BlackBerry is buying Cylance for $1.4 billion to continue its push into cybersecurity

BlackBerry was best known for keyboard-totting smartphones, but their demise in recent years has seen the Canadia firm pivot towards enterprise services and in particular cybersecurity. That strategy takes a big step further forward today after BlackBerry announced the acquisition of AI-based cybersecurity company Cylance for a cool $1.4 billion.

Business Insider reported that a deal was close last week, and that has proven true with BlackBerry paying the full amount in cash up front. The acquisition is BlackBerry’s largest ever and it is set to close before February 2019 — the end of BlackBerry’s current financial year — and it will see Cylance operate as a separate business unit within BlackBerry’s business. The company plans to integrate Cylance technology with its Spark platform in the future.

Business Insider’s report suggested Cylance was preparing to go public until BlackBerry swooped in. That suggests BlackBerry wanted Cylance pretty badly, badly enough to part with a large chunk of the $2.4 billion cash pile that it was sitting on prior to today.

Cylance was founded in 2015 by former McAfee/Intel duo Stuart McClure (CEO) and Ryan Permeh (chief scientist) and it differentiates itself by using artificial intelligence, machine learning and more to proactively analyze and detect threats for its customers, which it said include Fortune 100 organizations and governments.

The company has raised nearly $300 million to date from investors that include Blackstone, DFJ, Khosla Ventures, Dell Technologies and KKR. Cylance is headquartered in Irvine, California, with global offices in Ireland, the Netherlands and Japan.

“Cylance’s leadership in artificial intelligence and cybersecurity will immediately complement our entire portfolio, UEM and QNX in particular. We are very excited to onboard their team and leverage our newly combined expertise. We believe adding Cylance’s capabilities to our trusted advantages in privacy, secure mobility, and embedded systems will make BlackBerry Spark indispensable to realizing the Enterprise of Things,” said BlackBerry CEO John Chen in a statement.

Chen has overseen BlackBerry’s move into enterprise services since his arrival in 2013 as part of a takeover by financial holdings firm Fairfax. Initially, things got off to a rocky start but the strategy has borne fruit. The stock price was $6.51 when Chen joined, it closed Thursday at $8.86 down from a peak of $12.66 in January. While some of the progress has been erased this year, Chen has signed on to retain the top role at BlackBerry until at least 2023, giving him a potential 10-year tenure with the company that was once the world’s number one mobile brand.

11/11 shows biometrics are the norm for payments in China

Chinese consumers were quick to adopt digital payments, and a recent shopping binge showed they are ready for another leap: biometric payments.

On November 11, Alibaba wrapped up Singles’ Day – the world’s largest shopping event – and hauled in $30.8 billion in total transactions, a staggering amount bigger than Cyber Monday and Black Friday combined.

Instead of frantically inputting payment passwords to grab deals, Chinese users jumped on new technologies to shop in the blink of an eye. This year, 60.3 percent of Singles’ Day customers paid either by scanning their fingerprint or taking a selfie.

That’s according to Alipay as it collected the data for the first time. The Alibaba affiliate digital wallet handles online and offline transactions for 870 million users around the world and its close rival WeChat Pay, the payment method that runs on Tencent’s popular chat app, is on a par at over 800 million.

Both are racing towards a future of seamless payment. Alipay debuted pay-by-fingerprint back in September 2014. In less than a year, WeChat Pay announced its own. Over time Chinese shoppers got themselves familiar with biometric verification, using it to unlock smartphones and enter office buildings. By 2016, around 95 percent of the people surveyed by China’s Payment and Clearing Association said they “knew about” fingerprint recognition.

The more sophisticated selfie-taking method soon followed. Last year, Alipay rolled out a smile-to-pay scheme at a KFC store in Hangzhou, home to Alibaba and Alipay, and has since then launched face recognition verification for a wide range of offline scenarios, including delivery pickup.

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Alipay’s parent company Ant Financial lets users scan faces to pick up deliveries. / Source: Alibaba

The government has also been swift to leverage face recognition for other purposes. A well-known example is its alliance with the world’s highest-valued AI company SenseTime to develop China’s national surveillance system that can, for instance, track down criminals on streets.

Chinese people are getting in on unique-to-my-body authentification fast. In 2016, just above 70 percent users were comfortable with paying with their biometric information, according to the CPCA survey. In 2017, the ratio jumped to 85 percent.

This fast adoption also raises issues. In 2016, half of the respondents from the survey expressed security concerns over using biometrics payments. In 2017, 70 percent said they were worried. That same year, 77.1 percent cited privacy as another concern, up from just under 70 percent a year ago.

Alibaba made a smart screen to help blind people shop and it costs next to nothing

Just a few years ago, Li Mengqi could not have imagined shopping on her own. Someone needed to always keep her company to say aloud what was in front of her, who’s been blind since birth.

When smartphones with text-to-speech machines for the visually impaired arrived, she immediately bought an iPhone. “Though it was expensive,” Li, a 23-year-old who grew up in a rural village in eastern China’s Zhejiang province, told me. Cheaper smartphone options in China often don’t have good accessibility features.

Screen readers opened a plethora of new opportunity for those with visual impairments. “I felt liberated, no longer having to rely on others,” said Li, who can now shop online, WeChat her friends, and go out alone by following her iPhone compass.

Reading out everything on the screen is helpful, but it can also be overwhelming. Digital readers don’t decipher human thoughts, so when Li gets on apps with busy interfaces, such as an ecommerce platform, she’s bombarded with descriptions before she gets to the thing she wants.

Over the past two years, Alibaba’s $15 billion R&D initiative Damo Academy has been working to improve smartphone experience for the blind. Its latest answer, a joint effort with China’s prestigious Tsinghua University, is a cheap silicone sheet that goes on top of smartphone screens.

Li is among the first one hundred visually impaired or blind users to trial the technology. Nothing stands out about the plastic film – which cost RMB 0.25 or 3.6 American cents each to produce – until one has a closer look. There are three mini buttons on each side. They are sensory-enabled, which means pressing on them triggers certain commands, usually those that are frequently used like “go back” and “confirm”.

“It’s much easier to shop with the sheet on,” said Li. Having button shortcuts removes the risk of misclicking and the need for complex interactions with screens. Powering Smart Touch is human-machine interaction, the same technology that makes voice control devices possible.

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Alibaba’s $1 “Smart Touch” plastic sheet helps smoothen smartphone experience for the visually impaired. / Photo credit: Alibaba

“We thought, human-machine interaction can’t just be for sighted people,” Chen Zhao, research director at Damo Academy told TechCrunch. “Besides voice, touch is also very important to the blind, so we decided to develop a touch feature.”

Smart Touch isn’t just for fingers. It also works when users hold their phones up to the ears. This lets them listen to text quickly in public without having to blast it out through speakers or headphones. Early trials of ear touch show a 50 percent reduction in time needed to complete tasks like taking calls and online shopping, Alibaba claims.

Emotions also matter. People with visual disabilities tend to be more cautious as they fumble through screens, so Smart Touch takes that into account. For instance, users need to double-click on the silicone button before a command goes through.

At the moment, Smart Touch works only on special editions of Alibaba’s two flagship apps, e-commerce marketplace Taobao and payment affiliate Alipay . The buttons automatically take on different functions when users switch between apps.

But Zhao said she wanted to make the technology widely available. Some tinkering with existing apps will make Smart Touch compatible. The smart film requires more testing before it officially rolls out early 2019, so Damo and Tsinghua have been recruiting volunteers like Li for feedback.

“Unlike with regular apps, it’s hard to beta test Smart Touch because the blind population is relatively small,” observed the researcher, but embedding the technology in popular apps could speed up the iteration process.

There’s also the issue with distributing the physical sheets. According to state census, China had around 13 million visually impaired people in 2012. That’s about one in a hundred people. However, they are rarely seen in public, as a post on China’s equivalent of Quora points out.

One oft-cited obstacle is that most roads in China aren’t disability-friendly, even in major cities. (In my city Shenzhen, blind lanes are common but they often get cut off abruptly to make way for a crossing or a bus stop.)

Damo doesn’t plan to monetize the initiative, according to Zhao. She envisions a future where her team could give out the haptic films — which can be mass produced at low costs — for free through Alibaba’s expanding network of brick-and-mortar stores.

Time will tell whether the accessibility scheme is more than public relations fluff. Initiatives around corporate social responsibility have mushroomed in China in recent years. They have come under fire, however, for being transient because many merely pander to the government’s demand (link in Chinese) for corporate ethics overlook long-term impact.

“The technology is ready. It just takes time to test it on different smartphones and bring to users at scale,” said Zhao.

Xiaomi is opening a retail store in London as it extends its Europe push

Xiaomi’s expansion into Europe continues at speed after the Chinese smartphone maker announced plans to open its first retail store in London.

The company is best known for developing quality Android phones at affordable prices and already it has launched devices in Spain, Italy and France. Now, that foray has touched the UK where Xiaomi launched its Mi 8 Pro device at an event yesterday and revealed that it will open a store at the Westfield mall in London on November 18.

That outlet will become Xiaomi’s first authorized Mi Store. Styled on Apple’s iconic stores, the Mi store will showcase a range of products, not all of which are available in the UK.

Still, Xiaomi has shown a taste of what it plans to offer in the UK by introducing a number of products alongside the Mi 8 Pro this week. Those include its budget tier Redmi 6A phone and, in its accessories range, the Xiaomi Band 3 fitness device and the £399 Mi Electric Scooter. The company said there are more to come.

That product selection will be available via Xiaomi’s own Mi.com store and a range of other outlets, including Amazon, Carphone Warehouse and Three, which will have exclusive distribution of Xiaomi’s smartphones among UK telecom operators.

Xiaomi hasn’t branched out into the U.S. — it does sell a number of accessories — but the European launches mark a new phase of its international expansion to take it beyond Asia. While Xiaomi does claim to be present in “more than 70 countries and regions around the world,” it has recorded most of its success in China, India and pockets of Asia.

CEO Lei Jun has, however, spoken publicly of his goal to sell Xiaomi phones in the U.S by “early 2019” at the latest.

Still, even with its focus somewhat limited, Xiaomi claims it has shipped a record 100 million devices in 2018 to date. The firm also posted a $2.1 billion profit in its first quarter as a public company following its Hong Kong IPO. However, the IPO underwhelmed with Xiaomi going public at $50 billion, half of its reported target, while its shares have been valued at below their IPO price since the middle of September.

Trump has two ‘secure’ iPhones, but the Chinese are still listening

President Trump has three iPhones — two of them are “secure” and his third is a regular personal device. But whenever the commander-in-chief takes a call, his adversaries are said to be listening.

That’s according to a new report by The New York Times, which put a spotlight on the president’s array of devices — and how he uses them.

Trump reluctantly gave up his old and outdated Android-powered Samsung Galaxy phone when he took office in 2016 and was transitioned to Apple devices. iPhones have historically been seen as more secure than their Android counterparts. Although one of his devices is a regular iPhone that he can use to store his contacts, the two other iPhones for official business have been modified and locked down by the National Security Agency to prevent eavesdropping.

Except — even when you’re in the White House, you can’t escape the aging, ailing and insecure cell network that blankets the capital and the vast majority of the U.S.

A crucial cell network system that helps broker and pass information between networks — known as Signaling System No. 7 (or just SS7) — have made it easier in recent years for hackers to intercept phone calls and text messages. SS7 is the protocol that cell networks use to establish and route calls and texts, but SS7 so broken that codes used for two-factor authentication have been intercepted and used to break into and drain bank accounts.

Those largely unfixed flaws make it far easier for governments — and anyone else — to tap into calls as they’re being made. That includes China, Russia — and any reasonably knowledgable attacker with the resources to pull off a successful intercept.

Trump’s reliance on three iPhones may seem cumbersome, but it’s a step up from what his predecessor got.

President Obama once likened his government-issued iPhone — given to him during his second term — to a “play phone [that] your 3-year-old has.” It was modified so that it could receive email but couldn’t make calls, and didn’t have a camera or microphone that foreign adversaries could use to glean any knowledge that the president was working on. He wasn’t even allowed to text — not necessarily for technical reasons, but to comply with the Presidential Records Act, which requires high-ranking government officials to store their official communications.

As much as Trump has been given more leniency than Obama, the president is still supposed to receive new, clean devices every month to cut off any hidden persistent malware that could be lurking within. But that policy isn’t enforced as closely as it should be, the report says, because of the inconvenience of having to manually port over the old data to the new phone without accidentally transferring any lingering malware — if any.

Although flaws in SS7 remain an issue for the average person, they’re apparently no match for the president’s own terrible “opsec” — or operational security, an awareness of the threats that he faces and the effort to mitigate them. Even if the Chinese or the Russians aren’t listening to his calls, they could always try their luck by hanging around one of his golf courses — where the president sent staff into a scramble after losing one of his phones in a golf cart.

And this is someone we trust with the nuclear codes.

Review: Apple’s iPhone XR is a fine young cannibal

This iPhone is great. It is most like the last iPhone — but not the last “best” iPhone — more like the last not as good iPhone. It’s better than that one though, just not as good as the newest best iPhone or the older best iPhone.

If you’re upgrading from an iPhone 7 or iPhone 8, you’re gonna love it and likely won’t miss any current features while also getting a nice update to a gesture-driven phone with Face ID. But don’t buy it if you’re coming from an iPhone X, you’ll be disappointed as there are some compromises from the incredibly high level of performance and quality in Apple’s last flagship, which really was pushing the envelope at the time.

From a consumer perspective, this is offering a bit of choice that targets the same kind of customer who bought the iPhone 8 instead of the iPhone X last year. They want a great phone with a solid feature set and good performance but are not obsessed with ‘the best’ and likely won’t notice any of the things that would bug an iPhone X user about the iPhone XR.

On the business side, Apple is offering the iPhone XR to make sure there is no pricing umbrella underneath the iPhone XS and iPhone XS Max, and to make sure that the pricing curve is smooth across the iPhone line. It’s not so much a bulwark against low-end Android, that’s why the iPhone 8 and iPhone 7S are sticking around at those low prices.

Instead it’s offering an ‘affordable’ option that’s similar in philosophy to the iPhone 8’s role last year but with some additional benefits in terms of uniformity. Apple gets to move more of its user base to a fully gesture-oriented interface, as well as giving them Face ID. It benefits from more of its pipeline being dedicated to devices that share a lot of components like the A12 and True Depth camera system. It’s also recognizing the overall move towards larger screens in the market.

If Apple was trying to cannibalize sales of the iPhone XS, it couldn’t have created a better roasting spit than the iPhone XR.

Screen

Apple says that the iPhone XR has ‘the most advanced LCD ever in a smartphone’ — their words.

The iPhone XR’s screen is an LCD, not an OLED. This is one of the biggest differences between the iPhone XR and the iPhone XS models, and while the screen is one of the best LCDs I’ve ever seen, it’s not as good as the other models. Specifically, I believe that the OLED’s ability to display true black and display deeper color (especially in images that are taken on the new XR cameras in HDR) set it apart easily.

That said, I have a massive advantage in that I am able to hold the screens side by side to compare images. Simply put, if you don’t run them next to one another, this is a great screen. Given that the iPhone XS models have perhaps the best displays ever made for a smartphone, coming in a very close second isn’t a bad place to be.

A lot of nice advancements have been made here over earlier iPhone LCDs. You get True Tone, faster 120hz touch response and wide color support. All on a 326 psi stage that’s larger than the iPhone 8 Plus in a smaller body. You also now get tap-to-wake, another way Apple is working hard to unify the design and interaction language of its phones across the lineup.

All of these advancements don’t come for free to an LCD. There was a lot of time, energy and money spent getting the older technology to work as absolutely closely as possible to the flagship models. It’s rare to the point of non-existence that companies care at all to put in the work to make the lower end devices feel as well worked as the higher end ones. For as much crap as Apple gets about withholding features to get people to upsell, there is very little of that happening with the iPhone XR, quite the opposite really.

There are a few caveats here. First, 3D touch is gone, replaced by ‘Haptic Touch’ which Apple says works similarly to the MacBook’s track pad. It provides feedback from the iPhone’s Taptic vibration engine to simulate a ‘button press’ or trigger. In practice, the reality of the situation is that it is a very prosaic ‘long press to activate’ more than anything else. It’s used to trigger the camera on the home screen and the flashlight, and Apple says it’s coming to other places throughout the system as it sees it appropriate and figures out how to make it feel right.

I’m not a fan. I know 3D touch has its detractors, even among the people I’ve talked to who helped build it, I think it’s a clever utility that has a nice snap to it when activating quick actions like the camera. In contrast, on the iPhone XR you must tap and hold the camera button for about a second and a half — no pressure sensitivity here obviously — as the system figures out that this is an intentional press by determining duration, touch shape and spread etc and then triggers the action. You get the feedback still, which is nice, but it feels disconnected and slow. It’s the best case scenario without the additional 3D touch layer, but it’s not ideal.

I’d also be remiss if I didn’t mention that the edges of the iPhone XR screen have a slight dimming effect that is best described as a ‘drop shadow’. It’s wildly hard to photograph but imagine a very thin line of shadow around the edge of the phone that gets more pronounced as you tilt it and look at the edges. It’s likely an effect of the way Apple was able to get a nice sharp black drop-off at the edges that gets that to-the-edges look of the iPhone XR’s screen.

Apple is already doing a ton of work rounding  the corners of the LCD screen to make them look smoothly curved (this works great and is nearly seamless unless you bust out the magnifying loupe) and it’s doing some additional stuff around the edge to keep it looking tidy. They’ve doubled the amount of LEDs in the screen to make that dithering and the edging possible.

Frankly, I don’t think most people will ever notice this slight shading of dark around the edge — it is very slight — but when the screen is displaying mostly white and it’s next to the iPhone XS it’s visible.

Oh, the bezels are bigger. It makes the front look slightly less elegant and screenful than the iPhone XS, but it’s not a big deal.

Camera

Yes, the portrait mode works. No, it’s not as good as the iPhone XS. Yes, I miss having a zoom lens.

All of those things are true and easily the biggest reason I won’t be buying an iPhone XR. However, in the theme of Apple working its hardest to make even its ‘lower end’ devices work and feel as much like its best, it’s really impressive what has been done here.

The iPhone XR’s front-facing camera array is identical to what you’ll find in the iPhone XS. Which is to say it’s very good.

The rear facing camera is where it gets interesting, and different.

The rear camera is a single lens and sensor that is both functionally and actually identical to the wide angle lens in the iPhone XS. It’s the same sensor, the same optics, the same 27mm wide-angle frame. You’re going to get great ‘standard’ pictures out of this. No compromises.

However, I found myself missing the zoom lens a lot. This is absolutely a your mileage may vary scenario, but I take the vast majority of my pictures with the telephoto lens. Looking back at my year with the iPhone X I’d say north of 80% of my pictures were shot with the telephoto, even if they were close ups. I simply prefer the “52mm” equivalent with its nice compression and tight crop. It’s just a better way to shoot than a wide angle — as any photographer or camera company will tell you because that’s the standard (equivalent) lens that all cameras have shipped with for decades.

Wide angle lenses were always a kludge in smartphones and it’s only in recent years that we’ve started getting decent telephotos. If I had my choice, I’d default to the tele and have a button to zoom out to the wide angle, that would be much nicer.

But with the iPhone XR you’re stuck with the wide — and it’s a single lens at that, without the two different perspectives Apple normally uses to gather its depth data to apply the portrait effect.

So they got clever. iPhone XR portrait images still contain a depth map that determines foreground, subject and background, as well as the new segmentation map that handles fine detail like hair. While the segmentation maps are roughly identical, the depth maps from the iPhone XR are nowhere as detailed or information rich as the ones that are generated by the iPhone XS.

See the two maps compared here, the iPhone XR’s depth map is far less aware of the scene depth and separation between the ‘slices’ of distance. It means that the overall portrait effect, while effective, is not as nuanced or aggressive.

In addition, the iPhone XR’s portrait mode only works on people.You’re also limited to just a couple of the portrait lighting modes: studio and contour.

In order to accomplish portrait mode without the twin lens perspective, Apple is doing facial landmark mapping and image recognition work to determine that the subject you’re shooting is a person. It’s doing depth acquisition by acquiring the map using a continuous real-time buffer of information coming from the focus pixels embedded in the iPhone XR’s sensor that it is passing to the A12 Bionic’s Neural Engine. Multiple neural nets analyze the data and reproduce the depth effect right in the viewfinder.

When you snap the shutter it combines the depth data, the segmentation map and the image data into a portrait shot instantaneously. You’re able to see the effect immediately. It’s wild to see this happen in real time and it boggles thinking about the horsepower needed to do this. By comparison, the Pixel 3 does not do real time preview and takes a couple of seconds to even show you the completed portrait shot once it’s snapped.

It’s a bravura performance in terms of silicon. But how do the pictures look?

I have to say, I really like the portraits that come out of the iPhone XR. I was ready to hate on the software-driven solution they’d come up with for the single lens portrait but it’s pretty damn good. The depth map is not as ‘deep’ and the transitions between out of focus and in focus areas are not as wide or smooth as they are on iPhone XS, but it’s passable. You’re going to get more funny blurring of the hair, more obvious hard transitions between foreground and background and that sort of thing.

And the wide angle portraits are completely incorrect from an optical compression perspective (nose too large, ears too small). Still, they are kind of fun in an exaggerated way. Think the way your face looks when you get to close to your front camera.

If you take a ton of portraits with your iPhone, the iPhone XS is going to give you a better chance of getting a great shot with a ton of depth that you can play with to get the exact look that you want. But as a solution that leans hard on the software and the Neural Engine, the iPhone XR’s portrait mode isn’t bad.

Performance

Unsurprisingly, given that it has the same exact A12 Bionic processor, but the iPhone XR performs almost identically to the iPhone XS in tests. Even though it features 3GB of RAM to the iPhone XS’ 4GB, the overall situation here is that you’re getting a phone that is damn near identical as far as speed and capability. If you care most about core features and not the camera or screen quirks, the iPhone XR does not offer many, if any, compromises here.

Size

The iPhone XR is the perfect size. If Apple were to make only one phone next year, they could just make it XR-sized and call it good. Though I am now used to the size of the iPhone X, a bit of extra screen real-estate is much appreciated when you do a lot of reading and email. Unfortunately, the iPhone XS Max is a two-handed phone, period. The increase in vertical size is lovely for reading and viewing movies, but it’s hell on reachability. Stretching to the corners with your thumb is darn near impossible and to complete even simple actions like closing a modal view inside an app it’s often easiest (and most habitual) to just default to two hands to perform those actions.

For those users that are ‘Plus’ addicts, the XS Max is an exercise in excess. It’s great as a command center for someone who does most of their work on their iPhones or in scenarios where it’s their only computer. My wife, for instance, has never owned her own computer and hasn’t really needed a permanent one in 15 years. For the last 10 years, she’s been all iPhone, with a bit of iPad thrown in. I myself am now on a XS Max because I also do a huge amount of my work on my iPhone and the extra screen size is great for big email threads and more general context.

But I don’t think Apple has done enough to capitalize on the larger screen iPhones in terms of software — certainly not enough to justify two-handed operation. It’s about time iOS was customized thoroughly for larger phones beyond a couple of concessions to split-view apps like Mail.

That’s why the iPhone XR’s size comes across as such a nice compromise. It’s absolutely a one-handed phone, but you still get some extra real-estate over the iPhone XS and the exact same amount of information appears on the iPhone XR’s screen as on the iPhone XS Max in a phone that is shorter enough to be thumb friendly.

Color

Apple’s industrial design chops continue to shine with the iPhone XR’s color finishes. My tester iPhone was the new Coral color and it is absolutely gorgeous.

The way Apple is doing colors is like nobody else. There’s no comparison to holding a Pixel 3, for instance. The Pixel 3 is fun and photographs well, but super “cheap and cheerful” in its look and feel. Even though the XR is Apple’s mid-range iPhone, the feel is very much that of a piece of nicely crafted jewelry. It’s weighty, with a gorgeous 7-layer color process laminating the back of the rear glass, giving it a depth and sparkle that’s just unmatched in consumer electronics.

The various textures of the blasted aluminum and glass are complimentary and it’s a nice melding of the iPhone 8 and iPhone X design ethos. It’s massively unfortunate that most people will be covering the color with cases, and I expect clear cases to explode in popularity when these phone start getting delivered.

It remains very curious that Apple is not shipping any first-party cases for the iPhone XR — not even the rumored clear case. I’m guessing that they just weren’t ready or that Apple was having issues with some odd quirk of clear cases like yellowing or cracking or something. But whatever it is, they’re leaving a bunch of cash on the table.

Apple’s ID does a lot of heavy lifting here, as usual. It often goes un-analyzed just how well the construction of the device works in conjunction with marketing and market placement to help customers both justify and enjoy their purchase. It transmits to the buyer that this is a piece of quality kit that has had a lot of thought put into it and makes them feel good about paying a hefty price for a chunk of silicon and glass. No one takes materials science anywhere as seriously at Apple and it continues to be on display here.

Should you buy it?

As I said above, it’s not that complicated of a question. I honestly wouldn’t overthink this one too much. The iPhone XR is made to serve a certain segment of customers that want the new iPhone but don’t necessarily need every new feature. It works great, has a few small compromises that probably won’t faze the kind of folks that would consider not buying the best and is really well built and executed.

“Apple’s pricing lineup is easily its strongest yet competitively,” creative Strategies’ Ben Bajarin puts it here in a subscriber piece. “The [iPhone] XR in particular is well lined up against the competition. I spoke to a few of my carrier contacts after Apple’s iPhone launch event and they seemed to believe the XR was going to stack up well against the competition and when you look at it priced against the Google Pixel ($799) and Samsung Galaxy 9 ($719). Some of my contacts even going so far to suggest the XR could end up being more disruptive to competitions portfolios than any iPhone since the 6/6 Plus launch.”

Apple wants to fill the umbrella, leaving less room than ever for competitors. Launching a phone that’s competitive in price and features an enormous amount of research and execution that attempt to make it as close a competitor as possible to its own flagship line, Apple has set itself up for a really diverse and interesting fiscal Q4.

Whether you help Apple boost its average selling price by buying one of the maxed out XS models or you help it block another Android purchase with an iPhone XR, I think it will probably be happy having you, raw or cooked.

eBay launches Instant Selling, a new trade-in service for smartphones

eBay today launched a new service to help users unload their old smartphones on its online marketplace. With eBay Instant Selling, as the service is called, consumers can list their device info, add images, then receive an instant voucher that can be used towards the purchase of a new device from eBay. They’ll also receive an eBay shipping label to send their old phone to eBay.

The company claims it will offer a higher return than competitors’ sites, like Gazelle or EcoATM as well as carriers’ trade-in programs like those from AT&T and Verizon, plus Apple’s own Give Back program. It says that standard programs tend to offer 40 to 50 percent off the average market selling price, but eBay will provide up to 40% higher than trade-in values, on average.

Currently, eligible smartphones include Unlocked, Verizon and AT&T, Samsung Galaxy S7 to S9 + and Apple iPhone 6S 16GB through iPhone X 256GB. In November, eBay will add T-Mobile, Sprint and Google Pixel and select LG products to that list, it says.

If this all sounds familiar, that’s because eBay has tried its hand at similar services in the past – repeatedly. In 2013, it shut down an older “Instant Sale” service that focused on reselling consumer electronics, then returned in 2016 with a trade-in site called “Quick Sale.” However, Quick Sale relied on another shuttered eBay service, eBay Valet, which involved having eBay top sellers handle the device sales.

To use the new Instant Selling service, consumers can visit ebay.com/s/phone, then enter their device info and upload photos. After accepting the terms, they’ll receive their instant quote and can opt to print the shipping label to turn in their device to eBay.

The company was unable to provide more information about the revenue sharing portion of the program, as it’s in the quiet period in advance of earnings.

It did, however, provide a comparison chart of top devices and how they would sell on competitors’ sites.

“Millions of Americans have unused phones in their homes and simply don’t realize how much their devices are worth, probably because trade-in values are typically so low,” said Alyssa Steele, Vice President of Hard Goods, eBay, in a statement about the launch. “With Instant Selling, people can find out exactly how much their phone is worth, and sell their phone within a matter of minutes to immediately help fund the holidays, or maybe something off their personal wish list,” she said.

Building a great startup requires more than genius and a great invention

Many entrepreneurs assume that an invention carries intrinsic value, but that assumption is a fallacy.

Here, the examples of the 19th and 20th century inventors Thomas Edison and Nikola Tesla are instructive. Even as aspiring entrepreneurs and inventors lionize Edison for his myriad inventions and business acumen, they conveniently fail to recognize Tesla, despite having far greater contributions to how we generate, move, and harness power. Edison is the exception, with the legendary penniless Tesla as the norm.

Universities are the epicenter of pure innovation research. But the reality is that academic research is supported by tax dollars. The zero-sum game of attracting government funding is mastered by selling two concepts: Technical merit, and and broader impact toward benefiting society as a whole. These concepts are usually at odds with building a company, which succeeds only by generating and maintaining competitive advantage through barriers to entry.

In rare cases, the transition from intellectual merit to barrier to entry is successful. In most cases, the technology, though cool, doesn’t give the a fledgling company the competitive advantage it needs to exist among incumbents, and inevitable copycats. Academics, having emphasized technical merit and broader impact to attract support for their research, often fail to solve for competitive advantage, thereby creating great technology in search for a business application.

Of course there are exceptions: Time and time again, whether it’s driven by hype or perceived existential threat, big incumbents will be quick to buy companies purely for technology.  Cruise/GM (autonomous cars), DeepMind/Google (AI), and Nervana/Intel (AI chips). But as we move from 0-1 to 1-N in a given field, success is determined by winning talent over winning technology. Technology becomes less interesting; the onus on the startup to build a real business.

If a startup chooses to take venture capital, it not only needs to build a real business, but one that will be valued in the billions. the question becomes how a startup can create durable, attractive business, with a transient, short-lived technological advantage.

Most investors understand this stark reality. Unfortunately, while dabbling in technologies which appeared like magic to them during the cleantech boom, many investors were lured back into the innovation fallacy, believing that pure technological advancement would equal value creation. Many of them re-learned this lesson the hard way. As frontier technologies are attracting broader attention, I believe many are falling back into the innovation trap.

So what should aspiring frontier inventors solve for as they seek to invest capital to translate pure discovery to building billion-dollar companies?  How can the technology be cast into an unfair advantage that will yield big margins and growth that underpin billion-dollar businesses?

Talent productivity: In this age of automation, human talent is scarce, and there is incredible value attributed to retaining and maximizing human creativity.  Leading companies seek to gain an advantage by attracting the very best talent. If your technology can help you make more scarce talent more productive, or help your customers become more productive, then you are creating an unfair advantage internally, while establishing yourself as the de facto product for your customers.

Great companies such as Tesla and Google have built tools for their own scarce talent, and build products their customers, in their own ways, can’t do without. Microsoft mastered this with its Office products in the 90s, through innovation and acquisition, Autodesk with its creativity tools, and Amazon with its AWS Suite. Supercharging talent yields one of the most valuable sources of competitive advantage: switchover cost.  When teams are empowered with tools they love, they will loathe the notion of migrating to shiny new objects, and stick to what helps them achieve their maximum potential.

Marketing and Distribution Efficiency: Companies are worth the markets they serve.  They are valued for their audience and reach.  Even if their products in of themselves don’t unlock the entire value of the market they serve, they will be valued for their potential to, at some point in the future, be able to sell to the customers that have been tee’d up with their brands. AOL leveraged cheap CD-ROMs and the postal system to get families online, and on email.

Dollar Shave Club leveraged social media and an otherwise abandoned demographic to lock down a sales channel that was ultimately valued at a billion dollars. The inventions in these examples were in how efficiently these companies built and accessed markets, which ultimately made them incredibly valuable.

Network effects: Its power has ultimately led to its abuse in startup fundraising pitches. LinkedIn, Facebook, Twitter, and Instagram generate their network effects through Internet and Mobile. Most marketplace companies need to undergo the arduous, expensive process of attracting vendors and customers.  Uber identified macro trends (e.g., urban living) and leveraged technology (GPS in cheap smartphones) to yield massive growth in building up supply (drivers) and demand (riders).

Our portfolio company Zoox will benefit from every car benefitting from edge cases every vehicle encounters: akin to the driving population immediately learning from special situations any individual driver encounters. Startups should think about how their inventions can enable network effects where none existed, so that they are able to achieve massive scale and barriers by the time competitors inevitably get access to the same technology.

Offering an end-to-end solution: There isn’t intrinsic value in a piece of technology; it’s offering a complete solution that delivers on an unmet need deep-pocketed customers are begging for. Does your invention, when coupled to a few other products, yield a solution that’s worth far more than the sum of its parts? For example, are you selling a chip, along with design environments, sample neural network frameworks, and datasets, that will empower your customers to deliver magical products? Or, in contrast, does it make more sense to offer standard chips, licensing software, or tag data?

If the answer is to offer components of the solution, then prepare to enter a commodity, margin-eroding, race-to-the-bottom business. The former, “vertical” approach is characteristic of more nascent technologies, such as operating robots-taxis, quantum computing, and launching small payloads into space. As the technology matures and becomes more modular, vendors can sell standard components into standard supply chains, but face the pressure of commoditization.

A simple example is Personal Computers, where Intel and Microsoft attracted outsized margins while other vendors of disk drives, motherboards, printers, and memory faced crushing downward pricing pressure.  As technology matures, the earlier vertical players must differentiate with their brands, reach to customers, and differentiated product, while leveraging what’s likely going to be an endless number of vendors providing technology into their supply chains.

A magical new technology does not go far beyond the resumes of the founding team.

What gets me excited is how the team will leverage the innovation, and attract more amazing people to establish a dominant position in a market that doesn’t yet exist. Is this team and technology the kernel of a virtuous cycle that will punch above its weight to attract more money, more talent, and be recognized for more than it’s product?

Google tweaks Android licensing terms in Europe to allow Google app unbundling — for a fee

Google has announced changes to the licensing model for its Android mobile operating system in Europe,  including introducing a fee for licensing some of its own brand apps, saying it’s doing so to comply with a major European antitrust ruling this summer.

In July the region’s antitrust regulators hit Google with a recordbreaking $5BN fine for violations pertaining to Android, finding the company had abused the dominance of the platform by requiring manufacturers pre-install other Google apps in order to license its popular Play app store. 

Regulators also found Google had made payments to manufacturers and mobile network operators in exchange for exclusively pre-installing Google Search on their devices, and used Play store licensing to prevent manufacturers from selling devices based on Android forks.

Google disputes the Commission’s findings, and last week filed its appeal — a legal process that could take years. But in the meanwhile it’s making changes to how it licenses Android in Europe to avoid the risk of additional penalties heaped on top of the antitrust fine.

Hiroshi Lockheimer, Google’s senior vice president of platforms & ecosystems, revealed the new licensing options in a blog post published today.

Under updated “compatibility agreements”, he writes that mobile device makers will be able to build and sell Android devices intended for the European Economic Area (EEA) both with and without Google mobile apps preloaded — something Google’s same ‘compatibility’ contracts restricted them from doing before, when it was strictly either/or (either you made Android forks, or you made Android devices with Google apps — not both).

“Going forward, Android partners wishing to distribute Google apps may also build non-compatible, or forked, smartphones and tablets for the European Economic Area (EEA),” confirms Lockheimer.

However the company is also changing how it licenses the full Android bundle — which previously required OEMs to load devices with the Google mobile application suite, Google Search and the Chrome browser in order to be able to offer the popular Play Store — by introducing fees for OEMs wanting to pre-load a subset of those same apps under “a new paid licensing agreement for smartphones and tablets shipped into the EEA”.

Though Google stresses there will be no charge for using the Android platform itself. (So a pure fork without any Google services preloaded still wouldn’t require a fee.)

Google also appears to be splitting out Google Search and Chrome from the rest of the Google apps in its mobile suite (which traditionally means stuff like YouTube, the Play Store, Gmail, Google Maps, although Lockheimer’s blog post does not make it clear which exact apps he’s talking about) — letting OEMs selectively unbundle some Google apps, albeit potentially for a fee, depending on the apps in question.

“[D]evice manufacturers will be able to license the Google mobile application suite separately from the Google Search App or the Chrome browser,” is what Lockheimer unilluminatingly writes.

Perhaps Google wants future unbundled Android forks to still be able to have Google Search or Chrome, even if they don’t have the Play store, but it’s really not at all clear which configurations of Google apps will be permitted under the new licensing terms, and which won’t.

“Since the pre-installation of Google Search and Chrome together with our other apps helped us fund the development and free distribution of Android, we will introduce a new paid licensing agreement for smartphones and tablets shipped into the EEA. Android will remain free and open source,” Lockheimer adds, without specifying what the fees will be either. 

“We’ll also offer new commercial agreements to partners for the non-exclusive pre-installation and placement of Google Search and Chrome. As before, competing apps may be pre-installed alongside ours,” he continues to complete his trio of poorly explained licensing changes.

We’ve asked Google to clarify the various permitted and not permitted app configurations, as well as which apps will require a fee (and which won’t), and how much the fees will be, and will update this post with any response.

The devil in all those details should become clear soon though, as Google says the new licensing options will come into effect on October 29 for all new (Android based) smartphones and tablets launched in the EEA.

The Internet Bill of Rights is just one piece of our moral obligations

Congressman Ro Khanna’s proposed Internet Bill of Rights pushes individual rights on the Internet forward in a positive manner. It provides guidelines for critical elements where the United States’ and the world’s current legislation is lacking, and it packages it in a way that speaks to all parties. The devil, as always, is in the details—and Congressman Khanna’s Internet Bill of Rights still leaves quite a bit to subjective interpretation.

But what should not be neglected is that we as individuals have not just rights but also moral obligations to this public good—the Internet. The web positively impacts our lives in a meaningful fashion, and we have a collective responsibility to nurture and keep it that way.

Speaking to the specific rights listed in the Bill, we can likely all agree that citizens should have control over information collected about them, and that we should not be discriminated against based on that personal data. We probably all concur that Internet Service Providers should not be permitted to block, throttle, or engage in paid prioritization that would negatively impact our ability to access the world’s information. And I’m sure we all want access to numerous affordable internet providers with clear and transparent pricing.

These are all elements included in Congressman Khanna’s proposal; all things that I wholeheartedly support.

As we’ve seen of late with Facebook, Google, and other large corporations, there is an absolute need to bring proper legislation into the digital age. Technological advancements have progressed far faster than regulatory changes, and drastic improvements are needed to protect users.

What we must understand, however, is that corporations, governments, and individuals all rely on the same Internet to prosper. Each group should have its own set of rights as well as responsibilities. And it’s those responsibilities that need more focus.

Take, for example, littering. There may be regulations in place that prevent people from discarding their trash by the side of the road. But regardless of these laws, there’s also a moral obligation we have to protect our environment and the world in which we live. For the most part, people abide by these obligations because it’s the right thing to do and because of social pressure to keep the place they live beautiful—not because they have a fear of being fined for littering.

We should approach the protection of the Internet in the same way.

We should hold individuals, corporations, and governments to a higher standard and delineate their responsibilities to the Internet. All three groups should accept and fulfill those responsibilities, not because we create laws and fines, but because it is in their best interests.

For individuals, the Internet has given them powers beyond their wildest dreams and it continues to connect us in amazing ways. For corporations, it has granted access to massively lucrative markets far and wide that would never have been accessible before. For governments, it has allowed them to provide better services to their citizens and has created never before seen levels of tax revenue from the creation of businesses both between and outside their physical borders.

Everyone — and I mean everyone — has gained (and will continue to gain) from protecting an open Internet, and we as a society need to recognize that and start imposing strong pressure against those who do not live up to their responsibilities.

We as people of the world should feel tremendously grateful to all the parties that contributed to the Internet we have today. If a short-sighted government decides it wants to restrict the Internet within its physical borders, this should not be permitted. It will not only hurt us, but it will hurt that very government by decreasing international trade and thus tax revenue, as well as decreasing the trust that the citizens of that country place in their government. Governments often act against their long-term interests in pursuit of short-term thinking, thus we have 2 billion people living in places with heavy restrictions on access to online information.

When an Internet Service Provider seeks full control over what content it provides over its part of the Internet, this, again, should not be allowed. It will, in the end, hurt that very Internet Service Provider’s revenue; a weaker, less diverse Internet will inevitably create less demand for the very service they are providing along with a loss of trust and loyalty from their customers.

Without the Internet, our world would come grinding to a halt. Any limitations on the open Internet will simply slow our progress and prosperity as a human race. And, poignantly, the perpetrators of those limitations stand to lose just as much as any of us.

We have a moral responsibility, then, to ensure the Internet remains aligned with its original purpose. Sure, none of us could have predicted the vast impact the World Wide Web would have back in 1989—probably not even Sir Tim Berners-Lee himself—but in a nutshell, it exists to connect people, WHEREVER they may be, to a wealth of online information, to other people, and to empower individuals to make their lives better.

This is only possible with an open and free Internet.

Over the next five years, billions of devices—such as our garage door openers, refrigerators, thermostats, and mattresses—will be connected to the web via the Internet of Things. Further, five billion users living in developing markets will join the Internet for the first time, moving from feature phones to smartphones. These two major shifts will create incredible opportunities for good, but also for exploiting our data—making us increasingly vulnerable as Internet users.

Now is the time to adequately provide Americans and people around the world with basic online protections, and it is encouraging to see people like Congressman Khanna advancing the conversation. We can only hope this Internet Bill of Rights remains bipartisan and real change occurs.

Regardless of the outcome, we must not neglect our moral obligations—whether individual Internet users, large corporations, or governments. We all shoulder a responsibility to maintain an open Internet. After all, it is perhaps the most significant and impactful creation in modern society.