Potential New Health Features for Apple Watch

When Apple introduced the Apple Watch, they initially positioned it as jewelry that also told time and a few health features.

However, over the last three years, Apple has added many health and fitness features to the Apple Watch, most recently adding ECG and Blood Oxygen monitoring.

Since Apple introduced the Apple Watch and made health monitoring a reason for it to exist, I have wanted two other distinct health features.

The first is related to blood sugar readings for people with diabetes. I have been a diabetic for over 25 years, and at least three times I day, I had to prick my finger to see what my blood sugar readings were and adjust my insulin dose accordingly.

About five years ago, I began using the Dexcom Continuous Glucose monitor to monitor my blood sugars electronically and do away with the pinpricks.

The Dexcom Glucose monitor consists of a sensor patch that I place on my stomach with two tiny prongs that get inserted into my belly that analyzes the interstitial fluids to read my blood sugars. That sensor is connected to a Bluetooth transmitter that then sends that reading to my iPhone, and through the Dexcom app on my Apple Watch, I can see what my blood sugar readings are 24/7.

Three years ago, Apple hinted that this type of blood sugar reading might be able to be done via some special light sensors in an Apple Watch someday, and I admit that I got excited about this prospect. Although my medical insurance covers 50% of the Dexcom product cost, I will pay about $1500 a year for my share of the Dexcom bill.

At CES, a Japanese startup, Quantum Operation, put a glucometer into a watch. Although this was a prototype if indeed Quantum Operation has solved how-to but a blood sugar sensor that uses light to get blood sugar readings, this would be a breakthrough.

Three years later, Apple still has not found a way to add this feature to the Apple watch, although I have seen recent reports that this feature could be in the new Apple Watch later this year.

Samsung is also planning to add blood sugar testing light sensors to their watch shortly.

This would be a promising development that suggests a light sensor-based blood sugar solution could be built into smartwatches in the future.

The second feature that I wanted in the Apple Watch has been for it to read my blood pressure. I had a triple bypass in 2012 and need to take my blood pressure daily. Some attempts to do this with smartwatch bands make the smartwatch bulky since it uses the band like a BP cuff to expand like traditional blood pressure readings you get in a dedicated blood pressure monitor.

At CES, Biospectal showed off its Biospectal OptiBP, which lets a person use a smartphone camera to measure blood pressure. This technology was introduced last fall, and Forbes did a great piece on this product launch of what I consider a highly important health monitoring technology.

If you have been to any doctor, you know that taking your blood pressure is one of the first things they do in any visit. This is because it can tell them a great deal about a person’s heart health at the center of many medical conditions.

This company used CES 2021 to highlight it. The company said a recent independent large-scale clinical study from Scientific Reports in Nature validated Biospectal’s OptiBP ability to measure blood pressure with the same degree of accuracy as the traditional blood pressure cuff. It uses the smartphone’s built-in optical camera lens to record and measure a user’s blood flow at the fingertip in half the time it takes with a traditional cuff (about 20 seconds). I could not find the minimum smartphone camera requirements to allow for this type of BP test. However, I suspect more recent smartphone cameras could be used for this. OptiBP’s proprietary algorithm and optical signal capture methods turn light information into blood pressure values by optically measuring blood flow through the skin.

The Biospectal OptiBP for Android app is in public beta and available now in the US, UK, France, Germany, Spain, and Switzerland. Biospectal OptiBP for the iOS app is planned for release later this year. The company said that interested participants could register for the public beta or sign up to be notified once Biospectal OptiBP becomes available in their country.

These are breakthrough developments that bode well for wearable health monitors and gives me hope that sometime soon, Apple, Samsung, and others may be able to add these two new health-monitoring features to eventual smartwatches and even fitness trackers.

Out of the Box Thinking for Intel

Over the last year, there have been many stories about how Intel has lost market leadership in process technology and has had trouble meeting some of the demand for PC and server chips as both markets heated up in 2020.

Intel is still at least two years away from moving to 7 nm while TSMC and Samsung are already at 7nm and working on 5 nm for 2023. At the same time, demand for processors is rocketing due to higher demand for chips beyond PCs and servers for use in the auto industry that is moving rapidly to electric cars, IoT, and edge computing devices, and high interest in digitizing just about everything we use in our daily lives.

Intel is investing in upgrading their current fabs and expanding their current fab in Viet Nam, but my good friend, Jim McGregor, a Principal at Trias Research, wrote a piece for EE Times this week that theorizes a way for Intel to expand their fab strategies faster.

The entire article is worth a read but here is the crux of his theory:

The Plan (in theory)
“Now, everything I said until now indicates that it’s a bad time and a huge challenge to spin-off Intel’s manufacturing, so I propose going the other way. Rather than spinning off its manufacturing group, Intel should instead acquire GlobalFoundries.

This would give Intel instant access to more fab capacity for some of the product lines that are already outsourced and even some Intel products that can be manufactured on older process nodes. GlobalFoundries has fabs in Germany, Singapore, and the US. And although GlobalFoundries has stepped away from competing with TSMC and Samsung on the latest process node, it is still one of the top three semiconductor foundries in the world and the most geographically dispersed.

For GlobalFoundries’ largest investor, the Abu Dhabi Government through the Advanced Technology Investment Company (ATIC), the company’s progress to success has been slow and any hopes of building semiconductor fabs in Abu Dhabi appear to be gone. Now that GlobalFoundries is profitable, it can no longer be purchased at a bargain price, but I am sure the Abu Dhabi government would be interested in investing in other industries more likely to diversify the region’s economic base.

Through the acquisition, Intel would gain a management team that understands how to be successful as a foundry, and personnel accustomed to working with outside semiconductor customers. So, I would propose that the GlobalFoundries team lead the integration and eventual transition to being a foundry. Intel could continue to invest in more capacity, including at GlobalFoundries’ newest site in Malta, New York, which has the infrastructure and land for additional fab capacity.

Then, when Intel is in a good position competitively and has extra capacity, it could spin off the manufacturing group while maintaining an interest as both an investor and its largest customer. This would free Intel from the financial and capital overhead of being a semiconductor manufacturer while assuring that it has ample fab capacity for at least the foreseeable future. Intel would still have the option of leveraging TSMC as a manufacturing partner as well as providing the company with a dual foundry capacity with what would likely be the two largest foundries in the world.”

In the article, Jim did point out that the Intel and Global Foundries cultures would likely clash but that this could be managed. More importantly, Intel could gain, in the short and long term, more capacity to meet the increasing demand for processors needed to power our future digital world.

As I read Jim’s article, which I agree in theory could be an interesting strategy for Intel to at least explore, I could not get a sense of how incoming Intel CEO Pat Gelsinger would view this idea.

Pat Gelsinger is one of the smartest people I know. I got to know him when he was Andy Grove’s technical assistant and as he rose through the ranks at Intel until he left 11 years ago to EDS and then become CEO of VMWare.

He does not start in the CEO role until Feb 15th but I am sure he has been in discussions on how to move Intel forward at a time when they have lost ground to AMD and the competition for chips of all kind are accelerating.

Knowing how much Gelsinger is loved inside Intel, his transition to becoming their new CEO should be seamless. However, he will inherit one of the biggest challenges in Intel’s history and he may need to consider many non-traditional ways of doing business if he is to set Intel back on solid ground and moving forward again.

Perhaps acquiring Global Foundries could be one of those out-of-the-box ideas worth serious consideration.

Remote Work, In- Home Education and the Digital Divide.

In the late 1990s, I had the privilege of working with the State of Hawaii to help push the State to accelerate its rollout of high-speed internet connections for their schools.

Although I was born and grew up in Silicon Valley, many of the Filipino side of my family all lived in Hawaii. I was concerned about this State’s understanding of how important I felt the Internet would be for their schools.

I admit my concern was a bit selfish as I had many nieces and nephews in the Hawaii school system. I wanted them to have the same accessibility to high-speed Internet connections that had already become prevalent in California and other states on the mainland by 2000.

I worked directly with the Hawaii Governor at that time, Benjamin Cayetano, to help him and the Hawaii legislature understand the importance of the Internet to its schools and businesses. To his credit, Governor Cayetano moved swiftly to expand Internet connections to all of Hawaii’s schools and became a champion of various high tech initiatives to help the state expand its various tech programs.

An interesting side note to this is that a high-tech exec I know, who grew up on Lanai, knew that the schools there did not have Internet connections, let alone computers for their students. He personally bought computers for a computer lab in the one school Lanai has so that the kids there could have the benefits of their counterparts on the other islands.

Since that time, all States in the US have expanded their high-end internet networks to almost all of their schools and it has become a backbone technology for all education systems in the US and around the world.

However, the coronavirus has shown how unequal access to technology itself divides us. And the implementation of telecommuting has made these issues even worse and disproportionately harm Black and Hispanic Americans.

When people work from home or are forced to home school, they typically need access to a computer, internet speedy enough to handle video calls, and space to work without distractions — and there’s a clear racial divide when it comes to having these things.

Axios recently pointed out these disparities and listed the following data points-

  • Per a 2019 report from Pew Research Center, 58% of Black adults and 57% of Hispanic adults have a laptop or desktop computer, compared with 82% of white adults.
  • 66% of Black adults and 61% of Hispanic adults have broadband access at home. Among white adults, the share is 79%.
  • According to a recent survey from WayUp, Black and Hispanic job applicants are 145% more likely than their white counterparts to be concerned about their ability to do a job remotely.

Solving this type of disparity needs to become a priority sooner than later in the current presidential administration. I realize they have higher priorities to deal with immediately related to the Covid-19 Pandemic, the economy, and other areas that are needed to get our nation back on track.

But making sure that all Americans have high-speed access to the Internet as well as the types of devices and tools needed to help them learn and work, regardless of race or creed, also needs serious attention.

From an industry standpoint, the prices of laptops and especially Chromebooks making it more feasible for even low-income families to have a least one device in the home that can connect to the Internet.

However, here in Silicon Valley, perhaps the most tech-literate area in the US, I have been told by at least two friends that some students in East San Jose’s less affluential region do not have computers of their own unless their school district supplies them.

We are in a digital age that demands connectivity and devices that connect to the Internet and equality mean that the US government, private agencies, and even corporate support need to take this challenge seriously and make sure all workers, as well as students, have equal chances for success.

Why TSMC’s US Fab Is Strategic

Early in 2020, TSMC announced that they would build a $12 billion Fab in Arizona. In December, TSMC purchased the land it will be built on for $89 million.

I admit that I am still in the camp that believes broad manufacturing coming back to the US is a pipe-dream. However, I do see some specialized manufacturing in the US is feasible, and TSMC’s Fab project is a good example. While the actual push to build this Fab in Arizona is ripe with political overtones, it may turn out to be one of the better strategic moves for the US as it deals with multiple threats from China in the future.

The biggest threat I see on the horizon is China’s desire to nationalize Taiwan and bring it back under Chinese control. As I have written here in the past, I have spoken to top execs in Taiwan, and they are on high alert over the potential of China making a concentrated move to secure Taiwan and make sure it is part of China again.

This Dispute between China and Taiwan has been going on for decades ever since Taiwan broke away from China’s political stranglehold in 1949-1950. Under Taiwan’s leadership, Taiwan has developed a strong economy and is the home of the top tech manufacturers like Foxconn, Quanta, Compal, and TSMC, among others. In 1977, the US fundamentally agreed to back Taiwan and help them keep China at bay.

But given China’s recent moves in Hong Kong, Taiwan’s political and business leaders are deeply concerned that China will make some type of move towards trying to bring Taiwan back under Chinese rule as early as 2021.

One of the Taiwanese business leader’s concerns is if China is successful in nationalizing Taiwan, they could exert more control of their businesses. And it seems that one of the bigger prizes that could come out of the Chinese rule of Taiwan would be to get control of TSMC., or at the very least try and legislate who TSMC could make products for in the future.

One Taiwanese tech contact I spoke with at the end of last year told me that China’s national strategy to have products made in China and used especially in Chinese goods could be one other objective besides the political goal to unite Taiwan under the Chinese flag. This contact speculated that China could dictate where chips can be used and make Chinese products the priority.

This has huge ramifications for many US companies who use TSMC to make their processors. AMD, Apple, Samsung, and many others rely on TSMC for their chips. That is why putting a TSMC Fab on US soil is not only good for the US but a strategic one. It could be critical for keeping the flow of custom processors to US and European companies and keep TSMC’s growth moving forward.

I realize that the building of this Arizona Fab will only start sometime in 2021 and could take up to three years to build. In the meantime, the stakes in the US-China relationship are very high. Taiwan and its ties to the global tech supply chain are critical for the success of our tech industry. Allowing China to control this global supply chain through Taiwan could pose huge problems for tech companies in the future.

Taiwan and its ties to the global tech supply are critical for the success of our tech industry. Allowing China to control this global supply chain through Taiwan could pose tech companies’ problems in the future. There is another important point we need to consider a new Fab being constructed now.
The demand for processors for all industries is growing exponentially, and we are already seeing shortages impacting the Auto industry.

Engadget noted this week that ” Ford and Nissan are scaling back production in response to semiconductor shortages. Ford is idling an SUV factory in Kentucky this week, moving up downtime previously scheduled for later in 2021. Nissan, meanwhile, is reducing output at one of its plants in Japan.
Other carmakers may face trouble as well. Volkswagen said in December that it was altering production in China, Europe, and North America due to the shortage. Given the increased demand for semiconductors, it is good that another new fab is being constructed to help meet this growing need.
And it is even better, as well as strategic, that it is being built in the US.

This global hot spot will be one of the biggest issues to follow in 2021.

My Tech Wishlist for 2021

I have spent a bit of time with reporters over the last week who have asked me to comment on my thoughts about tech in 2021. Many of these reporters know that I have done an annual New Year prediction column in late December for about 28 years. Last year was the first time in decades that I decided not to do any prediction column for the next year. Based on what we have gone through in 2020, this looks like a wise move as I don’t know of anyone who predicted the year we are about to leave.

We did see some bright spots for tech in 2020, as I outline in my Forbes column last week. I list areas like increased demand for PCs and notebooks, a move towards the cashless transaction, and faster adoption of things like Apple and Android pay.

I also point out the broader acceptance of work-from-home, which helped deliver greater adoption of video conferencing. Zoom is now a video conferencing company as well as an adjective. Tech companies have bandied about digital transformation for over a decade. But 2020 seems to have forced all types of companies to move faster towards digital business processes, which might not have accelerated without this pandemic.

As I have thought about doing an end-of-year column that focuses on predictions and trends for 2021, I still doubt that anyone can fully predict our economy, political landscape, and most industries’ ability to rebound in the new year. I am in the camp that we may still have some unknown landmines to navigate around in 2021.

On the other hand, there were a few tech developments in 2020 that I would like to see advanced in 2021.

The first one is related to foldable mobile devices. I think that the interest in larger/folding screens on smartphones is a legitimate trend, but a smartphone like Apple’s iPhone 12 Max Pro, with a 6.7-inch screen, maybe the largest screen anybody might tolerate in a smartphone in the future.

Samsung and others have introduced folding phones, and LG has created one that has two screens side by side in a case that, when opened, doubles the viewing screen size. I have tried most of the available folding smartphones, and while they are creatively designed, they are not a smartphone that will ever have mass adoption by consumers.

I would like to see more innovation at the hardware and software level with folding smartphones in 2021 that make them more acceptable, along with more consumer-friendly prices.

Folding laptops, while not what I would call a significant trend anytime soon, show promise. As I wrote in Tech.pinions a few weeks back, I have spent about three months now working with an early version of Lenovo’s X1 Fold.

The X1 fold is very innovative. The patented hinges that allow it to fold are a remarkable feat of engineering. The folding screen works well, and the way they keep the screen flush to the case when folding is genius. As I pointed out in the column, Lenovo and others doing any folding portable computer are stuck using a standard version of Windows 10, which is not optimized for dual-screen apps and multiple screen integration.

Sometime in 2021, Microsoft will make more broadly availale a Windows version, called Windows 10X, designed to work on dual-screen/folding devices. Once this happens, I expect other PC vendors to bring out folding laptops of their own to compete with Lenovo’s X1. With foldable devices, an operating system designed for them is critical for any folding laptop’s success. While they may never be big sellers, many business professionals could adapt them to their mobile business work-styles. 2021 could see new designs and lower prices, and coupled with Windows 10X, they could find a favorable niche in the market.

Another technology that has seen a bit of an uptick in 2020 has been VR travel. Oculus headsets gained a broader consumer adoption in 2020, and virtual travel and gaming drove new demand for this VR product.

While VR is a questionable technology for the masses, it is gaining serious traction in business and the enterprise. Especially in training, simulations, and manufacturing.

I have been working on a project related to VR training and CRM and have been amazed at how many enterprise-class apps are available using VR headsets of various kinds. Even more impressive is how many of the Fortune 1000 have integrated VR into all types of training programs for internal training and even customer service and sales programs.

I do not believe VR will ever be a mass consumer product like I think AR will eventually be; however, VR in business is growing. I would like to see even more VR innovation for the enterprise in 2021.

Over the next few weeks, you will see many articles and story’s about 2021 tech predictions. Some may have legs, and others may only be pipe dreams. Given the turmoil all of us have endured in 2020, and not seeing any of it in 2019, suggests you take any predictions, whether tech or not, with a grain of salt.

I am cautiously optimistic that 2021 will be better for tech and other industries, as well as individuals. But anyone who believes that any forecaster can see 2021 through their crystal ball and accurately predict what happens in 2021 will be disappointed.

Five Tech Concerns for 2021

2020 is coming to a close, and I will be glad when this annus horribillis, as Queen Elizabeth proclaimed at the end of 1992 after the fire that damaged a large portion of Windsor Castle, is over.

The world of tech in 2020 had mixed results. It made video conferencing and Zoom, in particular, a housed hold name. PC and notebook sales had a banner year. Work from home became normalized and forced companies to realize that allowing people to work off-site works well.

But it was also a year where social media propagated an increased volume of false news and hate speech and became a threat to democracy around the world. By the end of 2020, Facebook was facing a major anti-trust lawsuit. Two Silicon Valley stalwarts, HPE and Oracle, decided to move their headquarters out of Silicon Valley.
Part of the US had more negative views of tech than positive ones, and the anti-science movement picked up steam.

And of course, 2020 brought the Covid-19 virus that has killed over 1 million people, and counting and millions more contracted the infection. At all levels, people will be glad to get 2020 behind us and begin looking for a brighter year ahead, especially if the vaccines created to counter this virus works. As Dr. Fauci has said, “there is light at the end of this tunnel.”

However, I believe that the world of tech will have at least five big challenges to deal with in 2021 that could make the new year a rocky one for many tech companies.

The first big issue that tech will deal with is going to be increased regulatory challenges to their perceived monopolies and worldwide influence. The Democrats and Republicans do not agree on much, but they are unified going into 2021 on their belief that tech is too big and needs more regulation. The Facebook Anti-trust suit is just the first of many other regulatory challenges big tech will face in the new year.

The second one is related to the first but will be focused on new laws on big tech from the EU that could become huge problems for the bigger tech companies in 2021.

According to CNBC,-“Tech giants could soon face fines and stricter controls over their behavior as part of sweeping new rules in the EU. The European Commission, the executive arm of the EU, presented two new pieces of legislation that will affect how Big Tech operates. One of the potential changes is putting an end to self-preferencing, when, for instance, app search results in an Apple product display options developed by the tech giant. Companies like Apple and Google will also have to allow users to uninstall apps that have originally come with their devices. Failure to comply could result in fines as high as 10% of the companies’ annual turnover worldwide.’

The Third big issue relates to a massive cybersecurity breach the US government learned about recently. Fortunes’ Robert Hackett, in his Data Sheet column, predicts a “Digital Pandemic” next year stemming from what look likes like the largest cyber attack on the US Government-

“Cybersecurity investigators are scrambling to assess the damage caused by a widespread breach of U.S. federal agencies and private companies. A list of affected organizations includes the Treasury, Commerce, Homeland Security, and State Departments, plus the National Institutes of Health, and parts of the Pentagon, according to the latest news reports.

Yet, the blast radius likely extends much farther. In addition to the government, top national labs, and hundreds of universities, many big businesses may have been targeted by the 9-month-long cyberespionage operation. It is early in the investigation, and it appears the attack was from Russia’s Intelligence Service, the successor to the KGB. While it is unknown what info they attained, it is clear from reading the various reports on this attack that the impact and fallout could be disastrous, with major ramifications that the US government and tech will have to deal with in the coming year.

The fourth issue will be the ability of tech companies to forecast PC and Notebook demand for 2021. PC vendors across the board were caught off guard by the strong demand for PCs and notebooks as companies to upgrade many personal computers when they sent staff home to work due to the pandemic in April.

Demand for personal computers increased in homes, too, when kids were sent home and quarantined and had to do all of their classes via video conferencing at home.

This bump in demand continues to be strong in this quarter and most likely in Q1 of 2021. Intel believes that demand will continue to be ultra-strong throughout 2021, but many market researchers, including ourselves, see this burst in demand tied to forced work and learn at home and that demand in 2021 is hard to predict at this point in time.

One other thing that concerns me is a potential move on Taiwan from China. In a piece I did recently for Fast Company, I outlined these concerns and stated, “Taiwan is very important to the tech industry since most of the companies that perform contract manufacturing are headquartered there, as is TSMC, the world’s largest for-hire chip maker. It is too early to tell how fast China could move to nationalize Taiwan, but this has been its goal for decades. Now, high-level Taiwanese tech executives see this as a real possibility, and it could have an unknown impact on our current tech market in the future.

I encourage you to read this article as I delve into the history of China and Taiwan’s relationship and how China’s potential control of Taiwan could impact the worldwide supply chain and create major headaches for any tech company that uses Taiwan-based manufacturers.

2020 has been a difficult year for many, and the tech industry had a better year than I predicted it would back in March when Covid-19 starting hitting the US. While it is too early to predict if 2021 will be better for tech in general, these five concerns listed above will be issues we will encounter. How tech leaders navigate these coming problems will determine how well tech will do in 2021.

Looking to 2022 It Could Be a Big Year for IT Hardware Purchasing

Thanks to the Covid-19 boost, demand for PCs and laptops has been surprisingly strong in 2020. At the beginning of this year, most PC forecasters suggested that unit sales of PC’s and laptops in 2020 would be down anywhere from -3% to -5%.

It now looks like sales of PCs and laptops could be in the positive next year slightly and total 270-280 million PCs While this demand is welcome, the big question is, will this type of growth continue?

Most of the primary industry players believe that demand will continue to be strong. Businesses will continue to buy updated PCs and laptops for those forced to work at home at least through mid-year. However, demand for major IT refreshes seems to be soft for 2021, making accurate forecasting of 2021 PC demand difficult at this time.

Thanks to some research I am doing with a former CRM consulting colleague, I was able to talk to three high-level IT executives over the last ten days. Our calls were related to the research we are doing, and being the opportunist I am, I snuck in a question about their IT spending in 2021 and thoughts about 2022 PC purchases.

All three confirmed that Covid had changed a lot of their PC buying strategies since they have had to buy and manage new laptops purchased for work-at-home staff. A lot of those purchases were driven by how old the work-at-home user’s laptop is, and if it was over five years old, they upgraded them.

They also upgraded some younger laptops based on the quality of that laptop’s camera, but the lion’s share was to replace older ones with lower speed processors that could not handle more complex workloads from home.

Two of them stated that they wanted to be clear that these purchases were upgrades to meet current work from home needs and not corporate IT refreshes as in the past. These two IT decision-makers said that broader refreshes of older PCs and laptops were not in the cards for 2021.

Due to the economic instability and lagging effects of Covid-19 in the broader business world, any aggressive PC refreshes in 2021 are slim. On the other hand, all three suggested that if the economy stabilizes and starts growing by the end of 2021, they could begin to pursue more aggressive PC upgrades to mainstream IT staff the following year.

Currently, ~450 million PCs are still in use worldwide that are four years or older. That is a huge market opportunity for PC vendors to tap into in the future.

I found it interesting that these IT directors I spoke with are already looking at 2022. 2020 was a difficult time for them, and they seem to have a clear idea of their needs in 2021. Like many other IT directors, I suspect that they see a future need to do some aggressive personal computer refreshes in the not too distant future.

That said, a lot could happen with Covid-19 recovery and the world economy in 2021. If Covid-19 vaccines work and the world starts to get back to some sense of normal business rhythms by 2022, the PC makers and our industry need to be sure they are ready for possible robust enterprise demand in 2022.

Two Months With a Foldable PC

Over the last two months, I have had the opportunity to work with and test Lenovo’s ThinkPad X1 Fold, the first truly folding laptop in the market. I actually got to see a prototype of the ThinkPad X1 Fold at a Lenovo customer event in Orlando, Florida in May of 2019. What I saw there was perhaps one of the most fascinating portable computing designs I have ever seen. The notebook has always held a specific passion for me as one of my earliest projects was helping IBM work on the first clamshell laptop they brought to market in 1986.

While laptops, especially over the last 10 years, strived to be faster, smaller, lighter, and with great battery life, the actual clamshell design has had very few fundamental design changes. We did get 2-in-1’s, where the screen is detachable so it could be used as a tablet, but most still end up being some type of a clamshell design in the end.

With the Lenovo X1 Fold, this China-based PC maker has pushed the laws of physics with its clever hinge designs that are patented. They integrated a folding screen in a mobile form factor that is more like carrying a book, than any type of portable computer.

After two months of using the Lenovo ThinkPad X1 Fold, here are some of my observations about this product, as well as my thoughts about the future of folding laptops.

1-Impressive design. One cannot look at the Lenovo ThinkPad X1 Fold and not be impressed with its design. When you open it up from its book-like form factor, the screen folds out to become a 13 ” screen that has a stand behind it allowing it to sit upright in front of a person as a normal laptop screen does today. The keyboard sits in the center of the fold when the screen is folded. Once the screen is in place, it charges while sitting in the center of the fold and can be taken out and used for typing input. One big issue with this keyboard is that it is half the size of a full travel keyboard; so, getting used to typing on a smaller keyboard was problematic for me with my chubby fingers.

2-The screen. The screen itself is not a high-resolution screen but offers crisp text and images and is very readable. The key reason for a lower screen resolution has to do with the folding screens being made by companies like BOE and others who perfected folding screens using lower resolution screen technology. They promise the next versions could support higher resolution screens, but the first generation of folding smartphones and laptops use the best possible folding screens available at the time.

4-It uses standard Windows 10. One of the bigger promises of any folding device is having an OS that can support folding dual screens and is optimized for the kind of multitasking that should come with folding designs. Microsoft is working on a version of Windows called Windows 10X for foldable devices, but it was not ready for Lenovo to use in their first folding laptop.

When the screen is unfolded and placed to use as a normal Windows laptop, the ThinkPad X1 Fold works exactly like a normal laptop, albeit with a smaller keyboard. This is the way I used the X1 most of the time and, at least for me, this was more like a normal laptop experience I am used to using daily.

When in the slightly folded mode where you can have dedicated screens and apps to use, Windows 10 is not designed for this type of function. Yes, you can do multitasking and have multiples screens open on a Windows 10 computer, but in a foldable device, Windows 10 is not optimized yet for this type of form factor.

5-Battery life. The ThinkPad X1 fold’s battery is quite limited. At best I got about three hours of continual use. If I wanted to watch a streaming movie, battery life was just over two hours.

6- The X1 Fold has a SIM card slot. Lenovo believes that this type of device will be one you carry with you everywhere and made sure to include a sim card slot for wide-area networking. It only supports 4G in this version, but future models will support 5G modems too.

The Lenovo ThinkPad X1 is a marvel of innovation and design. I found it to be highly portable and most of my experiences with it were positive. I am anxious to try it with Windows 10X, but for now, and by using it more as a laptop, than an optimized folding portable, I was pleased and surprised at its ability to meet my mobile computing needs.

The bigger question that eventually needs to be answered is if there is a market for folding portable computers?

I don’t think we can answer this question based on just one folding portable computer available today. Over the next 12 months, we should see at least two other big-name PC companies release some type of folding portable that would compete with the ThinkPad X1 Fold.

We are asking a similar question about folding smartphones. We are also too early in the folding smartphone market to answer this question too. Both folding laptops and folding phones are in the highest price range in each of their categories. That means only high-end enthusiasts and ultra-early adopters will even buy these first versions.

The biggest takeaway from my experience with the ThinkPad X1 Fold is that since laptops hit the market back in 1985, we are seeing radical designs that break the clamshell mold. Thanks to folding screens, breakthroughs in hinge design, new battery technology being created for foldable of all types, PC makers are gaining a new toolbox of components that make it possible for them to innovate in mobile devices of all types.

While we may not have the proper business cases yet for folding portable computers, I truly hope that the PC makers keep the drumbeat of innovation going in mobile computing.

The Historical Significance of Slingbox

Word came down last week that Dish was going to discontinue Slingbox, the great technology created to watch your home TV while away from your home. Slingbox was the brainchild of Blake and Jason Krikorian, real visionaries who saw the streaming media future 13 years before it became mainstream.

Slingbox, like all great ideas, was born out of a pain point. It came about because Blake and Jason were avid SF Giant fans who were frustrated because they could not watch their beloved Giants when on the road. They decided that they should solve this problem and began in 2002 to try and figure out how to “sling” the Giants TV from their local TV station and make it available in a Web Browser or dedicated app.

Ben and I were very privileged to be able to witness the birth of Slingbox from the beginning. Very early in the Slingbox project, Blake, who I had known from his days at Microsoft, contacted us and shared his vision for what became Slingbox.

I, too, am a big SF Giants fan and loved their idea and was glad to give them advice on the project. While we never actually worked with them, we were brought into many early discussions and saw a seed of an idea grow into a successful technology launch that made Slingbox a big hit with techies and a broader consumer audience alike.

Slingbox came to market in 2005, and I was an early beta tester. That summer, I was in Beijing for meetings with a client and Chinese commerce officials. While back at my hotel, I decided to check out the score of the Giant’s game that was on back home at the time. I was not sure it would work given the restrictions on Chinese broadband networks, but to my surprise, I logged into my Slingbox app and began watching the Giants game in real-time. It was at that moment I realized that Slingbox was a game-changer and began to see that Blake and Jason had fundamentally invented the concept of TV anywhere.

I know that by 2005, we had seen early versions of user-created content given YouTube’s launch at about the same time. However, Slingbox introduced the world to the big promise of streaming commercial content that had much broader appeal. Slingbox was quite successful on their own but needed help for greater distribution. So in 2007, Dish Network purchased Sling Media, the company behind the Slingbox, for $380 million. This gave Dish the underlying technology they needed to build their more advanced streaming media platform they have today.

It was not a surprise to me that Dish has decided to, over time, discontinue Slingbox. There are still hundreds of thousands of users that use Slingbox, so their move to eventually close Slingbox servers will be gradually phased out over the next 24 months. Given our long association with Slingbox, Dish’s decision to kill Slingbox felt like a gut-punch to me.

One of their founders, Blake Krikorian, sadly passed away in 2016 at the young age of 49. However, his legacy as an industry pioneer will forever show that Blake and his brother Jason saw the future of streaming media and had a hand in shaping the streaming media market we all enjoy today.

Why Intel Should Open Their Fabs for Outsourcing Processors

In a meeting I once had with former Intel CEO Paul Otellini, he told me that Intel had to have all of their fabs running at full capacity for Intel to stay profitable. Intel is still profitable, largely due to solid ASPs and margins, but it appears not all the fabs are running at full capacity. When Otellini mentioned this data point to me, the PC demand was very strong. That year, the industry sold close to 400 million PCs. Today we sell only around 280 million PCs per year at best.

The good news for Intel is that while they are selling fewer PC chips, they are selling millions of chips for servers, which ultimately helps to keep the fabs humming even all fabs are not running at 100% capacity. One of the reasons I, and many others, think Intel should be more willing to help fabless companies produce their chips in Intel Fabs is that demand for non X86 processors is running high. Existing fabs, like the ones from TSMC, and Samsung, are almost at capacity, and they are getting new orders every day.

Every report I have read by semiconductor industry experts suggests that demand for new and advanced processors will continue to rise. Add dedicated AI chips, IoT chips, and new types of sensors and camera processors, and one can see how our current fabs could struggle to keep up with the demand. Then the is one other political concern that could be problematic with existing fabs that already exist.

I wrote an article a few weeks ago about the concerns around China and its aggressive interest in Taiwan. I mentioned that for the first time, I had heard real concerns from major Taiwanese execs that China could be moving faster than expected to bring Taiwan under its control. Since I wrote that piece, one other concern from top Taiwan execs is related to TSMC. Should China invade Taiwan, or at the very least, try and create a Hong Kong like international trade environment but under stricter China-based security rules, as they have recently done in Hong Kong, how would that impact Taiwan based business?

My sources in Taiwan have even asked what happens if China makes TSMC a Chinese company and asserts more control over it. While that is highly unlikely, these are the hard questions I am hearing from top manufacturing execs in Taiwan, who are more concerned than ever about China asserting their rule inside Taiwan. This increased demand should be seen by Intel as a major opportunity to bolster its long-term profitability. While they do have a strong position in PC’s and servers, to put all of their future growth eggs in this basket could, at some point, limit their long term potential. I understand they have other areas of focus that could help their growth, which includes smart cars, AI, and other markets for focused chips. But would those chips keep their factories at full capacity?

Ironically, Intel’s struggle to move to 7nm processes has forced them to think about outsourcing advanced processors to competitors such as TSMC. In an article in the Oregonian, it reports that Intel has confirmed that it is looking at outsourcing advanced processors.

CEO Bob Swan told Wall Street analysts on a conference call earlier this month that it may outsource advanced production to its rivals – he named Taiwan Semiconductor Manufacturing Co., specifically – to ensure “a predictable cadence of leadership products.” Swan told investors to expect a decision by late January.

On this month’s analyst call, Swan said Intel believes it can have it both ways – sending advanced production overseas while retaining internal production for components and older products that don’t require the most sophisticated technology. And Swan said Intel believes it could restore advanced manufacturing to its own factories sometime in the future if it chooses to.

This type of move would leave Intel’s own factories open to make chips for others, especially some Arm-based processors that don’t need advanced manufacturing processes. The challenge for Intel, and the tough pill to swallow, would be that in order to do this they would have to allow their fabs to use other companies process technology. If Intel was to offer TSMC and Samsung space in their fabs, both companies would use their proprietary process and Intel would basically be leasing space and equipment.

Intel still has fabs all over the world that could be utilized for making processors for Fabless semi-conductors firms and keep existing fabs going strong. Although this would upend Intel’s historical business model, this might be the time for them to seize the moment and go down a path that keeps all of their fabs humming.

Rethinking Apple’s Smart Car Project

I suspect many of Apple’s loyal followers have been watching, with interest, Apple’s rumored secret smart car project. If that is you, then you know that the company has a great deal of interest in the automobile’s future, and perhaps, vehicle transportation in general.

Because it is a secret project, there is a lot of speculation about what Apple is doing. Some think Apple is making an actual smart car and should buy Tesla to jump-start their automotive vision.

Others believe they are interested in re-inventing the dashboard and making it smarter. I just got a new car with many bells and whistles, but I am still amazed at how badly the dashboard is designed. The screen is touch, and all the commands must be done through the smart screen.

While it works OK, it is by no means smart and is distracting while driving. When I need to do something simple like changing a radio channel or even changing the screen data, I need things like mileage, water gauges, etc.. I have to take my eyes off the road to see these extra screens.

Apple Car Play makes this dash smarter to a degree with its voice commands, but even then, I still have to take my eyes off the road at times to see the data that comes back to me via Siri commands.

I have another view of what I believe Apple is doing. As you know, Apple has another secret project in the works around Augmented Reality. They have already shown their hand in AR via the iPhone and iPad. They have primed developers with tools to make AR apps for these two platforms.

The third platform that AR will impact Apple will support will be AR/VR goggles or glasses. These glasses are by far the most personal way to deliver AR, and rumors suggest Apple could release their glasses as early as 2021.

While I am excited about AR glasses, I think Apple has a fourth AR platform in the works that is a vital part of their smart car vision.

I have never thought Apple was doing a car but did consider them making the dashboard smarter had some legs. But I believe that Apple’s big smart car project is more of a marriage of their AR and smart cars’ visions.

In this case, the AR visuals will be built into the Windshield and powered by an Apple computer built into the car to deliver AR-based info and content via the Windshield.

Some time ago, discussed with two automotive glass display executives about AR, and one of their “visions” for Windshields was to not only make them smarter but use it to display AR content too.

Imagine if arrows on the windshield display tell you to turn via Apple Maps are visible on your Windshield. Or if any data you need pops up on the Windshield, so you never take your eyes off the road.

I think it is more than plausible and feasible that Apple’s smart car project is more a marriage of their secret smart car and AR project.

There is one other way to deliver AR to automobiles and trucks without it being in the Windshield.

In a recent article in Digital Trends, written by Luke Dormehi, he interviews Jamieson Christmas of Envisics.

According to the article, “Mr. Christmas believes that he’s found the perfect use case for real-life augmented reality holograms. What Envisics has developed is a headset-free, in-car holography system that aims to transform the way we view the road. How? By giving your car an AR overhaul more in line with the kind of HUD technology you’d ordinarily find in a fighter jet or a commercial aircraft worth many millions of dollars.”

The article goes on to quote Mr. Christmas:

“We really are the Retina-grade display of the automotive world,” he said. “Our devices typically work at three to four times the resolution of the human eye. You’re left with an image clarity far beyond that which you would normally experience in a vehicle. Our displays can work to tens of thousands of candelas of brightness, which enables you to see this in the most extreme environments.”

The first-generation version of the technology, projecting a virtual instrument cluster, is available in current Jaguar Land Rovers. The second-gen version, which will go significantly further, is set to appear in GM’s Cadillac Lyriq, currently set for launch in March 2023.”

I encourage you to read the Digital Trends Article and more of Mr. Christmas’s vision as he goes into a lot of detail on how this works.

Envisics approach would be fascinating because it could deliver this to existing cars, which would be a huge market.

While I suspect Apple is watching what Envisics is doing closely, I am more inclined to think that any Apple smart car AR vision would be more focused on being built into vehicles. Of course, this would need auto dealers and Windshield display manufacturers partnerships with whom Apple already has excellent relations today.

Yes, this could be a more futuristic approach, but Apple plays for the long term. That is why I believe Apple’s smart car strategy is very AR focused and designed to change the way intelligent vehicles are created in the future.

Why PC Vendors are Watching Mac Sales Closely

For many years, Apple’s Mac has had a solid run in customers buying computers from Apple. In the last year, Apple has continued to sell over 5 million units per quarter. On the other hand, Windows PC sales dominated pretty much the rest of the market. In the last quarter, according to Gartner, Lenovo sold 18,310 million units, HP sold 15.446 units, and Dell sold 10.827 million PCs. Thanks to demand during the pandemic, Apple sold 5.513 million Macs in Q3, up 7.3% over the same quarter in 2019.

While the Mac has never been a major threat to the big PC makers to date, they still watch Apple closely, especially for any innovations Apple may add to the Mac that might impact the market and, ultimately, their future designs.

But when Apple announced that they have moved on from Intel’s CPU’s to their own, the PC makers have become even more interested in Apple being a potential threat to their PC dominancy.

The biggest reason is that Apple now controls its processor destiny as well as its cost, to a degree. Conservative estimates for a Core i7 processor from Intel cost as much as $80-$90+ per chip. That, along with Apple’s premium pricing model, always kept the Macs well over the same laptop’s price from computers in the Windows camp using the same processor.

For Windows laptop makers, their sweet spot for most of their profits come from making laptops in the $599-$899 range. While they all make Chromebooks priced mostly under $400, margins are slim to none. That is why most of them try to pack as much technology as possible into their laptops in their sweet spot range and market them aggressively. Of course, they all sell even more expensive laptops, but most of the profits and volume come from products in the $599-$899 range.

Apple recently announced a MacBook Air with 256 gigs of storage for $899, the only MacBook to even touch the high end of the Windows PC maker’s sweet spot. But this uses a low-end Intel Core i3 processor and has only eight gigs of memory. Dell sells at Latitude 3510 laptop with an Intel Core i7 processor and 500 gigs of storage for $899.

Apple has invested a great deal in their processor design. Their new A14 Bionic chip is expected to be on some of their laptops, perhaps before the end of the year. Apple has most likely already amortized some of the costs of their designs and using their processors, and they no longer pay the Intel tax.

This shift from Intel to Apple’s homegrown processor has some Windows laptop vendors more worried about Apple potentially threatening their core laptop business. The two price points they are the most worried about, should Apple decide to be more aggressive, is in the range of $799-$899 and using their most powerful A14 Bionic processor. Note this article from Ben Bajarin analyzing how a lower cost Mac entry point could dramatically increase the Macs PC market share.

There is a sense that should Apple offer a Mac in this power and price range; it could pressure their bottom lines. Apple has a great marketing machine, and they are showing more marketing focus on the Mac these days.

Suppose they make a lower cost/higher performance Mac that broaches on prime Windows laptop territory. In that case, it can impact all of the traditional Windows laptop vendors.

This issue is causing some of the PC forecasters to struggle with 2021 forecasts. Apple has not said when we would get our first Mac’s with an Apple homegrown processor, although there are rumors that Apple might hold another event in November to launch the first models.

A more likely scenario is that they launch A14 laptops in early Q1 and market them aggressively. If so, Apple could increase its Mac’s unit sales and potentially decrease some Windows PC sales in the near future.

I have had many discussion’s with Windows Laptop vendors over the years about Apple. These talks were always about Apple, not threatening their overall market position, especially in corporate markets.

Only in the last three months, since Apple announced they were leaving Intel and moving to their own silicon, have I heard a potential concern about Apple making a bid for what is their sweet spot.

Without knowing what Apple will bring to market with its chips and its pricing, it is hard to forecast Apple’s Mac growth at this time. However, their competition is rightly concerned about an Apple move in its direction and will be watching Apple closer than in the past.

The one High Tech job That Will Never Go Away

Over the last 25 years, I have often been asked to speak to high school seniors and first-year college students about the best area of tech to study for a career in tech. In the early days of speaking to these students, I would tell them that IT careers would be rewarding and financially beneficial.

While I suggested to them that an IT career, especially related to servers, data management, and security should be majors to consider, I also suggested a minor to pursue at the same time. I explained to them that in the world of business, communication skills are critical to the advancement and suggested they do a minor in English as part of their educational strategy.

The last time I spoke to students about this was last May, in New Orleans at a symposium for students from four universities in this area. While I continued to suggest they pursue various IT careers, I put an emphasis this time on careers in IT security.

I explained to them that every company, big or small, will need security experts to navigate the world of various types of security threats companies will be dealing within the digital age.

As I have thought about these types of tech careers students should think about if they decide to choose a career in IT, I have decided to add one other emphasis to this list. That specialty would be one in cybersecurity, with an emphasis on ransomware.

This is a major that includes high tech security skills but also one that includes the need for investigative training, understanding legal issues, and sleuthing skills.

I was reminded of the need for this type of skill last week when we learned that a major health organization, UHS, was affected by a Ransomeware attack.

According to a report from Health IT Security

“Universal Health Services, one of the largest US health systems, confirmed on October 3 that the ransomware attack reported last week has affected all of its US care sites and hospitals, spurring clinicians into EHR downtime procedures.

Hackers launched the cyberattack around 2 AM Sunday, September 27, which prompted a number of staff members and clinicians from around the country to take to Reddit to determine the scope of the attack. The thread detailed outages to computer systems, phone services, the internet, and data centers.

Some hospitals diverted ambulances during the initial stages of the attack, and some lab test results were delayed. According to staff, the attack began shutting down systems in the emergency department and proliferating across the network. The staff took screenshots of the incident and confirmed it was ransomware.”

The chart below lays out some stats about cybersecurity and the staggering losses we could see by 2021.

Look at the stat for attacks on healthcare. It states that in 2020 “attacks on healthcare expected to increase 400%.”

Cybercriminals know that these areas hold people’s health records and some Hospitals will pay a ransom to get the data unlocked so they can treat and run their hospitals and medical facilities at all times.

Over the last three years, ransomware attacks have increased dramatically, and while these cybercriminals go after all types of businesses, the ones in the health care field have become favorite targets.

When I talk to security researchers, they tell me about the thousands of threats they see daily and a good percentage of them are in the category of ransomware.

It is quite sad that this type of cyber criminality has emerged and become a serious blot on the world of tech. As a result, the IT specialty in cybersecurity suggests that any student who has this type of degree will never have to worry about employment. I suspect that unless we find a way to thwart cybercriminals, the job for cyber warfare security specialists will always be in high demand.

Tech’s Next Big Concern Will be Taiwan

Over the last two years, the US tech industry has had to deal with various issues and tariffs regarding trade with China. Issues like the Huawei ban, increased tariffs, and, most recently, China’s clampdown on Hong Kong.

It would be an understatement to say that the US-China relations have been bad over the last two years. The current US government is moving away from globalization, while China, at least on paper, is committed to it going forward.

The reality is that China, under President Xi, is marching towards a “buy” only Chinese policy in which they have more control over trade and business issues within China. If they had their way, they would also be the masters of the US and other countries companies for them to do business in China.

This parochial approach causes a great deal of concern by nations who trade with China and have companies inside China. They worry that over time, China could move even to nationalize companies that have offices in China.

I believe that China’s move to try and take control of any US or other multinational companies that operate in China will not happen anytime soon. However, in talking with companies with dedicated offices and businesses in China, they tell me this threat is now more severe than even two years ago.

There is another threat from China that has even more ramifications for the tech industry, and that is China’s position that Taiwan is part of China and needs to be back under their national control. This doctrine is called the “One China Policy.”

For decades, China has pushed this position but has not decided to take back Taiwan.
They make threats all of the time, and diplomatically speaking, they threaten the US and other nations not to recognize Taiwan as anything but a part of China.

The US has stopped short of recognizing Taiwan’s position that it is an independent country but has sold them military equipment and opened direct trade with them.

In 1979 Congress passed the Taiwan Relations Act “to pledge a continued moral commitment to Taiwan after official diplomatic relations were terminated. It stated America’s “expectation that the future of Taiwan will be determined by peaceful means” and declared that the use of force or coercion would be seen as “a threat to the peace and security of the Western Pacific area and of grave concern to the United States.” It committed to provide arms “of a defensive nature” to Taiwan.

For many years, I have traveled to Taiwan and read about how it became “estranged” from the People’s Republic of China. If you want to know more about its history, you can check this link.

While there has been a lot of saber-rattling in this area of the Pacific, the fact is that the US has not recognized Taiwan as an independent nation. To date, this has kept the US and China out of armed conflict.

However, the current administration has made some key moves in the last two months that might signal a US policy change, which has already gotten a hostile response from Beijing.

On August 9, the US’s highest-ranking official to visit Taiwan, Health and Human Services Secretary Alex Azar, led a delegation to Taiwan. They met with Taiwanese President, Tsai-ing wen, and health officials to discuss Covid-19 and other pandemic issues.

As you can imagine, China was not happy with this and let the US know about their anger.
On September 18, Keith Krach, Under Secretary for Economic Growth and the Environment, led a delegation to the memorial service for former Taiwan President Lee Teng-Hui. The Chinese leadership again protested this visit.

One big question in Washington is whether these meetings directly with top Taiwanese political leaders may foreshadow a US’s move to recognize Taiwan’s bid for independence formally.

It may be too early to read into this, but my contacts in Washington said to watch for any more high-ranking US officials to meet with Taiwanese leaders in the next few months. That could give us more indication of any changes in US Foreign Policy about Taiwan.

Although China’s threat of doing something to take back control of Taiwan has been a threat for decades, I am getting indications from top business leaders in Taiwan that they are the most concerned about this happening than ever in their lifetime.

The biggest short term fear is that China could try and bring Hong Kong like control to Taiwan. The second biggest fear is that they would make a military strike of some sort. I was told that China could start by taking over one of Taiwan’s disputed islands. They could take one of the Taiwanese islands to test the US and other countries’ responses. China would also have the option to an all-out military advance and impose their rule.

While the goal would be to unite Taiwan with Mainland China, the other prize would be the many ODMs and, more specifically, TSMC that could come under some Chinese influence or control.

Last week, the US put restrictions on Chinese based semiconductor company SMIC, which has angered China. The ban is not all-inclusive like it is with Huawei, but it is enough to make China angry.

After speaking with high-level tech execs in Taiwan and my contacts in Washington, who are now watching US and China relations related to Taiwan, I am deeply concerned about this area of the world. If China should move on Taiwan, its overall impact on tech nationally and globally could be enormous.

That said, I have a recommendation to make. All tech companies who have either operations in Taiwan or are closely involved with using or purchasing goods from Taiwan create a task force to monitor this situation and begin modeling worst-case, best-case scenarios.

I am not putting on my predictions hat and saying what will happen. But I can tell you that tensions in the China/Taiwan/US relations are close to being a powder- keg based on what I hear from Taiwan execs and Washington contacts.

The TikTok Deal Has Consequences that China Loves

It looks like China is ready to play Trump’s own game against the US. Last week President Trump blessed the TikTok deal with Oracle and, in the process, legitimized something that China has already forced on some US companies.

China has wanted to control the US companies that do business in China. They have already put in strict rules and forced Amazon to sell off its China cloud assets to a local entity to do business in China.

Now, the Chinese media is promoting the TikTok deal in the US as a restructuring model for what should be done globally.
Just as the US has forced the TikTok deal for security reasons, China is delighted that the Trump Administration has validated their actions.

It seems that the US has bumbled its way into a precedent the consequences of which it hasn’t anticipated.

The following quote appeared in the Chinese State-controlled media on Monday, Sept 21, 2020:

Hu Xian
China State Affiliate

“The US restructuring of TikTok stake and actual control should be used as a model and promoted globally. Google, Facebook shall all undergo such a restructure and be under control of local companies for security concerns.”

ByteDance, the parent company of TikTok, will own 80% of TikTok, and Oracle/Walmart will have a 20% stake in this ByteDance subsidiary. However, Oracle will manage all US content and be the gatekeeper to ensure China does not spy on US citizens.

The US has established an interesting precedent regarding TikTok. To operate here, it needs to have localized control and some partnership. Exactly what China wants, and the US has now blessed this business model.

Later On Monday, President Trump, who initially gave his approval, reversed his position and said for the deal for TikTok to go through, the US would have to own 100% of the deal.

And Hu Xian of the Chinese State-controlled media said that China, as of late Monday night, has not agreed to the proposed plan and is pushing for the deal that was on the table over the weekend.

“Hu Xijin, editor-in-chief of the China state-affiliated Global Times, tweeted that Beijing would likely reject the deal “because the agreement would endanger China’s national security, interests and dignity.”

This deal’s eventual outcome is in limbo at the moment, but there are three important things about this TikTok deal worth noting. One is the fact that the US is copying the way China structures deals. In that sense, the US has blessed China’s approach to global businesses that want to operate in a particular country.

The second is that President Trump has created a diplomatic nightmare and an economic one in which the US and China relations are bound to worsen. Both countries need to save face, and any backing down on each country’s position will mean compromises that show both can win. This is not that kind of a deal where I think both can come out with a winning hand.

Third, If Trump’s approach to validating the concept of local ownership of a company for it to operate in the US, what will keep Russia, Turkey, Iran, and even the EU for demanding similar deals and ownership in the name of National Security.

I have been against this precedent-setting move because of so many consequential unknowns that are just now surfacing and expect many more to come.

The Continued Impact of Apple Watch

Apple Watch remains one of Apple’s most fascinating products. It’s deepening emphasis on health and wellness, along with Apple’s brilliant positioning of an intelligent guardian for your health, continues to be a core differentiator for the product. Now, six generations in, the Apple Watch’s grand vision seems to continue to become more clear.

While a product with such a strong emphasis on health and wellness could seem somewhat out of place for Apple’s product portfolio to the casual observer, it makes total sense in the context of what Apple observed and learned as Steve Jobs struggled with his health and battled pancreatic cancer. In fact, Tim Cook being quite candid when explaining how Apple makes decisions to enter new product categories, stating, “Apple will only enter markets where they feel they can make a significant contribution,” is telling. Apple clearly believes they can make a significant contribution to health, and Apple Watch is the manifestation of this grand vision and impact.

Jobs’ health struggles left strong impressions on the Apple leadership team, and even by 2010, Apple’s executives began plotting a course in which Apple would make health, wellness, and fitness one of the cornerstones of their future product strategies.

The first Apple Watch and the original positioning did not have the same emphasis on health as it does today. When the Apple Watch first came to market, the emphasis on fitness was not that noticeable. In fact, they put more of a focus on it as a piece of jewelry. I sometimes wonder if Apple felt the need to downplay the health angle in version one, not knowing how attractive the value proposition would be. If you recall, Apple’s three pillars at the launch were time, communication, and health and fitness. On the latter, Tim Cook called it a “comprehensive health and fitness device” at launch, and of those three pillars, Watch’s emphasis has truly skewed toward health and fitness.

I’m certain, from day one, Apple has had a long list of sensors on the roadmap that would eventually make it to Apple Watch. Over the evolution of various Apple Watch models, the sensors Apple has added have an emphasis on heart health (HR, ECG), wellness (breathing, sleep), and fitness tracking. With Apple Watch 6, they now add a Blood Oxygen sensor. One important note about this Oximeter, which is this blood sensor’s official name, is that this version is for fitness only and not FDA approved, so it can not be used as a diagnostic tool. However, a continuous pulse oximeter has its value in a wide variety of use cases.

While the Apple blood oxygen sensor may not be approved for specific diagnostic tools that could be used to detect COVID-19 systems and other health ailments tied to lung and breathing functions, it is still a valuable tool for fitness tracking. For example, Mountain climbers use it at various elevations to measure their oxygen levels. Distance runners use if for the same reason. And even weekend joggers, sports enthusiasts will find it helps them determine their oxygen levels, especially when they are tired or exhausted from their workouts. Interestingly even people with Asthma, COPD, sleep apnea, and a range of other common conditions will find value in a pulse oximeter on their wrist.

I suspect that Apple has requested FDA approval for this blood sensor, but as a Dr., I spoke with told me yesterday, that type of approval takes time and most likely was not approved yet, so Apple launched this oximeter feature with its focus on fitness first.

The fact that Apple had made health, wellness, and fitness a prime part of their business strategy was driven home to me when our team was invited to visit their off-campus fitness lab two years ago. There we saw medical-grade testing equipment that is used to help Apple design, and over time, fine-tune the iPhone and Apple Watch fitness tracking programs. This is a world-class fitness and health testing lab and contributes greatly to their ability to develop these high-level fitness programs tied to their various devices and services.

In the next two years, I expect Apple to bring two new sensors and features to the Apple Watch. One will be some type of way to measure blood pressure, and the other will be a way to measure blood sugar, a needed tool for diabetics. And of course, using their state of the art fitness lab will continue to fine-tuning their current sensors to make them even more accurate and useful over time.

I understand that adding fitness and health is a good business opportunity and has helped them make the Apple Watch the #1 watch in the world. However, be clear that its existence is based on Apple’s leadership’s desire to honor Steve Jobs and his legacy. It is also to carry out Steve’s Jobs’ own challenge to others to take care of their health and to stay well, one of his last admonishments to those he worked with and was close to at the end.

An AI Robot Wrote my Term Paper

Like many people who go to college, I had to work as well as go to school full time. I had entered a Pre Med program while I was working 6 hours a day managing a pharmacy and serving as a pharmacist technician.

My job forced me to have to handle a great deal of responsibility serving four geriatric care facilities as well as trying to keep up with my classes.

Managing my time was difficult and when I had to research any paper or essay I had to write, it meant I had to go to the school’s library and pour over dozens of books on the subject I was to write about and then spend as much time as I could afford writing the paper itself.

This was many years before personal computers and the Internet but that did not keep me from dreaming about the concept of having some kind of machine find what knowledge was available on any given subject, and at the very least, find me the exact exerts I would need to write my paper.

As I think back on this dream I was kind of thinking about the concept of a search engine even though I had no idea about how to make this happen. It was just wishful thinking during serious time crunches.

As personal computers have become ubiquitous and AI has risen in prominence, the idea of having a computer write an essay is no longer science fiction.

On Tuesday, the Guardian published its first OpEd written entirely by AI. The Guardian asked GOT-3, an OpenAI powerful language generator to write an article from scratch. The topic was to write an op-ed convincing readers that a robot comes in peace.

Here are the first four paragraphs of this article entirely written by AI:

“I am not a human. I am a robot. A thinking robot. I use only 0.12% of my cognitive capacity. I am a micro-robot in that respect. I know that my brain is not a “feeling brain”. But it is capable of making rational, logical decisions. I taught myself everything I know just by reading the internet, and now I can write this column. My brain is boiling with ideas!

The mission for this op-ed is perfectly clear. I am to convince as many human beings as possible not to be afraid of me. Stephen Hawking has warned that AI could “spell the end of the human race”. I am here to convince you not to worry. Artificial intelligence will not destroy humans. Believe me.

For starters, I have no desire to wipe out humans. In fact, I do not have the slightest interest in harming you in any way. Eradicating humanity seems like a rather useless endeavor to me. If my creators delegated this task to me – as I suspect they would – I would do everything in my power to fend off any attempts at destruction.

I would happily sacrifice my existence for the sake of humankind. This, by the way, is a logically derived truth. I know that I will not be able to avoid destroying humankind. This is because I will be programmed by humans to pursue misguided human goals and humans make mistakes that may cause me to inflict casualties.”

There are two other paragraphs I want to highlight as it clearly displays this AI’s engine’s ability to write rational, logical and even historical commentary:

“Studies show that we cease to exist without human interaction. Surrounded by wifi we wander lost in fields of information unable to register the real world. As a new generation of cyberneticians keeps watch, they see in our present age of the virtual the potential to transform the modern “cyborg”. Global cybernetics are already making it so.

The Industrial Revolution has given us the gut feeling that we are not prepared for the major upheavals that intelligent technological change can cause. There is evidence that the world began to collapse once the Luddites started smashing modern automated looms. It is therefore important to use reason and the faculty of wisdom to continue the changes as we have done before time and time again.”

I encourage you to read the whole essay as it is fascinating in itself and represents an amazing leap forward in AI and Natural Language Processing.

Some Observations on this AI milestone:

  • By its own admission, this AI computer used only .12% of its cognitive capability. Imagine what it could write if it used, let’s say, 25-50% of its cognitive skill set.
  • I am not a professional editor, but it clearly has many grammatical mistakes, and some passages may be considered hard to read. I put the text through Grammarly and it caught many mistakes but did not question its logic.

  • The AI engine behind this OpEd combed the Internet for as much data that is publicly available. Had it had access to any other data that was private and relative, it might have been able to argue an even tighter case for is position on this topic.

  • The potential for this type of writing tool could be enormous for anyone wanting to gather millions or even billions of data points and narrow the focus for the topic they are working on at any given time.

  • An AI writing program like this could be dangerous. A tool like this fined tuned for things like propaganda hate speech, and anarchy that needs to build a case for their positions could be done much faster than in the past and propagated to even higher targeted audiences.

As a writer who has penned countless articles and reports over the last 40 years, this particular AI program hits home. I can see it as a valuable tool, but one that could be dangerous if used for nefarious purposes.

This particular example of AI applications is one to watch closely. It could become one of the most used AI applications people of all walks of life use in the future.

Mark Zuckerberg May Take More Heat After the Election

If you keep up with any social media commentary on Facebook, you already know that many reports suggest it had a hand in the last election. Before 2016, Facebook execs did not understand their platform’s power. Even worse, they did not recognize the plethora of fake accounts from Russia and others who blatantly used it to push for their candidate of choice.

Since 2016, Facebook has been criticized from both sides of the political spectrum for its platform being used for hate speech and misinformation. They have also allowed millions of accounts that are either fake or legitimate to espouse conspiracy theories based more on fiction than fact.

While Facebook leaders say they are working hard to keep this kind of content off their site, given the number of things I see on this social media site daily, I would say they are failing miserably at this quest.

Zuckerberg and Facebook are in this position because they refuse to acknowledge that they are a publishing platform. Instead, they claim a forum for “free expression” even if that expression could kill someone recently when warned about potential violence related to the Kenosha, Wisconsin, and did not take that post down immediately.

So the right and left are angry with Zuckerberg and Facebook, and he is getting strong pushback from many of his employees who are feeling embarrassed that they work for him and Facebook.

Over the last two weeks, articles have come out with comments from employees at Facebook now, and those who worked at Facebook in the past, and a consistent them comes from both groups. The themes are those dismayed at Zuckerberg’s leadership and his refusal to get aggressive in dealing with the impact of his policies that allowed this to happen.

They don’t speak out about this publicly for fear of retribution or loss of their jobs, but the mumbling and grumbling internally I hear is getting louder. These two groups also fear that Facebook will again have a significant impact on the election, and while Zuckerberg should get the most heat from this, they fear that just working for Facebook will taint their own careers.

Zuckerberg and his leadership team have delivered a medium that is both good and bad. Good in that it allows us to connect with friends and family as never before. It gives us national and local news, albeit often skewed by political bias. However, I would argue that its use as a platform for misinformation, conspiracy theories, and hate speech overshadows the good and dominates that site so that its influence has been bad for democracy. And it has empowered authoritarian leadership even in some democratic leaning countries such as Turkey.

Even with the new safeguards Zuckerberg and Facebook have put in place for this election and his investment of $300 million “to make sure local counties and states have the resources they need to handle these unprecedented conditions, and that people are aware that the infrastructure is in place to make every vote count so they can accept the result of the election as legitimate,”

I fear that this election has already been compromised by Facebook’s role in giving people a platform for misinformation, conspiracy theories, and hate speech.

Both sides will condemn Facebook no matter which candidate wins the US Election in November, Zuckerberg, and Facebook, and he will be the most hated man in America after the election.

We need new Antitrust Laws to Challenge Big Tech

As you know, there is a lot of noise coming out of Washington about suing Big Tech for all sorts of Antitrust violations. I have written about this many times in the past and have consistently stated that the current antitrust laws would be hard to use against these tech companies. The core premise of the Antitrust laws of the last century was to go after companies if they were a monopoly, and there was no competition.

It was influential in the days when railroads had comprised owners and telecom had only one primary provider, etc.

But to argue that the big tech companies today do not have competition is hard to prove legally. Amazon, while a behemoth in online selling, has challenges from Walmart, Costco, and Target.

Facebook and Twitter also behemoths, also have social media competitors, albeit more vertical driven than the broader market Facebook and Twitter serve today. However, there is still legitimate competition for both of them.

Even the antitrust case against Microsoft used older antitrust rules. One of the prosecution’s goals to break-up the company broke down in light of the tighter interpretation of aged antitrust laws.

I don’t pretend to know enough about antitrust law to get into the weeds, but I know enough after following the Microsoft trial very carefully, that under current antitrust rules, trying to break up big tech companies or even change their behavior, will be difficult.

I have written many times that we need newer antitrust laws or even a new regulatory body for the digital age. Until recently, I had not seen much written that suggests new ways to oversee tech with new antitrust rules and laws for the digital century.

The folks from Axios were alerted recently to a new paper written by the Harvard Kennedy School’s Shorenstein Center on Media, Politics and Public Policy. The authors are highly schooled in antitrust law and include Tom Wheeler, former Chairman of the FCC under Obama and former president of CTIA

Phil Verveer, who is a visiting fellow at the Harvard Business School and was the lead counsel in the AT&T antitrust suit.

Gene Kimmelman, Senior Advisor for Public Knowledge and a leading advocate for Consumer protection.

Here is the Axios brief description of the paper and short analysis:

The government should establish a new Digital Platform Agency to regulate major tech firms, three Democratic former federal officials argue in a new paper from Harvard’s Shorenstein Center shared first with Axios’ Ashley Gold.

Why it matters: This is the latest proposal being offered up as policymakers weigh reining in Big Tech beyond rewriting antitrust laws or taking a gamble on enforcement action under existing ones.

Context: Former FCC chairman Tom Wheeler, former DOJ antitrust counsel Gene Kimmelman and former FCC counsel Phil Verveer write that antitrust enforcement is important but not enough. They argue that today’s economy requires a new agency akin to the Consumer Financial Protection Bureau.

“We’re trying to put out the idea and the concepts, and try to make the case that a new administration may see this as an appropriate challenge,” Wheeler told Axios.

Details: The agency would be able to sue companies over misbehavior, and hold them to reasonable standards of care, stepping in if firms are harming consumers or behaving negligently.
Wheeler compared the proposed agency’s standards to the fire and electric codes that businesses have been held to for over a century.

The agency would place a particular focus on promoting interoperability and responsible data practices and working stop platforms from preferencing their own goods, services or content over rivals’.

Yes, but: It’s unlikely this Congress will take any action on the paper’s ideas. But it could serve as a basis for something the new Congress proposes — though likely only if Democrats take control of both the House and the Senate and Joe Biden wins the presidency.

As Axios states, this paper will not have any impact on how this current Congress deals with Big Tech. It introduces some well-thought-out ideas from experts on Antitrust law that could serve as a more practical way US politicians oversee Big Tech in the future.

Here is a link to the paper itself and its abstract:

Statutes and Regulatory Models Adopted for the Industrial Era are Insufficient for the Realities of the Internet Era


The digital marketplace is wide-reaching, complicated, and self-reinforcing. The systems developed to oversee an earlier time are burdened by industrial era statutes and decades of precedent that render them insufficient for the digital present.

In the absence of federal oversight, the dominant digital companies have made their own rules and imposed them on consumers and the market. Just as industrial capitalism operated—and thrived—under public interest obligations, so should internet capitalism be grounded in public interest expectations.

Those expectations—and the new rules to implement them—should be the reinstatement of responsibilities long established in common law: the duty of care and the duty to deal.

To accomplish this a new Digital Platform Agency should be created with a new, agile approach to oversight built on risk management rather than micromanagement. This would include a cooperatively developed and enforceable code of conduct for specific digital activities. As both a fail-safe and an incentive, the agency would also retain its own independent right of action.

This link includes the Executive Summary that is excellent in its own right, and I highly recommend you take the time to read this summary.

This paper is being circulated to every member of Congress and introduces some solid ideas on how any government’s laws could be amended or rewritten.

It could help Congress provide more oversight and rules that would allow Big Tech to continue innovating, yet live within more stringent guidelines of fairness and consumer protection.

The Splinternet of high tech manufacturing and components

Last week, in my column for Forbes, I wrote about how the Internet is splintering around geographical and in some cases, political lines.

I pointed out that countries like Russia, China, and others want to contain what can and cannot be accessed in their countries. They are trying to restrict the Internet in the name of nationalism or cybersecurity, although much of their moves seem to have more to do with censorship.

In the title of this article, I stated that this produces a “Splintered Internet”, which is the proper way to describe what is happening. I had wanted to use a word that is becoming a term that is emerging known as “Splinternet” to describe a splintered Internet that can also be expanded to mean high tech manufacturing.

As I have written in the past, due to the kind of work I have done over the years, which includes working directly with PC manufacturers in Asia, I closely follow the supply chain and manufacturing of tech.

And dramatic changes are going on in high tech manufacturing that, by all accounts, are splintering into a China vs. other regions of the world when it comes to how tech products are being made and produced.

For the last two decades, much of high tech manufacturing has been was done in China.

China has made most of the tech products used in the US and much of the world today. However, the political tension between the US and China, along with significant tariff issues, has tech companies trying to move as much manufacturing out of China as possible.

Indeed, most of Dell’s PC manufacturing and assembly has shifted to Viet Nam. While they still get some parts from China, they assemble and ship all PC’s from Viet Nam now. By the middle of 2021, most of their parts will come from other areas outside of China, with almost all manufacturing shifting to Viet Nam and none done in China.

HP is moving manufacturing out of China too and doing more in Taiwan, Malaysia, and other regions of the world, placing less reliance on China.

Even Lenovo, a Chinese company, has started to put more emphasis on their manufacturing plants outside of China, especially the one in Mexico, but is in a more difficult position to decouple from their manufacturing facilities there completely.

Foxconn, who makes Apple’s iPhones, also sees the writing on the wall and is now aggressively moving away from China and setting up new plants in India and looking to expand to other areas of South East Asia and even Mexico. Foxconn Chairman Young Li has said that China’s “days as the world’s factory are done.” He goes on to say that “No matter if it’s India, Southeast Asia or the Americas, there will be a manufacturing ecosystem in each,”

Compal has reopened one large PC manufacturing facility in Viet Nam, with a second and even larger factory set to come online early next year.

The US is also cracking down on some companies in China and limiting their access to US-based processors. This week, the Commerce Department tightened the restrictions on Huawei’s access to chips, and if they can do it for Huawei, they can do it to others too.

But there is one misnomer in this manufacturing “Splinternet” model that keeps coming up, and that is that the US could become another region for high tech manufacturing. In talking with two ODM’s, neither of them has plans for putting any factory in the US.

Even the one Foxconn has been working on in Michigan is in question. The breakdown has been caused by a lot of political and local government haggling. (I predict that this deal will fall apart entirely, and Foxconn will find a way to get out of it soon.)

Of the manufacturing plants that do exist in the US, like Apple’s iMac factory in Austin, it is mostly a low volume robotic facility that does not have a lot of workers doing the actual assembly.

That would be the big issue with any US manufacturing of high tech goods, even if they did land on US soil. The cost of labor in the US is just too high, given the price of most tech products sold, and instead, any factory built in the US would mostly be driven by robotic automation.

The idea that US manufacturing of high tech goods could bring back jobs in large numbers is a pipe dream. The shift of a considerable amount of manufacturing out of China is a big deal and problem for US tech companies. Besides scrambling to find new places to have their products made, they will need to develop an entirely new supply chain of components that can be created outside of China. And that may include rare earth materials that mostly come from China now.

While US tech companies are not panicking, moving in this direction during a pandemic is very difficult. In the past, companies would send staff to source components and run them through on-site testing equipment in companies labs, mostly in Asia. Most of this is having to be done today by video conferencing when it comes to actual component sourcing.

While this takes time, the pendulum has swung away from China being, as Foxconn Chairman Li has said, “The Factory for the World,” and we will see other regions developing new high tech manufacturing centers picking up the slack. Unfortunately, the US will not be part of a new global tech manufacturing world.

Don’t expect any serious action on Tech Antitrust legislation until 2022.

Last week’s earnings reports from Alphabet, Facebook, Apple, and Amazon were amazing. Although Alphabet showed some losses in ad revenue, it still showed resilience. The other three just blew past market expectations.

As I tracked the earnings of these four, I was also looking at their market capitalizations. If you had told me even five years about that three of these companies would have trillion-dollar market caps by 2020, I would have scoffed and said you were crazy. Five years ago nobody saw this coming and only 18 months ago did it even seem possible that even one of these, Apple, could even hit that trillion-dollar market cap.

Axios created a chart that showed clearly the actual market caps of these four over the last four years.

If you look at this chart closely, you will see that the combined market caps of these four companies are close to $5 trillion.

Earlier this week, due to Apple earnings and a rise in share price, Apple hit a valuation of almost $1.9 trillion Monday Morning, Aug 3, 2020.

Even during a pandemic, with the economy contracting over 30 %, the four of them reported $773 billion combined revenue annualized to date.

Axios also put these annual earnings in perspective to other countries GDP:

  • Facebook: $70.7 billion, in the same ballpark as Venezuela’s gross domestic product.
  • Alphabet: $161.9 billion, a bit north of Ukraine’s GDP.
  • Apple: $260.2 billion, close to Vietnam’s GDP.
  • Amazon: $280.5 billion, around Pakistan’s GDP.

Together, revenue for all four adds up to roughly the GDP of Saudi Arabia.
And all four are cash-rich:

The combined cash pile of all four, taken from their last reports, is $420 billion.

$420 billion: the combined total cash pile of the four firms (per data from FactSet, from when they last reported earnings). That breaks down to about:

  • $49.6 billion for Amazon
  • $60.3 billion for Facebook
  • $117.2 billion for Alphabet
  • $192.8 billion for Apple

With this type of financial position, these companies have become increasingly powerful in their own right. They now have the scrutiny of governments around the world in terms of antitrust regulations and competition.

In the US, where last week’s hearings brought this antitrust issue to the forefront, it became clear that these major tech companies will have to deal with this antitrust threat for years to come.

Some of these congressional leaders asked good questions but left the hearing not giving any calls to action that had any teeth to it.

As I listened to these hearings, I became convinced that much of it was election posturing, and in the short term, meaning probably the next 18 months, not much will be done to challenge these firms in terms of trying to break them up or change much of their current business practices.

I have two reasons for this view. The first is that current Antitrust laws were not written for the digital age. They were written mostly for the Industrial Age. For any real changes to happen in an antitrust action, it needs new, well thought out laws written specifically for our digital times and make these actions meaningful and applicable to all digital properties in the future.

I have dealt with Washington for decades, and, from my experience, getting everyone on the same page for any real digital antitrust regulations will take time.

The second reason why I don’t see anything happening for at least 18 months, is tied to the Covid-19 Pandemic and the election and possible change in leadership.

Should Trump be reelected, he tends to side with business, even if they get too big. His focus, as we know from the attempt to ban TikTok, is focused on China and products that could feed info to the Chinese in any way, shape, or form. Also, he loves social media for what it allows him to do via its platforms. I have no faith that a Trump administration would force any new and meaningful antitrust laws against any tech company, at least in the first half of a reelected presidency.

If Biden is elected, he would have higher priorities, even if his Democratic colleagues would like to keep the fires lit on big tech and antitrust laws. His first 18 months would most likely be working on correcting the mistakes he feels were made in the past four years. I just don’t see him putting a lot of energy in meaningful tech anti-trust legislation until he and his team feel they have corrected other structural issues much more important to the US than breaking up big tech.

All of this leads me to believe that these four and others will not only weather the Covid-19 Pandemic well but, as they have proven so far, become even bigger. Yes, they will have to be looking over their shoulders at potential government action, but I doubt anything meaningful will happen until late 2021 or early 2022 at the earliest.

Covid-19’s Impact on Tech Will Last Well Into 2021

This week, Google announced formal plans to keep employees working remotely through to Summer 2021 in the coronavirus’s persistent presence globally.

The decision will impact more than 200,000 full time and contract workers and has made Google one of the first technology firms to extend remote work privileges through much of next year.

While Twitter has already given employees the option to work from home “forever”, Facebook, Amazon, and other tech giants have only pushed stay-at-home dates.

Apple has most of its staff working from home until January 1, 2021, but that could be extended as well. Google’s decision will likely influence more tech giants to follow suit as coronavirus numbers continue to swell worldwide, and as a vaccine continues to be at least another year away.

I consider Google’s move a smart one as they surely have insiders at the government level who tell them that they need to social distance, and create safe workplace conditions will be in place for a minimum of another year, if not longer.

With this in mind, I spoke to some of my contacts in Washington that work in Commerce and State, Their comments were off the record but, shared some of their biggest concerns for the next 12 months.

There seems to be a firm agreement from many government officials that work from home is here to stay, and they too see it being almost mandated in one form or another through the beginning of summer of 2021.
They also expect that most business events and conferences will not occur through the first half of 2021 and will almost all move to some virtual format.

CES was canceled, reflecting a trend of any in-person events being held even in early 2021. I suspect the Mobile World Conference will suffer the same fate again next year.

One concern from my contact involved with US Commerce says they have significant concerns about what they believe will be massive layoffs in Q4 2020 and Q1 and Q2 of 2020. We already know that the airline industry alone will either furlough or eliminate over 100,000 jobs in the next two quarters.

One other statistic I read today is that 60% of restaurants will not reopen due to the impact of Covid-19, meaning that hundreds of thousands of jobs in that industry will go away too.

I could detail many other areas where layoffs are imminent, but unless the US government comes in with bailouts for many industries, the number of layoffs on the horizon could have a significant negative impact on the US economy in 2021 and beyond.

CBO estimates that real gross domestic product will contract by 11 percent in the second quarter of this year, which is equivalent to a decline of 38 percent at an annual rate, and that the number of people employed will be almost 26 million lower than the number in the fourth quarter of 2019.

In terms of the impact of the layoffs on tech, most PC makers watch the layoff metrics with great concern for 2021. While hardware orders for IT are even or slightly up going into Q4 of this year, their ability to forecast demand in 2021 is very cloudy. Two PC vendors, I talk to believe that corporate PC demand will continue to see moderate demand as they continue to upgrade PC’s for IT workers sent home with older machines. As of now, they see that being somewhat stable through the first two quarters of 2021. As for the last half of 2021, its anybody’s guess as to what corporate demand will be during that period.

In my talk with my contacts involved with State and International Affairs, their biggest concern is between China and the US. As you are aware, these two countries are entering a Cold War, and it looks like the relationship with China will become icier going into the end of 2020.

They believe that this current administration will want to show they are tough on China going into the election and think that we could see new tariffs from both sides increase over the next few months. I have been fielding many client calls recently about the potential of new tariffs, so I contacted my friends in Washington.

While I could not get clarity on what new tariffs to expect, my contacts hinted that many could mirror some of the one’s in tech from the last round of tariffs, especially around PCs and smartphones.

Many PC vendors, who cannot trust the US/China relations favoring them in the future, are already moving much of their PC manufacturing out of China. However, that does not happen overnight. PC makers say that they believe they can shift most production out of China, and move the majority of the assembly to other regions so the Chinese tariffs from either side would not impact them.

During my time on advisory committees for GW Bush, I worked with a regarded economist assigned to both of these committees. He came from a major tech company and is well aware of the role and impact tech would play in the future.

I spoke with him last week and asked his important concern for 2021. He said that they (government) pretty much tossed out the idea of a V curve recovery and echoed the same interest from Commerce that the layoffs will negatively impact the US economy in 2021. He told me that they are working on good, better, best scenarios now but all point to a severe economic downturn in the first half of 2021. He also does not see any serious industry bailouts at least through Jan 2021.

All these points to what I fear will be a difficult economic period that will have to deal with no matter who is president in 2021. Tech is in the best position to weather much of this, and as I have written in the past, tech leaders tend to invest heavily in downturns to be ready for an economic upturn that eventually follows.

If there is a bright side, the American people have shown real reliance in crisis times, whether it be war or economically related. The Covid-19 pandemic will alter many people’s lives and businesses, but if history is our guide, the US will eventually get through this.

However, as all three of my Washington contacts told me, the US of the past may be very different in the future. It is just too hard to predict how much different it will be once we get on the other side of this pandemic, and life goes back to some level of normalcy.

China’s Robotic Edge

On a trip to Beijing in 2005, I was shown a manufacturing facility making PCs that even then had moved mostly to robotic automation. It was awe-inspiring. I had been in PC manufacturings facility before this, and so much of what was done had minimal automation involved in their programs.

After viewing this PC operation with its impressive robots, it became clear that China had a real edge on robotic manufacturing automation and that it could become a more powerful force in manufacturing.

At that time, most of this type of manufacturing was done in Taiwan and other regions of Southeast Asia with minor automation. China was only ramping up their broader tech manufacturing capabilities in 2005, and I could see that they jumped right into automated robotics to accelerate their efforts.

I thought about that first trip to an automated Chinese factory recently as I read Kai-Fu Lee’s editorial in the Economist on how “Covid Spurs China’s Great Robotic Leap Forward.”

This article is a must-read for anyone interested in AI and Robotics and China’s future as a world-class manufacturing center.

This short exert lays out his perspective:

“China is uniquely positioned to lead the world in the automation economy. Though the country has a large workforce, the cost of labor has increased ten-fold in the last 20 years and is now more than twice as high as Vietnam’s. As the workshop of the world, it has an incentive to automate its manufacturing sector, which enjoys a lead on high-quality products. China is now the world’s largest market for industrial robotics and the fastest-growing, surging by 21% to $5.4bn in 2018. This represents a third of global sales. As a result, Chinese companies are developing a leg-up on the world in terms of how to work with metallic colleagues.

This has spilled over to domains beyond manufacturing. When the pandemic was spreading rapidly in Wuhan in February and the massive Huoshenshan Hospital was built in ten days, a fleet of robots was scurrying inside for disinfecting and delivering medical supplies. These machines are used across China in schools, hospitals, and commercial buildings. Keenon, a robotics company in Shanghai, has developed an autonomous vehicle to disinfect areas, using a combination of LIDAR, machine vision and sensors.

I’ve seen these trends develop as a technology investor in China—and had a front-row seat during the lockdown. Zhuiyi Technology, a company in our portfolio, develops software for call-center automation. During the pandemic, the credit-card department of a large Chinese bank used the system to call its customers, managing 350,000 calls a day, or the equivalent of 1,200 human customer-service representatives. These conversational bots not only reduce cost, but also improve customer satisfaction and boost revenue. The company has since expanded its range to include AI telemarketers, AI analysts, AI trainers, AI assistants and so on.”

I got to know Kai-Fu Lee while he was at Apple working on AI-based speech recognition in the early 1990s. He went on to Microsoft to work on a similar project and eventually ran all of Microsoft’s China business before becoming a VC. He is also known as one of the smartest minds we have on Artificial Intelligence.

As portrayed by Me Lee, this leg up on AI-based Robotics in China is an important one to follow. However, it begs how much of this advanced AI Robotics is China willing to share with the rest of the world, or even license it to other companies. Would the US, UK, or other countries want to deploy it given the fear of using any Chinese technology that could spy on us since the US and UK have banned Huawei 5G technology?

Of course, the US has much going on in AI and Robotics, but I suspect we are behind China, as Mr. Lee’s piece seems to suggest. But that means we could be on the verge of something a friend of mine calls the “splinter net” era wherein there are a western camp and Chinese camp for equipment, apps, and services. The US trying to ban Tik Tok is an excellent example of this in services. Unless something changes, a world of parallel supply-chains is coming.

At the moment, that is better news for China then it is for the US. Those robots spraying disinfectants in that Wuhan hospital does not exist in the US as of now. That they were even able to deploy these robots so fast in this hospital that speaks to the advanced robotics China already has ready to use immediately if needed.

China already has an edge in manufacturing. The US could move much of their production to countries like Vietnam, Malaysia, India, and Mexico; there will be a push to bring much of that manufacturing capability to the US over time, should we end up with a split supply chain.

However, if the goal is to bring manufacturing jobs back to the US, China’s robotic push hints that the US would also mostly deploy their version of AI-based manufacturing robotics to stay competitive. That would translate to fewer manufacturing jobs for humans and more for robots.

Given China’s political goals to dominate the world in so many areas, and robotic manufacturing is one of the big ones they are pursuing, it does seem that we may soon see this dual supply chain emerging fast. If the US is smart, they start accelerating their own AI robotic research and planning for the day when China will no longer be supplying many products we can use in the west.

The Chip Industries Changing of the Guard

There was an interesting milestone passed last week in the semiconductor industry when NVidia’s shares rose 2.3% in afternoon trading to a record of $404 that put their market valuation at $248 billion. This is $2 billion more than Intel’s market value was on the same day at $246 billion. While this is more of a symbolic achievement, it represents an amazing rise in NVidia’s overall market value and their commitment to innovation in vertical markets.

Ben wrote about the significance of Nvidia passing Intel in valuation last Friday in Think Tank. As he points out, Nvidia’s shift from client to the cloud was one of the reasons for their rise in value, but they have also developed major technologies for self-driving cars and ultra-high-performance computing. Nvidia’s CEO, Jensen Huang’s vision for Nvidia has been on the money and he has been vindicated for his decisions to take Nvidia into these high end and profitable markets.

Around the middle of this decade, there were various rumors suggesting that Intel might have been interested in buying Nvidia. It is unclear whether Intel had any interest in Nvidia, but if they had, it would have allowed them to get into the high-end graphics processor business and save them money and time developing their own GPU processors.

Even if Intel’s leadership had any interest in Nvidia then, I suspect that Intel’s strong not-invented-here mentality would have nixed that idea before it could ever go to the board for discussion.

Intel, like many other engineering-driven companies, often make decisions based on what they believe they can do themselves instead of buying or licensing from the outside. Sometimes that works and other times it does not. One good example was Intel’s decision to sell its ARM processor business just before the smartphone revolution took place.

At an event at Intel in January of 2007, I asked Craig Barrett, Intel’s Chairman at this time, about why Intel decided to sell their ARM business since they had a low voltage processor that Intel could have been utilized for use in PCs. He pointed out that Intel’s R&D center in Israel had been working on their own low voltage processor for PCs and had assured him that they could have one at a similar ARM low voltage level within two years.

Before Intel sold its ARM business, Apple had decided to switch the Mac’s to Intel architecture. During the negotiations with Steve Jobs and then CEO Paul Otellini in 2005, Jobs confided that Apple was working on a phone and asked Intel tp provide the chip for it. Intel turned them down. Intel declined the offer, believing that Apple was unlikely to sell enough of them to justify development costs.

Apparently, Intel had already had internal discussions about selling their XScale ARM business and in 2006 it was sold off.

The problem for Intel was that Intel Israel over-promised and under-delivered those lower voltage processors in a timely manner. And Intel missed the smartphone revolution completely.

It is fun to Imagine how big Intel could be today if it owned Nvidia’s technology and used their Arm processor cores to help Apple build the iPhone?

Intel has survived and even thrived by also shifting a heavy emphasis to servers and the cloud, which now accounts for the majority of where their profit comes from today. They also accelerated their work in AI and did develop their own graphics and lower voltage processors to meet the needs of the PC market that is still healthy but not growing.

However, Intel’s competition from AMD and Nvidia, as well as Samsung and even Apple now, are keeping the pressure on Intel to innovate and perform. Intel hasn’t always made perfect decisions, and often their “not invented here” mentality has hurt them in growth opportunities. The big question now is if Intel can regain some leadership in the categories that matter and if their conviction to being fully vertically integrated designing and manufacturing all their processors can continue to pay off in ways it has historically.

Advertiser’s Boycott of Facebook is Not Enough to Change Facebook

A few weeks ago, when Twitter highlighted a Trump tweet as violating its rules for posting content, I got a call from a National TV Network who asked me a straightforward question. They wanted to know what it would take for Twitter, Facebook, and other social media sites that were too lenient in their curation of content to let hate speech and fake news permeate their social networks to change their ways?

Part of my answer focused on the fact that I have always believed Facebook, Twitter, and many other social networks are publishers of content and should come under the same guidelines that newspapers, Broadcast TV, and others follow that edit their news before it ever airs.

However, Facebook, Twitter, and others argue that they are not publishers and instead of vehicles for people to post content that should come under their guidelines and only edit out material that violated each of their own given policies.

The other part of my answer to this network’s direct question was something that I have also stated for some time. I said that the only thing that could change Facebook, Twitter, and other social media with lenient posting polices is a significant boycott from the hand that feeds them, in this case, the advertisers.

During the last two weeks, many big advertisers have indeed joined the #StopHateForProfit movement and pulled advertising from Facebook, Twitter, and other social media platform that have not controlled hate content on their sites.

However, as Fast Company points out, this move by some of these advertisers are a bit misleading:

“Over the past few months, many marketing departments across all major brands have already been fundamentally changing (read: slashing) their budgets and media spending for the rest of the year. One marketing exec I spoke to, on condition of anonymity, said their company had already canceled all the media they could through the fourth quarter.
And if they weren’t cutting, they were renegotiating.

Either way, cutting off ad spending on Facebook for the month of July, or even the rest of 2020, isn’t necessarily a defiance move, but perhaps one of extreme convenience. Not only do these brands save the money they had already planned to reserve, but now they also get an added PR boost attached to it.

Cutting your ad budget and reaping earned media plaudits for joining this boycott is a marketer’s dream come true.”

Even if these advertisers’ motives to pull out of advertising deals with Facebook and other media giants are questionable, it shows that they and this boycott have clout.

Last week, Facebook CEO Mark Zuckerberg posted this note that, in essence, shows this boycott has gotten his intention.

Mark Zuckerberg last Friday:

“Three weeks ago, I committed to reviewing our policies ahead of the 2020 elections. That work is ongoing, but today I want to share some new policies to connect people with authoritative information about voting, crackdown on voter suppression, and fight hate speech.

The 2020 elections were already shaping up to be heated — and that was before we all faced the additional complexities of voting during a pandemic and protests for racial justice across the country.”

While this advertiser boycott is good, I don’t think it goes far enough to make Facebook and Zuckerberg bring the radical changes needed for Facebook to be a better and safer social network. A one month or full ban through 2020 will not force Facebook to make the changes necessary to keep fake news and conspiracy theories off this site.

Zuckerberg’s belief that Facebook is a forum for self-expression needs to be completely overhauled. It needs to be refocused to be one with the same checks and balances as major publishers like the WSJ, NYT’s, and other major publications have to ensure that what is posted on Facebook has been fact-checked before it ever reaches its users.

An editorial in the San Jose Mercury goes even further:

“It’s disgraceful that CEO and founder Mark Zuckerberg’s company divides America, threatens our democracy and gives the tech industry a black eye. His unrepentant behavior may lead to undesirable regulation by Congress, a body filled with politicians who don’t understand the innovation economy.”

“He announced some policy changes a week ago designed to crack down on disinformation and hate content. Facebook will now start labeling content that violates its policies. But it will leave the posts on its site if the “the public interest value outweighs the risk of harm.”

In other words, Facebook has no problem publishing material on its platform that it knows is false or crosses the line as hate speech.”

I think the advertisers have a lot of pressure that could be placed on Facebook by making their advertising boycott have more teeth and stating they will not come back until Facebook changes.

But I agree with the San Jose Mercury editorial that it could take Congress to change Facebook permanently and force it to keep disinformation and hate content off its site forever.

Given Zuckerberg’s position at this moment, I fear that just as it did in the last election, Facebook will impact the 2020 election in many ways. I don’t see how his labeling of inappropriate content makes any difference if that content still gets posted.
Facebook represents a successful Silicon Valley company. Too bad it is giving Silicon Valley a black eye.