Important Note
Tech Narratives was a subscription website, which offered expert commentary on the day's top tech news from Jan Dawson, along with various other features, for $10/month. As of Monday October 16, 2017, it will no longer be updated. An archive of past content will remain available for the time being. I've written more about this change in the post immediately below, and also here.
Xiaomi To Build Retail Stores and Smartphone Chips – Bloomberg / WSJ (Feb 10, 2017)
There’s a certain irony in a company which was a pioneer in its use of online retail falling back on brick and mortar stores as a way to shore up its business, but that’s what Xiaomi appears to be doing. It apparently wants to build 1000 stores in the next three years – roughly twice as many as Apple has globally, and 25 times as many as Apple has in China, by way of context. That’s a huge investment at a time when Xiaomi seems to be struggling, but physical retail is a good fit for the ecosystem of devices Xiaomi sells including both its own and its ecosystem devices for the home. Building its own chips is another big investment, and one that will likely take years to pay off – though it might establish some independence from current suppliers Qualcomm and MediaTek in the short term, the quality likely won’t be there from day one, so it’ll be interesting to see which of Xiaomi’s devices run its own chips – I’m guessing it’ll start by replacing MediaTek’s and work up from there. But it takes years to get really good in smartphone chips, and without an acquisition of existing talent here, I’m skeptical Xiaomi will do well anytime soon. Though Huawei is the local exemplar of this strategy, Apple and Samsung are still the gold standard for the make-your-own-chips strategy, and they’ve both been at it for years.
via Bloomberg (retail) and WSJ (chips)
Facebook Agrees to Audit of its Metrics Following Data Controversy – WSJ (Feb 10, 2017)
This is yet another bit of damage control by Facebook in the wake of its metrics problems in late 2016, and the MRC partnership has been in the works for some time (see the full timeline on the “Facebook’s Bad Metrics” narrative page). It sounds like marketers are reassured by some of these moves, which combine better third party auditing with some new video ad buying options.
via WSJ (Facebook’s own post here)
Amazon, Apple, Google and Other Tech Companies on the Billboard Power 100 (Feb 9, 2017)
Billboard does an annual Power 100 ranking of the most important/influential execs in the music industry. Coming at this from a tech angle, there are several notable companies on the list: Spotify’s Daniel Ek takes the top spot, several Apple folks are at #4, Amazon at #12, iHeartMedia at #19, YouTube at #30, Pandora at #34, Facebook is at #54, and various others are scattered through the second 50. Amazon’s ranking is surprisingly high, but is entirely due to Billboard’s perception of Echo and Alexa’s role in transforming music, as illustrated by Billboard’s interview with Jeff Bezos and Amazon Music head Steve Boom. I think the take here is a little overblown, but there’s no doubt Echo and Alexa are changing the experience of music for the small minority of people who use them. YouTube’s relatively low ranking is surprising given how important a channel the site is for the music industry, but of course its relationship with the labels and artists is complicated. This kind of ranking exercise is always somewhat arbitrary, but it’s interesting to get a music industry take on the tech companies and their relative importance here.
via Billboard Bezos Interview (see also Power 100 rankings)
Lyft has tapped the head of Google Street View to lead its mapping team – Recode (Feb 9, 2017)
This is a big hire for Lyft, which so often plays second fiddle to Uber in so many ways. Being able to recruit a top notch mapping engineer like this away from Google is a great validation of Lyft as a company and as a recruiter specifically, and should make it easier to hire in other talent for mapping and autonomous vehicle technology at Lyft. It’s also notable that Vincent would be willing to leave Google, which obviously has far bigger and deeper efforts underway around mapping and autonomous driving than Lyft does.
via Recode
The six terrible ways your life will change when Net Neutrality dies – Mashable (Feb 9, 2017)
This kind of overblown rhetoric is what we’ve all got used to around net neutrality, but it’s still shocking. Though reasonable people can disagree on what should and shouldn’t be included in the definition of net neutrality, and how strongly it should be regulated, there’s no reasonable case to be made that the dystopian outcomes outlined in this piece are at all realistic. This isn’t helpful to the debate, because it’s so easily dismissed as hyperbole. For what it’s worth, my own take on the topic is here.
via Mashable
Being black in tech can cost you $10k a year – USA Today (Feb 9, 2017)
This report from Hired this article is based on has lots of interesting data about salaries for software developers in lots of cities in the US and beyond, but the focus of the article is what the report says about bias. Specifically, the report finds that African Americans are 49% more likely to get hired than white candidates, while Latino and Asian candidates are each less likely to be hired, but it also finds that African American candidates ask for and receive lower salaries than Latino, Asian, or white applicants. The report doesn’t draw many conclusions from the data – increased likelihood of being hired for African Americans may be tied to that lower asking price, to diversity initiatives, or something else, and it’s also unclear whether these candidates ask for lower salaries because experience tells them to expect them, because they’re less well informed about going rates than their white counterparts, or again for some other reason. But the results are the results – yet another indication of systemic issues in the tech industry when it comes to race, whatever the underlying causes.
via USA Today (Hired report here)
Consumer Watchdog asks California to take Uber’s self-driving trucks off the road – Recode (Feb 9, 2017)
This is what you get when you build a reputation for flouting regulation: people don’t believe you when you claim you’re operating within the bounds of the law. Uber ignored the regulations around its self-driving cars in San Francisco until its DMV registrations were revoked, and now Consumer Watchdog says Uber subsidiary Otto can’t be trusted either when it comes to its self-driving trucks. As I’ve said repeatedly, Uber’s flouting of taxi regulations was a very different animal from its disregard for regulations concerning autonomous vehicles – in the former case, it had consumers on its side and could make a strong argument for increased safety, but that’s certainly not the case when it comes to autonomous vehicles. And yet both its past anti-regulation stances and the San Francisco case will come back to bite it, as they are here. This is when unchecked narratives – especially ones grounded in reality – really become dangerous.
via Recode
It’s not just Google — Snap has a $1 billion cloud services deal with Amazon, too – Recode (Feb 9, 2017)
Snap has filed an amended version of its S-1 IPO filing, and it’s added a few extra tidbits here and there. This Recode piece picks up on the most notable: earlier this month, Snap signed a deal with Amazon’s AWS which is worth at least $1 billion over 5 years, for redundant infrastructure (i.e. as a backup to its primary reliance on Google’s Cloud). Unlike the Google commitment, which requires a steady minimum of $400m spent per year, this deal ramps from a minimum of $50m in 2017 to $350m in 2021 (which is probably about how much Snap spent with Google in 2016). That’s a rapid growth rate, and implies that this level of redundancy may be new for Snap, perhaps triggered by investor concerns over its sole reliance on Google. Combined, that’s a minimum $3 billion commitment for just these two infrastructure companies over the next five years, which is about seven times its 2016 revenue – that’s a big commitment and increases the risks associated with slowing growth. Also new in the S-1/A are a couple of paragraphs intended to reassure investors about the multi-class stock structure and the disclosure they will receive with their Class A shares, as well as some expansion on its slowing user growth and the lower engagement levels its Rest of World users exhibit relative to its US and European users.
via Recode (Snap’s S-1/A here)
Facebook (FB) hires MTV executive Mina Lefevre to help it develop TV shows — Quartz (Feb 9, 2017)
Facebook has to this point been focused entirely on making it easy to share and enjoy content created by others, whether that’s its nearly 2 billion users, news organizations, TV stations, or others. To the extent that Facebook has tried to begin hosting some content, that content has still been created by other entities, even if it now lives on Facebook in either its native video platform or Facebook Instant Articles. However, it looks like that might start changing soon, with this hire from MTV. Lefevre doesn’t specify in her Facebook post what exactly she’s going to be working on, but does say she’s going to help build “Facebook’s original content”, and given her past expertise in TV, it seems reasonable to assume video will be a focus. There’s obviously a broader trend of platforms owning more of their own content, from HBO to Netflix and Amazon to Apple and so on, but this is new for Facebook. I’m very curious what the focus will be here – there are so many possible directions Facebook could go in with original video, though scripted dramas a la Netflix seem like a poor fit.
via Quartz (Lefevre’s FB post here)
Twitter Reports Q4 2016 Earnings Which Miss Badly on Revenue (Feb 9, 2017)
Twitter’s results this morning were a great illustration of the quandary Twitter presents: on the one hand, it’s never been more important or relevant in the world, and on the other it just doesn’t seem to be able to turn that into meaningful user growth, revenue growth, or profitability. Revenues were actually down year on year, especially in the US, while losses also increased due partly to restructuring costs. Monthly user growth was anemic again, while daily user growth accelerated, though Twitter bafflingly continues to refuse to provide actual DAU numbers (it’s likely that they’re well under half of its MAU number of 319 million, so around 150 million). Meanwhile, Twitter is still talking about exactly the same shortcomings in its ad product around measurement, targeting, delivering ROI, and creative capabilities that it’s been talking about for ages now. And it sounds like it’s rethinking a number of its direct response ad formats and may kill off some that are actually delivering revenue because they’re too resource-intensive. At this point in Twitter’s history (almost 11 years in) and Jack Dorsey’s second tenure (a year and a half in), the company really shouldn’t be about to undergo yet another major reset in its strategy. In the meantime, Twitter management is asking investors to take it on trust that they can convince advertisers that the underlying growth in DAUs and impressions means they should spend more money on Twitter. We’re certainly due for at least one more really shaky quarter, but there’s a good chance we won’t see meaningful financial progress in 2017 at all. I’ve done a slightly more in-depth take at Beyond Devices here.
via Twitter (PDF)
Facebook Lite hits 200M users as low-bandwidth world revenue skyrockets – TechCrunch (Feb 8, 2017)
On Facebook’s earnings call recently, it was asked what drove recent stellar growth in Asia (133 million new MAUs year on year, and 28 million DAUs quarter on quarter), and answered that there were three drivers: Internet.org, Android improvements including Facebook Lite, and third party promotional free data plans in places like India, which was the strongest single growth market. Internet.org actually only accounts for a small amount of growth – the last update the company provided was 40 million total users back in November 2016, so although it’s a high profile project for the company it’s not that significant. But today Facebook announced that Facebook Lite has 200 million users, which is over 10% of its total MAUs, and over a quarter of its combined Asia and Rest of World users, which is the vast majority of the target base. So this is the real success story here, and it’s just about making the app more bandwidth efficient for emerging markets, not about zero rating. Now, obviously those 200 million aren’t all incremental new users for Facebook – some will have switched from using the regular app – but this is a big growth driver for Facebook. Also worth noting is that all those three growth drivers are about either bandwidth efficiency or paying less (or nothing) for the same bandwidth – this is the single biggest factor in Facebook’s growth in emerging markets.
via TechCrunch
Here’s Why Apple’s 10th Anniversary iPhone Will Likely Cost More Than $1,000 – Fast Company (Feb 8, 2017)
The headline is focused on the price, but there’s some interesting detail in the piece that’s in some ways more important (and likely more accurate). Some of this confirms earlier reporting about OLED edge-to-edge screens, and a home button integrated into the screen. There’s some new information in there too, though, about an integrated 3D sensor, though it’s not clear what it’ll be used for (AR is one obvious bet given Tim Cook’s enthusiastic remarks about the technology). The point here is, though, that the $1000 price point is fully $230 above the base price for today’s 7 Plus, and so it would have to incorporate a lot of additional wizardry to justify that premium. I think it’s far more likely we see another roughly $100 step up from the Plus to $870, though of course with the right storage configurations that’ll easily rise over $1000.
via Fast Company
Music teams from YouTube and Google Play combine – The Verge (Feb 8, 2017)
It’s always been odd that Google has two separate music streaming apps rather than simply two on-ramps to a single streaming app, so it’s good to see it combining the teams behind them as at least a first step towards eventually having a single music experience too. Neither of Google’s apps ever shows up on industry charts of subscribers, so the numbers on both are likely small still, so this is a great time to make a change before foisting a lot of upheaval on a large base of customers. Note also the bizarre final paragraph in this piece, which somehow tries to tie Google’s move here into a narrative about apps in general falling out of favor with users.
via The Verge
Magic Leap engineers scramble to finish prototype ahead of February board meeting – Business Insider (Feb 8, 2017)
This and the earlier reporting from the Information and others on Magic Leap have been so powerful precisely because the company combines secrecy and slightly outlandish claims about its future products, which just begs reporters to investigate and dig up this kind of dirt. Magic Leap has almost zero control over its narrative because it refuses to provide any concrete evidence to the broader world about the progress it’s making on its product, while evidence is mounting on the other side that the product is nowhere near ready. The same phenomenon can affect established companies too in areas where there’s widespread reporting about future business the company itself hasn’t commented on – see Apple’s car-centric Project Titan. In the case of Magic Leap, there are quite a few people who say they’ve seen a live demo which was impressive, but one of the key questions continues to be whether the company can deliver that experience in the form factor it claims to be working on, and this story casts some doubt on that idea. I’m not sure there’s any way for Magic Leap to turn the narrative around here unless it starts opening up significantly, something it seems unlikely to do.
via Business Insider
T-Mobile’s Network Cleans Up in Latest OpenSignal Report – T-Mobile (Feb 8, 2017)
T-Mobile likes OpenSignal, Speedtest.net, and other network testing services and apps which rely largely on reporting from users’ devices, as opposed to the industry’s traditional reliance on professional testing services like RootMetrics. And the reasons are obvious: T-Mobile consistently puts in a much better showing in these reports than it does on the ones used by the rest of the industry. On the basis of this OpenSignal report, it looks like T-Mobile is basically tied with Verizon for the network available in most places and at the highest speeds nationally. That totally flies in the face of the reporting done by the professionals (see this RootMetrics report for H1 2016), and also goes against official coverage numbers from the other carriers.T-Mobile reasonably make the claim that the OpenSignal results are from real people actually using its networks throughout the country, not from testers only going to certain places, but self-selecting surveys of any kind are always unreliable. The reality is that T-Mobile has caught up a ton over the last few years with the two big carriers, but it’s still behind in coverage and quality, and you’ll see far more people complaining about their T-Mobile coverage than AT&T and Verizon customers do. Perception also lags reality – T-Mobile still has a reputation for poor coverage and quality even as the true gap with the big guys narrows.
via T-Mobile
New York Times Offers Free Spotify Service to Boost Subscribers – Bloomberg (Feb 8, 2017)
Spotify has long partnered with wireless carriers to boost subscription numbers with subsidized memberships, and it now looks like it’s going to do the same with the New York Times. The subscriptions are generally going to net Spotify quite a bit less than its standard US $10 per month rate (though it’s impossible to know how much), and that in turn devalues the paid subscriber numbers Spotify regularly releases. It’s the leader by paid subscriptions by some margin over Apple Music, but it’s quite possible that Apple Music could end up netting (and paying out) as much revenue as Spotify in the next year or two even with far fewer “paid” subscriptions because of this kind of discounting. And of course a discounted subscription likely means a lower margin for Spotify too, further complicating its efforts to try to turn a profit ahead of a possible IPO. Lastly, music and news are an interesting bundle, given that those are the two content categories for which Apple has launched its own app in the last couple of years.
via Bloomberg
E.U. Agrees To See-As-You-Travel Online Cross-Border Access – Variety (Feb 8, 2017)
This is bad news for big content service providers like Netflix and Spotify. This first step appears relatively benign, because it’s simply about using services you’ve already bought while traveling through the EU. But it’s the first step down a slippery slope which is explicitly intended to lead to an eventual single “digital market” across the EU. That means no more charging different rates or offering different content by market, regardless of whether the content may be considered more or less compelling in different countries, or whether local spending power is lower (there’s more than a tenfold difference in GDP per capita between the poorest and richest countries in the EU). This will be hardest on video services, which tend to be very country-specific, than on music services (which tend to offer more or less the same catalog everywhere). No wonder the big providers are fighting it.
via Variety
Snap Beefs Up Copycat Defense Amid Concerns Over Facebook Mimics – Bloomberg (Feb 8, 2017)
This is another one of those times where it feels like the Facebook copying Snapchat narrative might have been a little over-applied. It seems as though Snap has hired and/or acquired an engineer and his firm in Switzerland, whose expertise is making it harder for outsiders to reverse engineer code. The Facebook read here implies that Facebook is actually reverse engineering the code rather than simply building equivalent features from scratch. To the extent that this is about preventing copying, it’s far likelier to be a response to smaller outfits cloning Snapchat than Facebook, which has many engineers more than capable of building these features without reverse engineering code.
via Bloomberg
Facebook closing 200 Oculus VR Best Buy pop-ups due to poor store performance – Business Insider (Feb 8, 2017)
One of the biggest challenges VR faces at this point is suggestions that it’s somehow failing to take off despite a big push into the mainstream, and that’s a narrative Business Insider has pushed before. This is where narratives are dangerous – the fact here is that VR is that VR is still in its infancy as a mainstream technology – other than the mobile flavors, it’s expensive, requires other expensive hardware, and there’s not a ton of content there beyond gaming. But if the narrative instead becomes that it’s fizzling as it attempts to break into the mainstream, that is a lot more damaging than merely talking about a technology that has small but growing adoption. VR can, however, already be fairly compelling as a demo, which is why it’s a blow that Facebook is closing these Oculus demo stations, because VR is really impossible to grok without trying it in person. But those trying to sell VR have to be very careful not to oversell it to mainstream users – it still has quite a long way to go before it crosses the chasm, and making it seem bigger than it is feeds this dangerous narrative.
via Business Insider
Android Wear and LG Watch Reviews Are Mixed at Best (Feb 8, 2017)
It looks like Google and LG lifted an embargo this morning on Android 2.0 and LG’s two new smartwatches. My first reaction to the reviews here is that the new watches sound pretty terrible, and that we’re back to grading these smartwatches on a curve, something I first noted back in 2014 before the Apple Watch was announced. The Verge review is illustrative – it notes that the Sport version is uncomfortable and enormous (it doesn’t fit under shirt cuffs), doesn’t have interchangeable bands, the Android Pay app takes too long to load, and can’t be used while swimming; the Style version lacks most of the more interesting features on the Sport, looks cheap, and the batteries on both versions struggle to make it through the day, while Android Wear 2.0 is pretty buggy. The Verge’s rating? 7.1 for both. Their rating for the Apple Watch Series 2? 7.5. Android Wear has struggled to take off ever since it launched – it’s just never felt like Google or its OEMs understand that watches are fashion accessories, and need to be designed for that job. Packing a billion features into these watches isn’t going to cut it, especially if they don’t work well, or they end up looking ridiculous on your wrist. I’ve seen nothing here that makes me think Android Wear 2.0 is going to do any better than the previous versions.
via The Verge (see also CNET’s review here, while Techmeme should have more here shortly)