FCC Unveils Plan to Repeal Net Neutrality Rules 

Brian Fung, reporting for The Washington Post:

The Federal Communications Commission took aim at a signature Obama-era regulation Tuesday, unveiling a plan that would give Internet providers broad powers to determine what websites and online services their customers see and use.

Under the agency’s proposal, providers of high-speed Internet services, such as Comcast, Verizon and AT&T, would be able to block websites they do not like and charge Web companies for speedier delivery of their content.

This is literally bad for everyone but these mega-ISPs. Horrendously bad — and unpopular — policy.

Google Collects Android Users’ Locations Even When Location Services Are Disabled 

Keith Collins, reporting for Quartz:

Many people realize that smartphones track their locations. But what if you actively turn off location services, haven’t used any apps, and haven’t even inserted a carrier SIM card?

Even if you take all of those precautions, phones running Android software gather data about your location and send it back to Google when they’re connected to the internet, a Quartz investigation has revealed.

Since the beginning of 2017, Android phones have been collecting the addresses of nearby cellular towers — even when location services are disabled — and sending that data back to Google. The result is that Google, the unit of Alphabet behind Android, has access to data about individuals’ locations and their movements that go far beyond a reasonable consumer expectation of privacy.

Quartz observed the data collection occur and contacted Google, which confirmed the practice.

The cell tower addresses have been included in information sent to the system Google uses to manage push notifications and messages on Android phones for the past 11 months, according to a Google spokesperson. They were never used or stored, the spokesperson said, and the company is now taking steps to end the practice after being contacted by Quartz. By the end of November, the company said, Android phones will no longer send cell-tower location data to Google, at least as part of this particular service, which consumers cannot disable.

If they were “never used or stored”, why did they start collecting them in the first place? This is like a kid caught with their hand in the cookie jar saying they weren’t going to eat any cookies. Sure.

CNBC’s Google Pixel Buds Review 

Todd Haselton, writing for CNBC:

There’s nothing I recommend about the Pixel Buds. They’re cheap-feeling and uncomfortable, and you’re better off using the Google Translate app on a phone instead of trying to fumble with the headphones while trying to translate a conversation. The idea is neat, but it just doesn’t work well enough to recommend to anyone on any level.

Hardware is hard.

iPhone 7 Plus and Portrait Mode Lighting Effects 

Steven Troughton-Smith discovered that portrait mode lighting effects can be edited on an iPhone 7 Plus after using a hex editor on an exported photo to enable the feature:

Just to add insult to injury, if you AirDrop that photo back to the iPhone 7 Plus now it shows the Portrait Lighting UI, and lets you change mode. So Portrait Lighting is 100% an artificial software limitation. 7 Plus photos can have it, 7 Plus can do it.

My understanding is that these effects aren’t enabled on iPhone 7 Plus because performance was really slow at capture time. It really does require the A11 Bionic chip for adequate performance live in the camera. And Apple decided against shipping it as a feature for 7 Plus that could only be applied in post, because that felt like half a feature. So I’ve heard.

What I don’t know is why the new lighting effects are not available when you use an iPhone X or 8 Plus to edit a portrait mode photo that was taken using an iPhone 7 Plus. This should be possible.

The Best iPhone Fast Chargers and Wireless Chargers 

Joanna Stern, writing for The Wall Street Journal:

Wireless charging means you can toss your phone on a pad (sold separately!) on your desk and it will charge throughout the day. With a fast charger (sold separately!), you can plug your phone in and go from zero to 50% in 30 minutes.

Both can make a real difference in how you combat battery anxiety disorder. But figuring out which gear you need is complicated.

I went in search of the best options for both speed and wireless convenience, charging and draining iPhones nearly 30 times. My finding: Getting the best chargers doesn’t mean running up your charge card.

I second her recommendation of this 3-in-1 cable from Monoprice — Lightning, USB-C, and micro USB all on a single cable.

BuzzFeed: McMaster Mocked Trump’s Intelligence in a Private Dinner 

Joseph Bernstein, reporting for BuzzFeed:

Over a July dinner with Oracle CEO Safra Catz — who has been mentioned as a candidate for several potential administration jobs — McMaster bluntly trashed his boss, said the sources, four of whom told BuzzFeed News they heard about the exchange directly from Catz. The top national security official dismissed the president variously as an “idiot” and a “dope” with the intelligence of a “kindergartner,” the sources said.

A sixth source who was not familiar with the details of the dinner told BuzzFeed News that McMaster had made similarly derogatory comments about Trump’s intelligence to him in private, including that the president lacked the necessary brainpower to understand the matters before the National Security Council.

The Talk Show: ‘Christmas Mitzvah’ 

Merlin Mann returns to the show for a Thanksgiving-week holiday spectacular. Topics include the history of Markdown, nerding out with Keyboard Maestro, kids today and the computers they want to use, caring about idiomatic native UI design, a look back at last year’s election, and more.

Brought to you by these fine sponsors:

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Microsoft App Center 

My thanks to Microsoft for sponsoring this week’s DF RSS feed to promote App Center, their recently-launched service for Apple developers that connects to your GitHub repo to automatically build, test, distribute, and monitor iOS and Mac apps. App Center is the next generation of HockeyApp, which was acquired by Microsoft a few years ago.

The basic HockeyApp features like beta distribution and crash reporting got a revamped user interface, and Microsoft added new features for building, testing, analytics, and push notifications. Simply connect your repo, build the app on App Center’s Mac cloud, and run automated UI tests on thousands of real iOS devices in their hosted device lab. You can not only distribute your builds to testers, but also deploy directly to the App Store.

You can use all of these features together, or just the pieces that complement your current workflow. Spend less time on drudgery, and more time on your app. Sign up now.

HomePod Delayed Until ‘Early 2018’ 

I just got this statement from an Apple spokesperson:

“We can’t wait for people to experience HomePod, Apple’s breakthrough wireless speaker for the home, but we need a little more time before it’s ready for our customers. We’ll start shipping in the US, UK and Australia in early 2018.”

I had a feeling this would happen when the iPhone X press briefings came and went without a word about HomePod. It’s a tough miss for Apple — there are surely going to be a lot of Amazon Echo devices under Christmas trees this year.

Apple Machine Learning Journal: ‘An On-Device Deep Neural Network for Face Detection’ 

Apple Machine Learning Journal:

We faced several challenges. The deep-learning models need to be shipped as part of the operating system, taking up valuable NAND storage space. They also need to be loaded into RAM and require significant computational time on the GPU and/or CPU. Unlike cloud-based services, whose resources can be dedicated solely to a vision problem, on-device computation must take place while sharing these system resources with other running applications. Finally, the computation must be efficient enough to process a large Photos library in a reasonably short amount of time, but without significant power usage or thermal increase.

Face ID’s Innovation: Continuous Authentication 

Rich Mogull, writing at TidBITS:

Every year, as I travel around the security conference circuit, the hallway conversations always turn to the interesting things attendees have seen lately. To be honest, I can’t remember the last time I was excited about a legitimately cool security technology. I see plenty of security evolution, but not much revolution.

That is, until my iPhone X arrived on launch day, and I got to try Face ID in real-world usage. Put simply, Face ID is the most compelling advancement in security I have seen in a very long time. It’s game-changing not merely due to the raw technology, but also because of Apple’s design and implementation.

Vector 

Rene Ritchie has re-launched Vector as a daily — yes, daily — podcast. I’m halfway through yesterday’s “Designing for iPhone X Roundtable” episode, with guests Sebastiaan de With, Linda Dong, Marc Edwards, and Brad Ellis, and it’s terrific.

The Ringer: ‘The 50 Best Superhero Movies of All Time’ 

I largely somewhat agree with these rankings — but far more so than I usually do with such lists. But the whole thing is worth it just for the sub-list of the best superhero villains of all time — they nailed that one.

Jimmy Iovine and Most Bomb Record in the Solar System 

Jason Kottke on the golden record NASA sent into deep space with Voyager:

Carl Sagan was project director, Ann Druyan the creative director, and Ferris produced the Record. And the sound engineer for the Golden Record? I was surprised to learn: none other than Jimmy Iovine, who was recommended to Ferris by John Lennon.

As Kottke asks, how was this not in The Defiant Ones?

How Facebook Figures Out Everyone You’ve Ever Met 

Excellent investigation by Kashmir Hill, writing for Gizmodo, on Facebook’s creepy “People You May Know” system:

In the months I’ve been writing about PYMK, as Facebook calls it, I’ve heard more than a hundred bewildering anecdotes:

  • A man who years ago donated sperm to a couple, secretly, so they could have a child — only to have Facebook recommend the child as a person he should know. He still knows the couple but is not friends with them on Facebook.
  • A social worker whose client called her by her nickname on their second visit, because she’d shown up in his People You May Know, despite their not having exchanged contact information.
  • A woman whose father left her family when she was six years old — and saw his then-mistress suggested to her as a Facebook friend 40 years later.
  • An attorney who wrote: “I deleted Facebook after it recommended as PYMK a man who was defense counsel on one of my cases. We had only communicated through my work email, which is not connected to my Facebook, which convinced me Facebook was scanning my work email.”

Even if, like me, you’ve never even signed up for Facebook, they almost certainly have a detailed profile of you.

Ming-Chi Kuo on 2018 iPhones 

MacRumors on the latest from Ming-Chi Kuo:

Kuo expects the 5.8-inch model to have 458 pixels per inch, suggesting the second-generation iPhone X’s display will likely continue to have a resolution of 1,125×2,436. He said the 6.5-inch model will have roughly 480 to 500 PPI, while the 6.1-inch model is estimated to have between 320 and 330 PPI.

In his latest research note, obtained by MacRumors, Kuo said the 6.1-inch model will have a lower-resolution LCD display and target the low-end and mid-range markets with an estimated $649 to $749 starting price in the United States.

If accurate, next year’s new iPhone lineup would consist of the second-gen iPhone X with the same size screen, a larger 6.5-inch version that we’re tentatively calling the iPhone X Plus, and a mid-range 6.1-inch LCD model that adopts an iPhone X form factor and features but with a cheaper price point.

A “Plus” sized version of the iPhone X makes perfect sense. Even without these rumors from the supply chain, I’d have been surprised if Apple didn’t create such a phone next. The iPhone X may well draw some current Plus-sized iPhone users, but in use it feels like a “regular” sized iPhone with an edge-to-edge display. Given the popularity of Plus-sized phones, I can’t see why Apple wouldn’t do that with the X design.

But this 6.1-inch model with an LCD display makes no sense to me. First, I’d be surprised to see the X design trickle down to the $750 price range after just one year. Second, the size makes no sense to me. There’s a clear difference between the 4.7-inch and 5.5-inch regular and Plus classic-style iPhones. There would be a clear difference between 5.8-inch and 6.5-inch X-style phones. An additional 6.1-inch lower-priced X-style phone would just confuse things terribly. I don’t think Kuo has the story right on this phone.

Ina Fried Reviews Google’s Pixel Buds 

Ina Fried, writing for Axios:

Apple’s AirPods are more elegant as well as smaller and more comfortable. However, Pixel Buds have some other appeals, most notably the ability to aid in real-time language translation.

The real-time translation feature is cool, but how often would you need it? I’ve been using AirPods for about a year and I don’t think I would have used this feature even once. And it seems like it’s more of a feature of the Google Translate app, not the Pixel Buds themselves.

Given that they both cost $159, Apple comes out way ahead here.

Long-Term Coffee Consumption and Risk of Cardiovascular Disease 

New paper published in Circulation:

Background — Considerable controversy exists regarding the association between coffee consumption and cardiovascular disease (CVD) risk. A meta-analysis was performed to assess the dose-response relationship of long-term coffee consumption with CVD risk. […]

Conclusions — A non-linear association between coffee consumption with CVD risk was observed in this meta-analysis. Moderate coffee consumption was inversely significantly associated with CVD risk, with the lowest CVD risk at 3 to 5 cups/d, and heavy coffee consumption was not associated with elevated CVD risk.

I like that 5 cups of coffee per day qualified as “moderate”. That’s right around what I consume.

Squarespace Domains 

My thanks to Squarespace for sponsoring this week’s DF RSS feed. Buying a domain name from Squarespace is quick, simple, and fun. Search for the domain you want, or type any word or phrase into the search field, and Squarespace will suggest some great options. Every domain comes with a beautiful, ad-free parking page, WHOIS Privacy, and a 2048-bit SSL certificate to secure your website — all at no additional cost. Once you lock down your domain, create a beautiful website with one of Squarespace’s award-winning templates.

Try Squarespace for free. When you’re ready to subscribe, get 10 percent off at squarespace.com with offer code “DARING17”.

The Talk Show: ‘Bed Is Where My Problems Are’ 

Ben Thompson returns to the show to talk about the iPhone X.

Brought to you by these fine sponsors:

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Logitech Makes It Right 

Logitech, on their company blog:

We heard you and we want to make it right.

If you are a Harmony Link user, we will reach out to you between now and March 2018 to make arrangements to replace your Link with a free Harmony Hub, a product with similar app-based remote control features to Link, with the added benefit of controlling many popular connected home devices plus, it works with popular voice assistants.

Equifax Faces Hundreds of Class-Action Lawsuits and an SEC Subpoena Over the Way It Handled Its Data Breach 

Hayley Tsukayama, reporting for The Washington Post:

Equifax also said in its filings that it had received subpoenas from the Securities and Exchange Commission, as well as the U.S. Attorney’s Office for the Northern District of Georgia “regarding trading activities by certain of our employees in relation to the cybersecurity incident.” Shortly after news of the breach broke, reports circulated that top officials had sold Equifax stock after the company found out about the breach, but before disclosing it to the public. Equifax said this week that it had cleared its executives of wrongdoing after an internal investigation found that the executives did not personally know about the breach before their stock sales.

Yeah, I’m sure the SEC will just take their word for it.

Clips 2.0 

Major new release of Apple’s app “for making and sharing fun videos with text, effects, graphics, and more.” Headline feature for iPhone X:

Selfie Scenes on iPhone X make Clips even more fun by using the TrueDepth camera to place you in beautifully animated landscapes, abstract art, and even onboard the Millennium Falcon from Star Wars: The Last Jedi. Each scene is a full 360‑degree experience, so however you move iPhone X, the scene surrounds you on all sides.

Here’s a perfect example from Rian Johnson.

For an app that only debuted six months ago, Clips 2.0 is an ambitious 2.0. The entire user interface has been redone, and I think it makes everything more clear and obvious. I think Clips is the single best example of a productivity app designed for iOS.

Ryan Christoffel, writing for MacStories, has a really good rundown of what’s new and what’s changed in 2.0:

When Clips first debuted earlier this year, it was unknown what kind of support the app would receive from Apple going forward. Would it be another Music Memos, released to the public then largely left alone? While Clips 1.1 was an encouraging sign of life, today’s 2.0 clearly demonstrates Apple’s commitment to this app. And I’m glad for that.

I think Clips has flown under the radar since its release, but Apple seems very serious about it. It’s a big hit, apparently, in schools, where kids are using it to create presentations for classwork using iPads.

And one for the road: Rene Ritchie has a good look at it for iMore.

SuperDuper 3.0 

Dave Nanian, Shirt Pocket Software:

With that last bit of explanation, I’m happy to say that we’ve reached the end of this particular voyage. SuperDuper! 3.0 (release 100!) is done, and you’ll find the download in the normal places, as well as in the built-in updater, for both Beta and Regular users.

SuperDuper! 3.0 has, literally, many hundreds of changes under the hood to support APFS, High Sierra and all version of macOS from 10.9 to the the present.

SuperDuper! 3.0 is the first bootable backup application to support snapshot copying on APFS, which provides an incredible extra level of safety, security and accuracy when backing up. It’s super cool, entirely supported (after all, it’s what Time Machine uses… and it was first overall), and totally transparent to the user.

Fantastic update to one of my very favorite Mac utilities. I bought SuperDuper 1.5 in 2005, and I believe every single update since then has been free. I wish they’d charge me, I love SuperDuper so much.

If you’re not familiar with it, SuperDuper lets you clone any volume to another drive or disk image. It’s really configurable, but with a very easy to understand UI. It’s also really smart, and incredibly trustworthy. I recommend it wholeheartedly.

Wallpaper Interview With Jony Ive on Apple Park 

Nick Compton, writing for Wallpaper:

The building, though, is not a metaphor for open systems, or creative flow made concrete. It is a made object. Apple’s success has been built on higher-order industrialisation; not just designing beautiful objects that do all manner of new things but producing them in incredible numbers and at consistent quality. Its new building is, in some ways, the ultimate Apple product, in places using the same materials the company uses in its laptops and phones.

Ive, above all else, is a maker, thrilled to have his CNC milling machines close at hand. This culture of making was at the heart of what Behling calls the ‘hybrid studio’ forged by the Apple and Foster + Partners teams. ‘One of the connections that we made very quickly was that their approach to problem solving was uncannily similar to ours,’ Ive says. ‘We both make lots and lots of models and prototypes. We made full-size prototypes of parts of the building, we made prototypes to examine and explore a material. The prototyping took many forms.’

Gorgeous architectural photography throughout this piece — save it to read on the biggest display you have.

USB-C Earbuds: Slim Pickings 

Helen Havlak, writing for The Verge:

Two weeks after starting my cheap Pixel 2 earbud search, I finally have a working pair — but they cost almost twice the amount I wanted to spend, and don’t feel very premium. If I lose or break them, it’ll cost me almost $50 and another 10-day wait. The next time I upgrade my phone, they may not be compatible. Even the Apple Store sells $29 Lightning EarPods. Google needs to do a lot better by its Pixel owners than a single $149 USB-C option. Even better, just give us back the damn headphone jack.

Apple does better than selling $29 Lightning earbuds — they include a pair in the box with every iPhone. It’s embarrassing that Google doesn’t include a pair of USB-C earbuds with the Pixels.

Nintendo at Its Best 

Chris Compendio, reviewing Super Mario Odyssey for Paste:

I found that this videogame was persistent in its mission to bring me joy. Super Mario Odyssey is extra — in that same area in the Wooded Kingdom, I stood next to a boom box, and Mario, without any button prompt, automatically began dancing to the music. When I left Mario alone for more than a few seconds, he would lay down for a nap, and a bird would eventually land on his nose, with each kingdom having a different kind of bird. There are many moments like this that serve little to no purpose other than smiles, laughs and entertainment. Nintendo has a classic charm in all of their products. They do not simply go for the extra mile, but for at least fifty miles beyond that.

I bought it last week, but haven’t had time to play yet. Looking forward to it.

Forking the iPhone 

Jean-Louis Gassée:

What we see is Apple is doing what they do best: Taking chances. They made a risky bet with the iPhone X and covered it with the iPhone 8. The new and improved perception of Apple might come from the realization that both bets are winning, and that the iPhone X is a radically new, as opposed to a merely improved, breed of smartphone — and probably is the start of a new succession of carefully incremented future models.

A fork is exactly right: the iterative, familiar iPhone 8 and 8 Plus on one side of the fork, and the novel, back-to-the-drawing board iPhone X on the other.

TripAdvisor Removed Warnings About Rapes and Injuries at Mexico Resorts 

Raquel Rutledge and Andrew Mollica, reporting for The Milwaukee Journal Sentinel:

Seven years ago, TripAdvisor repeatedly removed a post written by Kristie Love, a 35-year-old mother of two from Dallas. Love told how she had been raped by a security guard at a highly rated all-inclusive Mexican resort owned by the global chain, Iberostar, based in Spain.

She wrote how, after an evening with friends, she had returned to her room to find the electronic key card no longer opened her door at the Iberostar Paraiso near Playa del Carmen. She headed to the lobby of the sprawling resort to get her card reactivated and stopped to ask a uniformed guard whether she was walking in the right direction.

He motioned her to follow him, then overpowered her, dragged her into some bushes and raped her. When she reached the lobby in tears, hotel staff refused to call police.

A TripAdvisor moderator spotted the post soon after it had published and deemed it in violation of the company’s “family friendly” guidelines.

The following year, another young woman, 19 and on vacation with her family, reported to hotel officials in the same resort complex that a security guard had raped her in the bathroom.

And in 2015, still another woman, Jamie Valeri, 34, a mother of six from Wisconsin, was sexually assaulted at the same resort after she and her husband simultaneously blacked out in the middle of the day, barely into their third drink.

It’s positively sickening that as a matter of TripAdvisor policy, actual rapes, sexual assaults, and druggings are OK, but reports about these crimes on their forums are not. TripAdvisor should get sued out of existence.

Most-Used OS in the World? 

Andrew Tanenbaum, creator of the MINIX operating system, in an open letter to Intel CEO Brian Krzanich:

Thanks for putting a version of MINIX 3 inside the ME-11 management engine chip used on almost all recent desktop and laptop computers in the world. I guess that makes MINIX the most widely used computer operating system in the world, even more than Windows, Linux, or MacOS. And I didn’t even know until I read a press report about it. Also here and here and here and here and here (in Dutch), and a bunch of other places.

It’s an interesting development, having a full-blown operating system running inside a CPU. And it’s a nice feather in the cap for MINIX, which heretofore had best been known as a teaching OS for computer science students. But it can’t be the most-used OS in the world. Android is. (Or, if you only want to count the kernel-level operating system, Linux, which runs at the heart of Android.)

MINIX is now almost certainly the most widely-used OS on Intel-based computers, but Intel-based computers are now far outnumbered by ARM-based ones.

Horace Dediu: Apple Watch Will Soon Generate More Revenue Than iPod at Peak 

Bookmark this for the next time you see someone claim Apple Watch is a flop.

Notcho 

Notcho, from Cromulent Labs:

Not a fan of the notch? Want to hide the horns? Now you can quickly and easily create wallpapers that hide the notch on your new iPhone X.

It’s a clever little hack: you give Notcho an image, and Notcho lets you export a version with black bars and rounded corners at the top to hide the iPhone X’s sensor array notch. I don’t actually think this is a good idea — if there’s anywhere where I think embracing the notch is just fine, it’s on the lock and home screens. Where the notch should have been hidden is when you’re using apps. This utility doesn’t (and can’t) do anything about it. This was Apple’s decision to make, and even if you disagree with how they decided to handle it, I don’t think you should fight it. I still don’t like it, but I have to say that after nearly two weeks with iPhone X, I really don’t notice it.

But damn if the name “Notcho” isn’t clever — it might be the best possible name for a utility that does this. Also clever is the monetization strategy: Notcho is free to download and use, but any wallpapers you create with it are watermarked with “Notcho” in the bottom right corner. For $2 you can remove the watermark. And if anyone is going to be bothered by that watermark, it’s the same sort of person who’s bothered by the notch.

(I really hope that floppy disk icon for the Save button is a joke.)


Twitter’s 280-Character Own Goal

J.K. Rowling, on Twitter raising the per-tweet character limit to 280:

Twitter’s destroyed its USP. The whole point, for me, was how inventive people could be within that concise framework.

USP is “unique selling proposition”. By doubling the character limit, Twitter has eliminated what made them unique. Yes, there were many trade-offs with the 140-character limit, both pros and cons. But one of the pros is it made Twitter unique. Twitter timelines now look more like Facebook — but Facebook is already there for Facebook-like timelines. Twitter trying to be more like Facebook is like basketball trying to be more like football — a bad idea that won’t work.

Stephen King was more succinct:

280 characters? Fuck that.

Andy Ihnatko:

I like the word-Tetris of making a complete thought fit in a 140-character box.

John Dingell, 91-year-old retired Congressman from Michigan (who is truly excellent at Twitter):

99% of you people don’t even deserve 140 characters.

It’s no surprise that writers, in particular, object to this change. I agree with Ihnatko — the 140-character limit made it a challenge. Fitting certain complex thoughts into a mere 140 characters sometimes felt like solving a small challenge, like one of The New York Times’s tiny little 5 × 5 crossword puzzles.

But perhaps the best commentary comes from William Shakespeare:

Brevity is the soul of wit.

Given 280 characters, people are going to use them, even to express thoughts that could have fit in 140. Given unlimited characters, such as in email, people ramble aimlessly.

That’s why email feels like a dreary chore, and Twitter feels like fun. The fewer tweets that fit in a single screen at a time, the less fun Twitter feels. I’m sure Twitter considered this change carefully, but I’m convinced they’ve made a terrible mistake. 


Understanding Apple’s Multinational Tax Payments 

Great piece by Shawn Tully for Fortune:

I figured that if this reporter found corporate taxes baffling, so did lots of sophisticated Fortune readers. So I dug into the financials of Apple to grasp how the world’s most valuable publicly traded company accounts for taxes. Albert Meyer, a forensic accountant and former academic who runs investment firm Bastiat Capital, helped explain how and why Apple books or defers taxes on different categories of income, and which rates it applies to each category. With his help, I present a primer on taxation of multinationals, using Apple as a case study.

I still don’t quite understand the whole thing, but I have a much better grasp than I did before. And I’m more convinced than ever that Apple is doing something complicated, not something devious.

It’s important to emphasize that Apple actually pays a lot of tax compared to other U.S.-based corporations with immense foreign earnings, and takes a highly conservative approach to tax accounting. […]

For FY 2016, Apple booked total pre-tax earnings of $61.4 billion. On its income statement, Apple showed a “provision for taxes” of $15.685 billion. That number is an expense that’s deducted straight from pre-tax income of $61.4 billion to yield net income of $45.7 billion. Hence, its reported “effective tax rate” was 25.6% ($15.685 billion divided by $61.4 billion), well below the official 35%, but on the high side for multinationals, many of which are in the teens.

The news coverage on Apple’s tax avoidance would lead you to believe (and in fact has led many to believe) that Apple pays a lower effective tax rate than most companies, when the truth is they pay a higher rate than most of their peers.

And later:

It’s important to note that Apple is extremely responsible in the use of this exemption for reinvested earnings. Many multinationals report that they intend to plough all of their foreign profits into operations, and hence, don’t make any accruals for U.S. taxes on their offshore earnings. Apple is the rare tech titan that books large annual accruals that lower net income.

The problem isn’t Apple’s tax structure, it’s U.S. law. You can argue that Apple should voluntarily pay more in taxes than they’re legally obligated to, but no one who holds such views would ever get hired as a finance executive at a large publicly held company.

Barry Ritholtz: ‘Why Apple Should Buy Netflix’ 

Barry Ritholtz, writing for Bloomberg:

I try not to give billionaires or corporate managers unsolicited advice on what they should do with their money. Warren Buffett and Apple Inc. both have done rather well for themselves and their investors without my help. Today, I violate my own rule: Apple should buy Netflix Inc. in an all-stock deal for about $100 billion. […]

The upsides for Apple are fairly obvious; the biggest downside is the cost. If anything, it might spare us the boring quarterly routine of analysts expecting soft iPhone sales and then being shocked when the company beats to the upside.

If Apple passes on Netflix, don’t be surprised if Amazon does not. That alone is reason to make the purchase.

Usually when someone proposes Apple make a huge acquisition, I hurt my eyes by rolling them so far back in my head. I remain unconvinced that Apple should buy Netflix, but I don’t roll my eyes at the notion.

I think the main problem is that there’s nothing magical about Netflix. Surely Apple could buy HBO for less money than Netflix would cost, and I would put HBO’s original content up against Netflix’s any day. I also think it’s a mistake to underestimate Apple’s ability to build its own first-class original content streaming service based on the crappy shows it’s released to date. A couple of more deals like the Amazing Stories one with Steven Spielberg and they’ll already have a foot in the game — for way less than the $100 billion it would take to buy Netflix.

And, just as I was about to publish this post, this just in: Apple has announced a deal for a two-season scripted TV series starring Jennifer Aniston and Reese Witherspoon as competing morning TV show hosts, with House of Cards producer Jay Carson writing the pilot and serving as showrunner.

Ritholtz (and others, like Om Malik and Ben Thompson) argue that Apple’s incredible cash hoard would allow them to make an expensive acquisition like Netflix. My argument is that Apple’s cash hoard would allow them to outbid the competition for the best new shows. Make Apple Studios the place where top notch talent takes new pitches first, knowing they’ll get paid top dollar and treated well. The trick isn’t the money — the trick is hiring the right executives to identify the best new shows.

Logitech Will Brick Its Harmony Link Hub for All Owners in March 

Chris Welch, reporting for The Verge:

Logitech has announced that it’s shutting down all services for the Harmony Link hub, a plastic puck the company released in 2011 that gave smartphones and tablets the ability to act as universal remotes for thousands of devices.

Owners of the product have received an email from the company warning that the Link will completely stop working in March. “On March 16th, 2018, Logitech will discontinue service and support for Harmony Link. Your Harmony Link will no longer function after this date,” the email says. There’s no explanation or reason given as to why service is ending in the email, but a Logitech employee provided more details on the company’s forums. “There is a technology certificate license that will expire next March. The certificate will not be renewed as we are focusing resources on our current app-based remote, the Harmony Hub.”

This sucks, but it seems like the way of the future with cloud-backed products. In the old days, products stopped working when they broke. Now, they stop working when the company that sold them loses interest in continuing to support them. It feels spiteful. More than ever, it matters how much you trust the company from which you buy stuff.

Apple at Its Best 

Ben Thompson, writing at Stratechery:

In these instances the iPhone X is reaching the very pinnacle of computing: doing a necessary job, in this case security, better than humans can. The fact that this case is security is particularly noteworthy: it has long been taken as a matter of fact that there is an inescapable trade-off between security and ease-of-use; TouchID made it far easier to have effective security for the vast majority of situations, and FaceID makes it invisible.

The trick Apple pulled, though, was going beyond that: the first time I saw notifications be hidden and then revealed (as in the GIF above) through simply a glance produced the sort of surprise-and-delight that has traditionally characterized Apple’s best products. And, to be sure, surprise-and-delight is particularly important to the iPhone X: so much is new, particularly in terms of the interaction model, that frustrations are inevitable; in that Apple’s attempt to analogize the iPhone X to the original iPhone is more about contrasts than comparisons.

“Surprise and delight” are intangibles. You can’t measure them with a benchmark or instrument. There are contingents of hardcore power user and open source nerd types who disdain surprise and delight as product attributes — and no surprise, those are the folks who seem to be dismissing iPhone X as a cynical cash grab.

Steven Soderbergh’s ‘Mosaic’ 

Angela Watercutter, writing for Wired:

Where they ended up was a smartphone-enabled story, developed and released by Silver’s company PodOp, that lets viewers decide which way they want to be told Mosaic’s tale of a children’s book author, played by Sharon Stone, who turns up dead in the idyllic ski haven of Park City, Utah. After watching each segment — some only a few minutes, some as long as a standard television episode — viewers are given options for whose point of view they want to follow and where they want to go next. Those who want to be completest and watch both options before moving on can do so, those who want to race to find out whodunit can do that too. Because each node, filmed by Soderbergh himself, feels like a TV show, launching Mosaic can be akin to sneaking a quick show on Netflix while commuting to work or waiting on a friend; but because it’s a long story that’s easily flipped through, it can also be enjoyed like the pulpy crime novel on your nightstand, something you chip away at a little bit at a time before bed.

This sounds fantastic, especially in the hands of someone as innovative and talented as Soderbergh. iOS-only (for now?), but that includes Apple TV.

iPhone X 4K Video vs. the Panasonic GH5 Professional Video Camera 

Impressive side-by-side comparison. The Panasonic GH5 sells for $2000 for the body only, and costs around $2800 with a lens. The iPhone X camera largely held its own in outdoor lighting.

Apple to Release Software Update to Solve iOS 11 Issue When Typing the Letter ‘i’ 

Benjamin Mayo, writing for 9to5Mac:

Some iPhone and iPad users are facing a weird bug after updating to iOS 11.1. When trying to type the lowercase letter ‘i’, autocorrect replaces the word with the letter ‘A’ and a question mark symbol.

Apple has documented steps for a workaround fix until a real bug-fix software update is released …

Such a weird bug — and embarrassing for Apple because it makes the device look so dumb. What I’ve heard is that this is a machine learning problem — that, more or less, for some reason the machine learning algorithm for autocorrect was learning something it never should have learned.

Bloomberg : ‘Walmart Pay Threatens to Surpass Apple in U.S. Mobile Payments’ 

Olga Kharif and Matthew Boyle, reporting for Bloomberg:

Available in 4,774 stores, Walmart Pay is enrolling tens of thousands of new users a day, up from thousands four or five months ago, said Daniel Eckert, who runs the business. Two-thirds of the customers who try it also use it a second time within 21 days, he said, giving him confidence Walmart Pay will surpass Apple Pay in the U.S. in terms of use by shoppers in stores where they’re accepted.

“If daily enrollments don’t slow down, I think that’s pretty well in the cards shortly,” said Eckert, senior vice president for services and digital acceleration. “I would have to imagine we are getting pretty close.”

Richard Crone, chief executive officer of researcher Crone Consulting LLC, estimates Walmart will pass Apple Pay in active U.S. users — those making at least two transactions a month — by the end of 2018.

What this guy Crone is saying is that Walmart Pay will surpass Apple Pay in active users — which, I think, is a legitimate metric for comparison. But what about total transactions? I make way more than two transactions per month with Apple Pay. And what about total revenue?

But the numbers from Eckert, Walmart’s executive, are downright misleading: “in terms of use by shoppers in stores where they’re accepted” is a bizarre choice for the denominator in this comparison. There seems to be no question here that Walmart Pay is a success, but I think by the metrics most people would choose, it’s not set to “surpass” Apple Pay in the U.S. (And this whole story is about the U.S. only — Apple Pay seems to be doing well worldwide.)


iPhone X Review Roundup

Because I’ve only had about 24 hours with the iPhone X, I’m in no position to write a review yet. But my quick take:

  • Face ID works great. In practice it’s like not even having a passcode on the phone. You just swipe and you’re in. It’s also very quick to set up — way quicker than setting up even a single fingerprint in Touch ID.
  • I don’t really notice the notch while using it.
  • I do notice the lack of a home button. I think I’ll get used to the new no-home-button UI soon, but 10 years of habits die hard.
  • The device feels great.

I was far from alone in not getting an extended period of time to test the phone before the review embargo lifted.

Here’s what others are saying in their reviews.

Matthew Panzarino used iPhone X for a week, and stress-tested it with a family trip to Disneyland. (He did the same thing with the iPhone 6 and 6 Plus three years ago — it’s a great conceit for a review.) He also got on-the-record interviews with Phil Schiller, Dan Riccio, Craig Federighi, and Alan Dye. Riccio flatly denied reports that Apple was scrambling to get Touch ID working with iPhone X:

“I heard some rumor [that] we couldn’t get Touch ID to work through the glass so we had to remove that,” Riccio says, answering a question about whether there were late design changes. “When we hit early line of sight on getting Face ID to be [as] good as it was, we knew that if we could be successful we could enable the product that we wanted to go off and do and if that’s true it could be something that we could burn the bridges and be all in with. This is assuming it was a better solution. And that’s what we did. So we spent no time looking at fingerprints on the back or through the glass or on the side because if we did those things, which would be a last-minute change, they would be a distraction relative to enabling the more important thing that we were trying to achieve, which was Face ID done in a high-quality way.”

Panzarino, on the iPhone X’s OLED display:

I hate to say it, but it makes the iPhone 8 Plus LCD look kind of like butt. I love it, even though it is flawed in one noticeable way.

The one area where this display falls prey to standard OLED gripes is in off-axis viewing. Apple tells me that it has done work to counter the drop in saturation and shift to blue that affects OLED screens traditionally. I can tell you that, compared to other OLED screens, you have to get further “off of center” to see a real shift in color, holding the phone 30 degrees or more off of dead on. But it is still there. For people who share their phone’s screen or use it at odd angles a lot, it will be noticeable. On some phones, OLEDs go super blue. On the iPhone X it’s more of a slight blue shift with a reduction in saturation and dynamic range. It’s not terrible, but it definitely exists.

I see the same thing with mine.

Nicole Nguyen also used iPhone X for a week and wrote a great review for BuzzFeed:

Whatever. I don’t feel strongly about the notch either way, but it’s really the other end of the screen that feels awkward. It’s when the keyboard, in any app, is on screen (which, for me, is most of the time): There’s all this dead space on the bottom, where Apple could have put common punctuation, frequently used emojis, or literally anything, but instead left it blank. Other full-screen apps on other phones put navigation or other design elements in that area, and it doesn’t look crowded or crammed. It looks fine. It’s puzzling why Apple didn’t put something more useful down at the bottom, or why it didn’t add a row of numbers or emojis up top and push down the keyboard to make it more thumb-accessible.

It does look like a waste of space, but I wonder if testing showed that there needs to be some space under the keyboard to separate it from the virtual home button? If there weren’t a gap under the keyboard, you might hit the home button while trying to hit the space bar, and vice versa. Update: I’ve heard from a little birdie that my speculation is correct; also: it’s about typing comfort.

For a normal human who isn’t aware of the 30,000 invisible dots being projected on their face or the 3D map of their head encrypted somewhere deep inside their phone, there’s nothing “futuristic” about these interactions. Using Face ID is what life without a passcode — life before we all became paranoid technofreaks — felt like.

That’s my take too. It’s like not having a passcode set.

Lance Ulanoff, in his review for Mashable:

During my first 24 hours of using the iPhone X, I helplessly pressed the space where a button should be. It’s a kind of Phantom Home Button Syndrome that I expect all iPhone X owners will experience in the early days.

It fades, though, and rather quickly, thanks to a smartly designed gesture interface and something Apple calls Face ID. […]

One important limitation of Face ID: It only lets you register one face. That may strike many as unnecessarily limiting since Touch ID lets users register up to 10 fingerprints, but Apple says it found the number of people who register more than one person’s fingerprints is miniscule. There’s also the simple and obvious fact that humans have 10 fingers, but just one face.

I’m surprised it’s only a minuscule number. I’ve got a fingerprint registered on my son’s iPhone — I’m sure other parents do the same thing. And last week my wife let me put a fingerprint on her iPhone so I could use Apple Pay while pre-ordering her iPhone X while she slept. 


Face ID FUD

Seemingly-sensational Apple story from Bloomberg today, reported by Alex Webb and Sam Kim, “Inside Apple’s Struggle to Get the iPhone X to Market on Time”:

As of early fall, it was clearer than ever that production problems meant Apple Inc. wouldn’t have enough iPhone Xs in time for the holidays. The challenge was how to make the sophisticated phone — with advanced features such as facial recognition — in large enough numbers.

As Wall Street analysts and fan blogs watched for signs that the company would stumble, Apple came up with a solution: It quietly told suppliers they could reduce the accuracy of the face-recognition technology to make it easier to manufacture, according to people familiar with the situation.

That sounds terrible. But what exactly does it mean? Does it mean Face ID will create too many false positives? Does it mean it will be too slow? Does it mean there will be too many false negatives? Surprise surprise, Bloomberg doesn’t say.

Apple is famously demanding, leaning on suppliers and contract manufacturers to help it make technological leaps and retain a competitive edge. While a less accurate Face ID will still be far better than the existing Touch ID, the company’s decision to downgrade the technology for this model shows how hard it’s becoming to create cutting-edge features that consumers are hungry to try.

“Downgraded technology” sounds terrible. But which components, exactly, were “downgraded”?

Apple spokeswoman Trudy Muller said “Bloomberg’s claim that it reduced the accuracy spec for Face ID is completely false and we expect Face ID to be the new gold standard for facial authentication. The quality and accuracy of Face ID haven’t changed; it continues to be one in a million probability of a random person unlocking your iPhone with Face ID.”

It is extraordinary for Apple to issue a blanket “this is completely false” statement on any news story. Apple, as policy, no-comments every news story, even when they know it’s bullshit. So either this story is particularly strong bullshit, or Apple is lying, on the record, under an employee’s real name (as opposed to the anonymous “an Apple spokesperson” attribution).

And what exactly is the point of Bloomberg’s story if, as reported, “Face ID will still be far better than the existing Touch ID”?

To make matters worse, Apple lost one of its laser suppliers early on. Finisar Corp. failed to meet Apple’s specifications in time for the start of production, and now the Sunnyvale, California-based company is racing to meet the standards by the end of October. That left Apple reliant on fewer laser suppliers: Lumentum Holdings Inc. and II-VI Inc.

Apple didn’t “lose” a supplier — Apple cut the supplier because they weren’t producing adequate yields.

To boost the number of usable dot projectors and accelerate production, Apple relaxed some of the specifications for Face ID, according to a different person with knowledge of the process. As a result, it took less time to test completed modules, one of the major sticking points, the person said.

It’s not clear how much the new specs will reduce the technology’s efficacy.

Now we get to the real heart of the story. Did Apple adjust the specifications for the components, or just the testing parameters? And if “it’s not clear how much the new specs will reduce the technology’s efficacy”, what is the point of this story? When did Apple “relax” these specifications? Before or after the September event?

To be clear, I have no idea whether Face ID works as advertised or not. I haven’t used it even once yet. Maybe it stinks, maybe it’s great, maybe it’s somewhere in between. But Bloomberg clearly doesn’t know either, yet they published this story which has a headline and summary — “The company let suppliers reduce accuracy of the phone’s Face ID system to speed up production” — which suggests that Face ID is going to stink because Apple’s suppliers couldn’t get enough good components out the door. If this weren’t merely clickbait, they’d be able to say how well it actually works.


Frankly, I don’t trust anything Bloomberg reports about iPhones any more. On July 3, they published this piece by Mark Gurman, “Apple Tests 3-D Face Scanning to Unlock Next iPhone”:

Apple Inc. is working on a feature that will let you unlock your iPhone using your face instead of a fingerprint.

For its redesigned iPhone, set to go on sale later this year, Apple is testing an improved security system that allows users to log in, authenticate payments, and launch secure apps by scanning their face, according to people familiar with the product. This is powered by a new 3-D sensor, added the people, who asked not to be identified discussing technology that’s still in development. The company is also testing eye scanning to augment the system, one of the people said.

The sensor’s speed and accuracy are focal points of the feature. It can scan a user’s face and unlock the iPhone within a few hundred milliseconds, the person said. It is designed to work even if the device is laying flat on a table, rather than just close up to the face. The feature is still being tested and may not appear with the new device. However, the intent is for it to replace the Touch ID fingerprint scanner, according to the person. An Apple spokesman declined to comment.

Apple did in fact replace Touch ID with Face ID in the iPhone X, but the timing on Gurman’s story is wrong. They weren’t “testing” the viability of any of this in July. According to several trusted sources within Apple, including multiple engineers who worked directly on the iPhone X project, the decision to go “all-in on Face ID” (in the words of one source) was made over a year ago. Further, the design of the iPhone X hardware was “locked” — again, a source’s word — prior to January 2017. If I had to wager, I’d say it was locked a few months before the end of 2016. This was a nine-month-old decision that Bloomberg reported in the present tense.

Beyond Bloomberg, there are the slew of reports from various “analysts” that suggested Apple was still working to incorporate Touch ID into the iPhone X display as late as this summer.

Ming-Chi Kuo in January:

In a note sent out to investors on Friday, and subsequently obtained by AppleInsider, well-connected KGI analyst Ming-Chi Kuo says he believes Apple is developing a new class of bio-recognition technologies that play nice with “full-face,” or zero-bezel, displays. Specifically, Kuo foresees Apple replacing existing Touch ID technology with optical fingerprint readers, a change that could arrive as soon as this year, as Apple is widely rumored to introduce a full-screen OLED iPhone model this fall.

By January, there were no plans to embed an “optical fingerprint reader” in the display of any Apple device this year. Apple did, of course, investigate ways to embed Touch ID sensors in edge-to-edge displays, but, again, those efforts were abandoned in favor of Face ID over a year ago.

Cowen and Company analyst Timoth Arcuri, on June 21 (of this year), under the AppleInsider headline “Apple Still Undecided on Fingerprint Tech for ‘iPhone 8’, No Shipments Until October”:

The OLED-embedded fingerprint technology for Apple’s “iPhone 8” is “still being worked out,” an analyst claimed on Wednesday, with the company only deciding on one of three options by the end of June.

The one settled point appears to be that there won’t be a sensor on the back of the phone, Cowen and Company’s Timothy Arcuri indicated in a memo obtained by AppleInsider. The three options include thinning the cover glass over a sensor area, creating a pinhole through the glass for an optical or ultrasonic sensor, or trying a “film” sensor integrated into the display, using either capacitive or infrared technology.

This, it turns out, was complete nonsense. Again, Apple was “all-in” on Face ID over a year ago. The idea that they were still “working this out” in June is a joke.

And back to Ming-Chi Kuo, in August:

Apple has decided against an embedded Touch ID solution for its forthcoming “iPhone 8” handset, according to well-connected analyst Ming-Chi Kuo, leaving the door open for competitor Samsung to debut similar technology in next year’s Galaxy Note 9.

In a note to investors obtained by AppleInsider, Kuo says Apple has “cancelled” plans to embed a fingerprint recognition solution in the next-generation flagship iPhone. The analyst left embedded Touch ID off a list of standout “iPhone 8” features published in July, but did not indicate that Apple had abandoned the initiative altogether.

As with Gurman’s report in June, the problem here is with the timing, not the facts. By August of this year, this was a nearly year-old decision.

The Wall Street Journal, in a September 7 report attributed to reporters “Yoko Kubota in Tokyo, Tripp Mickle in San Francisco, and Takashi Mochizuki in Tokyo”:

The production delays earlier this summer stemmed in part from Apple’s decision to build new phones using organic light-emitting diode, or OLED, screens similar to those used by rival Samsung Electronics Co. At the same time, Apple decided to ditch the physical home button that contains fingerprint sensors for unlocking the device. Apple tried to embed the Touch ID function, or fingerprint scanner, in the new display, which proved difficult, the people familiar with the process said.

As deadlines approached, Apple eventually abandoned the fingerprint scanner, the people said, and users will unlock the phone using either an old-fashioned password or what is expected to be a new facial-recognition feature. Nonetheless, precious time was lost and production was put back by about a month, according to people familiar with the situation.

I quote the two Tokyo datelines in the byline because I don’t think this information came from Apple. Again, my sources at Apple, directly familiar with the decision, have told me that they chose Face ID over a year ago because they were convinced it was better than Touch ID. Touch ID was not abandoned because it was difficult to embed in the display.

For good measure while I’m pouring out the claim chowder, here’s Zach Epstein, writing for BGR on July 20, “I Might Know the Truth About Touch ID on Apple’s iPhone 8” (note that the device he refers to as “iPhone 8” is the iPhone X):

I have now received information from three different well-placed sources over the past few weeks, and they have all told me the same thing: The iPhone 8’s Touch ID fingerprint sensor is in the power button.

The news first came to me about a month ago from a source I know well. I’ve since been told the same thing by two additional sources I haven’t known for quite as long. All three sources have provided information to me in the past that has proven to be accurate.

That’s a lot of “well-placed sources” for a bullshit story.


All of this fits with what I’ve heard from rank-and-file engineering sources within Apple for years. To wit, producing hardware at the iPhone’s scale, while pushing the boundaries of the industry in technology, is so difficult, so complicated, that it requires hardware designs to be locked down far in advance of when iPhones are actually announced and released. Apple’s iPhone hardware engineering teams did not spend 2017 working on the iPhone X and iPhone 8 — they spent this year working on new iPhone hardware for 2018 and 2019 (and perhaps beyond). Hardware is nothing like software. If Apple had really been dithering over Touch ID-embedded-in-the-display vs. Face ID in June of this year, iPhone X wouldn’t be hitting the market until 2018. And the final decisions on the hardware for the iPhones that will be debuting next year are being made right now.

So where do these rumors come from? I don’t know. My guess is that if there’s an intent behind them, it’s that competitors (cough, Samsung?) within the Asian supply chain are attempting to sow doubt about Face ID. The narrative presented by analysts and certain news reports this summer was that Apple was still scrambling to get Touch ID working embedded within the iPhone X display, suggesting that Face ID was their Plan B.

People are naturally skeptical about biometric ID systems. They were skeptical about Touch ID when it was still only rumored, just like they’re skeptical now about Face ID. Today, though, Touch ID is both trusted and familiar. So rumors claiming that Apple really wanted to get Touch ID into iPhone X but had to settle for Face ID play into both the skepticism of the new and the comfort of the familiar. FUD is one of the oldest tricks in the book.

The other, simpler explanation is that it simply takes 9 months or longer for engineering decisions made within Apple to percolate out to the rumor reporters and analysts — and their sources are so far removed from the halls of Cupertino that they mistake old news for new news.