View from Washington - General

1 2 >> Next
Elon Musk kicks Ultron's butt... with ironclad rules

27 October 2014 by Paul Dempsey

"I think we should be very careful about artificial intelligence. If I were to guess at what our biggest existential threat is, it's probably that.

"So we need to be very careful with artificial intelligence. I'm increasingly inclined to think that there should be some regulatory oversight, maybe at the national and international level, just to make sure that we don't do something very foolish.

"With artificial intelligence, we are summoning the demon. You know all those stories where there's the guy with the pentagram and the holy water and he's, like yeah, he's sure he can control the demon. Didn't work out."


The quote itself sounds like it's from a movie. Latter-day Cassandra describes dire threat from behind lectern. Nobody listens. Uh-oh.

But these are the thoughts of Elon Musk from last week's Centennial Symposium at MIT's Department of Aeronautics and Astronautics. The man behind SpaceX, Tesla and PayPal is hardly one of the tinfoil hat brigade. Rather, a prescient and successful visionary - Tony Stark without the penchant for blowing things up.

Hollywood has given us many AI villains. From Hal 9000 to Skynet to the battling cyber intelligences of current TV hit Person of Interest. This Spring, Marvel's Avengers will battle the genocidal robot Ultron, with last week's leaked trailer coldly referencing Pinocchio: "There are no strings on me," intones our not-at-all-a-real-boy.

As for Isaac Asimov's Three Laws of Robotics, those date back to 1942 - clearly he had the original Hydra in mind.

Joking aside, with a few notable exceptions like Asimov, we have used dramatic conflict between man and machine to define our own humanity - and its superiority. We give HAL a nervous breakdown; the machine couldn't cope with our garbage inputs. In Terminator 2, the story pivots around teaching Schwarzenegger's 800-series human morality.

This was hardly stuff that many technologists would debate publicly. AI was then still a remote prospect - great for sci-fi authors to exploit and philosophers to debate, but engineering had more immediate problems.

What's changed - and what makes Musk's comments important - is that AI is finally here. It may not be 'fully formed' or 'conscious', but consider this example.

The human sales process involves an understanding of emotional responses, body language and desires. It's very much about telling the client what he or she wants to hear. Something you might look for from a Turing Test perhaps.

Now consider how good Amazon's personal product recommendations or Facebook's ad placement are getting. They are also about reading you.

Obviously, this is just one component of a fully-fledged AI, but we are seeing more of them enter real-life use all the time.

And when someone like Musk raises the topic, we listen. Because here's a savvy guy who gets bombarded with investment opportunities in Silicon Valley. In that context, AI is hot.

But it's also a secretive sector, even by Valley standards. Some start-ups are wooing the military and others are after similarly protective e-commerce companies. And more.

Musk will be seeing a lot of these pitches cross his desk. He has insider knowledge. Whatever, his teeth are itching.

Given all this, the more immediately important thing in what he says isn't the existential Hollywood trope. That's to get your attention. What matters is the call for regulation.

Today, we can identify AI components and how to create them - and it is inevitable that they will play an increasing and ubiquitous role in our lives. If Musk is talking about them like this, we need some rules - detailed post-1942 rules.

We can no longer use AI as a straw man to define how 'good' we are; we have to define AI to make ourselves and our world better.

Or maybe Ultron (and Douglas Adams) are right: "Virus with legs. P'ah. See ya."

Edited: 27 October 2014 at 09:57 AM by Paul Dempsey

Share |

   

    Posted By: Paul Dempsey @ 27 October 2014 09:22 AM     General     Comments (1)  

Nokia - so much more than what's in a name

23 October 2014 by Paul Dempsey

So, Microsoft is to kill off the Nokia brand in mobile phones - at least on its own kit. It's amazing in some ways that the news does not come as much of a surprise.

Nokia's phone division had been stumbling for a while. Widely acknowledged as having missed the boat on smartphones, it pushed Psion's Symbian mobile OS spin-out to the point of acquiring it, then jumped for Windows Mobile with a few Android products, and was finally acquired by the Redmond behemoth. Just six months later, in comes the towel.

Then, add the facts that younger rivals can now pump out smartphones at ever cheaper cost - shoppers can pick up unlocked models for well under £100 - and that Apple stole Nokia's reputation for having the best UI.

Yet it is still only a little over 20 years since Nokia got the mobile revolution going with the first mass-produced GSM handset. The 1011 arrived in 1992 and was followed, even into the early WAP days of the mobile Internet, by a sequence of hands-down winners. We even forgave them that diddle-ee-dee, diddle-ee-dee, diddle-ee-dee-dee ringtone.

In Europe particularly (though less so in the US where GSM was a late arrival), Nokia was intensely fashionable. It pioneered garish fasciae long before the iPhone 5C. It had all of us peering at that blasted Snake game for far longer than was healthy. And, among the young, its cheaper, easy-to-use phones kickstarted our continuing fondness for instant messaging, then with SMS.

You would think that, even some obvious missteps aside, there would still be a residual brand value in the Nokia name. And maybe there would have been had it not been Microsoft that bought its handset business - I'm not saying that for any malicious reasons, but more because Microsoft has been juggling so many mobile brands, some rationalization was inevitable.

It's unlikely though that the continuing and separate Nokia Oyj conglomerate - still a major player in comms infrastructure and IT in its own right - will quickly seek to re-enter the handset business, assuming that use of the brand now reverts back to it. Questionable margins, too many players.

Moreover, it's arguable that as the handset market grew, it did progressively shift away from where Nokia as a company has historically and culturally been strongest.

Some years ago, Nokia was jokingly introduced to me by one of its own executives thus, "You've heard of 3M. Well, we're the 3W company: wood, wire and wellies." We were talking about the company's then early emergence as a mobile technology giant. But while Nokia had also moved on from those industries by then, there was a character truth to the quip that carried over to its new incarnation.

Nokia was built by harnessing Finland's natural resources and turning them into practical products for use at home and, more important, export - particularly in the 20th century to Russia. Paper and other finished timber products. Cable for telegraph and telephony. Rubber boots for workers and consumers battling some of the world's more inclement weather. And so on.

The move into mobile communications was itself seeded in practicality and the company's own experience. Supplying infrastructure for wired networks in often inhospitable conditions taught Nokia how difficult it could be to construct and maintain. Reliable, ubiquitous and affordable wireless communications had attractions you could readily grasp in Scandinavia.

As Microsoft winds down the brand's use, it's ironic perhaps that wellies will soon represent the most likely way in which consumers will encounter the Nokia name on the High Street. Albeit also sold off by the main conglomerate, the brand is battling Hunter for gumboot glory amid one of the more unlikely fashion trends in recent memory.

The Nokia conglomerate carries on. Its ability to innovate from necessity and then also deliver solid, well-designed and reliable products has been baked in for more than a century. It has reinvented itself more often - and generally more successfully - than HP. Don't let a mere brand retirement mislead you.

On hearing the news, though, I still had to pause and miss my own old 3210. It looked good. It did everything I thought I could want of a phone at the time. And it took the kind of physical beating none of today's kit could withstand. Nowadays, I carry a fragile toy by comparison.

Edited: 23 October 2014 at 07:21 AM by Paul Dempsey

Share |

   

    Posted By: Paul Dempsey @ 23 October 2014 06:55 AM     General     Comments (0)  

Technology and content: better-off apart

17 October 2014 by Paul Dempsey

Word has it that Silicon Valley is circling Hollywood for acquisitions. We've been here before and what evidence there is suggests that technology and content do not make such happy bedfellows.

Vanity Fair editor Graydon Carter chose San Francisco for his magazine's New Establishment Summit this month. You get an idea of where Carter used to see that establishment's epicentre from his other big annual shindig: the post-Oscars party that attracts simply everybody daaahling.

Collared by the New York Times, George Lucas divined Carter's summit thinking bluntly.

"Do you smell that?" he said. "It's the smell of money. That's why they're here."

So it was that L.A. movers like Disney's Bob Iger and Paramount's Brad Grey sat down with Valley shakers like Google's Eric Schmidt and PayPal co-founder Peter Thiel. Neither quite sure which was lamb and which lion.

Silicon Valley has already done music. Now, technology companies are becoming more active in film and TV production. Netflix led the way with House of Cards. Amazon backs a raft of shows and stepped in to rescue the BBC's excellent Ripper Street from cancellation. YouTube has deals with Endemol of Big Brother fame and many other major producers.

These are examples of streaming services securing high profile content, but it isn't such a leap to imagine many more kit-sellers and portals commissioning their own shows, maybe spamming U2 at you. Then, as the Times' Nick Bilton notes, nudge things one arguably affordable step further:

"[At the summit,] I heard several venture capitalists mention that for one-fifth of the $22bn that Facebook paid for WhatsApp, the messaging platform, it could buy Lions Gate or AMC Networks, valued at $4bn each. Facebook could easily make that content exclusive (Breaking Bad, brought to you by Facebook). In one session, Kara Swisher of [tech news site] Re/code talked about Apple buying Disney, as if it were buying a carton of milk at the deli."

OK, my first reaction to that possibility consists of one word: Sony. My second consists of three: AOL Time Warner.

Next month marks the 25th anniversary of Sony's acquisition of Columbia Pictures. The Japanese giant still owns its movie studio. It still owns the bulk of the music industry acquisitions it has made since CBS in 1988. Sony controls and profits across a broad swathe of the supply chain.

But few would say the company has built enduring and innovative content/hardware crossover businesses as a result of its adventures. The Walkman was ubiquitous when it bought CBS. Columbia's movies would help Blu-Ray win the last great packaged media battle against HD-DVD, but only for Sony to get blindsided by streaming.

More immediately pertinent, Sony is reckoned to earn far more in music sales from iTunes than it does from the PlayStation Store. Sony got into online music fairly early, but for all its supposed synergistic resources, suffered ignominious failure. It overpriced and only 'rented' songs. Apple had no in-house vested interests pushing back, came later, got the model right and has prospered profusely.

As for 2000's $350bn merger of AOL and Time Warner...well, that went well.

Sony has stayed the course because various businesses that were meant to play well together - but didn't - have been successful in their own right. But the point stands: one 'competence' has not informed the other as much as it was supposed to.

So, if these deals offer a warning from the past, is anything different today?

A big part of what fuels current talk of 'synergistic M&A' is fear within the music, TV and film businesses. Traditional distribution channels are being marginalized. Then, there is the belief that getting some major technology companies inside Hollywood's tent would lead Silicon Valley to lobby more aggressively on piracy.

OK, but is that really different? The large content providers fought tooth-and-nail against video rental back when VHS and Betamax slugged it out. In their view, it would diminish receipts from cinemas and TV sales. In reality, it filled their boots to overflowing and sparked a surge in content production. And despite what the 1980s campaign said, home taping did not kill music. Technology did those guys a lot of favours despite their best efforts.

Invite such forces inside a technology company in the digital age and chances are they will push back again. Content has already proved ponderously slow to adapt to today's market.

For here's a final irony: creative industries don't do creative destruction. Not when it comes to business models. Technology companies should buy the content gurus' cool stuff (oh, and push the budgetary controls on them too). But they shouldn't get too close or they could find their co-drivers slamming the brakes on innovation.

History says we're best staying just good friends.

Share |

   

    Posted By: Paul Dempsey @ 17 October 2014 06:54 AM     General     Comments (0)  

Apple bites Asian pair

14 October 2014 by Paul Dempsey

One of the many ways in which Tim Cook is not Steve Jobs is that he doesn't do 'feuding' - at least not in the public, theatrical sense. Arise then Sir Jony Ive.

Aside from the carefully choreographed launches, Jobs was infamous for firing off caustic zingers at staff, hacks, rivals and even customers who sent in what he considered dumb emails.

His biographer Walter Isaacson recalls when even Phil Knight, the equally marketing savvy founder of Nike, got a tongue-lashing from Jobs for having too diverse a product line: just make a couple of awesome sneakers and be done with it.

Cook's smart-casual demeanour belies a tough negotiator - this is the guy who struck Apple's rock-hard manufacturing contracts - but you can't quite see him doing that. Then again, until just now you'd have been tempted to say the same about Sir Jony. Before he gave 'cool' Chinese smartphone company Xiaomi quite the slap.

A Vogue interview and high profile presence at Paris Fashion Week were all part of Apple's backroom design guru emerging into the spotlight. He grabbed centre stage by essentially accusing Xiaomi and its founder Lei Jun of ripping him off.

OK, Sir Jony kept his actual comments generic, but given they were in response to a comment about Xiaomi, it was clear where his ire was directed.

This is particularly good feud stuff because Xiaomi has been cultivating its image as the Chinese Apple both assiduously and openly. Lei Jun sports a turtleneck and jeans for his own launch events and cites Steve Jobs as his corporate icon.

Xiaomi has so far offered a muted, almost apologetic and apparently surprised response via the Chinese Weibo blogging portal. Now, that could simply be the sad pushback of a wannabe. I"m not buying it.

Ive's comments have brought Xiaomi to global attention, far beyond its rapidly growing Asian base. No publicity is bad publicity, particularly when you just got the stink eye from the 800lb gorilla. And you ain't no pup no more - but you got ambition.

So, taking this one on the chin might not hurt so much. Xiaomi does make well thought out products - although yes, it stands on giant's shoulders. Still, those products are now being sought out far more widely by the West's geek community.

At the same time, I admire Ive's outspokenness. Released from the design studio, he has emerged as someone who puts heart and soul into his work. In the context of a supremely successful shedload of iStuff, he's more than earned the right to snark. For here, the cliche holds up: his influence is profound.

And it takes us back to a time when tech professionals were more willing to speak their minds, for good or ill. Dialogue in the business has become too tame, too corporate. Jobs' generation includes other brilliant but also sometimes candidly OTT men like Larry Ellison and Scott McNealy. Ive feels a bit like a throwback to that, and they were exciting, innovative and passionate times, full of doers.

So there may be two winners here - albeit one more than Sir Jony had in mind.

Share |

   

    Posted By: Paul Dempsey @ 14 October 2014 11:51 AM     General     Comments (0)  

Ebola: the IT side is about resources too

10 October 2014 by Paul Dempsey

The IT tools and methodologies that help combat viral outbreaks are mature and effective. Like many other aspects of the Ebola crisis spreading beyond West Africa, their usefulness has and will be determined by available resources.

The US Centers for Disease Control and Prevention released an important analytical tool last month. Ebola Response is a free-to-download and easy-to-use Excel spreadsheet - no major advanced training required.

The problem is GIGO: garbage in, garbage out. A tool is only as valuable as the quality of the inputs.

This is no criticism of the frontline teams fighting the virus. They are doing all they can, but have been too long constrained by the resources of some of the world's poorest countries. Maintaining data integrity comes a distant second when you don't have enough careworkers and beds in isolation wards.

This is why it is so critical that governments, like our own, and global institutions, like the World Bank, acknowledged this week that the fight against Ebola needs an urgent and meaningful increase in support. It is long overdue, and may need to be substantially increased - but endless point-scoring about that won't help us win. Bodies like the World Health Organisation need all the help they can get.

Let's remind ourselves why analytics matter. The delivery of actual care is the priority, but without the data to review and predict that process as accurately as possible, where will we be?

A specific but simple example. Healthcare experts say that you know you are 'winning' when you bring a reinfection rate below 1 - every victim passes the disease on to less than one other person. Therefore, the outbreak is in decline. Your strategy is paying off.

The rate for the current Ebola outbreak is variously estimated between 1.5 and 2 - and that is on the basis of patchy data. But here is another concerning report.

In one rural region, there were reports of a fall in the reinfection rate. Good news or outlier? Nobody knows.

There have been claims of villagers moving victims out of sight; others have proved to be in slightly further outlying areas care teams did not or could not reach.

Those gathering the data could not say there were enough resources going into its collection - or indeed their care efforts - to be confident of what the analysis said. We must praise their caution.

But this highlights a danger. Health workers need to know if their strategies are working. IT analytics help track progress. But reports that sow false confidence can be fatal, allowing an epidemic to burn on when experts thought it was being extinguished.

We need to get the technology not just in the right hands, but enough of them. Let's hope we've started to do that.

Share |

   

    Posted By: Paul Dempsey @ 10 October 2014 12:42 PM     General     Comments (0)  

Team Geek - saving the world nightly. But what's in it for us?

3 October 2014 by Paul Dempsey

We used to complain that there were far too few 'positive' representations of science and scientists on TV and at the movies. Right now though, we're drowning in them. And that begs another question.

Do you remember when it was said that if we had a more 'attractive' image it would translate into more young men and women taking STEM degrees and jobs? Hasn't happened, has it?

First, look at some of what stands atop the TV schedules on both sides of the Atlantic.

In the UK, The Doctor might not get Downton numbers but he's graduated from children's hour to primetime and will hang around a lot longer. Sherlock, that most rational of autodidacts, is another international phenomenon. And while Blighty may have more soaps and reality shows than we'd like, our ever superb documentarians give the science fiction a factual spine.

It's in the US, though, that the geeking has really got serious. CSI will mark its 15th year on air in 2015. Sure the UK has the even longer-running Silent Witness, but few shows have fetishised technology quite as well. And the franchise, which has already spawned two spin-offs in New York and Miami, will mark its birthday by launching a third: CSI:Cyber is explicitly dedicated to all things blackhat.

Meanwhile, Person of Interest continues to explore the worlds of surveillance and artificial intelligence while, albeit in supporting roles, shows such as 24 and The Blacklist have heroes who depend heavily on their own versions of Q. Indeed, they are so integral to the plot, you could even say the increased role Ben Whishaw's Q had in Skyfall was Bond copying back from such programmes the 2.0 version of what they had originally stolen from it.

Oh, and now we also have Scorpion. This latest, heavily-hyped addition to US primetime sees a team of multi-disciplinary geniuses save the world every week, and even claims a basis in fact. Specifically, it says it is drawn from the case files of real-life cybersecurity expert, Walter O'Brien - though what they have done with any input he has had is often pretty eyerolling.

As for the movies.... Tony Stark anyone? Iron Man 3 saw him explicitly encouraging a young lad along the engineering path.

An important thing to note here is that all the TV shows I've cited score well with teenagers and those slightly younger in the ratings. These audiences like this stuff, and like it more than the traditional police procedurals it has typically replaced. So why don't we see more of the same kids becoming more engaged with STEM? Where's the knock-on enthusiasm?

You could say that in today's dramas, we like our heroes to be imperfect. Indeed, we've long preferred them that way. The old-school copper might be a brilliant detective but also needs some marital tensions or to be too fond of a pint. Similarly, today's geek heroes therefore tend to be socially awkward (As Benedict Cumberbatch's Sherlock sarcastically misdiagnoses himself: "I'm not a psychopath, Anderson. I'm a high-functioning sociopath. Do your research").

So 'positive' representations? Only up to a point.

But this is a dead-end. It suggests that we haven't quite got what we want, but that we can. When it comes to drama, I'd suggest that we can't and should probably give up ever expecting to. Drama requires conflict; conflict typically requires character flaws.

There's also a bit of 'shoot the messenger' going on here. It's the media's fault because 'they' make 'us' all look like nutty professors or, also, because they play fast and loose with what science can do. In fact, on that last point, transparent Marvel-like fantasies aside, today's writers take far more care to stay on the right side of the divide between speculation and absurdity.

The reality is that those countries and cultures that seem to be encouraging more young people into STEM education and careers place considerable top-down value on science and engineering. They may use the media to communicate that but only in how they pass those values through the social hierarchy.

India and China, for example, have large totemic space projects - their own Apolllos. But an economy doesn't need their size or scale to get across the same kind of message such endeavours do convey.

So, here's an irony. Perhaps the success of science-inspired TV fiction shows us that there is a generation intrigued by technology. Its fondness for gadgets and gaming consoles would tend to suggest that also. The challenge, though, is not in getting media or dramatists to harness that, but figuring out how we do it ourselves. And with the help of the others who actually lead our societies.

Meanwhile, there's some great telly back on for the autumn season. Do enjoy.

Share |

   

    Posted By: Paul Dempsey @ 03 October 2014 11:14 AM     General     Comments (0)  

Climate change and the limits of realpolitik

16 September 2014 by Paul Dempsey

The United Nations will host Climate Summit 2014 on September 23rd in New York. Hype and expectation around the event are lower than in the past. Everyone still remembers the misfires of 2009. And this prelude to the next round of detailed treaty negotiations in Peru this December has already been put in its place.

About 120 heads of state will attend the event, including US President Barack Obama. He will unveil an initiative to phase out US use of the ubiquitous HFC greenhouse gas R-134a - a coolant found in most American cars, homes and offices - in the hope that other nations will follow suit. Good for him. But he will not be joined by his opposite numbers from either China or India, respectively the two largest emitters of greenhouse gases along with the US.

This is not an outright snub as senior politicians from both nations will attend (and the US has done the same at other climate change events). But China's and India's decisions are still underpinned by realpolitik in a way that shows where and how any final treaty is likely to be written.

China, for example, will send Vice-Premier Zhang Gaoli as a special envoy representing President Xi Jinping. For Xi to attend in New York would involve him traveling twice to the United States before Obama has visited Beijing once since his appointment.

Instead, look to see how climate change figures during Obama's trip to the Middle Kingdom. It's currently scheduled, conveniently enough, for November, just before the Peruvian treaty bargaining begins.

Indian Prime Minister Narendra Modi is likewise busy elsewhere. He is sending environment minister Prakash Javadekar to the UN meeting (though he will address the full General Assembly four days later).

One critical climate change discussion here is set for the following week when Modi is due to meet with Obama for bilateral talks in Washington. Modi is also said to be unwilling to be forced into making any major public statement on the topic at what would be his first major UN engagement as Prime Minister.

Nevertheless, the impression is that the real horse trading is taking place among the main industrial players on their own terms in a group that also includes the EU, Brazil and Russia.

'Twas ever thus, you might say.

But the especially disappointing aspect of this is that moves towards a successor to Kyoto were supposed to take place not just across but in a much broader church for very good reasons.

While we debate the topic of extreme weather in the developed world, it has already become an existential threat to many smaller nations. Island coastlines are eroding to a degree that the medium term viability of countries such as The Republic of the Maldives and Kiribati (formerly the British possession of Gilbert) is already in doubt.

There are two issues to unpick, it must be said.

The first concerns politicians' varying attitudes to climate change itself (other notable UN summit absentees include Prime Ministers Tony Abbott of Australia and Stephen Harper of Canada, notable sceptics on the economic viability of carbon curbs).

The second is the issue of what responsibilities the world's other nations will face if some countries (or very large portions of them) become uninhabitable because of changing weather patterns whatever their cause.

It is that last factor that makes you uneasy about the stayaway decisions of some of the world's more powerful politicians. Small nations may be involved but we could still see massive population displacement and whole sets of regional economic dominos tumbling. And all this, according to some research, before the end of the century.

Will a big country-drafted climate change treaty fully address the potential implications of that? You can't hold out much hope, can you?

As a final point, the UN itself is not my favourite organisation and one in desperate need of reform. You can point to regional bodies - like the EU - or trans-continental groupings - like the Like Minded Developing Countries - as other potential forums. But for all the UN's flaws, they lack its global reach. It is what it is; it is what we have.

The lesson of 2009, both at the UN in New York and later at the Copenhagen negotiations, was that a muddled-through fudge wouldn't work. It hasn't been learnt.

Edited: 17 September 2014 at 06:14 AM by Paul Dempsey

Share |

   

    Posted By: Paul Dempsey @ 16 September 2014 07:59 AM     General     Comments (0)  

Apple Pay is the company's biggest gamble ever

12 September 2014 by Paul Dempsey

Among other fine qualities, Apple is a company that legitimises new technology with the general public. That's good for Apple and also good for engineering as a whole. But with the launch of Apple Pay this week, it has put that reputation on the line.

There was once a saying in business that, "Nobody got sacked for buying IBM." In consumer electronics, the simple but telling slogan "It's a Sony" served the Japanese giant well. Implicit in both were claims to pre-eminence in quality, technological innovation, design and reliability - but most of all trust.

New features appear on products all the time, but back in the day their adoption by IBM or Sony signaled readiness for the wider market. They were safe to use. Apple has now assumed that mantle.

Look at the reaction to Apple's adoption of Near-Field Communication (NFC) to power its new tap-to-pay service. In the critical world beyond us techies, Alexandra Shulman, editor-in-chief of the UK edition of Vogue, wrote about Apple Pay as though nothing like it has been seen before.

"[Apple Pay] allows you to pay at the touch of a fingerprint ID for every credit card you log in. Heaven for those of us carrying around huge numbers of credit and storecards."

Then in our backyard, CNET headlined its report, Apple takes NFC mainstream on iPhone 6, Apple Watch with Apple Pay.

Mainstream? Only now? Really?

Tap-in stored-value NFC cards are an established reality for millions of commuters worldwide (Oyster in London, SmarTrip in Washington DC, Octopus in Hong Kong, etc). Several credit card issuers already incorporate NFC in their plastic.

As for handset-based payments, Google Wallet launched as a smartphone app in 2011 and you can load your Visa or MasterCard on devices from HTC, LG, Motorola and Samsung.

Apple is very late to the NFC party. Yet Shulman's gushing reaction illustrates a High Street thought process that goes far beyond haute couture: "Apple's now doing this, so I can believe in it." Moreover, CNET's "mainstream" claim basically stands up.

Google Wallet has been heavily pushed in the US, particularly by connecting it to GMail. But in June 2013, Bloomberg Businessweek reported that Play Store downloads had yet to pass 10 million and that it was "leaking money". Today, Google claims downloads in the 10-50 million range, but even given a year as an eternity in the apps world, most analysts believe the number remains at the lower end. The installed base is a tiny percentage of the Android market.

So yes, Apple has legitimized ubiquitous, phone-based tap-to-pay. For now.

But it is putting perceived core values at risk.

The biggest issue is of course security. Google Wallet came under initial criticism for claimed vulnerabilities. That may still dog downloads although flaws have been fixed. For its part, Apple has gone further than almost all other tap-to-pay configurations in adding fingerprint ID as an extra layer of protection before the app will run. Good move.

Nevertheless, such is Apple's power in promoting technology that it is now the poster child for NFC and tap-to-pay. The trust consumers place in the company - far greater than that they place in Google - means its implementation will be judged to a higher standard than those from its rivals. So beloved is Apple that the bar may also be set higher than for banks' work on cyberfraud.

So for starters, a plethora of benevolent and malicious hackers will look to break Apple Pay (a big takeaway for lay readers by the way: don't opt into the first generation of any app, but particularly a financial one. Engineers generally don't and there are some very bad people out there. Murphy's Law is your friend).

But there is also a social risk. Apple may soon find itself under scrutiny because tap-to-pay is so easy to use that it leads to excessive spending. Take the controversy over huge bills run up on in-app payments, then multiply its possible intensity by several orders of magnitude (hat-tip: shortly after writing that I noticed The Guardian's Oliver Burkeman has already pushed this button).

The potential rewards of Apple Pay are huge, certainly greater over time than those from any of the new phones and the Watch launched last week. But the charges Apple will face if the launch has but just a few hiccups could damage the company more seriously than any issue it has faced before. The risk/reward balance is as delicate as they come.

There is an upside that comes out of Apple's technological conservatism. You can be pretty sure that Apple Pay will be as carefully crafted as anyone could reasonable expect. It's just that the 'reasonably expect' benchmark will be the one we apply to our money, rather than to downloading the latest album from U2.

Share |

   

    Posted By: Paul Dempsey @ 12 September 2014 05:10 AM     General     Comments (0)  

Taiwan fears chip 'brain drain' to the mainland

9 September 2014 by Paul Dempsey

As technological links grow between China's fast-emerging high technology sector and its more established Taiwanese counterpart, there are inevitably some tensions. What could these tell us about China's future role in both its local and the global engineering market?

Last week's Semicon Taiwan 2014 conference and exhibition brought just over a dozen mainland Chinese companies to Taipei under the banner of the Shanghai Integrated Circuit Industry Association (SICA). Importantly, Semicon draws some 600 companies from the various branches of chip manufacturing, so this was very much a 'fledgling' presence (indeed, only SICA's second official year as a pavilion organizer). But there's more.

The event also hosted a day-long PRC/ROC Cross-Strait and Chinese Innovation Technology Forum. Most of this again had a 'getting to know you' flavour but it did also include mainland companies presenting on their own innovations in advanced areas such as the through-silicon-vias needed to manufacture incoming 3D stacked silicon.

The message from the mainland was clear. After years of lagging behind Taiwan and - in this particular market - its huge chip foundry TSMC, China wants to give the impression that it is catching up fast. Privately its semiconductor players believe that the industry is at an important crossroads that in turn represents opportunity.

Maintaining the performance (if not the physical) gains set down in Moore's Law has driven moves to technologies such as 3D finFET transistors and 3D chip stacks or advanced interposer-based packages. Neither of these has proved as easy or timely to implement as the existing technological powerhouses would have liked.

Meanwhile, the Internet of Things continues to be touted as the next big thing for the industry. Yet its economics are unforgiving. The IoT requires devices that integrate processing, communications and sensors for production in massive quantities at minimal cost. There will be no honeymoon period to allow products to be run through wafer fabs at progressively greater efficiency. The IoT depends on near instant, dirt-cheap ubiquity.

So, China sees a technological gap in the market that will also largely require the kind of aggressive cost-down manufacturing strategies at which it excels. And, of course, China has the money.

Beijing has allocated an initial $20bn, give or take, towards taking China's semiconductor manufacturing operations to the next level. At a time when a single state-of-the-art wafer fab can can cost upwards of $8bn, assuming the latest process node and the incoming 450mm wafer size, that initially huge-looking number does need some extra context. But it is still a serious play.

Just how serious is evident from the concerns some Taiwanese executives were expressing during Semicon and have now taken to government.

As Semicon wound down, the fear that mainland semiconductor companies are using their Beijing windfall to woo and capture key local talent led the Taiwan Semiconductor Industry Association to appeal, according to WantChina Times, for more public sector "support" towards "worker bonuses and stock options, as well as increased cash resources, tax relief and other benefits".

Nevertheless, the dynamic is delicate. Taiwan's key players equally see China as vital to their own further growth. Never mind the economic doldrums still said to becalm western economies, when it comes down to that IoT goody bag, the PRC has made much of the running. Its ability to mandate huge IoT projects while international rivals tread more carefully around regulatory issues cannot be ignored.

So Taiwan wants - not surprisingly given the history - an arm's length but also increasingly friendly rivalry with the mainland. But will it get one?

How tensions in the chip industry play out could soon tell us much about China's general intentions in using its growing engineering (as well as economic) muscle - and not just in terms of Taiwan specifically (and all the national baggage that entails), but also the rest of Asia and the global economy.

Share |

   

    Posted By: Paul Dempsey @ 09 September 2014 08:57 AM     General     Comments (0)  

Luis Suarez and the law of unintended consequences

26 June 2014 by Paul Dempsey

Uruguay is in denial. Few others doubt that its star player Luis Suarez bit Italian defender Giorgio Chiellini in the countries' critical World Cup encounter. Yet many Uruguayans refuse to accept the evidence, and say in particular that the damning image of teeth marks on Chellini's shoulder has been Photoshopped.

The saying that, 'The camera never lies', died a death long before the digital age. Stalin was airbrushing enemies from history well over half a century ago. Before that, surrealists such as Man Ray were manipulating multiple exposures and other optical tricks to render the impossible photographically. So, as far-fetched as we may find it, the Uruguayan case must be answered.

And according to my mole in the Maracana, FIFA is setting out to do just that. Amongst the unbroadcast video footage of the game is a fair chunk shot by Sony and Japanese partners in both 4k and 8k ultra-HD resolution. If, the thinking goes, some of that raw footage helps push the case against Suarez still further beyond reasonable doubt, FIFA's disciplinary committee really will be able to throw the book and probably a set of goalposts at the player. And, yes, he deserves it.

Sony, itself a major FIFA sponsor, certainly didn't imagine that the thuggery of a footballer would prove a major showcase for the new broadcast standard. It wants images of 'the beautiful game'. It wants to leverage a fast-moving, globally-popular sport to show off the maturity, quality and technical capacity of the UHD standards. Earlier World Cups did much the same for 1080p HD.

You have to imagine, though, that Sony will take Gobgate for now. Yet hope that Messi, Schweinsteiger, Neymar et al provide a more palatable showreel for the next big consumer electronics show.

But there's another issue for football. Given the egregiousness of Suarez' act and that this time he really did do it on the world stage, it may be a secondary point here. However, it's still worth stating.

Not everyone is comfortable with the increasing use of technology to reach important decisions in the game. This World Cup has seen FIFA follow a number of national leagues in introducing goal-line technology (though strangely not the extra goal-side official seen in the UEFA Champions League), taking one responsibility off the referee. Next up, UHD and parallel processing's increasing ability to allow for intimate analysis of its images in real-time are being talked about as potentially removing responsibility for calling off-sides from a ref's assistants.

This World Cup has seen some shockingly poor decisions, and not just from officials in supposedly lesser leagues. Mexico had two perfectly good goals disallowed in one game. And, to even the score, while the Mexican ref and his multinational assistants in Uruguay vs Italy didn't spot the bite itself, they also didn't catch what the rest of us initially saw as an attempted head-butt. Those merely top a long list. So, since we now can, let's go digital.

Well, hang on a minute. There is a strong counter-argument. It states that every time you take something away from the referee - no matter how apparently unimportant in itself - you diminish his role as arbitrator and make him more of a blank-faced administrator, a call-centre goon in black.

Consider this non-technology example. I know a fair few refs and pros, all retired now but still close observers of the game. Both groups generally hate the far greater strictures that have been placed on when and why officials give fouls and cards. The refs feel their authority has been undermined; the players feel the refs are now - and I've heard the word used a few times - 'robots'.

This brings us back to Suarez. The ref's main role is to ensure the rules of the game are followed. But after that, it's really about keeping 22 highly-trained thoroughbreds under control (and indeed, a Liverpool-supporting friend was being mostly but not entirely flippant when he drily noted this week of his club's best player, 'Racehorses also bite').

As fans, we want these elite athletes to go to the edge, for there to be some tension in the game - but we also recognise that there is a line. Certain tackles, diving and especially acts like biting cross it. They tend to be emotional heat-of-the-moment acts that require 'human' control or prevention.

There will always be good refs and bad ones, and never a perfect one. There will always be players blessed with great talent but also varying deficits in self-control. But all sport entails imperfection in every regard: the missed shot, clumsy tackle, fluffed clearance and so on. However, if we render the arbitrational aspect of refereeing progressively more irrelevant, it's just asking for trouble. And the player-referee dynamic is already about as poor as it ever has been.

It's in that context that should FIFA produce ultra-quality images to indict Suarez, many in the game will applaud the punishment but detect a 'technology creep' within it that, well, makes their teeth itch. They may well have a point.

Edited: 26 June 2014 at 07:08 AM by Paul Dempsey

Share |

   

    Posted By: Paul Dempsey @ 26 June 2014 06:58 AM     General     Comments (0)  

Amazon Fires up phone shopping

19 June 2014 by Paul Dempsey

Aw gee, Amazon has launched a phone. Now there's a surprise. Although it does say some interesting things about the 'retail experience'.

I have to apologize that the blog hasn't been updated for a while. A case, as Harold McMillan said, of 'events'. But as we now dive into the Fire Phone - a candidate no doubt for one of E&T's Teardowns very soon - let me share an experience from my peripatetic life over the last few months.

We're in beautiful, downtown Manchester (OK, I'm biased). And we're shopping for a relative who can't make the trip herself. For every item on the list, the in-store quality is checked and then the price compared with the equivalent from that shop's own website and elsewhere on a handset. What makes sense to buy-and-bag now - "Sale. 50% off!" - and what is better taken on next-day delivery?

'Not much new about that,' you say. Well, true enough if you trend towards 'nerd' or are under 40. But my shopping companion, the one doing all these price checks, was an elderly aunt. She doesn't have a great many apps on her smartphone, nor is it a bleeding edge model. But there are a lot of things she does like about it.

She likes the fact that the numbers on the touch screen are bigger than those on a traditional handset.

She likes the fact that she can plug in headphones when making or receiving a call, her hearing not being what it once was.

And she likes the web browser, though the QWERTY keys are more "fiddly" even in landscape mode. The thing there, though, is that once you've correctly typed in the addresses for, say, Marks & Spencer, Debenhams and Primark a few times, you get offered them automatically in future. "Or you put them in 'Bookmarks.'"

This, of course, brings us back to the fact that she loves bargain hunting. Moreover, she says that so do plenty of her friends. It was one of them who persuaded her to trade up from her chunky, reliable old Nokia primarily for that reason.

Anecdote over. Back to the Fire Phone.

It's Amazon hardware, so of course it's all really about shopping. And notwithstanding its success with the Kindle tablets and e-readers, a phone is the one thing Amazon's line-up has obviously lacked. It's the practical pocket device to use when you're comparing prices on the High Street.

The difference now, however, may be that this model has become far more prevalent, if not quite ubiquitous. I'll do anything to avoid looking at the actual merchandise in a department store - a slab of unreconstructed blokeishness, I'll happily concede - so watching one older person use a phone as, if you will, a retailing aid prompted me to scan around the racks and shelves to see if others were doing the same.

Two models stood out. The chap skulking by the escalator while his better half trawled through 'ladies fashions', staring intently at a screen no doubt for news of Oxlade-Chamberlain's fitness. But then, plenty of shoppers - of all ages - swapping between price tags and displays. Oh, and when the scene changed to an electronics store, the guys were up to it as well.

So when looking at the Fire Phone, the key thing to note is its Firefly technology. Push that button and the phone will identify products and take you straight to their details on Amazon.

Right now, it is largely confined to digital media and those household items that best lend themselves to visual recognition (although QR and barcodes will also work). Still, this simplifies the idea of the comparison shop even more. It becomes, to borrow the branding for Amazon's purchase button, a one-click activity. And it should give bricks-and-mortar retailers even more to worry about.

Getting Firefly into your pocket is something that Amazon has recognized as a challenge. The Fire Phone has other features designed to make the product attractive as a phone in its own right. These include a dynamic 3D perspective that adjusts the display as you tilt or turn the phone. There's also a highly-specified 13MP camera, Dolby Digital Plus audio, and a 2.2GHz quad-core Snapdragon processor chuntering away in the background like a hamster on Red Bull.

Again, it's going to be interesting to see what the Teardown specialists make of all this because these extra features do seem to have pushed up the bill of materials substantially.

Acknowledging the 'shop window' aspect of its hardware, Amazon usually specifies its designs very tightly so that it can subsidize and price its hardware below comparable kit from the likes of Apple and Samsung. The Fire Phone, however, will cost $199 with an AT&T contract on its launch in the US next month - pretty much the same as equivalent (though not top-of-the-range) iPhones or Galaxies.

So, by effectively going head-to-head, could Amazon's dedicated phone suffer much the same fate as offerings we've seen from Facebook and Google? Yes, very possibly. But the real game changer that comes out of the Fire Phone may be what happens when - as it surely soon will - Amazon looks to transfer Firefly across from its own products in an app that any Android or iOS user can download to their devices.

Everybody is doing it. Firefly undoubtedly makes that smart shopping task easier to accomplish. And admit it, as much as some of us may fear being completely in thrall to the likes of Amazon, you can't say it's not tempting.

Share |

   

    Posted By: Paul Dempsey @ 19 June 2014 05:11 AM     General     Comments (0)  

Congratulations to Oculus Rift

31 March 2014 by Paul Dempsey

"Ooh. Those capitalist swine at Facebook have bought super cool VR headset guys Oculus Rift. And after they were crowdfunded on Kickstarter too. It's a bloomin' outrage...." Give me a break, you numpties.

Amid all the accusations of corporate sell-out by the Oculus team, can we not acknowledge that, in the purest sense, this rather proves than
disproves the crowdfunding concept, when it is done properly.

Oculus went to Kickstarter with a concept, asked for non-equity and
non-debt financing to realise it, and delivered. Indeed, they delivered so well that the company has now been acquired for $2bn by an 800lb tech gorilla.

In return for its crowdfunding, Oculus offered early product access and
goodies, as Kickstarter requires. Its proposal was clear: to develop a
business based on a VR headset with innovative engineering.

I can understand that many crowdfunding proposals target niche markets, are short-term or one-off, and would otherwise struggle to secure traditional backing. The numbers are too small to offer professional investors a sufficient return. As for loans from retail banking, yes what did you do with all that bailout money?

But for a number of very decent hardware and software projects, even
sources of seed capital for long term commercial ideas have been shrinking. Any engineer with a cool start-up idea knows that well enough. Crowdfunding fills this gap as well - indeed it can provide an initial indicator of demand-over-time.

But make no mistake, if they get their initial cash injection, such successful ventures will have to start behaving like traditional companies at some point.

And this is what gets my goat about the slating the Oculus guys now face. That they got acquired by' uncool' Facebook is beside the point. They had an idea, the 'real' target market (gamers) backed them to take it further, and through their innovation they did that.

So the current wave of brickbats could stifle other attempts to bring other great ideas through, just as surely as our broken investment sector already does, by now stigmatising others who take the crowdfunding route.

"Ooh, you're another Oculus - you're too commercial for us!"

Please, be serious. The rules for crowdfunding are clear and the ambitious should not be punished for success. We need more innovators, so such reactions are not merely mean-spirited and perverse. They're dangerous.

Share |

   

    Posted By: Paul Dempsey @ 31 March 2014 01:56 PM     General     Comments (0)  

Don't be that surprised if Erdogan gets away with banning Twitter

24 March 2014 by Paul Dempsey

As many of you are aware, I'm a sceptic when it comes to social media's ability to realize social change. It may be good for mobilizing initial opposition but what then?

However, there is another side to this, and we're seeing it in Turkey right now. What happens when a regime seeks to suppress criticism by blocking various services. As of last week, Turkish Prime Minister Recep Tayyip Erdogan has been at war with Twitter - and most of us think he isn't winning.

Certainly, his government's IP-level ban on the messaging service has once more foregrounded claims of individual corruption on his part internationally. The move also appears to set back Turkey's demands to be seen as a western-leaning, democratic bridge between Europe and the Muslim world.

And Erdogan's personal bluster about Twitter does echo the 'marmalising' threats of one of Doddy's Diddymen.

The problem with all this is that we are not looking at Erdogan's moves through the eyes that matter most to him: those of his current and possible supporters. It's much the same as our difficulties in understanding the extraordinarily positive response Vladimir Putin has had at home to the annexation of Crimea.

Erdogan's core vote is said to be older and more conservative. Think on that for a moment. Even in the west, those likely to dislike or generally disregard social media are more likely to come from those parts of civil society. In Turkey - which, let's not forget, is undergoing strong economic growth - those people have also heard and reached their own conclusions about the allegations against their Prime Minister.

Similarly, we often overstate the importance other cultures attach to notions of plurality and democracy. Many people in authoritarian countries would prefer to start with a decent living wage and the rule of law (whatever laws there may be). Erdogan may be in trouble on the second, but he's not in quite such a pickle on the first.

However, there is a third global element - the degree to which many outside (and arguably many within) social networks are beginning to see them as vehicles for bullying.

Let's leave Istanbul for a moment, and compare and contrast between Washington DC and Beijing, China. Without wanting to be too explicit, bullying over a social network recently brought the child of some friends of ours close to a very serious depression, possibly (it was caught, so we'll never know for sure) worse. Parents aware of this incident now take a universally dim view of social media. Freedom of speech doesn't come into it. And too many people now have such tales to share.

Meanwhile, thousands of miles away in China, both Twitter and Facebook are blocked by the Great Firewall, though there are local equivalents such as Sina Weibo. And one trend attracting concern generally and among the country's leaders is the 'human flesh hunt'. This is a process by which a supposed wrong-doer (or sometimes simply a pretty girl) gets video-clipped, tracked down and publicly exposed by legions of netizens. It is a worrying trend, mob as judge and jury.

There are very different contexts involved here, but one can inform the other. The politician who is slated online can claim that this is the worst form of justice. And many people - and in many many countries - will agree with him or her.

In other words, if Erdogan does get away with what is - yes - an unwelcome imposition on free speech, don't be that surprised. The actual social problems that do ignite mass popular movements aren't there. And social media's strength is meanwhile far too easily undermined.

Share |

   

    Posted By: Paul Dempsey @ 24 March 2014 11:11 AM     General     Comments (0)  

Comcast and Netflix reshape the Internet - and not for the better

24 February 2014 by Paul Dempsey

The news that video streaming giant Netflix is to essentially pay US cable giant Comcast to maintain the quality of its signal will have implications far beyond the American telecoms market. In the simplest terms, it's a body blow to hopes of maintaining any semblance of 'net neutrality'.

Wikipedia is our friend here. It defines net neutrality as "the principle that Internet service providers and governments should treat all data on the Internet equally, not discriminating or charging differentially by user, content, site, platform, application, type of attached equipment, and modes of communication."

In other words, the data that makes up your blog should be treated exactly the same as all 13 episodes of House of Cards, notwithstanding 'real' capacity and technical issues. Similarly, your ISP shouldn't charge you extra because you are a Frank Underwood addict rather than a frequenter of old school bulletin boards, assuming you both subscribe for the same connection speed.

Of course, we know that net neutrality is an ideal rather than a reality. Bandwidth throttling - particularly of P2P - does take place and there are numerous countries that operate great firewalls. But in essence, the Internet has grown and fostered innovation largely because it is a huge free market in that respect. Netflix has grown largely because of that.

But the company is now to pay Comcast to directly connect its servers to the cable operator's networks and thereby ensure its offerings arrive on US subscribers' screens uninterrupted by the hateful 'circle of wait'.

On one level, you might say fair enough. Netflix today accounts for a huge amount of bandwidth - as much as a third of Internet traffic in the US, according to some estimates. Why shouldn't it get out of everybody else's way?

It's not quite that simple. Netflix has largely agreed to the deal because of Comcast's clout as the ISP for much of the US population (and that proportion is set to mushroom further, if its current bid for one of its closest US rivals, Time Warner Cable, is accepted by regulators). What Comcast can secure by negotiation from Netflix, it may well be able to demand from others, establishing a further barrier to entry for new Internet services and potentially hobbling existing ones.

Beyond that, as Timothy Lee of The Cato Institute points out there are some potentially serious implications for competition in the Internet backbone market.

And let's not just paint Netflix as the victim here. It has struck a deal that will give it preferential access to Comcast subscribers on terms any direct competitor might not be able to match. You doubt that it has paid $19bn, but parallels with why Facebook is paying that much for WhatsApp are not entirely inappropriate.

The irony is that the likes of Netflix, Amazon and other new economy giants have long argued that despite their massive reach, their's should not be seen in the same light as other potentially anti-competitive businesses because the Internet itself levels the playing field. We're all playing on equal ground - just quite clearly now, more in an Orwellian sense.

A tiered pay-to-play-fastest Internet will rob the market of its dynamism. Even if a plethora of super-fast wired and wireless connections are soon available to every home, this deal implies so much gatekeeper power for those who supply the 'last mile' connection that some knock-on cost to consumers would seem inevitable. Less innovation, fewer choices and at more cost.

Actually, that does sound like something Frank Underwood himself would cook up.

Share |

   

    Posted By: Paul Dempsey @ 24 February 2014 09:32 AM     General     Comments (0)  

Putting a price on Facebook's 'paranoia' - how about $19bn?

20 February 2014 by Paul Dempsey

Looking at the staggering purchase price Facebook is paying for WhatsApp, the echoes of "Only the paranoid survive" are even stronger than they were in the social media group's launch of Paper. The company's drive to not merely improve its mobile offering, but dominate the sector just got extremely aggressive.

According to Mark Zuckerberg, the deal took just 11 days from dinner conversation to announcement. Mind you, if a buyer is willing to put this much on the table (even if only $3bn is cash, and the rest various forms of stock), saying 'Yes' is never that difficult. When not developing more mobile tech, Facebook's skunk works might want to construct a new prosthesis for Zuckerberg's missing hand.

You can see why Zuckerberg 'went large'. WhatsApp (and in much of Asia, Tencent's WeChat) have been giving Facebook a bit of a kicking outside the US. They are both very good apps, easy to use and cheaper for IM based communication.

WhatsApp claims 450 millions users already and to be adding them at the rate of one million a day. It's biggest inroads are reckoned to be among younger non-Facebook (or 'Facebook Never') users. It's a group that does more of its communication on mobile devices. Where social media has been seen as a replacement for personal interactions, these younger users tend to use WhatsApp as an adjunct to it, it's much easier to 'push' instant communication to friends rather than waiting on them logging-in.

And of course, in the wake of Facebook's 10th anniversary, WhatsApp and WeChat are the newer, cooler platforms. E-years are shorter than dog years.

It's hard, then, to see this as anything other than a defensive move on Facebook's side. It does have its own messaging services, but the uptake is far lower. In that sphere - arguably because it has been comparatively slow to move on mobile - it has not caught the right kind of users' attention.

There is a temptation here to compare the price Facebook is paying to those foolishly thrown around during the heady pre-Millennial Internet bubble. However, a more long-term Silicon Valley trend among its giants - and Facebook is now unquestionably one of those - seems more appropriate.

"Only the paranoid survive" was the motto proudly displayed on the desk of Intel's Andy Grove, and Intel has a long history of making big buys to enter markets where it considered itself to be lagging. Part of the motivation is typically to catch up, another part is to head off the possibility that another company would acquire a technology jewel and leave Intel still further behind.

There's a bit of both in Facebook's move too. We've talked about its need to do more about the move to mobile platforms, but there has also been a fair bit of speculation that WhatsApp could be a target for China's social media giant Tencent (aka QQ). Merging WhatsApp and WeChat would certainly have given it an armlock over that part of the communications market, and added muscle that would truly make it Facebook's primary and equal global competitor.

So, to the extent that Zuckerberg has hinted that this was a non-competitive bidding war, only up to a point, Lord Copper. He went so high so fast that any rival would either gawp at the number - WeChat is doing well enough building its own network with help from Lionel Messi - or have no time to respond.

Of course, many of those Intel acquisitions have proved unsuccessful - especially its own M&A whirl on the Hokey-Cokey in mobile. Moreover, from a financial analyst's perspectives, deals of this size are inherently Manichean, brilliant gambles or inept calamities.

In this case, however, the links between WhatsApp and Facebook's existing core business are far stronger - one could, indeed did, hurt the other. In answering whether or not Facebook has paid over the odds, you have to factor in an element of risk mitigation. At this stage in social media's growth, that is very hard to do.

But let's try anyway. The deal should:

1. Remove a key strategic rival.
2. Bring non-Facebook users inside the fold at a time when growth has been thought to be slowing.
3. Answer criticisms about and greatly enhance Facebook's mobile strategy.
4. Offer a bolt-on enhancement that is complementary to Facebook's existing offer.
5. Provide more profiling data, particularly in terms of mobile behaviour.
6. Add a new revenue stream (WhatsApp transitions users to initially a $1 annual sub after the first year's usage).
7. Keep Tencent at bay for now and erect an arguably insurmountable barrier for most other players in the mobile IM space (I'm excluding Google here for reasons below).

A couple more caveats, though.

We'll keep a eighth point - 'Open up China to Facebook' - off the list for the moment. Facebook is currently blocked by the Great Firewall, but WhatsApp is not. Given Tencent's importance to the Chinese technology economy, which way do you think that will ultimately go? That's not a hint, but an honest question - the reality though is that the answer lies in hands other than those actively involved in the deal, and it should be discounted as a potential benefit for now.

Beyond that, Zuckerberg said that Facebook would hold to WhatsApp's no advertising strategy. That costs his company a sales opportunity, but arguably also keeps Google at bay - if instant social media doesn't have that revenue stream, the search giant may be less aggressive in attacking WhatsApp's market. Google is less enthusiastic about subscriptions.

Otherwise though, Facebook has many core business motivations for this deal. Further, against the current Internet landscape, you could say that this was a necessary one - price no object.

The serious stuff lies then in two areas. First, how well Facebook integrates WhatsApp and exploits the potential benefits it offers. Second, the 'unknown unknowns' of what will happen on the Internet over the next few years. The first can be measured, as can many of the motivations for this deal. The second cannot, except in retrospect - yet it is also where the $19bn number will most likely be praised or damned.

However, the figure now doesn't look quite as insane as has been suggested. There comes a point where defence is as costly as attack.

Edited: 22 February 2014 at 05:32 AM by Paul Dempsey

Share |

   

    Posted By: Paul Dempsey @ 20 February 2014 07:44 AM     General     Comments (0)  

Facebook: We're 10 but the pressies are only for special people

4 February 2014 by Paul Dempsey

I had to laugh when I saw that Facebook's highly praised Paper newswire app would only be available for now to iPhone users in the US. No Android. No iPad. No international. Because guess what, I think that strategy will work brilliantly.

It's time to look back 10 years, so let's do exactly that. When thefacebook.com originally launched in February 2004, it did so only in elite US universities. Oxbridge came soon after. Then more global colleges. Then high schools. Then the likes of Apple and Microsoft (Mark knew where his bread was buttered early on). The hoi polloi only got a look-in from September 2006.

During those two-and-a-half years, Facebook created a buzz - and it did so by breaking one of the supposedly golden rules of Internet marketing. "The minute you go on the Internet," the thinking goes, "you are global, your audience is global and your customers are global."

Codswalllop. This notion has probably done more damage to Internet start-ups than any other. But I can remember it being gravely intoned before Mark Zuckerberg had his brainwave/good fortune and it's still being trotted out. Even now, far too many players rush in with give-it-away models where even success can expose their technical or financial ability to scale.

Of course, a lot of other good Internet marketeers understand the value of the tease. Hollywood mastered it long ago, and every big movie or TV release will be accompanied by not just trailers and interviews, but authentic-looking viral sites.

However, there's another important technological aspect to this. Even huge companies like Facebook with Paper (or indeed Google with Glass) that can afford to ignore the tyranny of accumulating clicks wherever and however they can, still know that much of their business is 'learn as you go'.

I don't think you could throw the old adage "You're only ever six weeks away from bankruptcy" at them. But swap 'bankruptcy' with 'irrelevance' and you can recognize that the cost of any high profile snafu can be hard to correct. For example, I'm not even sure that Facebook (and for that matter Google, Microsoft and Yahoo) have or ever will extricate themselves from the PRISM clusterblunder for a great many users.

But it's a birthday, so let's get back to the valuable lessons here. Facebook's staggered roll-out gave it time to scale its infrastructure and refine its offering before inviting in us mums and dads. Indeed, it still has a reputation among developers for endless - and for them frustrating - tinkering with its code. Though today, that remains largely invisible to users.

The point stands that success in the Internet age - and though I'm not a Facebook fan as a user, it has been a roaring success - means you can never stand still. To augment Andy Groves' famous maxim, "Only the paranoid survive", you can also say "And the bigger you are, the more paranoid you have to be."

So, impatient as you may be, stand back and look at what Paper is, beyond the glowing reviews (and the predictably irritating gloating of that iPhone 5S user you're stuck next to).

It's got some interesting ideas. Independent and anonymous selection of news content. There's a clever approach to zooming and flipping text as well as the presentation of images. The layout is clean and easy to follow (a point many traditional newspapers seem to have forgotten). It could up everyone's game, particularly with its focus on presenting information well on mobile devices.

But at the same time, it's the product of a very small think-tank at Facebook, just 15 people according to many reports. So, it's good enough to engage beta users - much like the original 'exclusive' Facebook incarnations - but probably still needs a lot of work.

And there may well be some controversy to come. Don't expect the traditional news media to be overly comfortable with anything that still further establishes social media as a gateway between them and us.

All in all, though, that's just another reason for Facebook to stick to a strategy that's served it well for a decade. Yes, a decade.

It's striking how badly patience has been downgraded in that time.

Edited: 05 February 2014 at 12:14 AM by Paul Dempsey

Share |

   

    Posted By: Paul Dempsey @ 04 February 2014 09:58 AM     General     Comments (0)  

Google meets Lenovo in the Middle (Kingdom)

30 January 2014 by Paul Dempsey

Did Google sell a problem child or did Lenovo buy a prodigy? Neither. There's probably a lot more to the surprise sale of the Motorola handset business than meets the eye. And Google's difficulties in China may account for much of that.

As has been pointed out, the net 'loss' is anyway far less than the difference between the $12.5bn Google shelled out for Motorola Mobility two years ago and the $2.9bn Lenovo is paying now. Allow for earlier Google disposals (most notably the Motorola TV set top box business), cash on hand, tax credits and associated staff cuts. Then, you can argue that the Motorola related patents Google is holding on to have a value of $2bn against an earlier booked $5.5bn. And that ongoing value is worth thinking about: ask Apple or Samsung.

Meanwhile, the division's R&D arm is mostly staying within Google. Motorola's problem has not historically been finding really smart engineers. That team remains under the formidable leadership of Regina Dugan, former head of the bleeding edge US defence research agency DARPA. We know it has some cool projects in hand.

And, Nexus-wise (and Googly-eyed Glass-wise), Google will stay in the hardware business.

Finally there is the suggestion that while Motorola Mobility was founder Larry Page's whim of a buy, other executives and Wall Street did not like it. Patents they got, but the associated hardware bits they did not. So, good to be rid of the dross, yes?

You can cut the numbers and the intellectual capital and the oh-so-blessed market sentiment in a number of ways. So let's now add China.

Google has long had a difficult relationship with Beijing. After some high profile headbutting, its local servers reside in Hong Kong and perform erratically (if at all) on the mainland. Government officials have also spoken ominously of its wider influence.

At the same time, Google's Android operating system is by far the dominant platform for the region's smartphones (though access to Google Play is often another matter).

Lenovo, for its part, is one of China's tentpoles as the country seeks to build a world class technology sector. And it just went from Android user to Android evangelist.

Set aside the cruder aspects of the numbers, and you see a sweet deal with arguably much to support it on both sides.

Lenovo continues its drive to become the world's biggest mainstream electronics hardware player - it has also just added IBM's low end server operation to its existing leadership in PCs. Google finds a way to play nice with China after a long confrontation.

Or to put it another way, there's already plenty of scuttlebutt about how this is a 'chump change' deal for Google, a playground bruise. Sure, the numbers are huge to mortals, but, you know, not for them.

But really, it's just the cost of doing business globally. No evil has been done, has it?

Share |

   

    Posted By: Paul Dempsey @ 30 January 2014 10:09 AM     General     Comments (0)  

UK engineering and the role of business ambassador

27 January 2014 by Paul Dempsey

Congratulations to Ron Dennis, then. Not on his return to McLaren though but on being named one of the UK government's new Business Ambassadors. However, you can't help but feel that many branches of engineering still remain under-represented on the list.

The bricks-and-mortar contingent is there, as is defence. And with Dennis' appointment, there are now two F1 representatives within Prime Minister David Cameron's line-up of advisors and all-round tubthumpers for Business Blighty. The ambassadors are well-known names offering to talk of British success in various industries, thus raising their sectors' - not just their individual companies' - profiles overseas.

However, direct involvement by the hardware and software design industries is, at first glance, non-existent. Yes, you will find Hermann Hauser, one of the Acorn originals who have begat ARM and others. Mike Lynch, formerly of Autonomy, is another. But both act as ambassadors officially representing the consultancies and investment funds they work with today. There are no mainstream code slingers and chip designers.

Before we go any further, let's be clear that we can't lay all the blame for this at the PM's door or that of UK Trade and Investment. These are posts that executives put themselves forward for, as much as being tapped by Whitehall.

Similarly, my personal experience is that there is a historical and now inherited resistance among hardware and software's leaders to getting too close to the government. The name 'Inmos' can still provoke some serious sucking of teeth, even among those too young to remember its history in detail. And Whitehall's record on recent IT implementations doesn't exactly promote the civil service as the 'go to' source for much in the software world, beyond some nastier war stories.

Nevertheless as an expat, I have noticed that much of the rest of the world has little idea of advanced British engineering. I have - although over a period of years - even met postgrads and staff engineers in companies in both the US and Asia who tried to convince me that ARM originated as a Silicon Valley start-up.

Yes, I can equally talk about UK trade representatives who have admitted privately that working with cutting edge engineering firms terrifies them because they don't have much of a clue what these companies do. But that merely highlights that this is a two-way street.

The days of public funding for commercial engineering are behind us - defence and infrastructure orders notwithstanding. But if government is to understand better what some of our most innovative companies do, those companies need to make their voices heard. And if there are ways to leverage public funding to boost UK technology's international profile, it's worth making the best of them.

It was heartening, then, to see Nigel Toon of Xmos joining the Cameron-led trade delegation to China at the end of last year (and how appropriate that that should coincide with the company unveiling another round of VC funding). But Nigel is a savvy bloke who knows a good quote (including, for example, a memorable description of ARM as a gorilla - but "obviously, a very nice gorilla").

Whitehall's coats need a lot more tugging than that, because it is equally true that an expat notices how harder other countries do try at government level to establish technology leadership. And it's not just the emerging BRICs working the market harder, but also our more established leading EU rivals.

Now if I have piqued you, you might not know which coat to tug. Well, you could do much worse than a chap known as Baron Livingston of Parkhead, the minister assuming responsibility for the ambassador scheme. Some of you might know him better as 'Ian'... Yup, he's the chap who used to run BT.

Share |

   

    Posted By: Paul Dempsey @ 27 January 2014 06:42 AM     General     Comments (0)  

The Mystery of the Peeping Tom

16 January 2014 by Paul Dempsey

How good a barometer is popular culture for tracking public reaction to issues of the day? If 2013 was the year of Prism and phone hacking revelations, are TV's better writers envisioning 2014 as the year of the backlash? Certainly, hugely popular shows like Sherlock, Elementary and Person of Interest are trying to riff off these scandals for more than plot points.

The two Conan-Doyle updates - Sherlock in the UK and Elementary in the US - are drama at its most self-aware - an inevitable consequence of relocating Holmes in the 21st Century. Where they offer a commentary on profiling, surveillance and technology, they do so knowing the irony that their hero seeded the very concepts. Holmes was the first profiler, closely observing both victim and perpetrator for clues. His original incarnation also drew upon the cutting edge science of his time, authoring monographs and catching evildoers.

With Elementary still mid-series, it's not yet time to judge exactly where it will take the profiling theme, though its Holmes (Jonny-Lee Miller) will keep noting how foolish we are to willingly submit to it, by either governments or corporations. The shadows though are darkening.

Sherlock has completed its latest and all-too-brief cycle. Holding off too many spoilers for international readers, it does ultimately go all the way. After four-and-a-half hours, most of which adopts a jokey tone, it turned out to be less a trio of mysteries and more a mini-series that only revealed the ice in its heart during the last 30 minutes.

The main villain is a newspaper proprietor, Charles Augustus Magnussen (Lars Mikkelsen), born of the UK phone hacking scandal. He is a manipulator of information to wicked, self-serving ends. He is also more than simply an update of Conan-Doyle's original blackmailer, Milverton. Rather he proves to be, in every sense, the anti-Holmes. And the solution to the problem he poses is genuinely shocking.

However, the series then goes past phone hacking to offer a full-on cyberhacking punchline. This coda suggests that things have got to such a point that our only hope is Benedict Cumberbatch's "high functioning sociopath". How comforting.

Sherlock is not alone in pushing contemporary surveillance themes to the limit. The big-hitter among technology-based thrillers remains the US drama Person of Interest. It has already spent two seasons exploring the good and bad sides of a world in which a Machine independently observes everything, analyses all our actions and, if necessary, recommends intervention.

For its third season, the programme has upped the ante by introducing a new antagonist, Vigilance. If Sherlock's concerns have been with the misuse of technology by those at the top of society, Person of Interest has now added its spin on where resistance could end up if that misuse goes unchecked.

An obvious evolution of the Anonymous hacking group, Vigilance seeks to protect privacy and curb snooping by any means necessary, including paramilitary assaults and murder. Rather than Guy Fawkes masks, its members adopt pseudonyms from a more successful uprising, the American Revolution.

What makes Vigilance interesting - and importantly there is no question that these are very bad guys, whatever their aims - is that Person of Interest's creators are establishing a continuum of responses to its surveillance society.

At one extreme, there is, as ever, a shadowy government agency that is as willing to use violence to 'protect' as Vigilance is at the other. But between them now stand a clutch of views held by the show's good guys. There are the beliefs that the Machine makes no difference, that it can be of benefit to mankind but needs to be controlled, and that we are on the verge of the Singularity - each embodied by a different characters with whom we are invited to identify.

The simple message is that we really haven't begun to think out the implications of where technology and surveillance are taking us, and it's about time that we did.

All three shows are exaggerations. They are satires, the signature tone for speculative fiction. Vigilance therefore is not Anonymous; rather it is a commentary on where protest could go if concerns are ignored or suppressed. Similarly, Magnussen is not Murdoch, but again a symbol of where allowing the elite unchecked power over information could take us.

But are these ideas and thematic indicative of wider public sentiment? We're back with the barometer.

One tenet of both episodic drama and any successful series of novels is that, over time, they all tend towards 'darkness'. The challenges that face their heroes must become ever greater. With the top levels of the characters exposed in earlier installments, the later ones find they can only develop them further by digging into ambiguities. And entropy must always play its role. That trajectory is visible in these speculative fictions but also in the Harry Potter books or Downton Abbey.

However, something else tends to happen with more typical pieces. Fans will praise the growing 'sophistication' but mainstream audiences and readers will start to jump ship. You can only escape that if your darker themes reflect the more general views of civil society, even where they are not yet fully expressed.

And the global audiences for Sherlock, Elementary and Person of Interest are growing. Yes, all are extremely well constructed and entertaining dramas in their own rights. But it's probably fair to say that they are latching on to - and offering a smart commentary on - wider public angst and anger.

By that measure, 2014 is going to be an interesting year.

Edited: 16 January 2014 at 03:02 AM by Paul Dempsey

Share |

   

    Posted By: Paul Dempsey @ 16 January 2014 02:49 AM     General     Comments (0)  

Black Friday finds US shoppers in a cautious mood

30 November 2013 by Paul Dempsey

Amid much controversy, the US' Black Friday sales frenzy actually began a day earlier on Thanksgiving itself, with major retailers such as Wal-Mart and Macy's opening their doors at 8pm on the holiday.

Plenty of reasons for the early start have been offered. Consumers remain wary, particularly after this year's earlier government shutdown. Bricks-and-mortar retailers also remain conscious of the competition from online giants such as Amazon - and clicking repeatedly for that new flat screen telly does beat the idea of queuing until midnight and then facing the shopper scrumdown.

But initial reports are that while comparatively strong - though remember that 2012 was a pretty downbeat year for all US retailers - the crowds were big but flat, and those who did turn up had a very clear idea of the bargains they wanted. Casual bargain hunting remained spotty.

Beyond that, while there were plenty of YouTube clips of bargain-hunters-at-war, the actual rate of traffic was slower with the earlier openings. Some people just wanted to have a proper holiday with friends and family, and thought they'd wait for the weekend. Others probably didn't feel they could open their wallets wide right now.

This is all hugely important for the health of the consumer electronics industry, and chances are that it will emerge better than most of its rivals. But there were signs here of concern. Apple has held back on offers for Black Friday and the upcoming Cyber Monday until recently. This year, big spenders were offered $75 gift cards at its online store. For their part, some shed retailers - notably Target - were willing to offer even larger incentives to iPad shoppers.

Tablets are a tight margin market, even for Cupertino's finest, with both Amazon and Samsung competing hard.

Still, electronics does match well with the kind of Black Friday offers that attract most buyers, both white and brown goods. But there was anecdotal evidence that spending on peripherals remained slow. People had identified the products they wanted, and if stocks had run out, tough luck.

Black Friday only tells part of the story. Retailers reckon to make about 20% of their sales in the four or so weeks between now and Christmas. For electronics, always a big winner for pressies, that proportion is even higher. Much of that revenue does go online. Again, analysts like Shop.org reckon that Internet sales will make up 15% of business this year, up from 2012's 13%, but TVs, tablets, phones, laptops and even washing machines outperform the overall number.

So, we'll have a clearer picture after Monday when many of the online stores release their hot deals.

But the other factor already being discussed is the degree to which shoppers now use malls to eye up products and then later try to find them at the best possible price online. Black Friday hypes the consumer into a frenzy, but that's a lot harder when he or she is increasingly used to seeking out all-year-round bargain prices on the Internet.

It will take a little longer to fully analyze the significance of that last trend.

Share |

   

    Posted By: Paul Dempsey @ 30 November 2013 07:56 AM     General     Comments (0)  

1 2 >> Next

FuseTalk Standard Edition - © 1999-2014 FuseTalk Inc. All rights reserved.

Latest Issue

E&T cover image 1410

"Climate change in Antarctica is leading to interest in extracting the region's natural resources, but there's the small matter of a treaty."

E&T jobs

Subscribe

Subscribe to the hard copy of E&T magazine, and various other newsletters.

Subscribe to E&T

E&T podcast

Tune into our latest podcast

iTunes logo