Apple generated more revenue in one quarter than Google did in all of 2014

Apple-upper-west-side

Now that Google has reported earnings, we can add another incredible stat to Apple’s mind bending fourth quarter performance.

For the December quarter, Apple generated $74.6 billion in sales.

For all of 2014, Google generated $66 billion in sales.

That’s really impressive. So is this…

The combined fourth quarter revenue of Microsoft, Google, and Amazon was $73.9 billion.

That’s less than Apple did over that same period.

Just as impressive? Apple, against a bigger number, is growing faster than these companies.

  • Apple’s sales were up 30 percent for the quarter.
  • Microsoft’s sales were up 8 percent.
  • Amazon’s sales were up 15 percent.
  • Google’s sales were up 15 percent.

We could be here all day marveling at Apple’s quarter. It’s nuts how much better Apple is doing than the rest of the tech industry right now.

This story originally appeared on Business Insider.


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Amazon Web Services is building an SDK for the Go programming language

Amazon Web Services DBegley Flickr

Amazon Web Services has built a lot of credibility among developers over the years by providing more and more tools to speed up application development on its public cloud. Today Amazon announced its latest initiative in that vein — a plan to release a software development kit (SDK) for a growing programming language called Go.

Go was first developed at Google, which competes fiercely with Amazon in the public cloud market. So it’s a little bit ironic that Amazon is embracing Go. But so be it — Amazon surely wants to be able to say yes to developers who prefer Go over languages like C#, Java, JavaScript, PHP, Python, and Ruby, for which Amazon already has SDKs.

The Go SDK work actually came out of hot payments startup Stripe, Amazon Web Services senior product manager Peter Moon wrote in a blog post today.

As we began our research, we came across aws-go, an SDK from Stripe. This SDK, principally authored by Coda Hale, was developed using model-based generation techniques very similar to how our other official AWS SDKs are developed. We reached out and began discussing possibly contributing to the project, and Stripe offered to transfer ownership of the project to AWS. We gladly agreed to take over the project and to turn it into an officially supported SDK product.

So long as the Go SDK is in an experimental state, it will be further fleshed out in a publicly available GitHub repository, Moon wrote.

“We invite our customers to follow along with our progress and join the development efforts by submitting pull requests and sending us feedback and ideas via GitHub Issues,” he wrote.


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Next stop for Google Wallet: the U.K.

pounds

Google is finally starting to roll out Gmail support for Google Wallet outside of the U.S. Starting today, users in the U.K. can use Gmail to send money peer to peer.

What? Isn’t Google Wallet already in the U.K.? Technically, yes. There, as in many parts of the world, you can open a Google Wallet account to pay for items in Google Play. But today’s rollout is the first step toward bringing the full version of Google Wallet to the U.K. — and potentially beyond. Google clearly has its sights set on Europe for growing adoption of its digital wallet. The company first launched ‘send money’ for Gmail back in 2013, but this is the first time the feature will make its way out of the 50 states.

 

Google Mail UK

As of today, users in the U.K. can start sending British pounds to one another via Gmail. When you compose an email, a little ‘£’ ‘ symbol will appear alongside various attachment options. Both senders and receivers will have to set up a Google Wallet account in order to use the new tool.

Once the search giant has enough registered users in the U.K., it will probably push out its tap-to-pay mobile wallet app. Unlike the U.S., the U.K. is well versed in contactless payment solutions, so Google Wallet could potentially see higher adoption rates there than here.

If, that is, it can get there before Apple Pay.

Apple is currently in negotiations with several banks in the region, which is stalling a launch planned for sometime in the first half of 2015, according to the Telegraph. But most mobile phones in the U.K. run on Android, so there’s still plenty of opportunity for Google in the mobile payments space.


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You’re spending more time playing mobile games than ever before

Mobile gaming is swallowing up people's free time.

Your phones are getting bigger, and so is the amount of time you play games on them.

The average time spent playing mobile games in 2014 increased by 57 percent compared to 2012, according to a report from industry intelligence group The NPD Group. The organization’s study reveals that people spent about 3 hours every day playing games on their iPhones, Android, and tablets. In 2012, that was 2 hours, 20 minutes. While phones are a big part of this trend, it’s actually the larger tablets that are leading the increase in game time.

The NPD notes that not only do people spend more time playing games on tablets, but these gamers are also more likely to spend money. That’s a good thing for the industry, and it is a big reason why mobile gaming has grown into a $25 billion market.

“Continued mobile growth will stem from existing customers paying more to play, especially in the free-to-play portion of the market,” NPD industry analyst Liam Callahan said. “A positive sign of consumer behavior trending this way is the fact that more than twice the number of app gamers reported making an in-game purchase than they did when we conducted this study two years ago.”

Now, if you’re wondering what these mobile gamers look like, imagine someone very young. People of all ages are gaming on phones and tablets, but The NPD Group reveals that kids between the age of 2 and 12 spend the most time on mobile devices gaming. This group also plays five different games on average, and they play an average of three premium-priced games as opposed to free-to-play. They are also second only to gamers age 25 to 44 in spending on new games and in-app purchases in the last 30 days … I hope their parents are aware of that.


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“There’s no denying the important role kids play in driving revenue,” said Callahan. “But it’s the adult gamers who are spending more than kids and teens. This group also tends to be the decision-makers for their young children’s gaming experiences, making them a prime target for developers and marketers alike.”

Finally, NPD’s mobile report claims that people who play on smart devices also enjoy games on console or PC. Only 20 percent are “mobile-only” gamers, but phones and tablets dominates in terms of time spent playing no matter how many devices people own. That doesn’t mean playtime on mobile is coming at the expense of console and PC. NPD says that gamers are playing for just as long on those platforms as they were a year ago, which means that total game time is likely eating into other media, like television.


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YouTube ditches Flash for HTML5 video by default

youtube logo

YouTube today announced it has finally stopped using Adobe Flash by default. The site now uses its HTML5 video player by default in Google’s Chrome, Microsoft’s IE11, Apple’s Safari 8, and in beta versions of Mozilla’s Firefox browser.

At the same time, YouTube is now also defaulting to its HTML5 player on the web. In fact, the company is deprecating the “old style” Flash object embeds and its Flash API, pointing users to the iframe API instead, since the latter can adapt depending on the device and browser you’re using.

These changes has been a very longtime coming. In January 2010, Google announced a test version of an HTML5 video player. That was five years ago.

A few months later, the company then discussed how YouTube’s HTML5 video performed compared to Flash and improved its embed code, which is how a lot of YouTube videos are distributed. Over the following few years, we didn’t hear much from the Google-owned company, but a lot of work was in progress and there were hints that a change was imminent.

In May 2014, I noticed YouTube had changed to the HTML5 player by default on most videos in most browsers (content excluded was mainly from partners like Vevo). I got in touch with YouTube multiple times throughout the year, but the company wasn’t yet ready to talk make it official.

Now it has finally flipped the switch, and provided more information about the journey. The company underlined five key technologies that made the change possible:

  • MediaSource Extensions: Adaptive Bitrate (ABR) streaming helps provide a quality video experience for viewers as well as enable live streaming on game consoles, streaming sticks, and in browsers. With it, YouTube can quickly and seamlessly adjust resolution and bitrate depending on network conditions. In fact, ABR has reduced buffering by more than 50 percent globally and as much as 80 percent on heavily-congested networks, the company says.
  • VP9 video codec: YouTube’s implementation of HTML5 uses the VP9 codec, which Google says gives users higher quality video resolution with an average bandwidth reduction of 35 percent. Smaller files mean more people can access 4K and HD at 60FPS. More importantly, and videos can start anywhere between 15 percent to 80 percent faster.
  • Encrypted Media Extensions and Common Encryption: Instead of requiring that the delivery platform is linked to the content protection technology, Encrypted Media Extensions separate the two, letting content providers use a single HTML5 video player across a wide range of platforms. Common Encryption is the icing on the cake since multiple content protection technologies can be supported on different platforms with a single set of assets.
  • WebRTC: Web Real-Time Communication (WebRTC) technology is an open project that lets Internet users communicate in real time via voice and video simply by using a compatible browser. In this case, WebRTC lets YouTube provide broadcasting tools from within the browser, no plugins required.
  • Fullscreen APIs: The fullscreen APIs in HTML5 mean YouTube can offer an immersive fullscreen viewing experience with a standard HTML interface. Before this became available, a lot of extra code was required for a fairly basic feature.

“These advancements have benefited not just YouTube’s community, but the entire industry,” YouTube said in a statement. “Other content providers like Netflix and Vimeo, as well as companies like Microsoft and Apple have embraced HTML5 and been key contributors to its success.”

In short, to start using HTML5 by default, YouTube had a lot more to consider than just its main use case (playing videos). Multiple tech companies and organizations worked toogether to make this all possible, and to put another nail in Flash’s coffin.


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Police can’t have it both ‘Waze’ on expectation of privacy in public

waze-navigation-1

Spurred to action by the murder of two cops in New York in December, some in law enforcement fear that Google’s Waze social traffic app could be used to “stalk” them. So they want Google to disable the app.

Waze, which Google acquired in 2013 for $966 million, uses social features to warn drivers of traffic entanglements and other bad driving conditions. There’s a “cops” page in the app that can be used to map the locations of police. Cops can be tagged as “visible” or “hidden.”

In late December Los Angeles Police Chief Charlie Beck complained in a letter to Google CEO Larry Page that Waze could be “misused by those with criminal intent to endanger police officers and the community.”

Sheriff Mike Brown of Bedford County, Virginia, told the Associated Press that he thinks it’s “only a matter of time” before Waze is used to stalk and harm police. Brown raised the issue at a National Sheriffs’ Association meeting in Washington January 23.

waze map edit“The police community needs to coordinate an effort to have the owner, Google, act like the responsible corporate citizen they have always been and remove this feature from the application even before any litigation or statutory action,” Brown said.

Police, it seems, feel they have the right to absolute stealth — even when they’re out in broad daylight — and that the citizens who pay their salaries have no right to make note of where they are.

This is ironic, points out Electronic Freedom Foundation spokesman Steve Maass, because the police are usually the first to say that anything that happens out in public is fair game for surveillance. They use this argument when justifying the widespread practice of mass license plate scanning, and when justifying the use of facial recognition technology to identify us in a crowd.

But in the case of Waze it’s the police who are being identified in public, and they’re crying foul.

Their complaints, might grow, in part, from a basic misunderstanding of what the app does. Waze does not “track” cops. It only provides a place for users to post static markers of where police have been. The marker doesn’t lock onto a specific officer and follow him or her around on a map. The Waze “cops” page is really meant to warn drivers of where police may be lying in wait to issue tickets.

And it’s not like Waze is some wholly new threat presented by an exotic new technology. There’s plenty of precedent for the core functions of the app.

“When I was a kid I used to go on road trips with my grandparents and they would always turn on the CB radio,” EFF’s Maass says. “Drivers on the road would warn each other of patrolmen in the area.”

“CB radios have been part of road culture for years,” he adds.

Waze isn’t fundamentally that much different. Waze simply takes that same type of communication and broadens it out as a social media app, Maass says. He says that law enforcement would be hard pressed to get any court to deny people the right to communicate in this way.

Just ask the city of Grain Valley, Missouri, a suburb of Kansas City. Until recently, police there were ticketing drivers who flashed their headlights at oncoming traffic to warn that a speed trap lay ahead. A resident of the town, Jerry Jarmin, was recently caught doing just that, and the police alleged that he was — get this — “engaged in expressive conduct.” The ACLU stepped in and filed a federal case on Jarmin’s behalf, proving that the city had violated his First Amendment rights.

Actually nobody’s ever used Waze to harm a policeman.

A man who killed two policemen in New York in December posted some Waze screen grabs on his Instagram account along with some threatening messages toward police. But investigators found that the gunman, Ismaaiyl Brinsley, had dropped his phone two miles from where the murders took place, proving that Waze was not used to “stalk” the policemen.

The event was apparently enough to spook some cops. Or, more likely, the event gave certain members of law enforcement the frame they needed in which to rail against Waze.

It’s understandable that police would like to work with as much stealth as possible. I don’t doubt that it makes the work of finding bad guys easier. But law enforcement’s desire for stealth can go only so far as where the public’s right to freedom speech begins — even if it’s in a social traffic app.


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Wooga chief says mobile gaming is separating into winners and losers (interview)

Jens Begemann, CEO of Wooga, shows off Agent Alice.

Wooga’s latest title, Agent Alice, sure reminds me of console-game production. This kind of title signals a big change for the mobile space, which will separate into a small group of winners and a much larger pack of losers.

The hidden-object adventure game for mobile devices just debuted after two years of development. It was built by a core team of 15 people, but more than 80 worked on it over the course of the project. And at the end of February, Berlin-based Wooga will launch the Agent Alice with the largest marketing budget it has ever had — somewhere in the millions of dollars.

Jens Begemann, chief executive of Wooga, told me in a conversation that this is what it takes to succeed in the modern mobile-game business. Agent Alice will launch as a free-to-play release with eight episodes, but Wooga’s team will produce a new episode every Friday.

Here’s an edited transcript of our conversation.

Agent Alice

Above: A screenshot from Agent Alice.

Image Credit: Wooga

GamesBeat: Tell us about the making of Agent Alice.

Jens Begemann: Agent Alice is basically the successor, but also the reinvention, of our most successful game of the moment, Pearl’s Peril. It’s a hidden-object game. Everything we learned there we’re taking to Agent Alice. At the same time, we’re trying to reinvent the genre for mobile.

Hidden-object games have been huge on the PC. Big Fish and other companies have seen a lot of success there. The demographic is mostly women, typically 40-plus years old. Pearl’s Peril has been very big on Facebook, always among the top Facebook games, but it’s never been big mobile. That’s what we’re trying to change.

We have very high production values and attention to detail. The game is designed particularly for mobile. The hidden-object scenes and the puzzle scenes are designed for a small screen. The play sessions are short, so you can come back a few times a day. It’s extremely story-driven. We tried to take inspiration from TV, where there’s a new episode every week. … We’ll do a big launch at the end of February with the highest launch budget we’ve ever had in terms of marketing. We’re spending millions of dollars on launch weekend. We’ve produced a trailer.

GamesBeat: Is this one of those 40 prototype ideas you were talking about a while ago?

Begemann: Exactly. The way we work now, we create lots of concepts. Last year we created more than 100 concepts. That’s more than 100 concepts on paper. Out of those, we created 35 prototypes. One of those 35 prototypes is Agent Alice, which is now launching Feb. 26. Some of the other prototypes also made it to the next stage and are coming later this year, in spring and summer.

GamesBeat: What did you find from doing all that iteration and study of the genre?

Begemann: A few very interesting things. One is that this demographic — women 40 and older — is underserved on the app stores. You see lots of action and strategy games geared toward men. But for women 40 and older we have puzzle games — Candy Crush or Jelly Splash — and not much besides that. If you look at what this audience watches on TV, it’s drama, things like Downton Abbey. Not much on mobile is story driven or character driven. That’s what we want to create.

The Agent Alice team is a very international team. At Wooga, we now employ more than 40 nationalities. That’s one key thing we’ve found. The second is that this is all about content. If you think about it, every episode is like a TV episode. Most of these hidden-object games that have existed so far, you start playing them, and after a week you’re through. That’s it.

We want to avoid that. This will be endless like a TV series. Every week, predictably, there will be a new episode. That’s a crazy amount of effort. We have a small team internally, but we have people doing the artwork externally, and then we have localization. In total, 80 people work every week on Agent Alice to create the new episodes. That took us years to build up with Pearl’s Peril. Now we’ve done it, it works, and we’ll apply it to Agent Alice.

GamesBeat: Is each episode produced by the same team or do you have different teams working in tandem?

Begemann: The core is the same. Pearl’s Peril came out early in 2013. Many of the key people — I’d say about two-thirds of the team — moved on to start Agent Alice. Pearl’s Peril still has a live team. We have many new people there who continue to improve the game. But we took all of those learnings and the key people from the team and moved them to Agent Alice. Then we added new ones.

GamesBeat: How long does it take you get to something like 80 people?

Begemann: Out of those 80, about 30 are internal. The others are external. We have partners in Canada, Ukraine, and India who help us with artwork. The ramp up to 80 was around the late summer or early autumn — September or October — when we started making this weekly content. Until roughly October, it was about the core of the game, and the team was small, about 10 or 12 people. Now we’ve scaled up. Going forward, we’re launching with eight episodes, and every week, there will be a new one.

Potentially you could play for years. That’s what we see in Pearl’s Peril. Every week, people wait for the new episode to arrive.

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Google’s Eric Schmidt: Better broadband will save the world

Eric Schmidt, Chairman of the Executive Committee and Chief Executive Officer, Google, USA; Co-Chair of the World Economic Forum Annual Meeting 2010 talks during the session 'Technology for Society' at the Annual Meeting 2010 of the World Economic Forum in Davos, Switzerland, January 29, 2010 in the Congress Centre.

Speaking at the World Economic Forum, Google’s Eric Schmidt told a crowd at the annual elite vacation/conference that better Internet connectivity will solve most of the world’s major problems.

“Almost all of the problems we debate can be solved by more broadband connectivity,” said Schmidt, during a panel with Microsoft CEO Satya Nadella.

Schmidt reportedly told the crowd that blazing-fast internet solves a range of systemic issues from governance to education to human rights.

Given Schmidt’s and his fellow CEO’s wild optimism for better broadband, it’s no surprise that the major Internet firms are all investing in broadband projects, both In America and the developing world. For example, Google has its Project Loon to bring the wonders of the Internet to remote areas via floating balloons.

T-shirt enthusiast and Facebook CEO Mark Zuckerberg was recently down in South America to promote a new initiative to provide Internet for poor people in Colombia, part of his company’s broader effort to connect the entire world.

Microsoft-founder-turned-super-philanthropist Bill Gates is less impressed. He once called Facebook and Google’s charity-through-connectivity projects a “joke.”

“When you’re dying of malaria, I suppose you’ll look up and see that balloon, and I’m not sure how it’ll help you,” he said in 2013. In more recent interview with Steven Levy, he further explained,

“The key is not Internet connectivity. There’s plenty of places where you have Internet connectivity….If it wasn’t for the digital revolution, we could not be so ambitious. But if you just stood back and watched those things take place, the children would still be dying of malaria and the poor would still have no banking.”

It’s a tad ironic that on the panel, newly minted Microsoft chief Satya Nadella was amenable to Schmidt’s view, saying “there’s a consensus that low-cost bandwidth is a must.”

Interestingly enough, no one is talking about some of the potential short-term harms that come from increased broadband. A recent economic analysis found that in developed nations (Norway), increased broadband may exacerbate inequalities between low and high-skilled workers. This isn’t to say that we should cut off Internet access to poor neighborhoods, but we should be sensitive to the short-term impacts on local jobs.

Either way, Google and Facebook are going full steam ahead with their universal connectivity projects. So, we’ll all find out who is right soon enough.


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Why future tablets won’t burn your lap (interview)

Peter McGuinness of Imagingation Technologies.

It’s no fun when you fire up a heavy-duty game on your tablet and it starts to get warm. Imagination Technologies, the chip design company that owns the MIPS processor and PowerVR graphics technologies, wants to create a future where tablets are both capable and power efficient.

We should all hope that it succeeds, because we’re going to want our tablets to handle increasingly difficult work loads, like figuring out hazards on the road or taking data from sensors and making it meaningful.

We talked with Pete McGuiness, director of technology marketing at Imagination, at the recent 2015 International CES. He didn’t hold back his opinions on the right way and the wrong way to approach this critical computing problem.

Here’s an edited transcript of our talk.

Lane detection demo

Above: Lane detection demo

Image Credit: Imagination Technologies

VentureBeat: What do you have on your tablet?

Peter McGuiness: This is a piece of software written by a partner, a company called Luxoft. What it’s showing is a proximity warning and a lane departure warning. When you drift out of the lane or change lanes, it gives you this red warning. It gives you the distance to the vehicle ahead and things like that.

The framerate is the nice thing. We have a framerate counter here and a central processing unit (CPU) utilization counter here. Two things are going on. First of all, if you like, it’s a heterogeneous app. It’s running partially on the CPU, but the heavy lifting on the image processing is being done by the graphics proccessing unit (GPU). The underlying algorithms have been ported to OpenCL. It’s on Android, with an Intel Atom. It has a four-cluster Rogue 6-series GPU in it.

VB: And this tells us what?

On Android, if you’re doing imaging of this type, you’re passing video buffers between the various hardware components. You import it from the camera, decode a bitstream, and that creates a buffer with the image data in it. Then you have to take that buffer and copy every frame into an area of memory owned by the GPU, in this case. It could be a video encoder, for video conferencing, or a display controller if you’re just going to put it on the screen. But the point is that with every movement between the different hardware blocks in the SOC, Android tries to make a copy of the data. That turns out to dominate performance on apps like this.

What the imaging framework does, we’ve extended some of the APIs in EGL, the buffer management in EGL, and we’ve added some utilities. It doesn’t completely eliminate buffer copies, but it minimizes them. Instead of having six or seven buffer copies, which is easily possible if you just use stock Android, it’ll go down to a single copy, which makes something like this possible on an embedded system on chip  (SoC). You can get the framerate and you don’t overheat the device.

You’ve seen the Nvidia Tegras are big in autos, right? One of the reasons for that is because in a car, you can put a fan on top of the device. That’s the limitation in most cases, the power dissipation. In a form factor like this, without OpenCL and without the buffer – we call it Zero Copy technology – this would just go into thermal shutdown after just a few seconds. Instead, this will run indefinitely.

VentureBeat: Is that the Dell Venue 8, the brand-new one?

McGuiness: Exactly, that’s right. This is just one example. It’s a device that’s already launched. We have another tablet we can’t show publicly from another manufacturer, with the same chipset. What they did was, they used our Zero Copy and the imaging framework to port a lot of the computational photography and image processing tasks onto the GPU. Of course they want video filters and Instagram filters and things like that.

Imagination Technologies' board

Above: Imagination Technologies’ board

Image Credit: Imagination

VentureBeat: Is this going to get hot as well?

McGuiness: Feel it. It’s barely using the CPU.

VentureBeat: I use an Nvidia Shield, which can run very hot.

McGuiness: Yeah. But not to get into Nvidia bashing. Or why not? I mean, Tegra is not really a mobile device. It runs too hot. It’s just not suitable.

There’s a couple of messages attached to using GPU compute. The first one is that for highly parallel tasks like this, it’s a power optimization method. You can get much better performance at much lower power. We’ve seen instances where we’ve multiplied the performance by a factor of six and divided the power by a factor of 10. That’s 60 altogether, just by moving onto the GPU. When you’re streaming video, the architecture of the GPU is so much more appropriate for that sort of task.

This image framework was the thing we found was necessary to make that feasible in Android, because of the way Android tries to manage buffers. That’s why we put it out there. The way we’re deploying it, we’re working with OEMs who want to differentiate their products. This is something laying on top of Dell. But this other tablet manufacturer—I don’t know when they’re going to launch the thing. What they’ve done is taken our imaging framework, taken the standard camera app for Android, and extended it to differentiate their tablet from everyone else’s. They’ve added camera features like anti-shake and face detect by using that framework, and also added other fun effects like face beautification, or this app that will enlarge your eyes. Apparently in China they think that’s a wonderful thing to do.

This is where we see the technology going. Everyone’s talking about GPU compute, heterogeneous compute. HSA is coming along, all that sort of thing. This is where we see it going. It’s going to be in visual imaging applications. It’s usable in Project Tango, in Glass, in lots of other image-based appliances and other things out there.

We have a really nice demonstration at our booth based on a camera sensor. It’s mounted up in the ceiling and mapping an area about the size of this room. When someone walks into it, it maps them and tracks them and detects where they go. It’s a point-of-sale monitoring thing. They can see when people walk to the register, what they look at, whether they pick something up and buy it or just walk away without buying anything. The intelligence for that is shared between the camera and the point-of-sale terminal, but in any case it has to be using a consumer-level IOT device rather than a big PC. That’s where we see a lot of this technology going.

VentureBeat: Do you think that for things like augmented-reality glasses, that there’s some sort of preferred platform yet? What kind of graphics do you need to make that acceptable and cheap? Some of these glasses come from the military, so they’re really high-end, around $5,000.

McGuiness: And they don’t work very well. Oculus Rift is much cheaper and much better. The first-generation Glass was kind of disappointing. The screen is tiny. It’s limited in functionality and it really has no graphics, apart from just putting up messages in front of your eye. It’s definitely not augmented reality. It doesn’t overlay things on your view. You need a pair of glasses with a screen that covers your entire field of vision.

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Amazon learns how to fail faster

Amazon

In just the last couple of days, Amazon shut down its private-label diaper product (only six weeks after launch) and withdrew its mobile wallet (six months after a prominent rollout).

These moves come just six months after the almost universally booed launch of its Fire phone. Is Amazon, the legendary master of all things e-commerce, cutting back on its due diligence? Or is it simply adjusting to what seems to be a much faster pace for 2015?

“The company is under a tremendous amount of pressure to throw a lot of things against the wall. There are going to be a lot of things that won’t stick,” said Sucharita Mulpuru, a veteran e-commerce analyst with Forrester Research. “It’s good that they are recognizing that things need to be pulled quickly. No reason to let things linger.”

But, she added, “it does seems to suggest that (less of a focus on due diligence) is what is happening.”

Tom Forte, a Wall Street analyst who is a longtime tracker of Amazon, is still bullish on Amazon, but points to mobile-fueled market shifts that are rapidly forcing new behaviors, both in terms of due diligence and how long weaker-than-expected market performance will be tolerated.

“To me, what’s different is that we’re in a stage of the Internet cycle where a lot of categories are going to merge. That feigns the appearance that they are exiting products more quickly,” said Forte, who today tracks e-commerce and logistics issues for Brean Capital. “The amount of change is so significant and the pace of change is so fast, it creates the false appearance that they are exiting faster or that there has been a change in strategy.”

The two most recent product pullbacks — diapers and the mobile wallet — were very different situations, but they shared two elements. First, both represent necessary strategic moves by Amazon. Diapers are part of the margin-enhancing private label campaign, one that Forte — like others — has argued is critical for Amazon’s long-term survival. And the mobile wallet is also a top strategy, a defensive move to keep rivals Apple and Google from controlling how shoppers pay for products and services on mobile devices.

Amazon was correct in needing to attack those segments, just as it had good reason to attack the smartphone segment when it rolled out the Fire phone. But that doesn’t mean that the products were attractive enough to generate significant sales.

And that speaks to the second shared element:  Both were late entries into very well-established markets with extremely dominant players. Hence, Amazon didn’t need products that were merely good; it needed products that were materially better in some way.

As for the diapers, Amazon abruptly yanked them from the site last week and shut down prepaid diaper subscriptions.

“Based on early customer feedback about Amazon Elements Diapers, we are making some design improvements. We’ll let customers know when new diapers are available,” Amazon spokesperson Nell Rona said in an emailed statement.

The Amazon Wallet was shut down January 21, some six months after its launch.

“We’ve learned a great deal from the Amazon Wallet beta program,” said Amazon spokesperson Tom Cook, “and (Amazon) will look for ways to apply these lessons in the future as we continue to innovate on behalf of our customers.”

Brean Capital’s Forte tried putting Amazon’s efforts into a historical context.

“As a general rule, Amazon goes into a new category or a new country with a 5- to 7-year investment horizon,” he said. But within a given category, a specific product implementation may get much less time to prove itself.

“Amazon is not above pulling out of something that isn’t working,” he said, pointing to an early effort to bill monthly for Prime as an attempt to hurt Netflix. “That was short-lived.”

Part of the change is also a willingness to try experiments, without the need to stay long if sales don’t materialize quickly.

“Amazon is investing in a lot of different categories. They are willing to try a lot of things,” Forte said. “Unlike Google or Apple, they don’t have a high-margin business. They have to be somewhat selective. I applaud their willingness to try so many different things. I’m a believer that Amazon can make adjustments.”


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