotely control a moving object with no time lag is immense. Yet, I would guess that self-driving cars will be relying on many of the same components from sensors and computing power to network coverage and speed minus the human component that remain in control of the vehicle.

As excited as I got about the potential of having a personal chauffeur when I needed it and unlike Uber and Lyft not having to worry about being in the same car as them I was even more excited about the future potential of holograms.

I have had Microsoft HoloLens demos, and I have tried both AR and VR and as immersive as these experiences are you are still missing the tactile component. Haptics has been used with touch screens for many years so that we can receive a tactile feedback every time we touch a specific key on our smartphone or PC. With VR we need to move this type of 3D touch experience to our full body to really have a fully immersive experience. The most off-putting part of VR today, in my opinion, are the controllers that in most cases prevent you from feeling fully immersed just because they cannot replicate a wide enough range of gestures. Sure you can pull a trigger, but you often cannot grab and hold an object in a very natural way.  There are some data gloves that can both track hand motion and use air bladders to harden and restrict grip so that you can feel an object like a ball in virtual reality but these are very high-end solutions that might hit enterprises before they can be made available for consumers. The CyberGrasp is good examples of such solutions. There are also solutions like the Teslasuit that aims at developing a full body suit that can feel impacts and temperatures as well as track full body movement. The opportunity for such solutions in a B2C environment is immense, from entertainment to health touch will take VR to the next level.

Kimoyo Beads

There are a few implementations of the Kimoyo beads in the movie, but the most obvious one is in bracelets where each of the beads serves a different function. You can see many Wakandans wearing these bracelets throughout the film. There is a Prime Bead that provides a lot of information about the wearer’s health as Wakandans wear these from the moment they are born. There are Audio/Visual Beads that provide a holographic display (with no need for special glasses) with access to the kingdom database. The size of the screen can be altered to go from personal use to shared. Communications beads that can be used in a similar way to mobile phones but they also use sign language to send text messages. Finally, there are simpler beads with single function sensors like geotagging.

What I love about these bracelets is the promise of what wearables could be going forward. In particular, I like that these Kimoyo bracelets reflect jewelry that is quite common among African populations hinting at the fact that technology is better adopted when hidden in everyday objects. This was the hope for smartwatches one however that struggled to materialize as the union of technology and fashion did not quite deliver for many brands. Apple Watch is the success story that seems to embody many of the Kimoyo beads capabilities: communication, audio and more and more health.

Over the years we have seen smartphones toy with the idea of using gestures to execute some functions from dialing a number by writing the numbers in the air with the phone, to hanging up by turning the phone screen-down. Smartwatches have yet to incorporate gestures as part of communication. I am not saying it would be easy, especially for an Italian like me whose hands can say more than words but I find it interesting that the idea of using sensors on wearables and gestures to either spell out letters or perform specific actions has not been entertained enough to get to market.

Our phones are becoming repositories of all sort of information, and recently Apple shared its plans to add health records to the list of data these gadgets hold. Wearables would be an even better location for at least some 911 type of information. Think, for example, at an accident that requires the intervention of a paramedic who can get vital information such as allergies and medications right from the wearables rather than having to spend time searching for a phone that might have been thrown feet away from the patient.

There is certainly much more than wearables can be as long as we keep the right balance of design and usefulness. The beads concept of sharing use cases and features through different beads could extend to bands that you wear with your watch depending on your activity need: a general band, a work-out band, a security band and so on.

 

Some of these technologies are closer than we think, how they will be marketed and how we as a society are prepared to accept them and embrace them remains to be seen. More importantly, there are choices that Silicon Valley will have to make. Of course, Silicon Valley will not create technology for the benefit of its own people, as Silicon Valley is not a kingdom but a conglomerate of corporations. Yet, I believe such corporations are called more and more to ponder whether they will create for the pleasure of some versus the benefit of all.

 

Do We Really want an Always Connected PC?

I suppose, first, we should ask if we want a PC at all! Our recent US study run across 1262 consumers says we do. Less than one percent of the panelists said they have no intention to buy another PC or Mac. As a matter of fact, twenty-five percent of the panel is in the market to buy a new PC or Mac in the next twelve months.

What do We want When buying a Notebook?

Well, it depends who you are!

No matter which brand of PC we own, or how savvy of a user we are, when it comes to notebooks there is one thing we want out of the next computer we are buying: a longer battery life. Fifty-nine percent of our panelists picked battery life as a must-have feature in their next PC – one third more than for any other feature.

The other top two features are a little different depending on the camp you are in. While not strictly a feature, brand comes as the second most important consideration point for Mac buyers, which I am sure is not a surprise as with brand you buy into a whole entire ecosystem of both software and devices. Outside of Apple users, current PC owners only view brand as the sixth most important feature which causes some interesting challenges to the many brands in the Windows ecosystem trying to establish themselves in the high-end. Going back to hardware, what comes after battery very much depends on the kind of user you are. For early adopters a higher resolution display matters (34%) but for everybody else, including Mac owners, it is about more memory.

So where is connectivity in the list of features for our next notebook? Not much of a priority it seems.

Only 23% of our panel picked cellular connectivity as one of the top three features they want in their next notebook. Even more interesting, only 19% of early tech did so. I believe there are a couple of things at play here: either early tech adopters are quite happy to use their phone as a hotspot when they need connectivity, or they are actually just happy to use their phone for any of their on the go needs. It seems that, in this case, being tech-savvy is working against a feature that is being marketed as cutting edge. Where cellular connectivity resonates is with mainstream users (28% of which listed it in their top three features) and late adopters (20%). It seems to me that with these users, the marketing message around the PC being the same as your phone is working quite well.

The short-term opportunity, considering current owners in the market to upgrade their notebook within the next twelve month is not much more encouraging as only 25% of them picked cellular connectivity as a top three must have.

We also wanted to see if people who have a more flexible work set up in both hours and location might be better placed to appreciate such a feature but it does not seem that this is the case. Cellular was, in fact, only selected as a top three feature by 19% of panelists fitting that work style.

We say We want it but do We want to pay for It!

While the interest in cellular was not great, let’s dig a little deeper and understand what kind of premium potential buyers are willing to pay for the luxury of being connected any time any place.

We asked to imagine the following scenario: “you are purchasing your next notebook, and you have settled on a model when they tell you that it comes with a variant that offers 22 hours of continuous battery life and always-on internet connectivity. What premium (above the cost of the model without those features) would you be prepared to pay for it?”

Maybe conditioned by the current iPad offering that still puts a $100 premium on cellular or maybe because it is the sweet spot for this feature, 34% of the panelists would consider to pay up to $100 more. Seventeen percent would choose the cheaper model, and another 12% would expect those features to come as standard. This picture does not change much even among people who picked cellular connectivity among their top-three must-have features.

Where we find a considerable difference is in the willingness to pay a monthly fee for that cellular connectivity. Among consumers who are interested in cellular capability, only 19% said not to be interested in paying monthly, while among the overall panel, that number almost double to 39%.

When companies talk about PC connectivity and points to user behavior with smartphones as a parameter to determine demand and success potential, I think they are missing the mark. There are two major differences that play a big role in how consumers will interact with PC compared to their phones:

  •  Smartphones are truly mobile, and PCs are nomadic. This is a big difference as it implies I might be using my phone while I walk or I am standing in a crowded train/bus, but I would never do that with a PC. When I use a PC I am sitting somewhere and in more cases than not that place will have Wi-Fi. This is certainly true in the US, but less so in Europe and Asia, which is why those markets offer better opportunities for cellular enabled PCs.
  • The other factor that I think is not considered enough is the much wider application pool we have to choose from on our smartphones compared to our PCs. On the smartphone it is not just about email and video, it is about social media, news, books, chat, gaming, and the list goes on. So in a way, there are more things I can do with my smartphones that I might want to do while on the go than I will ever be able to do on my PC. Sometimes having a larger screen is a disadvantage, not just in case of portability but privacy too.

Does Always-Connected Simply mean Always-on?

Maybe when we think of connectivity, we think more about power than cellular. From the crave for longer battery life transpiring from our data it sure seems that way. That is the feature we all agree on we want in our future notebook. Our panelists would even consider buying a PC with a processor they were not familiar with as long as it delivered on battery. 29% saying they would do so for a notebook delivering 14 and 16 hours, another 17% wanting 16 to 18 hours and another 17% wanting 18 to 20 hours. Early adopters are even more demanding with 35% wanting between 14 and 16 hours before they consider a processor brand they are not familiar with.

This is where the short term opportunity for Qualcomm and Microsoft and their always-connected PC really is.  Among the panelists looking to upgrade in the next 12 months, a whopping 67% would consider a PC with an unfamiliar brand if it delivered between 14 and 20 hours of battery.

News You might have missed: Week of February 9, 2018

Nest is rolled back into Google

On Wed. Alphabet Inc announced that it rolled Nest into its hardware group. Under the new org structure, Nest CEO Marwan Fawaz reports to Google’s hardware chief, Rick Osterloh, a former Motorola executive who took charge of all Google’s consumer devices in 2016. That includes Google Home smart speakers, Pixel smartphones, and Chromecast streaming devices.

Via Reuters

  • With Tony Fadell gone, you might remember he left Nest in the summer of 2016, and with Google renewed focus on hardware it makes sense for Nest to fall under Rick Osterloh’s organization.
  • As I pointed out on Twitter if you followed the Pixel 2 launch you had to know this change was coming. At the event, the new Nest Camera was playing very nice with Chromecast and Google Home devices, yet it was not as deeply integrated as it could have been.
  • This very point is the main drive behind this move. Google is playing catch up in the home to Alexa and with Amazon getting into security cameras and God knows what else in the future, Google has to make sure that Google Assistant is as deeply entrenched into our homes as it can possibly be.
  • We have seen Google offer bundles of devices, last year, for instance, there was a deal that paired Nest products over $100 with a free Google Home Mini and these type of offers will help penetration.
  • While bundling is important it is more developing solutions with Google AI right insight those products and if Nest remained an independent company Google would have had to treat it in the same way as it would have any other hardware partner. There is no question, however, that deeper integration, especially when it comes to an Assistant, is the best solution for both users and Google. It allows staying true to the vision Google has, offers better alignment with hardware and ultimately drives richer user engagement.
  • One big criticism that was put to Nest was how slow it has been moving in developing products with its biggest line up announced only a couple of months ago. It will be interesting to see if that will change now under Osterloh.
  • It also remains to be seen if there is anything that Google can do on current announced products that have yet to ship or if it is simply too late in the cycle and we need to wait for a new set of products that will be co-designed and engendered.

Twitter turns Profitable, at last!

Twitter reported a profit of $91 million in the last three months of 2017, compared with a loss of $167 million in the fourth quarter of 2016.  After aggressively slashing spending over the past few years, Twitter will invest in products this year that increase audience engagement, which will cause expenses to “more closely align with revenues,” Chief Financial Officer Ned Segal said during a conference call. Twitter will be doing more experimentation to make its timeline more “personalized and relevant” to people, Dorsey said. He also emphasized a focus on matching people with their interests as fast as possible. There will be “a much more cohesive strategy” around events, like seeing sports scores during live games, Dorsey said. New product tweaks, like Twitter’s decision to increase the character limit to 280, have increased engagement and minimized confusion, he said.

Via Bloomberg

  • The company said it had 330 million average monthly users in the fourth quarter, up 4 percent from the prior-year period, but flat from the third quarter. The number fell short of expectations, but Twitter pointed to the crackdown on bots and fake accounts which ultimately will improve experience across the board.
  • Interestingly the number of subscribers grew internationally during the quarter but dropped in the US. Considering the recent discovery of Russian bots accounts that were used to influence not just the elections but US politics overall, the trend checks out as the majority of the accounts killed by Twitter would have been US accounts.
  • The big question is whether or not the subscribers’ numbers will grow next quarter as while I am sure fake accounts and bots will continue to get to Twitter, I would imagine the bulk of the spring cleaning.
  • Lack of subscribers growth will substantially temper today’s optimism as it would push Twitter to squeeze more advertizing revenue from current subscribers rather than being able to spread over a bigger base.
  • COO Anthony Noto’s recent departure has raised concerns over future quarters performance and continued to turn around, which is a valid concern. One would hope that the wheels are in motion from a business perspective to prioritize engagement to make the platform more attractive to advertizers.

Goldman Sacks might finance Your next Apple Product

Apple is in talks with its investment bank Goldman Sachs about the possibility of offering customers financial loans when buying Apple products, according to a report by the Wall Street Journal on Wednesday. Right now, customers can get financing through Citizens Financial Group when they use the iPhone Upgrade Program, which offers interest-free cash for 24 months. Apparently, Goldman Sachs wants a part of that action, although whether it would be as a replacement for CFG or an additional option isn’t clear.

Via Macrumors 

  • If true, Goldman Sacks would provide these loans through Marcus, an online lender created in 2016 that helps people refinance credit-card debt. Apparently there are plans for the company to be building a ‘point-of-sale’ financing business that will offer loans to shoppers at checkout basically helping consumers not to crank up that credit card debt in the first place.
  • Many received these speculations positively for Apple, but given the lack of detail, we are left with more questions than answers. First, if the Goldman Sacks loans are supposed to just take over the current Citizen Finance Group’s loans, it would not help Apple expand the opportunity unless Apple is getting a better deal and they are able to lower repayments. I doubt that the approval process would be different as it would imply a bigger risk for Marcus. The offer might expand to iPhones that are on longer cycles which might be less appealing to Apple but, longer term, might alleviate the replacement fatigues of the higher priced model.
  • There are also speculations that the loan offer will expand beyond iPhones. The current financing option for non-iPhones is provided through a Barclays credit card, which is interest-free for a certain number of months based on the amount purchased. If you get a Barclaycard Visa and buy an Apple device within 30 days, you can get the device with no extra charge as long as it is paid off within 6-18 months, depending on how much is put on the card. For the higher ticket items, 6 to 18 months is likely still limiting Apple’s addressable market. Goldman Sachs apparently is planning on offering a loan at a 12% interest rate for customers who might want to take longer to pay off a device than what the current options allow
  • As I mentioned in my Apple earnings analysis, With iPhone prices increasing and replacement cycles lengthening, Apple would be smart in looking at different financing options, especially in the US market where there is a bigger opportunity for its flagship models. We’ll certainly keep an eye on this development.

News You might have missed: Week of February 2, 2018

Earnings Thursday!

Apple

  • Revenue reached $88.3 billion, growing 13% over Q1 FY2017 and above the high end of Apple’s guidance.
  • This quarter was a week shorter than 2017: average revenue per week was up 21%.
  • Apple’s business is growing in all product categories and in all regions worldwide.
  • Apple’s installed base hit 1.3 billion devices in January, up 30% in just two years.
  • iPhone saw its highest revenue ever.
  • Apple returned $14.5 billion to investors during the quarter.
  • In the March quarter, Apple expects revenue to be between $60 billion and $62 billion.

Via Apple 

iPhone

  • 77.3 million iPhones sold in the quarter, down from 78.2 in the same period of 2017. But this was with one week less in the quarter. Had Apple worked on a 14 weeks quarter iPhone sales would have actually been up yoy.
  • Production for the iPhone X started to meet demand only in December
  • iPhone X was Apple’s top-selling model since it started shipping in November all the way through January
  • iPhone 8 and iPhone 8 Plus rounded out the top three
  • iPhone ASP increased to $796 from $695 a year ago, driven mostly by iPhone X. Luca Maestri is guiding to a lower ASP in Q2 due to the change in sell-through mix. He said: “We typically reduce channel inventory for our newest iPhone’s in Q2 because they enjoy very large demand in the initial weeks of sales, which are compounded by the holiday season in Q1. So we anticipate doing that in Q2 this year as well. For ASPs, there’s also another element that we need to consider. As you know, our newest products this year have higher ASPs than they had in the past. And so as a result, as we reduce inventories of these newest products, the overall ASPs for iPhone in Q2 will naturally decline sequentially by a higher percentage than we have experienced historically”
  • Sell through in Q2 expected to be higher than a year ago while sell-in will decrease as channel was prepped in Q1 especially for iPhone X
  • When asked about how the battery replacement offer would impact replacement cycles, Cook said they did not consider that at all when making the decision. I have no doubt that is the case, as maintaining loyalty – that they quoted at 96% in the US – is way more important in the long run than making a sale in the short term. Apple knows that looking after their customers now it will mean an upgrade eventually so it is just a deferred revenue.
  • Apple reached a 1.3 billion installed base a number that is a solid foundation for continued growth in services current and future. Of course, the iPhone is making up the great majority of this number
  • The big question in 2Q will be China as Chinese New Year falls in mid-February and that is always a big driver
  • The ASP increase, even if the extent we have seen this quarter will not be sustained, is quite unbelievable considering where the rest of the market is. It also may be a more realistic metric going forward than units. As more and more market reach saturation being able to upgrade and have users spend more is critical.
  • Replacement cycles came up on the call but Tim provided a somewhat vague reply. From the data I have seen, the cycles are lengthening but by a few weeks rather than months but it is an issue that will impact the whole market sooner or later which raises some questions as to what should vendors to keep upgrades steady. Apple’s annual upgrade is one thing and the numbers for that have been growing in the US quite steadily but still small in comparison to multi-year plans.

Services

  • Services revenue grew 18% yoy reaching $8.5 Billion. Paid subscriptions represented 240M of that – a 58% growth yoy.
  • “Apple Pay is now accepted at more than half of all American retail locations, which includes more than two-thirds of the country’s top 100 retailers”

Apple Watch

  • Apple Watch had a great quarter “with over 50 percent growth in revenue and units for the fourth quarter in a row, and strong double-digit growth in every geographic segment. Sales of Apple Watch Series 3 models were also more than twice the volume of Series 2 a year ago” Of course while the performance is clear from the growth in revenue it is still hard to point to an actual volume number as all the numbers that Apple is comparing the latest performance to are not public. So basically they are growing 50% in units over a number we do not know.
  • It is fascinating to me how Apple is able to talk about wearables now as it includes AirPods and brands like Plantronics have been unable to ride on the back to the excitement that this segment name had created a few years ago. Of course by now wearables pretty much only means Apple especially when you are talking about smartwatches.

Mac and iPad

  • These two products did not get much love during the earnings call but they both performed ok especially with iPad growing both in volume and ASP.

Overall, Apple remains an incredibly strong company that is solidifying the foundation for future growth outside of hardware.

Alphabet

Alphabet’s Q4 results versus Wall Street’s expectations, per Bloomberg:

  • Net revenue:$25.9 billion vs. $25.6 billion expected
  • Net Loss: $3.02 billion (due to one-time charge of $9.9 billion due to tax changes)
  • EPS (adjusted):$9.70 vs. $10.04 expected

Via Alphabet

  • Traffic acquisition costs (TAC) was $6.45 billion, up quite a bit from the $4.85 billion in TAC a year ago. TAC is what Google pays to third parties like Firefox and Apple so web searches on those platforms direct to Google. The growing TAC is one of the biggest concerns with Google’s advertising business. TAC as a percentage of revenues was the highest it’s been in at least two years.
  • Dai Wakabayashi at The New York Time linked the growth in TAC to my previous point about the value of the 1.3 billion Apple ecosystem in this article “Alphabet’s Earnings Disappoint. Blame it on the iPhone ‘

Amazon

Full-year revenue came in at $177.9bn (£124.6bn), a rise of 31%, while profit hit $3bn, against $2.4bn in 2016. The company reported record sales in the final three months of the year, driven by a surge in online shopping over the holiday season and demand for its cloud services. Amazon Web Services, the cloud services business, accounted for $5.1 billion in revenue for the quarter. This is up from $3.5 billion in the same timeframe the previous year. Physical stores revenue, which primarily comes from Whole Foods, came in at $4.5 billion. This is the first full quarter to have Whole Foods revenue included in Amazon’s sales

Via Amazon

  • Online shopping continued to drive Amazon’s revenue especially thanks to holiday shopping. Cyber Monday was the biggest shopping day ever.
  • In 2017, the highest number of users joined the ranks of Prime Members. Similarly to the Apple installed base, these are captivated users that will continue to spend within the ecosystem
  • We did not get many details on Amazon’s branded hardware that was expected to contribute heavily to the holiday quarter revenue. We did, however, get a promise that Amazon will double down on Alexa – if that was not clear by all the devices Amazon launched in 2017 as well as how Amazon is making sure Alexa is the intelligence in the home, the office, and the car.
  • Similarly to Apple Watch, I wonder how long it will take for Amazon to mention some hardware numbers. Fire TV and Echo in particular. Putting some hard numbers in these two segments will only increase momentum in my view.

Apps and Cloud are redefining Computing

It used to be so easy; you were either a PC or a Mac kind of person. You chose your software, and then you picked your hardware. Sometimes it might not have been clear why you embraced a specific computing experience. At times it might have been a bit of a chicken and egg situation, whether you got there for the device first or the software. Maybe you came for the hardware and stayed for the software, either way, there were no identity crises you were either a PC or a Mac.

Then hardware changed shape. Vendors called the same device in so many different ways that you felt you no longer knew what was what, although, deep down, it all felt like we were talking about the same thing. You were still performing the same tasks as before, giving you a feeling that a leopard cannot change its spots even if you give it a new name.

I am not here to discuss what hardware is better but to underline that maybe our obsession with gadgets is leading us to miss what I see as a fundamental shift in the way users think about computing. Users have started to craft their own computing experience. A computing experience that might cross operating systems and ecosystems thanks to cloud and apps. A computing experience that might make the hardware feel like it is just along for the ride.

Our studies have shown that Millennials are all about being able to get to the applications they use every day. So do more engaged, experienced users. Both groups also embrace cloud services more eagerly. The combination of these two factors, apps and cloud, allows them to focus on the computing experience they want to have rather than focusing on the hardware they are using.

The Value Peg is Moving

Engaging with cloud and apps offers opportunities for users to be much more flexible with the kind of hardware they use. Let’s take Microsoft Office, still the most used productivity suite in the world. It used to be that you had Office on your PC but with Office 365, you can access Office from a PC, a Mac, an iPad, an iPhone, a Chromebook and an Android phone or tablet. When you use the cloud, all your content is also easily accessible from all the devices you want to use throughout your day. Most cloud solutions also work across operating systems which means that your flexibility is not ecosystem dependent.

This ability to use different devices creates less of a feeling of reliance on one device and builds a much more priority dependent pick and mix attitude. This means that jumping ship when it comes to an operating system is much easier than it was in the past. It also means that users might not see the underlying operating system as being the core of their computing experience. While I am sure, most of us still know what a computer is, agreeing on what can or cannot deliver a solid computing experience might be a topic of contention.

Modern Computing: Winners and Losers

The three main computing operating systems and the ecosystems that are associated with them seem to fare quite differently in this new computing experience driven by cloud and apps.

I love how far Windows 10 has come as an operating system, but its “verbiage” and its underlying construct make it feel overly complex and much less modern than it is. This is why I think that Windows 10 has the potential to lose out to Chrome, macOS and even iOS because Microsoft Office is now universally available thanks to 365 but also because Microsoft has been focusing on making other apps available across platforms from OneNote and OneDrive to Microsoft Teams and Microsoft Translator. So, over time, we might see increased engagement with Microsoft across the board thanks to other operating systems but a decreased engagement on Windows 10. Of course, Microsoft is in the fortunate position of having its Surface line where owning both hardware and software delivers a superior experience. The question is how much the concern of alienating OEM partners will push Microsoft to always keep the Surface team on a short leash when it comes to software differentiation on top of the OS.

I am not quite sure what the threat for Chrome is, to be honest, mostly because outside of education I have yet to see much interest. Microsoft hopes that Windows 10S devices could shift users from Chromebooks, but it is still very early days to be able to assess the full potential outside of education. Google’s apps are platform agnostic, so engagement with Google is strong across all computing and smartphone platforms, leaving not much of a risk for them.

For Apple, I see a risk for macOS to lose out to iOS. Of course, even in this scenario, Apple wins, which is usually just fine with them. If we want to call out specific hardware, I see Macs losing out to iPads as the latter is becoming as capable as the former but feels much more modern and agile.

 

Millennials and Gen Z will be the driving forces behind these potential operating system and ecosystem shifts. Driven by a love for flexibility, mobility and a focus on the task at hand while freed by legacy, these generations will be able to create computing experiences that work for them. The big trend of Bring Your Own Device that remained mostly limited to smartphones might finally expand to computing. Unlike smartphones though where BYOD was mostly driven by hardware first, with computing it is really an end to end experience rather than hardware alone that will drive this shift.

Apple HomePod: tell Me where You come from, I will tell You who You are!

We have a date! Apple HomePod will be available in stores from February 9, and it can be ordered online from this Friday, January 26 in US, UK, and Australia. Apple’s release also says that France and Germany will get it in the spring.

While we do not have much more information than we did when HomePod was announced back in June many, including yours truly, are trying to read the tea-leaves on how successful this product will be. In doing so, comparisons are made with previous products such as iPod and Apple TV, as well as competitive products like Sonos, Amazon Echo, and Google Home.

I would like to take a step back and look at how Apple positioned HomePod and why.

It’s all about Music

From the very beginning, Apple has positioned HomePod as a high-quality-sound speaker.  Even on stage, back in June, Phil Schiller said HomePod was going to be as important to the home music experience as iPod was to the personal music experience. This makes it compete more with the likes of Sonos than Amazon Echo.

When talking about the smarts of the device, it is its audio innovation and software that are highlighted rather than smart home connectivity and digital assistant support. Even when it comes to Siri, it is her augmented knowledge about music that is first mentioned. Of course, Siri can do other things the same as she does on the iPhone.

All indeed points to Apple making HomePod a music device for the home, not a catch-all smart speaker like Amazon and Google’s. This does not mean that HomePod might not be used in a similar way as many use Echo and Google Home products. Nor does it mean that buyers will not find the music experience compelling enough to justify spending $349. In this respect, HomePod is very similar to AirPods when it comes to the value of good quality and innovative audio solution coupled with simple set up.

Music has never been a hobby for Apple, quite the opposite. And this is why I see HomePod as an essential product for Apple. It might not be in a way most people are thinking about it, as a cornerstone to a connected home, but this does not make it less important to the growth in services that Apple has been recording, of which Apple Music subscriptions are a big part.

Siri is not looking for a New Home

Apple is in a very fortunate position of not needing a home for Siri. As their press release points out, Siri is already actively being used on over half a billion devices across the world. This was clearly not the case for Amazon. Siri is already in the home, in the car, on my wrist, and in my ear. This is bound to impact the way Apple is thinking about HomePod in the home.

Because of how we use Siri today I see her as a very personal experience, not a shared one. Siri in the car is an excellent example of how less seamless the interaction can be when it is not just the two of us. Because CarPlay is connected to my phone, it means I am in charge of what music is going to be played as Siri does not respond to anyone else’s music requests. This means that I either have to trigger Siri for my daughter to make a request or I have to sit and listen to her complaining while she screams “Hey Siri” to get me to give in.

It will be interesting to see how Apple deals with the shared music experience with HomePod. Will we be able to train Siri to recognize different voices and therefore set up different profiles? Or will HomePod be linked to one phone and one profile but everybody could ask Siri anything music related? What about HomeKit? Will I be the lady of the house or will the whole family be able to turn the lights on and off?

Building a relationship with a personal assistant takes time and trust but should be more straightforward to set up from a technology perspective. When shared, the complexity that an assistant will have to deal with grows. No one has done that elegantly thus far other than for very top level actions, so Apple is not alone in having to figure this out. That is, of course, if Apple is interested in a communal Siri. Historically, Apple has been more focused on personal experiences than shared ones, mostly because those experiences were starting from a personal device.

Voice too, not Voice only

If I am right and HomePod will be a music-first kind of device, I also start to wonder whether or not Apple believes in ambient computing. I certainly think, Apple believes in giving people options when it comes to how they interact with Siri, but they might not believe that smart home interactions and the value of an assistant can only be channeled through voice. This might explain why Siri’s skills and HomeKit’s support are not added at the same pace as we have seen with Amazon and Google.

We are still at the very beginning of this smart home, voice first and ambient computing roll out and I think it is hard to believe we know what consumers will eventually settle on. Right now, it is natural to think that because you can do more with a specific assistant that assistant is more advanced. Over time, however, we might not appreciate an assistant that is the Jack of all trades, and we might even trust less an assistant that cracks a joke over one that is more focused and gets the job done.

As we are getting started, and there are still so many questions offering more seems to be a way for companies to see what works and what sticks. This is not what Apple usually does though. Apple has a vision and while that vision might get tweaked – Apple Watch probably the best recent example – we will never see Apple throwing everything at the wall to see what sticks.

Microsoft Cortana, the Cinderella of CES18

Everybody was eagerly watching to see whether Alexa maintained the leadership she so clearly established in 2017. This year, of course, she was not the only belle of the ball. Google Assistant had a very strong presence both in advertising and announcements but still trailed behind Alexa. As Ben Bajarin noted, Siri and the Apple ecosystem were much less visible than we have grown accustomed to since the iPhone and iOS hit the market. We can list the reasons why this might be the case: from a lack of strong marketing on Apple’s part for HomeKit and how it is linked to Siri, to a limbo phase while we wait for the new and improved Siri in HomePod, or maybe because when it comes to the home even Apple fans do not only consider Apple. Whatever the reason is, I think that Apple gets the benefit of the doubt that they will be there when it matters but someone who does not get the same treatment are Microsoft and Cortana.

Cortana’s Support is a Tick Box for Windows Partners

Cortana was not totally absent at CES as there were some announcements made like added support for Ecobee, Geeni, Honeywell Lyric, IFTTT, LIFX, TP-Link Kasa and Honeywell Total Connect Comfort. Yet, when it came to Windows partners and bigger brands, Cortana was always the last assistant mention. It seemed that having support for Cortana had more to do with wanting to support Microsoft and Windows rather than believing Cortana has a real shot at becoming one of the assistants in our life.

While this tick in the box approach might be good on paper it is not likely to make a difference in the market. Lack of conviction that Cortana is a differentiator will impact how much it will be highlighted as a feature both in products and in marketing.

The Race is Long, pacing Yourself is Good but so is showing Determination to win

In a recent interview with GeekWire Andrew Shuman, corporate VP of Cortana Engineering stated that “it’s a long journey to make a real assistant that you can communicate with over a longer period of time to really be approachable and interesting and better than the alternative.” I could not agree more with this statement.

The Digital Assistant race is a marathon, not a sprint and we are just at the beginning. Getting it right when it comes to skills such as context-awareness, natural language and empathy will make a huge difference in building engagement and trust. Yet, precisely because the relationship with a digital assistant is not born overnight, engagement must start somewhere.

Today, our exchanges with an assistant might be basic and certainly nowhere close to a conversation. That said, we are starting to learn who does what best, whose personality we like the most and who we trust to get it right. Over time, our engagement will drive loyalty and while we might find a better assistant the idea of having to start again with training her might just put us off too much.

This is Microsoft’s risk, which is not very dissimilar to what they faced in mobile. By the time Windows Mobile was a solid alternative to iOS and Android, consumers were either too vested in one of those two or inertia just did not have them try something new.

Past missteps, like Windows Mobile, is what Microsoft is being judged on here rather than the actual efforts made with Cortana. Microsoft was certainly not late to the voice assistant party. Cortana was announced at Build 2013 a few months before Alexa. But there is a feeling that Microsoft, even more so than Apple, was unable to capitalize on this early move.

Needing vs. having an Ecosystem

A sense of urgency is a great thing for any brand. When it comes to digital assistants I firmly believe that nobody had a stronger sense of urgency than Amazon. Finding a different way to grab consumers after the failed Fire Phone attempt was paramount and they went all in with Echo and Alexa.

The same cannot be said for Microsoft or Apple. Microsoft had a long list of partners around Windows – albeit more on the enterprise side than on the consumer side – and Apple had iOS. This made the assistant a longer-term game in my view and certainly not a short-term necessity.

When it comes to Microsoft, in particular, I do believe they think there is more time given enterprises are yet to show much interest in digital assistants despite Amazon making Alexa for business. The question then becomes, is Microsoft interested in having a digital assistant in the consumer market or at least one that will leave the office and come home with us? If the answer is yes, then their sense of urgency should certainly grow. If smartphones have taught us anything is that the flow of technology influence has shifted from the consumer to the enterprise and I do not see that reversing any time soon.

Cortana needs a Bigger Voice

Finally, if the question to my above question is yes, Microsoft does want Cortana outside of the enterprise, they must talk about her more. Often it feels that Cortana is just another Windows 10 feature rather than, for lack of better words, a “tool” in her own right. While I understand the difficulty of talking about Cortana in a broader context due to her strong presence on PCs, Microsoft must focus on talking about her capabilities, providing more point of contact with users and broadening her reach in the home in particular. Easier said than done, I know, but it could all start with Microsoft being more open on how they see Cortana develop. Microsoft has been able to share the vision around HoloLens since the device was merely a prototype fresh out of the lab, surely, they can articulate how they see Cortana evolve and take us on that journey.

Not Everything that has a Voice is an Assistant

If what we have seen in the first couple of days of CES is a taste of what is in store for us in 2018, we can expect to be talking a lot. Most of the time, probably more like shouting commands right, left and center, to devices scattered around our house, in the office and the car.

What last year was an “Alexa takes all” show turned into a stage for all vendors to show off either their support for Alexa and Google Assistant or to announce their own assistant. But as more vendors jump on the bandwagon, it is essential that a distinction is made between a voice interface and an assistant. While they might seem to be the same, they are not and making it clear what is which will secure its success.

An Assistant is an Investment

For an assistant to be helpful you will need to invest time into it. First, at least for now, the user will need to learn how to talk to it. As much as voice is a very intuitive user interface, current voice assistants just do not communicate like a fellow human being. Lack of context limits most exchanges to a set of simple questions and answer. Like a real assistant, a digital one needs to get to know you, which means to know your preferences and information such as calendar appointments, access to apps you use regularly and the devices you might want it to control for you. It’s a true learning curve that will require time even for the smartest assistant.

Of course simple tasks that are more like commands like turn this on, play that, remind me of this, or search queries require little knowledge of us on the assistant part. However, when you want the assistant to be proactive and start doing things for you without you asking, like a true assistant would do, that is when knowledge Is power. To some extent the smarter the assistant the less I should actually need to talk to it.

The Ubiquitous Nature of an Assistant

In the home, my assistant should be pretty ubiquitous to be useful. This is why speakers have been such a focus for Amazon, Google, Microsoft and Apple. Being able to control my devices and ask questions from wherever I am in the home is key to build engagement and ultimately dependence.

At CES and even leading up to it, we have heard of other devices such as TVs, refrigerators, light switches and even showers all coming soon with an assistant inside. Soon our homes will be seeded with many devices able to assist us and that could potentially have a voice.

As we are at the very beginning of this journey, I can understand why vendors are trying to cover all corners as it is yet unclear what device will be the Trojan horse into someone’s home. So for instance, someone might not be buying a smart speaker but be happy to have an assistant integrated in the new TV they are purchasing. I would argue, however, that there is a limit for how many devices should have an embedded assistant versus being able to be controlled through an assistant. The difference in my mind is proportional to the value that an embedded assistant will  deliver, which must go beyond being able to execute commands. I might want to be able to control my dishwasher with voice but I do not have to engage in conversation with it, the same can be said about my washing machine. My fridge however, could give my assistant access to a lot of information on how fresh my food is to the best temperature to maintain it fresh, to recipes that would use up what I have left in it. In order for this information to be conveyed the fridge should have access to the internet, have a camera and have a voice and of course be smart. Embedding an assistant vs. connecting the fridge to an external assistant seems to be a much more effective implementation.

If adoption of voice enabled devices goes the way vendors are hoping for, we will also have to have a way to manage all these devices that will be voice enabled. This could go two ways. I would either be able to call my assistant something that is device specific or only the assistant in the device I want will respond based on context. So I would either call my assistant for the fridge “chef” or if I ask “what can I cook tonite?” only the assistant in the fridge will answer me. Right now neither of these scenarios is an option. So if I own a TV, a speaker, a phone, and a fridge all assistant enabled, the likely scenario is that at my question “what can I cook tonite?” I will have my TV show me a cooking program, my speaker say “sorry I am not sure how to help with that yet” my phone will say “here is something I found on the internet” and my fridge will actually give me a recipe. Not very helpful!

Voice UI has Value in Itself

There are more devices that will benefit from a voice UI than they would an assistant. The value that a voice first UI will deliver to users could be huge even if there was no full fledge assistant in the device. This is why I strongly feel that vendors should stay clear from using the term Assistant. Roku has recently announced their Roku Entertainment Assistant and immediately the press has been asking wether it will be better than Alexa or Google Assistant. The reality is that such a comparison is unfair because it is not an assistant. It is a voice first UI that will let users ask to play content with their voice. If you have a Comcast remote, you can do that today. I can press a button and ask “Play Scandal” and the TV will show me all the ways I can watch it. This is not an assistant, it is a voice UI that saves me a bunch of steps for which I am very grateful. Should these voice first UIs even have a name? I would say no. As a user all I need to know is that I can use my voice.

If you think I am over complicating this point, look at how hard was for Samsung to pitch Bixby. Bixby started out as a voice first interface but it was called an assistant and because of that the reviews were fairly negative. This mostly was due to the fact that, as an assistant, Bixby did not have access to a deep pool or data and as soon as users started to use it in the same way they would use Alexa or Google Assistant its value was limited.

Differentiating between a voice first UI and an assistant also brings a series of benefits for what needs to be integrated in the device which could be helpful from a price structure perspective.

An assistant should be much more than a user interface and I think this is where the market is struggling at the moment, because assistants are not actually that smart yet. I truly believe the smarter my assistant will be the less I will talk to it because the power of AI will have my assistant do her job which is making my life easier by anticipating my needs.

News You might have missed: Week of January 5th

Meltdown and Spectre

These hardware bugs allow programs to steal data which is currently processed on the computer. While programs are typically not permitted to read data from other programs, a malicious program can exploit Meltdown and Spectre to get hold of secrets stored in the memory of other running programs. This might include your passwords stored in a password manager or browser, your personal photos, emails, instant messages and even business-critical documents. Initially thought to affect only Intel chipsets, these bugs in different forms are in fact impacting AMD and ARM solutions as well. This means that most PCs and phones are affected. Cloud services running Intel-powered servers are also affected

Tech giants had been made aware of the bugs by the Google Project Zero team and had been working behind the scenes to release a fix on January 9thbut, unfortunately, reports of the bugs started to leak in the press leaving the companies scramming to explain.

Via ZDNet 

  • What do these bugs do? Meltdown breaks the most fundamental isolation between user applications and the operating system. This attack allows a program to access the memory, and thus also the secrets, of other programs and the operating system. Spectre breaks the isolation between different applications. It allows an attacker to trick error-free programs, which follow best practices, into leaking their secrets. Spectre is harder to exploit than Meltdown, but it is also harder to mitigate.
  • Apple said they had already implemented fixes into High-Sierra and Microsoft released an out-of-band security update.
  • It is somewhat baffling to me that despite planning to release a patch on Jan 9th, the tech giants had not coordinated a better PR line around these bugs which resulted more into a communication meltdown than a tech one.
  • The extent of this security flaw should raise some alarm bells as we are working on adding more connectivity and computer power to so many more devices. And while as a consumer we might think of the implications on our PCs and connected home it is really more connected cars and smart cities that should be our concern.
  • Security remains the least sexy topic to discuss when it comes to tech but it is certainly becoming a crucial one to tackle. This is especially true when we talk about the country infrastructure and core services such as banking, health, and education.
  • While right now the focus might be on the tech giant we should start to question which responsibility lies with the government, hospitals, schools and so on to make sure their backend is safe and with it all the data they have about us.

Smart Lock Maker Otto suspended Operations

Four months after introducing their smart-lock to the market and just a few days before shipping it, marker Otto suspended operations. In a Medium post, CEO Sam Jadallah explained that a failed acquisition left the company with no money.

Via engadget 

  • Otto’s smart-lock was supposed to sell for $699, the highest price for what was quickly baptized as the iPhone of smart locks
  • The choice not to ship the device was the responsible one, as stopping operations after consumers bought the product would have raised many questions on what kind of support those buyers would have had long term.
  • Otto is not the first startup focusing on high-end gadgets to pull the plug over the past 12 months. Juicero with its cold press juice maker and Teleforia and its tea-maker come to mind.
  • While making a gadget might not be impossible, bringing it to market is still a very complex process that many companies are just not prepared for. Think of Essential with their Essential Phone and even Google and its Pixel 2 and Google Home Mini and you can clearly see the complexities of shipping a product
  • While Otto’s CEO still maintains that the price of the lock was not an issue I do wonder how large of a market they would have had. Consumers are still uncertain when it comes to connected home and they are looking for trusted brands and manageable costs.
  • It is hard to say why the prospective buyer changed its mind and pulled the plug on the acquisition as little is known about the actual product to understand if there might have been issues with the product itself.
  • From a consumer perspective, this might be a cautionary tale when selecting home products especially products that have to do with security.

My Windows Mixed Reality Experience Feels a bit like a Dream Deferred

Holidays are always the best time to see the good and bad of tech, I feel. Most people come together bringing friends and family of different ages, tech skills, and interests all around a table or a sofa. If your family is anything like ours, playing games is a big part of what the holidays are all about. Of course, nowadays with games often comes technology and professional hazard gets me to look more at the dynamic of tech games than playing the game.

Over Christmas I was testing one of the new Windows Mixed Reality (MR) Headsets, and I loved not having to set up any sensors around the room. I was very much looking forward to the plug and play experience, but alas that was not meant to be.

The Out of the Box Experience

Instant gratification was not what I got. My first attempt at using the headset failed because the PC I was using, running the latest Windows 10 software needed an update for Mixed Reality, the installation of which took over an hour. My second attempt failed because the USBC to HDMI adapter I had was not working correctly. Three days in and I finally got to set up the headset and the perimeter to play in, which was pretty straightforward and painless as was connecting the controllers. The problem was maintaining those connections. Quite a few times the controllers were lost and had to be turned off and back on.

I don’t want to comment on the connectivity part as I have not compared across devices yet, but the out of box experience must be better. If the MR part of the software is not going to just be added as part of a regular Window 10 update to all PCs, then new MR users should be warned that a lengthy software installation is necessary before the fun commences. Vendors should also be clear as to what adapters are needed. Assuming I will use my brand-new MR headset with a PC of the same brand might not be the best assumption to make. I might have bought the Lenovo Explorer – the headset I was testing – because of the reviews but be a Dell PC user, for instance. The degree of my delight might determine if I will switch brands on my next PC purchase. Any opportunity a brand has to delight the customer has to be taken in the current market where brands are looking at building loyalty through multi-device experiences.

Content

Having tried MR before I was familiar with Windows Mixed Reality Cliff House and how to move around in it, but it was no problem at all for my daughter to figure out what to do with the controllers as the initial set up just walked her through teleporting and other actions. The initial excitement of the Cliff House wore off when it became the place you went back to whenever a game malfunctioned or a connection was lost.  This cool new home started to feel more like Monopoly’s Jail space. The nice open space design also made it a little difficult to place “windows” around the house as there are not many useful walls to hang them to so you end up with these random “screens” in the middle of the lawn or floor.

My Cliff House was empty of content, so I had to go and find something which was not that easy. Navigating through the headset although straightforward was cumbersome due to the controllers. I ended up just taking the headset off to find the content. This was the other step that impacted instant gratification as downloading three apps took a long time given their size and despite being in a home with decent broadband. On a positive side, there were quite a few good deals on some more pricey apps. Maybe because of the delay I had already faced, I would have very much appreciated having some little experiences ready for me to try as soon as I walked through the door.

Content is also where you are reminded this is Mixed Reality and not “just” VR. Most of the time you wouldn’t know there is a difference, to be honest, but some apps that say are MR compatible are windows you can plaster your full wall in the Cliff House with but do not give you an immersive experience. Sadly, I found out the hard way after spending $19 on a Pixar app. I believe this to be a big issue and possibly the most significant driver of disappointment for users. Content must be clearly labeled so the right expectations are set on how immersive your experience will be. It is possible that with headsets with a broader field of view that big window will deliver an immersive enough experience but we are just not there yet.

Long Engagements are Still Ways Off

At a recent Mixed Reality event in San Francisco, Alex Kipman said we would soon be living in MR more than in real life. I was skeptical when I heard him say that and even more now that I saw my kid play with MR. I have a child, who, like most gen Z kids, can spend hours glued to a screen yet 30 minutes wearing a headset were enough for her. This gave me pause and made me conclude that it is one thing to get lost in a screen but still be able to see and hear what is going around you and a totally different one to be forced out of your world entirely to enter another. This is ultimately why I remain much more bullish on AR than VR.

While MR headsets were available in time for the holidays, I expect sales would have been limited both in numbers and target audience. Testing a device comes with the understanding that being one of the first means we get more than a fair share of “kinks.” It also means we are likely to soldier through more than an average consumer is prepared to face, especially when they paid good money for the device. Luckily, all the hiccups I experienced are easily fixed with a mix of communication, marketing, and second gen products which will hit the market in 2018.

 

 

iPhone Battery: Slow Down or Die?

The conspiracy theory that Apple has been slowing down older iPhone models has been around for quite some time. So far, however, users that were pointing out how Apple was willingly handicapping their devices to force them to upgrade had no facts to back up their claims.

Earlier this week, Geekbench developer John Poole published a post outlining how iOS  10.2.1 and 11.2.0 introduced the ability to slow down the processor speed to preserve battery performance. On Thursday, Apple confirmed that, since last year, they have added a throttling feature to iPhone 6, iPhone 6s and iPhone SE. Here is the statement that Apple made available to the press:

“ Our goal is to deliver the best experience for customers, which includes overall performance and prolonging the life of their devices. Lithium-ion batteries become less capable of supplying peak current demands when in cold conditions, have a low battery charge or as they age over time, which can result in the device unexpectedly shutting down to protect its electronic components.

Last year we released a feature for iPhone 6, iPhone 6s and iPhone SE to smooth out the instantaneous peaks only when needed to prevent the device from unexpectedly shutting down during these conditions. We’ve now extended that feature to iPhone 7 with iOS 11.2, and plan to add support for other products in the future”.

While I am sure those users who have been crying wolf feel vindicated, I think it is important to look at the reasons behind Apple’s decision as it is certainly not to force upgrades.

Here is how I break it down:

  • iOS updates are installed in over 70% of devices within the first couple of months of availability. This means that a software that has been designed for the latest hardware available gets to run also on devices that are as old as 4 or 5 years. The ability to renew your device through software is exactly why iPhone owners see their phone choice as a good investment and hold on to it.
  • In a recent study we ran across 1200 US consumers, we asked about motivations driving upgrade and found that the phone being old and slow is the biggest driver with Android phones. When it comes to iPhones “old and slow” comes only third.

  • While not specifically asking about what role battery life plays with upgrades we did ask how it influences purchase decision and came to see that, once again battery life is more of a driver for Android users than iPhone users. This leads me to believe that, by and large, iPhone users are not concerned with their battery performance.

  • The big argument many are making is that Apple should have been transparent about this feature. Some even argue that Apple should leave it to the consumer to decide what they want.
  • I do agree that more transparency could have helped users feel less blindsided. But when it comes to the decision Apple made to handle the issue I believe they made the right call.
  • The lack of concern for battery performance our study highlights would be quite different if older iPhones just died throughout the day. And this is the choice Apple made: let the phone just run at full speed and kill the prematurely aged batteries or slow down the phone so the battery would last longer. I am sure if consumers were posed that question they would mostly opt for the latter option.
  • It is also important to point out that Apple’s new feature does not impact all the units of the models mentioned in their statement. The throttling only kicks in if your phone has an inefficient battery. This means that if your phone has not been recharged when the battery was still mostly full, was not left under charge after reaching 100% or was exposed to extreme cold or hot temperature chances are you will not be impacted it.
  • Another argument some people are making is that Apple could be more proactive in offering battery replacements either in the stores or through kits consumers could buy. This is because iPhone 6 owners have shown that replacing the battery on their sluggish device brought them back to full performance. Such option is not as easy as it sounds. I am not sure how realistic the scenario of consumers opening up their iPhone to swap out their battery really is. As far as Apple offering battery replacement as a service, beyond what they currently do for defective batteries, would be a little complicated as I assume it would have implications for the warranty. Users might still opt to have their battery replaced by a third party knowing that this option does impact their warranty.
  • I am sure that performance was not the only reason that drove Apple to this choice. Safety must have played a big role in the implementation of this software feature. also leaving consumers to make a choice by flipping a switch also was not really an option. If Samsung’s Note 7 recall taught us something is that consumers continue to use their phone even when their own security is at risk.
  • If slowing down performance was used as a purchase driver Apple would not limit this feature to non-Plus models. iPhone Plus models benefit from a larger battery which could mitigate some of the issues.
  • The conspiracy theorists, not convinced by my point, I am sure would argue that Apple should design a software that does not impact a phone within a couple of years. But, of course, if they did that would these same critics not argue that Apple is not keeping up with the pace of innovation?
  • Apple has already said that this feature might be extended to future products, yet, as Apple takes more control over CPU and GPU design, it will be interesting to see if battery deterioration could be prevented especially given we now know Apple will be designing its own power management controller.
  • As always, when something happens in the smartphone market, comparisons are made, so in this case, some are wondering why this is not a need for Android phones. While we do not know if any Android vendor is adopting similar techniques we do know Android phones do not see the same software update success that Apple’s iPhones have. This difference is due to both consumers not upgrading as well as the software not being made available to older models. Hence the impact new software will have on old hardware and batteries is more limited.

 

 

 

Dear Santa, All I want for Christmas is….

It is the season and as I think I have been pretty good this year, I thought I’d come up with my Letter to Santa. There are a few things on the list but when it comes to tech it comes down to five things: more diversity in leading positions in tech, more tech for good, a true conversational assistant, smart today and the death of passwords.

More Diversity in Leading Positions in Tech

I might start to sound like a broken record when it comes to diversity in tech. I have talked about women as well as racial diversity  Yet, not much is changing and I will continue to talk about it as long as it takes to really see significant change.

In 2017, by and large, we have seen more women on stage at tech events. Surely that is progress, I hear you say. Well not quite! The great majority of women we saw on stage were invited on it by a more senior, often older, male colleague who gave up his spot for them to do a demo. There have been some exceptions of women owning the stage of course. The two who come to mind are Angela Ahrendts at the iPhone launch and Julia White at Microsoft Ignite. You only needed to follow those events on Twitter and the focus on their outfit to understand how much more work we have to do.

Diversity on stage should reflect diversity at the decision table of these company, a diversity whose sole purpose is not to make the diversity report published every year look better. Corporations should be seeking such a diversity to make sure they do not have any blind spots when it comes to shaping our future, a future that we should be more inclusive not elitist.

This awakening is what I what I want to see in 2018. A sense of purpose in wanting to relate to as many people as possible by hiring and empowering a diverse group of tech leaders.

More Tech for Good

I have seen great tech innovation helping improving life for a variety of people who face challenges either due to the environment they live in or due to their own health. From prosthetic 3D printing, to medicines delivered via drones, to wearables that help reduce tremors or apps that help you see the world around you, there are many companies working for social good. Yet, we hear far more often about tech innovation that makes the life of the wealthy and fortunate even better.

While it might be easy to come to the conclusion that this is just the reflection of what tech is focusing on I am hoping that it is more a messaging problem than a greed problem. It is far sexier to talk about the next gadget that lets you take the ultimate selfie than talk about a smartwatch that helps those suffering from PTSD fall asleep at night.

In 2018, I would love to hear more about what tech companies are doing to solve world problems. As some of these very smart innovations come from startups, they need their message to be amplified as much as possible. Increasing awareness of what is available by dedicating tracks at tech shows, talks opportunities on podcasts and of course press coverage could be the first step.

Hearing more about the good that comes out of tech not only might help improve or save more lives but it hopefully will help inspire more kids to get into tech than the ones who are attracted by the idea of being a millionaire by the time they are 20!

A Conversational Assistant

I have been using pretty much all the assistants that are out there for as long as they have been available. My engagement varies depending on where I am and what I am doing. While overall digital assistants seem to do what they say on the box, there is one thing I detest: the lack of context.

All the big companies will tell you that if you ask their assistant the weather in San Francisco and you follow up with a question about things to do you do not have to repeat the name of the city to get your answer. Some even understand a bit of context but they do not go very far. If I tell Siri when replying to a message from my husband “tell him, see you soon” she types that verbatim rather than just type “see you soon”.

In 2018, I want to stop having to adapt to how assistants understand and process what I say and have them do the work and just talk more like me instead. When failing to understand what I asked, it would be great if they use AI to guess based on previous queries and what they know about me the most obvious word I could have used vs. replying back with the most obscure one. I am not expecting to have a 10-minute conversation with any of my assistants. I would simply like to be able to have a conversation that does not make me think I am talking to Pixar’s Dory the fish.

Smart Today

Artificial intelligence is everywhere, or at least that is what we are told. The other day I even heard toymaker Mecchano advertise their latest toy saying “with artificial intelligence”. Most of what is deemed to be infused with AI, however, is barely showing some signs of cerebral activity. While general intelligence might be wide-spread, context-aware intelligence, cross-device intelligence, and personal intelligence are still in their infancy.

I also feel that we are focusing so much on what tech will be able to deliver in the next five, ten years that we ignore what could be done today. Autonomous cars are probably the best example. We focus so much on the vision of no longer driving that we do not see what could be done today.

In 2018, I would like to hear more about cars as an extension of the connected home. For many who commute daily, the car is an extension of the home. Some of us end up spending more hours in their car than at home! It is only to be expected that my home and my car were able to exchange information about my day, my music preferences, my likes, and dislikes. I do not expect the car to talk to the fridge to warn of a difficult commute and the need for a glass of wine. But I do expect my car to be able to automatically control my lights and thermostat as I approach home. My assistant, sensing the car is approaching, could ask me to ID myself before saying “welcome home” and opening the garage door and ask me if I want to transfer the call I am on or the content I am consuming to my home.

Another good example would be our home that might be connected but not necessarily smart. Last week I had to change my Wi-Fi SSID and that meant resetting the connection with all my devices. Why after setting up the first device was I not prompted to allow other devices to share the password is unclear to me. It really should not be this hard. If my iPhone can share my Wi-Fi password with my iPad or a friend who is close to me, the devices in my home should be able to do the same.

The Death of Passwords

If you have ever tried Apple’s Face ID, Windows Hello or Samsung’s Iris recognition you will appreciate how much more efficient these methods are. Face ID, in particular, makes you forget you are being authenticated.

This, coupled with the need to protect more and more information and devices around us will get us to want a better way than typing a password to get what we want.

In 2018, I want to be able to use my face, iris or finger in as many situations as possible. How quickly developers have embraced Face ID leaves me optimistic about my desire to kill passwords. I have the feeling, however, that what I am hoping for, like my connected devices to reconnect to a new home Wi-Fi, might be more negatively impacted by turf wars and interoperability issues than tech limitations.

A lot of wishful thinking, I know, but it is Santa I am writing to, after all 😉

 

 

News You might have missed: Week of December 15th, 2017

Apple Acquires Shazam

After TechCrunch first broke the story last Friday, Apple confirmed on Monday the acquisition of UK based Shazam. Apple said:

“We are thrilled that Shazam and its talented team will be joining Apple. Since the launch of the App Store, Shazam has consistently ranked as one of the most popular apps for iOS. Today, it’s used by hundreds of millions of people around the world, across multiple platforms. Apple Music and Shazam are a natural fit, sharing a passion for music discovery and delivering great music experiences to our users. We have exciting plans in store, and we look forward to combining with Shazam upon approval of today’s agreement.”

Apple did not disclose the price but we have several sources that have confirmed to us that the deal is in the region of $400 million.

Via TechCrunch 

  • I see this acquisition speak more to content discovery, ambient computing and AI than a pure music service play
  • Shazam’s core business is in music recognition. People use its app to capture a clip of music that is playing to recognize what it is. Its app has seen over 1 billion downloads to date.
  • Shazam built other services around that core business. Music referral to Apple Music, iTunes, and Spotify; it started to provide information about music and artists; it creates charts of the music most requested.
  • More recently It’s also branched out into more marketing services based on visual recognition. Users can capture snaps of images even using barcodes, that lead them to more content from a brand or another organization.
  • In 2014, Apple also integrated Shazam into Siri so that every time you asked Siri what song is playing, Siri uses the Shazam’s engine.
  • Apple has a lot to gain from an AI perspective in the acquisition. First, it gains access to a highly engaged base from which it can learn a lot about music preferences and use the knowledge to improve its service.
  • Second, while I expect Shazam to remain an open app on all platform I do expect Apple Music to be the sole referral service. This will without a doubt help grow users for Apple Music as well as increase engagement from current customers.
  • While Shazam has a geographically broad base I am not sure how age diverse that base is which might mean that the referrals might leave out millennials.
  • Access to this data is key to Apple as right now it has a smaller base than Spotify, which might mean a weaker recommendation engine.
  • I also wonder if there is any IP or any learnings that Apple could apply to other types of content, from podcast to TV. this would play a big role as HomePod hits the market in early 2018 and ambient computing.
  • The latest move into AR and marketing is also very interesting considering how vocal Tim Cook has been about the power of AR. Barcode integration, in particular, might offer some interesting opportunities in China.

F.C.C repeals Net Neutrality

The Federal Communications Commission voted on Thursday to dismantle rules regulating the businesses that connect consumers to the internet, granting broadband companies the power to potentially reshape Americans’ online experiences.

The agency scrapped the so-called net neutrality regulations that prohibited broadband providers from blocking websites or charging for higher-quality service or certain content.

Via The New York Times 

  • The commission Chairman defended his position saying this is great for consumers as it will create more competition, which in turn will lower prices. However, the other side of the coin is that providers might just offer tiered services where cheaper plans just do not deliver a rich enough experience. This would drive consumers to just pay more for a better service. But the downside for consumers who cannot pay more would be to have access to a smaller internet. An internet that could not just be slow but be partial too.
  • This is quite astonishing considering what other countries in the world are doing. While net-neutrality is a given in all mature markets it is still a battleground in some of the emerging markets. If you think about what we are now facing: slowing down internet traffic, fast lanes for certain kinds of content, the blocking of websites you can see that these are all techniques used in totalitarian regimes.
  • Other emerging markets are going out of their way to make sure that basic internet services are granted to all so that the poor are not left out. India is a good example.
  • There is also concern that company looking to reach potential customers over the internet will face a pay to play mentality that might just leave out start-ups or companies with smaller budgets.
  • Such concerns are not only for businesses but for anyone using the internet as a form of communication. Non-mainstream media, activists, any minority groups, they could all see their sites put at a disadvantage and basically their voices silenced.
  • Things get even more complicated when internet providers own content companies as they could decide to favor their content over their competitors’ content. Think for instance about being able to stream movies on your phone from the AT&T service without impacting your data plan but not being able to do the same with Netflix.
  • Vertically integrated ISPs like Comcast and Verizon are trying to compensate the decline in cable television revenue with bundles of video services with internet plans so that the internet looks more like cable. Without net neutrality, these service providers have carte blanche in how aggressive they can be.
  • Our internet will not change overnight. But this is not necessarily a good thing. Companies will experiment and implement small but consistent changes to the point where we will not know what we do not know anymore.