The Talk Show

103: ‘Robotitize the Assembly’ With Guest Dan Frommer


00:00:00   You really want to talk about Cubs baseball though, right?

00:00:02   (laughing)

00:00:04   That's why we're here,

00:00:04   Chicago Cubs 2015 National League Champs.

00:00:08   - I gotta tell you, I am delighted

00:00:10   to have Joe Madden out of the AL East.

00:00:13   (laughing)

00:00:14   That guy, I think he's the best manager in baseball.

00:00:19   I really do.

00:00:20   - Well, I heard similar things about Don Baylor,

00:00:25   Dusty Baker, and Lou Piniella

00:00:28   before they signed down with the Cubs too. So yeah, look, Sweet Lou was a good manager.

00:00:33   He I think I mean, you got it. Like, you know, he's got a certain style and intensity. But

00:00:39   he was good manager with the Yankees. I thought he was a good manager with Seattle.

00:00:43   He did actually succeed fairly well with the Cubs. But they also, you know, not every year.

00:00:51   Yeah, well, they were better than the Cubs usually are. But they weren't. They never got up to good.

00:00:55   No. It hurt me because Lou Piniella, unless my memory is really shot, he was managing Seattle

00:01:04   in '95, the year right before the Yankees started their dynasty.

00:01:10   The year I had a Mariners hat.

00:01:12   Right. And it was Mattingly's last season, and the first time he got in the postseason.

00:01:20   Mattingly played great. He had a great series, but the the Mariners won and when it just was salt in the wound that it was

00:01:27   Yankee legend Lou Piniella at the helm. Well, we'll see. I'm actually so

00:01:31   I'm actually going to CES for the first time. I remember this is something we talked about either a year or two ago

00:01:37   Yeah, I might actually put a little money on the Cubs. We'll see. Oh, yeah, you got I know you got to do that

00:01:42   I got it - you got it. You got to make a prop bet. We're gonna do it prop bets are fun

00:01:47   For two reasons one you get great odds

00:01:50   I don't know what the Cubs are at but I'll bet they're probably like 15 to 1 at least maybe more something

00:01:55   I don't even know number two. You have the challenge of keeping track of that little piece of paper for nine months

00:02:01   Right, and it's like I don't even think they print them on super high quality. It's like

00:02:07   that heat transfer, you know like regular paper receipts you get from

00:02:13   Retail stores and if you like leave it out in the Sun or something, it'll fade to nothing or in your wallet

00:02:18   Yeah, because the heat you know, it's so you I and I find that so weird because you would think you know

00:02:23   You know casino, you know, I guess it's because they don't lose if you're if you yeah destroy your ticket, but breakage

00:02:29   Yeah, because I there we go. There's our Kickstarter casino receipts

00:02:34   preserver

00:02:36   Kit. Yeah, boom print on inkjet or something. You know something's gonna last

00:02:41   You should get good odds on that

00:02:43   When did you decide to go to CES a

00:02:47   Few weeks ago. It was presented as an option for me here at quartz and I've never been and I figured this is the perfect

00:02:54   year to go

00:02:56   You know when I have the the name of a big news agency behind me to get good meetings and that kind of stuff

00:03:02   But also work for a site that doesn't churn out, you know hundreds of stories a day

00:03:07   so I won't have to file an article every half an hour.

00:03:11   Yeah, that sounds like the way to do it.

00:03:13   Yeah, it's gonna be great.

00:03:14   It's a perennial topic. It's like my second week of January topic every year on this show

00:03:19   is, "Boy, I thought last year I should maybe go to CES. One of these years I gotta go,

00:03:24   and I didn't do it this year again."

00:03:26   Yeah, I think that was us last year.

00:03:27   I do it every year. I have the same thought.

00:03:30   Well, I'll let you know how it is.

00:03:32   And it's one of those things where my natural inclination towards procrastination is just fails

00:03:39   because it's really you can't do it at the last, well you could do it at the last minute, but it's

00:03:43   super expensive. Yeah and it's kind of annoying like they make you book your hotels through their

00:03:48   centralized system and the flights are expensive or sold out so even you know not when I booked a

00:03:55   month and a half out it was still kind of annoying but yeah it's gonna be awesome. I'll bet there's a

00:04:00   a ton of people from New York go so yes yeah yeah yeah like I think if you lived

00:04:05   in them you know Joe random city like I'll bet Philadelphia's Vegas flights

00:04:10   probably aren't that different that week because I bet there's not that many

00:04:13   people from here that go but the hotels is there a mass yeah yeah I can't wait

00:04:19   to hear hear your report yeah it's gonna be great no and I totally think that's

00:04:22   the way to do it is to do it as a publication that has a measured tone not

00:04:27   a bombardment of we gotta have 30 posts a day and you know.

00:04:31   - Yeah, it's funny.

00:04:32   I was talking to someone from a large

00:04:34   consumer electronics company the other day

00:04:36   and they're like, so you're coming to our press conference,

00:04:39   you're coming to our media day and I'm like, nope.

00:04:41   I'm not even getting there until Tuesday

00:04:44   after all that crap has already happened.

00:04:46   - That's the way to do it.

00:04:48   - Yeah.

00:04:49   So no waiting in line for, you know, stupid,

00:04:53   whatever they're gonna show.

00:04:55   big TVs and home automation stuff probably, I had no idea.

00:05:00   - Yeah, that's a good question.

00:05:01   I wonder what the big thing will be.

00:05:04   TVs are always the thing.

00:05:05   - I think my sense, yeah, I mean TVs,

00:05:07   but my sense is that this is the year

00:05:09   that all the connected home stuff starts to gel.

00:05:12   So, home automation stuff and refrigerators

00:05:17   that talk to your pet, that kind of stuff.

00:05:21   - I'll bet watches, watches have gotta be huge.

00:05:23   - Oh yeah, watches too.

00:05:24   Because A, and Apple watch aside,

00:05:27   Android Wear is out, it's a real thing,

00:05:32   and it's already starting to accelerate.

00:05:35   Where they're, you know, like when they first announced it

00:05:36   back at IO in June, there were two watches,

00:05:39   and they both were really clanky.

00:05:42   I mean, they sucked.

00:05:43   Then the Moto 360, or as I call it, the 270, hit.

00:05:48   And now there's been a trickle of watches that are,

00:05:50   you know, that seem reasonable.

00:05:52   They seem like something that people might wanna consider.

00:05:55   - Yeah, we'll see.

00:05:57   That'll be interesting.

00:05:58   I've gotten a few pitches on shirts

00:06:04   that have sensors built in

00:06:05   so you can measure your heart rate through your shirt.

00:06:09   So we'll see about that.

00:06:11   - Yeah, 'cause the other thing

00:06:12   that I think makes it have to be watches

00:06:13   is then going back to Apple Watch,

00:06:16   with Apple Watch on the horizon.

00:06:18   And we're clearly not gonna hear anything new

00:06:20   about Apple Watch before CES.

00:06:23   - Right, and probably not during either

00:06:25   unless they do one of those silly Apple leak type things.

00:06:29   - But that means any consumer electronics company

00:06:31   that wants to bet on smartwatches because Apple, you know,

00:06:36   betting on what Apple is interested in

00:06:39   is a pretty good way forward.

00:06:42   They're gonna wanna get that stuff out before,

00:06:44   as soon as they can.

00:06:45   - Right, so this is HP's chance to show off the slate

00:06:49   in Steve Ballmer's last keynote or whatever.

00:06:51   - Right.

00:06:52   - Sweet, yeah.

00:06:56   - I have a little bit of follow up

00:06:57   from previous episodes of this broadcast.

00:07:01   - Star Wars follow up?

00:07:03   - A little bit of Star Wars follow up.

00:07:05   I have to go all the way back to the Merlin episode,

00:07:07   which was-- - Oh, nice, again!

00:07:08   - 99, episode 99?

00:07:10   Yeah, that was four episodes ago.

00:07:12   So we talked about Roman numerals in the Super Bowl,

00:07:16   and then in a subsequent week followed up

00:07:18   They are the NFL is indeed dropping the Roman numerals for not this year Super Bowl next year's

00:07:24   50 which would have been just L and that looks stupid

00:07:28   So they're just going to put Super Bowl 5-0 and I was happy but it ends up

00:07:35   They're only doing that for Super Bowl 50 because L looks so stupid

00:07:38   Starting with Super Bowl 51. They're going back to the stupid Roman numerals. So bad news on the Roman numeral front

00:07:47   Star Wars. No, I don't think I have any follow-up on Star Wars. Although there was I saw a really funny bit from

00:07:55   Stephen Colbert defending the new Sith lightsaber. Oh nice. I'll put it in the show notes, but it was it's really really funny

00:08:03   What'd you think of it? Well, I don't really know much about Star Wars

00:08:08   I know I'm sorry

00:08:11   Although so my first exposures

00:08:14   I don't know, my dad showed me Caddyshack and those types of movies instead.

00:08:18   So we were like a Zappa household, not a Beatles household.

00:08:26   But the first time I ever saw Star Wars was when they re-released them in the mid-90s

00:08:31   on probably the biggest screen that existed in Chicago at that point at this movie theater

00:08:36   downtown called McClurg Court that was like five times bigger than any other movie screen.

00:08:42   So that was kinda cool and we went and saw those.

00:08:45   And I've still never seen "Jedi."

00:08:49   I'm bad, I need to do this at some point.

00:08:52   - That's crazy.

00:08:53   - Sorry, I sound like an idiot now.

00:08:55   Anyway, I don't know what I was gonna say,

00:08:59   but I thought the new lightsaber looks fine.

00:09:02   - That's crazy.

00:09:03   You don't have an opinion.

00:09:03   Your opinion does not count. - I have no opinion.

00:09:05   No, it does not count, I have no opinion.

00:09:07   - All right, the other bit of--

00:09:09   - Sorry. - Follow-up.

00:09:10   And this is really minutia, but why not?

00:09:12   let's be precise, is in last week's episode with Whiskus,

00:09:16   we were talking about Bond movies,

00:09:18   and I brought up that the Lazenby one

00:09:22   on Her Majesty's Secret Service,

00:09:25   Dave was under the impression that it was universally,

00:09:29   everybody hated it, everybody knew it was a mistake,

00:09:31   and it turns out, I am correct on this,

00:09:33   that it's very divisive.

00:09:34   Most people seem not to like it and agree it was a dud,

00:09:38   but there's a fairly sizable contingent of Bond movie fans

00:09:41   who either think it's their favorite

00:09:43   or one of their favorites, one of the better ones.

00:09:46   - I have not seen that one.

00:09:47   What is polarizing about it?

00:09:50   - Well, I think it's a weird story.

00:09:55   I think Lazenby's take on the character was off.

00:10:00   I just don't buy him as Bond.

00:10:03   Other people think he's great though.

00:10:04   He's definitely not Sean Connery, that's for sure.

00:10:11   I don't know and there's something about the story the way the story is written that I

00:10:14   just think it's a dud but some people really like the direction some people think the action

00:10:20   sequences are some of the best of that era and I think I think his name is Peter Hunt

00:10:27   and in the earlier movies he was the editor of the movies and he got to direct this one

00:10:35   and some people think that that helped make the action sequences better because he knew

00:10:40   how to shoot them to give the editing the footage that they would need. You know, that

00:10:44   an editor's perspective on directing makes for better action sequences. Film Crit Hulk.

00:10:49   Do you ever read Film Crit Hulk?

00:10:50   I don't, but I am aware of it and I appreciate its existence.

00:10:56   He's a big fan. He did a thing where he wrote about all the Bond movies and he really liked

00:10:59   it.

00:11:00   Oh, cool.

00:11:01   Anyway, friend of the show, Nat Irons. I think he's @NatIrons on Twitter. Great guy. Works

00:11:06   works at Black Pixel, really smart guy, long time friend of the show, long time daring

00:11:10   fireball reader. I mean like back in 2002, this guy who's sending me typos and stuff

00:11:15   like that, great guy. I said it was his favorite Bond movie and in fact he corrected me on

00:11:21   Twitter and said it is in his top six. He is a fan of the movie but he would not call

00:11:25   it his favorite and I wouldn't want to besmirch somebody in such a way. So, let's clear the

00:11:30   record for for Nat. Oh and the last thing Whiskas made a mistake the Chris

00:11:36   Cornell song I forget the name of it but it was the theme of it was not the theme

00:11:42   of Quantum of Solace that was the theme for Casino Royale and I don't know I was

00:11:49   tired or something let it slide I didn't catch it when Whiskas made that mistake

00:11:53   The theme for Quantum of Solace was the Jack White one, which was kind of weird.

00:11:58   You've watched…

00:11:59   Yeah, I haven't seen that one for a while though.

00:12:02   I've been watching the old ones.

00:12:04   You have seen James Bond movies.

00:12:05   Oh yeah, yeah.

00:12:06   I've been watching the old ones.

00:12:08   You know, I'd started seeing all the new ones as they had come out and I'd never seen the old ones.

00:12:12   And then after you and Dan started doing the shows, I started watching them.

00:12:17   and actually, as you know, they're so annoying to stream,

00:12:21   so I've had to end up buying a bunch of them.

00:12:23   But yeah, I dig them.

00:12:26   - The streaming rights on those Bond movies

00:12:28   are the craziest thing in the world.

00:12:30   Somebody twittered me the other day

00:12:31   that a bunch of the Connery ones are back on Netflix,

00:12:34   but they're not all of them.

00:12:35   And they're all--

00:12:36   - No, and I think a bunch were on HBO Go,

00:12:39   which is where I watched one recently.

00:12:41   - But not all of them.

00:12:41   - Not all of them, and not the ones I wanted to watch.

00:12:44   So I was like, well, okay.

00:12:47   - Yeah, who knows what those negotiations are like.

00:12:49   But you would just think though

00:12:50   that it would be like a blanket deal.

00:12:52   - Are they all one company?

00:12:54   - All except for Never Say Never Again,

00:12:57   which is an entirely separate long story

00:13:00   about how it exists.

00:13:00   But all the other Bond movies are from Eon Productions.

00:13:04   Eon, the abbreviation, everything or nothing.

00:13:07   So it's just bizarre.

00:13:10   It must just be that, you know, that's--

00:13:13   - And which conglomerate owns those?

00:13:15   Is it Sony or one of those?

00:13:18   It used to be.

00:13:19   Who owns MGM now?

00:13:21   I don't know.

00:13:22   I don't know.

00:13:23   Yeah.

00:13:24   Well, but anyway, it's crazy.

00:13:25   It's very frustrating.

00:13:26   Now you'll have more follow-up.

00:13:27   Sorry, man.

00:13:28   I think it's one of those things like a piece of buttered toast is always going to land

00:13:34   face down.

00:13:35   It's like whatever Bond movie you're in the mood to watch is always not going to be available

00:13:38   for free on Netflix.

00:13:39   Totally, yeah.

00:13:40   Yeah.

00:13:41   Actually, why don't I just take a break right here and do the first sponsor read and then we'll get started on perfect

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00:18:08   - Sounds cool.

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00:18:10   - Gluten free.

00:18:12   - First thing I wanna talk about,

00:18:13   I wanna talk about this thing, I sent you the link.

00:18:15   It was a article by Eric Jackson writing at,

00:18:19   I always confuse Forbes and Fortune.

00:18:23   I think it was Forbes.

00:18:24   - It's Forbes, yeah, and as a former Forbes employee,

00:18:27   we love it when you confuse Forbes and Fortune.

00:18:31   You know what, I just did it the other day with there was a story by a fortune writer

00:18:36   and I of course attributed it to Forbes.

00:18:38   It really is as simple as in my mind they're both business magazines and they start FOR

00:18:46   and that's it.

00:18:47   That's how my mind files them away.

00:18:49   Just remember that fortune is the boring one.

00:18:53   It's like the index in my mind, like the hashing index.

00:18:56   It only has like three letters.

00:18:57   Yeah.

00:18:58   It only goes to FOR.

00:18:59   the rest. Anyway, now he wrote about this earlier in the year too and then I

00:19:06   politely rebutted it but his point is he wants to see Apple use their massive

00:19:13   cash reserves to make big acquisitions and my take earlier in the year was more

00:19:19   or less that he was saying just do something with your money and with which

00:19:23   seems to me ill-advised like it seems to me like he's articulating in a viewpoint

00:19:28   that Apple has to do something with this money and you know I I just disagree I

00:19:34   think doing just doing something for the sake of doing something is gonna lead to

00:19:37   distractions so he has a follow-up he just posted it was at the very end of

00:19:41   the month it was I go for Thanksgiving and to summarize I would say he's he

00:19:47   thinks that the what they are doing with their money with the stock buybacks

00:19:50   which is I think most I think it's about 70% of what they're doing and then the

00:19:54   The dividends that they're now paying are a waste of money and that they they're not really

00:19:59   That the the stock rise that we've seen since apples instituted. This would have happened anyway

00:20:05   Just because apples financials are doing better and the the

00:20:10   Vague they're not going to be able to survive without Steve Jobs fear that might have been depressing the stock is gone

00:20:16   Nobody really seems to think that they're in bad hands under Tim Cook's leadership anymore

00:20:21   Which I think everybody would agree with that

00:20:23   So, what he thinks they should do, even if he doesn't think they should have done that

00:20:29   and what he thinks they should do now is he and he's I think he's dead serious about this.

00:20:33   He thinks they should buy Tesla, which he thinks would cost about 45 billion, Twitter,

00:20:40   which would be about 40 billion, buy Pinterest for 15 billion, then spend 10 billion on better

00:20:48   batteries through R&D and spend 10 billion to make iCloud work properly.

00:20:56   So what do you think about this?

00:20:58   I don't mean to laugh.

00:21:01   And this also happens.

00:21:03   So I also published a story today, Friday, called 10 Things I Learned About Apple This

00:21:08   Year on Quartz.

00:21:10   And one of the things I touched on was a little commentary about Apple's basically doing their

00:21:19   first big buy ever this year, which was Beats Audio and Beats Music or Beats Electronics

00:21:25   or whatever it's called, which was $3 billion, which is not $40 billion, but it's still pretty

00:21:31   big.

00:21:34   the context of people over the years saying Apple should buy all these companies.

00:21:41   The one that's been thrown about a lot actually in years past was Adobe, that Apple should

00:21:45   buy Adobe so that it owns the professional desktop software market.

00:21:53   And one of the articles I found while researching this was during Fireball 14 May 2008, why

00:22:00   Apple won't buy Adobe.

00:22:03   And I think the post you wrote here, if you want to do a find and replace with almost

00:22:10   every company on that list, you could pretty much paste it in there.

00:22:16   And you've also written about why Apple buying Tesla wouldn't necessarily be the craziest

00:22:23   thing because it kind of fits the model a little bit of what they do.

00:22:29   But if you look at Pinterest and Twitter and Tesla, first of all, you can't buy three companies

00:22:36   that big at the same time.

00:22:37   I don't think that's even possible from a logistical or regulatory standpoint.

00:22:42   Like imagine if you announced $100 billion in acquisitions in a week.

00:22:47   My guess is that the government would say, "Yeah, very funny.

00:22:52   Okay, now we're going to make you wait for two years while we sift through all this stuff."

00:22:59   So beyond that and yeah let's just put that aside for now but I do agree with you and

00:23:03   in particular for example I think that trying to acquire Twitter and Pinterest simultaneously

00:23:08   would definitely be very complicated getting approval much more complicated than buying

00:23:15   one of them or the other right more than twice as complicated because yeah it would be seen

00:23:20   as and you know anti-competitive because in some ways Pinterest is a social network yeah

00:23:26   and therefore it competes with Twitter.

00:23:28   - But beyond that, even if you had like,

00:23:30   even if all that stuff was totally doable,

00:23:34   then your Apple, and you have to integrate

00:23:36   Pinterest and Twitter into your company.

00:23:39   And first of all, how, and second of all, why?

00:23:43   Like what do you do with that?

00:23:45   And it just seems to me like that is not

00:23:47   what Tim Cook needs to be doing right now.

00:23:50   Twitter is not gonna change Apple

00:23:54   in a way that would make it solve all of its problems.

00:23:57   I think there are much, much bigger problems at Apple

00:24:00   that have nothing to do with spending cash

00:24:03   to acquire new companies that have some relation

00:24:06   to potential future businesses for Apple

00:24:09   or something like that.

00:24:10   - Yeah, the why is the bigger question than the how.

00:24:15   Because the easiest answer to how would be to acquire them

00:24:19   and kind of let them run independently.

00:24:22   But then, you know, you mean like there, how to me has some solutions.

00:24:26   It's why though is the, is the first question, right?

00:24:28   Which by the way is, is harder than it sounds because the people who made

00:24:32   Pinterest into, well, maybe not Twitter, but the people who made Pinterest, what

00:24:35   it is, don't necessarily want to keep making it under the ownership of a bigger

00:24:40   company. So this is a very common problem. But anyway, the wise is ultimately more

00:24:45   interesting or the one I got, I don't see how owning Twitter or let's just focus

00:24:51   on Twitter but owning Twitter to me doesn't help Apple do anything that Apple already

00:24:58   does.

00:24:59   There's no, it solves nothing, you know, in terms of Apple's core businesses which is

00:25:05   really selling computing hardware and now an array of form factors, traditional PCs

00:25:13   and laptops, tablets, and of course cell phones, and coming soon the watch, which are all computers.

00:25:23   That's really, you know, fundamentally that's what Apple does, is they make computers.

00:25:26   And the way that they succeed is by making computers that are the best in the world as

00:25:34   perceived by a significant number of people who are therefore willing to pay a premium

00:25:40   for them.

00:25:42   And to me, that's Apple in a nutshell.

00:25:44   And there's almost nothing that the company does that matters that isn't in service of

00:25:49   that.

00:25:51   Which is why it has all this cash to spend in the first place.

00:25:54   So for example, yeah, exactly.

00:25:56   And that's how they got all this gas.

00:25:57   So for example, the whole thing of iTunes isn't at first, at least at like a one level

00:26:04   of indirection has nothing to do with selling computers.

00:26:08   I think like two levels of indirection it does because one type of computer that's no longer

00:26:16   really a significant part of the company's business but one type of computer is iPods

00:26:21   computers that are computing devices that are meant as portable music and video players and

00:26:28   to sell those it really really helped I would say it was essential to make it easy to buy content

00:26:35   for them. Therefore, that's why iTunes exists.

00:26:38   And I think you're selling iTunes a little short. I mean, at its peak of utility in the early 2000s,

00:26:45   like it was way easier to use than Winamp or something like that for managing a music library

00:26:52   and ripping CDs and that sort of stuff. And then, arguably more importantly, it became the

00:27:00   the home of sync, of syncing your devices to each other,

00:27:05   to your iPod, and eventually your iPhone to your Mac,

00:27:08   which that's a really great place to be.

00:27:13   Michael Gartenberg I think once tweeted something,

00:27:16   if you own sync, you own everything.

00:27:18   I don't know, something like that.

00:27:20   And that's what iCloud is supposed to do right now.

00:27:21   So iTunes actually probably sold a lot of Macs, I would say.

00:27:26   - Yeah, I don't mean to sell it short,

00:27:29   But it's all in service of selling and selling Mac selling iPod selling phones, you know,

00:27:34   right definitely it that they had the infrastructure in place both the the cloud infrastructure

00:27:40   of having the store and the cloud servers that could send content over and could do

00:27:46   activation.

00:27:47   Remember, you have to activate your your phone, your iPhone through iTunes, and the desktop

00:27:52   software which was on hundreds of millions of Macs and Windows PCs.

00:27:56   let them ship the iPhone sooner than they would have been able to otherwise

00:28:01   if they didn't have it in place because for years you know three or four more

00:28:04   years before iCloud really became an independent thing you'd really you know

00:28:08   they needed it to have the you know just for things like software update they

00:28:14   didn't have the infrastructure in place to do over-the-air software updates to

00:28:17   the iPhone and so if they wanted to do what they definitely wanted to do which

00:28:21   was control the software updates to the phone as opposed to the carrier they

00:28:26   needed iTunes for it. So I'm not trying to sell it short. I'm just saying no, it was

00:28:29   in service of that fundamental business of selling the best computing devices in the

00:28:34   world.

00:28:35   Yeah. And now that of course the acquisitionist would say, well, now Apple should buy Spotify

00:28:41   because that's the future iTunes. So why doesn't Apple just spend the cash that it has and

00:28:47   buy Spotify?

00:28:48   That's it. That I would not disagree with. I don't think they have to buy Spotify. I

00:28:52   I don't think they have to buy rather than build their own streaming music solution.

00:28:57   But if the news came out, you know, after you and I get off this show and the news comes

00:29:03   out late on Friday that Apple is, you know, made an offer to buy Spotify, I wouldn't be

00:29:08   surprised at all.

00:29:09   Would you?

00:29:10   Well, I was just making fun of it.

00:29:12   So I may be.

00:29:13   Really?

00:29:14   I don't know that I think about it.

00:29:16   No, well, I well, I might be surprised.

00:29:19   I wouldn't be shocked.

00:29:20   Yeah, it wouldn't seem out of character.

00:29:21   In the same way that Beats, Beats was definitely a surprise.

00:29:24   But it's, you know, it doesn't seem totally out of character.

00:29:31   - Right, and Spotify, like it has,

00:29:33   it seems to have survived long enough

00:29:35   to actually be something important on its own,

00:29:39   both in terms of usage and kind of a community

00:29:43   and the product that it's built.

00:29:45   So yeah, that wouldn't, you know, I don't know if,

00:29:49   yeah, I guess the question is like,

00:29:50   okay, does that, yeah, then there's all these dork questions

00:29:54   like does that become the iTunes app or does the Spotify,

00:29:57   I don't know the answer to that.

00:29:58   And I don't know if that even matters.

00:30:03   But yeah, I think that like something like that,

00:30:07   which, you know, the question for all these deals

00:30:09   would be like, if, even if Apple shut all the Android users

00:30:14   off of these products in the planet, you know,

00:30:16   and made them Apple only,

00:30:19   Does that make the Apple product that much better,

00:30:22   that people would buy that instead of something else?

00:30:26   - No, I mean, and they could, the outcry,

00:30:29   if they bought Twitter and made it Apple only,

00:30:32   it would, you know, the outcry would be phenomenal.

00:30:35   I mean, it would lose most of its users.

00:30:37   I would guess a majority, some majority of Twitter users

00:30:41   are, you know, using devices, or at least one device

00:30:45   that's not an Apple product.

00:30:47   It just wouldn't even, you know, I don't even,

00:30:50   why would you buy them if you were just gonna--

00:30:51   - Yeah, Chrome.

00:30:52   - Yeah, or the web, right?

00:30:54   - Yeah, even just the web.

00:30:55   - It just, you know, and then what would be the point?

00:30:59   It just, it almost seems like, to me,

00:31:01   buying Twitter would just be the,

00:31:03   it would be a sign that Apple sees itself now

00:31:05   as like a conglomerate, you know, like Berkshire Hathaway,

00:31:09   where they just buy companies

00:31:10   and they're like a meta company on top of them.

00:31:13   - Right, and I'm not like an expert in kind of financial

00:31:18   tricks and that kind of stuff, but someone explained to me

00:31:21   buybacks the other day as, you know, if you have this money

00:31:24   and you think that the best investment you can make

00:31:27   is in yourself, if you think that Apple shares

00:31:29   are gonna go up, then that's probably the best investment

00:31:33   you can make, and just, you know, buy your own shares

00:31:35   instead of buying shares in something else.

00:31:37   - Yeah, I've read that too, that's very close to

00:31:42   Warren Buffett, speaking of Berkshire Hathaway, Warren Buffett's advice and take on buybacks

00:31:51   is that it's, you know, it's like most of his stock advice, and again, I'm no expert,

00:31:56   but it's, you know, it's as simple as that, that if you, if you think, yeah, exactly what

00:32:01   you said, if you think that your stock is underpriced, then it's, you know, it's a good

00:32:07   It's a good use of your money, that it actually does help your shareholders and inflate the

00:32:13   value of the company.

00:32:15   And who better than the leadership of Apple to have a sense as to whether they think that

00:32:20   their stock is underpriced?

00:32:22   Right.

00:32:23   Right.

00:32:24   Yeah, I mean, and this is, again, an area where I'm not like an expert, but finance

00:32:31   reporters that I've talked to have said that Tim Cook has actually done a really good job

00:32:36   at converting Apple from being a fast growth,

00:32:40   growth, growth, growth company to more of a blue chip

00:32:43   where yeah, it does have a dividend

00:32:45   and buys back its shares and does things with its cash

00:32:49   that a growth company probably wouldn't do,

00:32:52   but that big institutional investors

00:32:55   really respect the way that Tim Cook has done that.

00:32:58   - Yeah, and I do, as an outside observer who follows Apple

00:33:03   mostly from the product and designs side,

00:33:05   not the business side.

00:33:07   I completely agree with that.

00:33:11   And it does feel like the stock has settled

00:33:14   because the market as a whole has accepted that transition,

00:33:18   that they're not looking for.

00:33:19   I don't see people trying to figure out ways

00:33:23   to make Apple Watch an iPhone-sized business

00:33:27   in any near-term future.

00:33:29   It seems like expectations are reasonable.

00:33:32   Whereas like two years ago,

00:33:34   I feel like if they had announced the watch then, expectations would have been too wild

00:33:41   because people, business writers, people looking at it from a financial perspective were asking,

00:33:48   how can Apple keep growing at this crazy rate that they've grown the last seven years?

00:33:53   Especially having seen the first couple of years of the iPad come out right out of the

00:33:57   gate super strong.

00:33:59   And look like maybe that was it, right?

00:34:01   Right.

00:34:02   Oh wow, this is gonna be as big as the iPhone right away.

00:34:05   And then, okay, here comes the watch.

00:34:07   Now it's gotta be that big too.

00:34:09   - Yeah, and I'm guilty as charged on that front.

00:34:11   I'm on the record as speculating.

00:34:14   I didn't pick a year, but I was on the record

00:34:17   of saying that I thought an iPad

00:34:18   would be a bigger business than iPhone soon,

00:34:21   meaning by now.

00:34:22   And clearly that was wrong.

00:34:23   It's not, it's settled in far lower.

00:34:27   It's actually growth that's stopped.

00:34:29   That's not to say growth is stalled forever,

00:34:30   but it's for about a year, maybe even longer, right?

00:34:34   Didn't you count the quarters?

00:34:35   - Yeah, four of the last six quarters,

00:34:37   it's actually shrunk year over year.

00:34:38   So this year, it will almost certainly be smaller

00:34:42   than it was last year.

00:34:43   Not even just slowing growth, but actually shrinkage.

00:34:47   - Whereas iPhone, which is older,

00:34:49   is still continues to grow.

00:34:51   They've never had a stronger launch

00:34:52   than they did with this year's models.

00:34:55   - And of course, the iPod has been shrinking

00:34:57   for several years, and until very recently,

00:35:00   was still a non-laughable business.

00:35:04   So it's perfectly reasonable for things to eventually decline.

00:35:08   But I don't think anyone would have

00:35:10   expected that the iPad would be in its decline already.

00:35:15   And it's probably not permanent.

00:35:18   I don't think that tablets were a fad.

00:35:22   Yeah, I don't think so either.

00:35:24   I think what it was-- I've been thinking about this.

00:35:26   And I know this is a little bit of an aside

00:35:28   on this game of let's spend Apple's money.

00:35:31   - No, we're gonna spend Apple's money in a minute, so yeah.

00:35:33   - Yeah, if we didn't have a long digression,

00:35:36   it wouldn't really be the episode of the talk show.

00:35:38   - Absolutely.

00:35:39   - My gut feeling on the iPad sales stalling

00:35:44   is that in the early years where it was growing,

00:35:49   and this is what made me think

00:35:52   it was gonna be bigger than iPhone,

00:35:53   is in the first few years of iPad,

00:35:56   It's like iPads year one was bigger than iPhones year one,

00:35:59   and iPads year two was bigger than iPhones year two.

00:36:02   It never was bigger than iPhone,

00:36:04   but it was bigger than the iPhone in 27, 28, 29,

00:36:09   in years one, two, three of iPad.

00:36:11   And then it fell behind that curve.

00:36:13   And I think it's because the two markets

00:36:15   are entirely different.

00:36:16   The phone market is literally every person on the planet

00:36:20   who can afford a phone.

00:36:22   That's where we're headed,

00:36:24   is that however many billion people there are on the planet,

00:36:27   if they are in a country,

00:36:30   you have 100 bucks and you can afford

00:36:35   some monthly service charge,

00:36:37   you're gonna have a cell phone if you don't already.

00:36:40   So it's an enormous market.

00:36:42   It's almost capped by the number of people on the planet.

00:36:45   And I think the market for tablets

00:36:49   is really a sub-market of the PC market.

00:36:53   I think what it is is that it's really just part,

00:36:58   I think that the iPad is best seen as part of the PC market.

00:37:01   And what happened in the early years

00:37:03   is that the market was vastly underserved

00:37:08   by PCs, portable PCs that are simpler,

00:37:13   more portable, and get way better battery life.

00:37:19   Like the things that made the iPad the iPad

00:37:22   that it just sucked all the air out of the growth

00:37:26   in laptop sales, including Mac books for a while.

00:37:29   That the iPad style of portable computing

00:37:36   is just way better for so many use cases

00:37:38   than laptops are.

00:37:41   And that it had go-go growth

00:37:44   while it fulfilled that unmet need.

00:37:47   And then it just reached the point where,

00:37:50   everybody who really wanted one got one and they still work, you know, and that there's no then the second factor is that iPads

00:37:57   Continued, you know, two three four year old iPads continue to work

00:38:01   Just great for most people's needs and so they don't replace them every two years like they do a phone

00:38:06   So that's my that's my digression on iPad decline or growth decline

00:38:12   Yeah, I think that's right

00:38:15   You know, I'm not sure

00:38:18   You know, this is this is like an example where it's tempting to use your own personal

00:38:22   example

00:38:24   But I don't know how well, you know, so I still use it an iPad one every day to watch

00:38:30   video

00:38:32   in my house, but we're about to have to replace it because

00:38:36   Time Warner Cable is finally ending support for the their app

00:38:41   No, really for iOS 5 or whatever it runs. So

00:38:46   Maybe maybe Apple

00:38:48   Asked them to do that so that we would buy a new iPad

00:38:51   Yeah, my dad has an iPad one still and I wouldn't say he loves it because he's just not in the technology

00:38:58   But he swears he does not want a newer one. It's just fine. It's in perfect shape. But now Candy Crush doesn't run. Oh

00:39:03   Yeah

00:39:07   It's just like it crashes at a certain point and I'm sure it's big, you know, I said I probably

00:39:12   It's just the type of bug that slips in because I'm bet they don't test on the iPad one anymore

00:39:16   And now they're gonna get complaints about it and they'll fix it in the next update

00:39:19   But you just have to wait for them to update it. Yeah

00:39:22   But I've had one it the iPad one is sort of an exception to because there's a lot of things that have dropped support for

00:39:28   iPad one right but iPad two is effectively still on the market. It's because it's like the guts of that cheap

00:39:37   How the mini non retina mini is effectively an iPad - yeah, I have the cash registers at the coffee shops of America

00:39:45   So yeah, like if anything the opposite problem with iPad - where developers are going to be saddled with

00:39:52   Supporting that level of you know CPU and RAM

00:39:55   It's gonna be years and I you know

00:39:59   I think the fact that they're still I know a lot of people really complain about the fact that they're still selling that because it's you

00:40:06   You know, it's holding back that level of baseline support, you know, where you really

00:40:15   only have to support X number of years of iPhones going back.

00:40:18   iPad is sort of stretching that a lot further because they're keeping that iPad 2 level

00:40:25   of device around.

00:40:27   But on the other hand, I think it's a sign that in the real world, millions of people,

00:40:30   that's good enough.

00:40:31   Totally.

00:40:32   And I think maybe it just got a little ahead of itself.

00:40:37   Everyone bought a tablet, and then some people

00:40:40   bought two or three because they were getting better

00:40:43   or coming in at smaller sizes and that kind of stuff.

00:40:46   And now combine that with the probably longer, much longer

00:40:50   replacement cycle than a cell phone and a smaller market,

00:40:55   now we're seeing the results of that.

00:40:56   And maybe in a year or two, as people grow tired,

00:41:01   or as their current iPads become less useful,

00:41:06   they'll replace them.

00:41:07   I think a lot of it is on Apple to,

00:41:12   and I don't wanna repeat a million people

00:41:14   who've talked about this,

00:41:15   but is really on Apple now to further define

00:41:19   what the iPad is for.

00:41:21   And I think that they're starting to do that.

00:41:26   - Yeah, I expect it to grow sort of like the way the Mac has,

00:41:30   you know, like slowly but surely.

00:41:31   If they can keep it ahead of the market, which is central.

00:41:36   I mean, there's a lot of times when I talk,

00:41:40   I make the assumption that Apple's gonna continue thriving

00:41:45   and sometimes critics of my writing,

00:41:48   or just readers with thinking critically

00:41:52   So we'll point that out and assume that it's some kind of bias or that I think Apple is

00:41:58   magic and that they, you know, magically just no matter what they do, they're going to succeed.

00:42:02   It's all based on the fundamental assumption that they can keep doing what they've been

00:42:06   doing for close to 20 years which is making superior products.

00:42:11   Whether everybody agrees that they're superior or not, you know, some number of people have

00:42:15   seen their devices as superior in significant ways.

00:42:19   assuming they can keep doing that, I think they can keep growing.

00:42:22   So there is an assumption there.

00:42:24   But I think it's going to grow like the Mac, where the Mac is doing great the last few

00:42:27   years and it's growing in an overall shrinking market, but it's very slow growth compared

00:42:32   to the iPhone.

00:42:33   Yes.

00:42:34   All right.

00:42:35   So now I'm going to end this parenthesis and I'm going to say, "Okay, now you're Tim Cook

00:42:38   with $100 billion.

00:42:40   How do you spend it to keep making those products great?"

00:42:45   And it's not buying Twitter and Pinterest.

00:42:47   I think it's, you know, and I wrote this in my piece today, like what would be ideal is

00:42:53   if they could, if they had a year where they could just focus on making iOS and macOS and

00:42:59   all their software better, that's not feasible.

00:43:02   But if they could increase their engineering organization so that there were enough people

00:43:06   to A, build the new stuff they wanted to build and B, keep refining the old stuff, that that

00:43:14   would be a good use of money.

00:43:15   it's hard to hire engineers and they're having to open up new offices and other places to do that

00:43:20   kind of thing. But that's where I'd like to see Apple spend their money. Right. And then there's

00:43:25   the whole mythical man month factor where you can't even if you can get more good engineers,

00:43:33   you can't solve individual projects problems just by throwing more engineers at them. True. More

00:43:39   engineers would definitely help. I don't think there's a single company in technology today

00:43:44   That's not doesn't feel talent starved. I really don't I mean, I think it's I think it's universal Google

00:43:52   Apple Microsoft

00:43:55   Twitter any of those companies Facebook any of those companies, you know for everything I've seen is that the you know

00:44:02   The recruiting market is as more to add as tenacious or more tenacious than it's ever been

00:44:07   But it's not about throwing more people at the same projects

00:44:11   it's having more people to spread into, you know,

00:44:14   the size of a team is not gonna grow,

00:44:16   but it's being able to have more teams.

00:44:18   - Yeah, right.

00:44:20   So maybe Apple should buy one of those coding schools.

00:44:22   There you go.

00:44:23   No, I just like, you know, and I've been watching,

00:44:30   you know, I've been using Apple products

00:44:31   for 25 years now or more, and you know,

00:44:34   nothing was ever perfect, but it does certainly feel now

00:44:37   like there are some holes in the products I use every day where you know nothing is really really

00:44:45   bad but it's it could be better to be stretched a little thin yeah I think and that they've you know

00:44:51   I and maybe that's a good thing maybe in the grand scheme of things if you can't achieve perfection

00:44:58   and you you know and let's just assume you know it's human nature that nobody's perfect

00:45:03   it's a little better to err on the side of going too fast

00:45:07   than to err on the side of going too slow.

00:45:10   Totally, right?

00:45:10   That you wanna be on that too fast side

00:45:14   and not the too slow side.

00:45:16   And I think what we've seen in the last year

00:45:20   is that Apple's being a little too fast

00:45:22   is they're a little too far away from that optimal line.

00:45:26   Things like all the continuity features and stuff like that.

00:45:30   Most of them work great,

00:45:31   but none of them feel quite to me like perfect.

00:45:36   Like one thing that has definitely changed

00:45:39   my daily computing is,

00:45:41   'cause I'm especially between phone and Mac in the house,

00:45:46   I'll go downstairs and get more coffee

00:45:49   and I'll take my phone out and I'll see something.

00:45:52   And now, ooh, I wanna link that on during Fireball.

00:45:54   And I used to do something like send it to Pinboard

00:45:58   and come up to my Mac and load Pinboard and do that.

00:46:00   Now I use AirDrop.

00:46:01   I AirDrop to myself every day, multiple times.

00:46:04   And usually it's perfect.

00:46:06   You just say share, there my other device shows up

00:46:10   on AirDrop and I tap it and a second or two later it's there

00:46:13   and then I don't have like an extra bookmark in Pinboard

00:46:17   that I really didn't want there permanently

00:46:19   to do something with.

00:46:20   There's no, I don't know what you would call it,

00:46:24   digital detritus left over.

00:46:26   It's great.

00:46:27   But then there's sometimes where I'm right there

00:46:29   next to my Mac with my phone and I go to AirDrop

00:46:31   and my Mac just doesn't show up.

00:46:33   And I haven't turned Bluetooth off or anything like that.

00:46:35   Just doesn't show up.

00:46:37   - And this is my experience as well.

00:46:39   And it's most frustrating because I don't know

00:46:43   why it's not working.

00:46:44   And then it seems like I'm not in my own contacts file

00:46:50   or something like that so I have to change

00:46:52   the AirDrop settings to share with everyone

00:46:55   and not just contacts.

00:46:57   but it should know I'm me because I'm the same,

00:47:01   I don't know how it knows I'm me or not.

00:47:03   - I've seen some people write

00:47:04   that it really doesn't work well for them at all.

00:47:06   For me, I would say it works at least 95% of the time,

00:47:09   maybe more.

00:47:10   - I'm like in the 25% range.

00:47:12   And maybe I just need to let loose with the permissions

00:47:17   and let it share with everyone.

00:47:18   But even just trying to sync with my own Mac

00:47:20   or with my wife's iPhone,

00:47:24   where we're definitely in each other's contact files,

00:47:26   It still never wants to find them when we wanna use it.

00:47:31   - Another example, I mean, it's not a new 2014 thing.

00:47:35   It's actually a little bit older,

00:47:36   but I mean, don't even get me started on my experience

00:47:38   with iTunes match, which it's just, I don't know.

00:47:43   My wife had it turned on too,

00:47:46   and it's like, we got our new iPhones a couple months ago,

00:47:50   and it's like, she was just pissed.

00:47:53   She came back from the gym the one day,

00:47:54   And she, at one point, she had the new phone

00:47:56   and she had all of her music and it was on the phone,

00:47:59   'cause it was the sort of thing with the new phone

00:48:01   that she would have checked before she went to the gym

00:48:02   the first time to listen to music.

00:48:04   She had it and she listened to music.

00:48:06   And then like the next day, she got to the gym

00:48:08   and her phone had no songs, zero,

00:48:09   just no songs, they're just gone.

00:48:11   - That's, yeah.

00:48:12   Well, I just did something immensely stupid,

00:48:16   which was I put a new hard drive in my iMac

00:48:20   and tried to start from scratch,

00:48:22   But my iTunes, of course, through iTunes match

00:48:25   already had all the metadata for all my songs in it.

00:48:29   So instead of trying to download them all

00:48:31   from Apple servers, I dropped the music folder

00:48:35   on top of the iTunes icon in the dock

00:48:38   to theoretically re-associate all those song files

00:48:43   with the app.

00:48:46   And then it duplicated everything in the listings.

00:48:50   And I'm like, oh shit, now I have two copies

00:48:52   of every song, I'm gonna have to figure out

00:48:54   how to go through and unduplicate it.

00:48:57   And I tweeted something to that extent,

00:48:59   and people were like, "Oh, don't mean,"

00:49:01   you know, that kind of stuff.

00:49:02   And then, you know what's so funny?

00:49:03   I came back the next day, and it had totally fixed itself.

00:49:07   Like, nothing was duplicated.

00:49:09   So I have no idea how that worked,

00:49:11   but it actually worked.

00:49:13   - Some of these features are supposed to be,

00:49:16   like AirDrop, I don't even know quite how it works.

00:49:20   I know it's some combination of Bluetooth and WiFi,

00:49:22   and those invisible Wi-Fi networks

00:49:25   that don't show up as Wi-Fi networks.

00:49:27   But it's encapsulating a lot of complexity

00:49:30   to make all the handshaking,

00:49:32   and then it presents itself in a very simple interface.

00:49:35   But it's gotta be bulletproof.

00:49:36   It's gotta be that if this device A and device B

00:49:39   are clearly within range of each other and they're both on,

00:49:42   it should be every bit as consistent

00:49:45   as when you open the Finder and you go to your home folder

00:49:50   that your home folder has all of your stuff in it, right?

00:49:53   Every time you go to the finder

00:49:54   and you go to your home folder,

00:49:56   the connection between OS 10 and the files

00:50:00   on your hard drive, it's 100% consistent.

00:50:05   Like AirDrop has gotta get that good.

00:50:07   - Right, it should feel like magic.

00:50:09   And that's where I'd rather see Apple invest

00:50:12   in kind of perfecting that.

00:50:16   And I'm sure it's tricky.

00:50:17   Bluetooth for years seemed like it was just a joke of a technology and it seems to have

00:50:23   gotten better more recently.

00:50:25   It's definitely, definitely gotten better at battery life.

00:50:28   The Bluetooth low energy is aptly named.

00:50:32   It's, you know, because I used to never keep Bluetooth on.

00:50:34   I always turned it off.

00:50:37   The only thing I really could have used it for, well, we have speakers that are Bluetooth,

00:50:41   but I didn't use them.

00:50:43   and then my car, you can connect it to the car so you can get your calls through the

00:50:48   thing. But it was such a hassle to remember to turn Bluetooth off before I got in the

00:50:52   car that I never did. And if I left it on, which I always would, if I did remember to

00:50:56   turn it on, I would forget to turn it off when I got out of the car. And I'd be like,

00:51:00   "Geez, I didn't even use my phone for a while. Why did the battery life drop?" And

00:51:02   it's because I had Bluetooth on. But it doesn't, you know. Now it just seems like

00:51:05   you can leave Bluetooth on your phone and it's good.

00:51:09   I would say the biggest thing that Apple could do with the amount of cash that they have

00:51:13   is focus it on ways that give them competitive edges that can't be matched by anyone else

00:51:24   or by as few other companies as possible.

00:51:29   Because I think that's the key to their success for 20 years is that they've had design chops

00:51:35   that couldn't be matched.

00:51:37   um and arguably still aren't right and but focus on more and more of those things i think that the

00:51:44   whole sapphire debacle in arizona was an attempt at that yes and they botched it and i think you

00:51:51   know the idea was that um they were going to work out a deal with uh what was that company uh i don't

00:51:59   remember but yeah well you know they worked out a deal where they were going to uh you know supply

00:52:05   the capital to create an unheard of number of sapphire furnaces and they would have the right

00:52:11   to buy as you know the you know all of the sapphire that the facility produced which if it

00:52:17   had worked or if they can somehow salvage this and it does eventually work they'll have something that

00:52:23   nobody else will have nobody else you know Samsung won't be able to make a phone you know in in in

00:52:29   quantity with the sapphire display because there won't be anywhere in the world to buy them I think

00:52:34   it's a perfect example of the sort of thing that Apple should be doing with its money.

00:52:38   Yeah. And it's something that Apple can do now that it couldn't do in the old days before they

00:52:42   had this giant massive sum of cash, you know, in 2002 2003, Apple didn't have the ability to spend

00:52:50   10 or $20 billion on x because they didn't have 10 or $20 billion sitting in a bank account.

00:52:56   Right. And instead, they famously like negotiated just crazy great terms on, you know,

00:53:02   deals with suppliers and buy out all the flash or whatever right but now they're in a position to bankroll the

00:53:10   creation of an entire new

00:53:12   Basically industry. I mean this by the way, the company is called GT advanced technologies and

00:53:18   The stat that I found crazy is that Apple already is

00:53:23   using

00:53:25   1/4 of the entire world supply of sapphire just for the iPhone camera lens and fingerprint reader

00:53:32   and that was the Wall Street Journal.

00:53:33   So--

00:53:34   - And they've already promised that the top two tiers

00:53:38   of Apple Watch are gonna have Sapphire covered displays.

00:53:41   - Right, so that's a crazy amount of the market

00:53:44   that they already control for these two tiny components,

00:53:48   granted on hundreds of millions of products,

00:53:50   but you can imagine now,

00:53:53   take those hundreds of millions of iPhones

00:53:54   and multiply the Sapphire by whatever,

00:53:57   20 or something like that,

00:53:59   and you literally are creating an entire new market.

00:54:02   And that's what you could do with

00:54:04   when you have $100 billion.

00:54:06   - Secondary digression is on the Sapphire thing.

00:54:10   And one of the things I've been thinking about lately

00:54:12   is one of the things that's come out of the court filings

00:54:15   with the bankruptcy of GT advanced technology

00:54:17   is that we now know what we suspected all along,

00:54:20   but we know for sure now that at some point,

00:54:23   Apple had hoped to use Sapphire in this year's new iPhones

00:54:27   for the displays, not just for the camera back.

00:54:30   That if everything had gone perfectly,

00:54:33   or at least according to plan,

00:54:34   or some measure like that,

00:54:36   Apple, the iPhone 6 and 6 Plus would have Sapphire displays.

00:54:40   And they don't.

00:54:43   Which makes me wonder how much,

00:54:47   whether they're now, the fact that GT Advanced failed,

00:54:50   whether they're in trouble now

00:54:53   with the Sapphire displays for the watches.

00:54:57   - Ah, huh.

00:54:58   - And not that they would have to change it,

00:55:00   'cause they've already promised that they're coming out.

00:55:02   I would be shocked if they switched to glass

00:55:06   for the addition in the stainless.

00:55:09   But I'm wondering if we might not see

00:55:12   one of those Apple launches where, you know,

00:55:15   midnight everybody's madly clicking,

00:55:18   and you know, by like 12, 15 Eastern,

00:55:21   or I guess they go on sale Pacific, I don't know.

00:55:23   But 15 minutes after the pre-orders go online,

00:55:27   people are already seeing quotes of four to six weeks.

00:55:30   And the next day, you're already seeing

00:55:34   six, seven weeks estimated delivery.

00:55:37   - Oh yeah, that could be. - And not necessarily

00:55:38   because it's so many people buying them,

00:55:40   but because it's the Sapphire,

00:55:42   if they were banking on GT advanced technology,

00:55:46   the Sapphire might be a significant constraint.

00:55:49   Just a hypothetical. - Right, both in,

00:55:50   - Yeah, in supply and maybe even in price.

00:55:53   Although at this point they'd probably eat the money

00:55:58   and make the watches, I have no idea.

00:56:01   - Yeah, but I'm not-- - I'm not Tim Cook,

00:56:03   so I don't know. - Yeah, exactly.

00:56:04   I think that this is the sort of thing though

00:56:06   that Tim Cook is the best in the world at, at least so far.

00:56:10   But the other thing that I thought

00:56:11   that I'm probably wrong about that,

00:56:13   that the Sapphire will be a significant gating issue

00:56:16   on production is that they're gonna need

00:56:18   lot less sapphire for Apple watch than they would have for the phones because

00:56:23   the phones are you know how many did they sell in the holiday quarter how

00:56:26   many they expected to sell this holiday quarter I don't know but I'm gonna make

00:56:30   up a number and say 50 million yeah and figure maybe 30 to 40 million of those

00:56:35   are iPhone 6s right so something yeah could be yes to say at least 30 million

00:56:39   iPhone 6s which are bigger and in the case of the 6 plus a lot bigger than the

00:56:46   Whereas the watch, you know, nobody knows how many

00:56:49   they're gonna sell, but especially in the more expensive

00:56:51   stainless and addition levels.

00:56:53   - Right, it's not 30 million in a quarter.

00:56:55   - And it's not a five inch display.

00:56:59   - And we're not gonna be told how many they've sold.

00:57:02   - No, which is true.

00:57:04   - Yeah, so yeah, that's a great example.

00:57:08   Another one which they did do is test flight.

00:57:10   I mean, I think that's the sort of thing

00:57:13   that they actually probably know they should have done sooner

00:57:16   and probably were just being snobby about it.

00:57:20   Why are all these developers using TestFlight

00:57:22   when they should be using our built-in drag and drop

00:57:25   email attachment app testing system?

00:57:28   So anytime you see a bunch of app developers

00:57:33   jumping onto a third-party tool like that,

00:57:36   just pick it up.

00:57:37   I mean, they've certainly tried to build a few of them.

00:57:42   like CloudKit, which I haven't used,

00:57:45   is very similar to Parse, which I do use,

00:57:48   which Facebook owns.

00:57:50   That's the kind of thing that they should just keep an eye

00:57:53   on for that kind of stuff.

00:57:55   And none of those are billion dollar deals.

00:57:57   Those are all much smaller.

00:57:59   - I think manufacturing in general is a big deal.

00:58:01   And I can't help but wonder if,

00:58:05   this is another purely hypothetical,

00:58:07   but we know that they're building

00:58:10   like the Mac Pros in the US or assembling them.

00:58:13   And if they have grand plans to shift more and more

00:58:18   of their assembly to the United States,

00:58:21   which if they do, my guess would be that it would be more

00:58:26   along the lines of robotatizing the assembly line.

00:58:31   'Cause if you ever look like this, you know,

00:58:33   it was surprising to me, like when we first started

00:58:35   getting behind the scene looks at Foxconn

00:58:38   and how phones are assembled and iPads are assembled

00:58:40   and how much of it is just done by hand,

00:58:42   by just people at a bench putting these pieces together.

00:58:47   I think if they brought that to the United States

00:58:51   to make it cost effective,

00:58:52   it would probably not be like a bonanza

00:58:54   of manufacturing jobs.

00:58:56   It would probably be about figuring out a way

00:58:58   to robotatize the assembly.

00:59:00   And then they could bring it internally,

00:59:02   and they'd have these roboticized assembly lines

00:59:06   that no one else in the world would have, right?

00:59:08   Like Foxconn gains the ability to do X,

00:59:12   then anybody who uses Foxconn gets the ability to do X.

00:59:16   - And Foxconn itself too.

00:59:18   - Exactly, which is--

00:59:19   - I'm a little surprised they have not been

00:59:20   more competitive already.

00:59:22   - Right, and for example, just look at the Nokia tablet

00:59:26   that looks as like a iPad mini lookalike,

00:59:30   and it's every, you know, drilled aluminum, all this stuff.

00:59:33   It's really like a relabeled Foxconn product.

00:59:36   it's a Foxconn tablet that Nokia is putting their name on.

00:59:40   Where do you think Foxconn learned to make a tablet

00:59:42   that looks like that?

00:59:43   Well, they learned it from Apple.

00:59:44   You know, I don't think it's any coincidence that Samsung,

00:59:49   which makes a lot of components,

00:59:52   and until recently made all the CPUs for the iPhone

00:59:55   and iPad, you know, got better at making cell phones

00:59:59   after they, you know, worked with Apple on that.

01:00:02   So I wouldn't be surprised to see that.

01:00:05   to me would be an interesting way for Apple to spend money. And I think the GT Advance deal

01:00:09   was a sign of that. It's not just about materials, but maybe assembly in general. But maybe for some

01:00:15   reason, why did they do the whole thing with GT Advance instead of Apple just making and owning

01:00:22   their own Sapphire furnace? I don't know. For some reason, they seem resistant to...

01:00:25   They want to decrease the risk. And then if they fail...

01:00:29   - And if you looked at the court filings on the terms,

01:00:32   like boy did they ever decrease the risk.

01:00:35   It's crazy how basically Apple has complete control

01:00:40   over everything and GT basically can't do anything.

01:00:45   - Right, and GT's court filing was kind of pathetic

01:00:49   'cause they made us this offer that was horribly unbalanced.

01:00:54   And everybody's like, wow, Apple's really mean.

01:00:56   There was even a phrase where they quoted a guy

01:00:58   that in a phone call, a guy from Apple told them

01:01:01   to put your big boy pants on.

01:01:02   - Yeah.

01:01:04   - It was a very dismissive,

01:01:07   but my take on that is it wasn't like GT Advance

01:01:09   had to say yes to this, they agreed to all of it.

01:01:12   - Right.

01:01:13   - It's sort of like unsaid in their filings is,

01:01:15   well, of course we said yes, because if it worked out,

01:01:17   look at how much money we would have made.

01:01:19   - Totally.

01:01:20   - Right?

01:01:21   - Yeah.

01:01:22   Meanwhile, there's a $50 million NDA penalty.

01:01:25   - Yeah, that was an interesting thing that came out of it.

01:01:27   - Yeah, 15, and it was, and it got worse

01:01:30   like for subsequent ones.

01:01:31   - Yeah, it's great.

01:01:32   - One thing I've noticed, and if you look at the list

01:01:35   of suppliers and stuff that we know about Apple Watch,

01:01:40   it's a different list than that makes iPhone and iPad.

01:01:44   Just like the component makers,

01:01:47   it's coming from a lot of different companies.

01:01:49   And I can't help but think that's because Apple

01:01:51   is dissatisfied with their manufacturing partners

01:01:54   for those things because of all the rampant leaks

01:01:57   - Could be, yeah.

01:01:58   - Yeah, in a way that competing products

01:02:01   seem to be piggybacking on their innovations.

01:02:03   So I think that the one thing they could do

01:02:05   with their resources now is try to make those things,

01:02:10   something that they own.

01:02:13   I think an interesting example of that already,

01:02:18   I would say are the A-series systems on a chip,

01:02:23   which it's like they've turned the whole we use different CPUs than the standard components

01:02:32   that everybody else does thing on its head.

01:02:34   In the old days when Apple was on Motorola 68,000 chips and later PowerPC chips and the

01:02:41   Wintel industry was on x86 Apple was selling in lesser quantities and they could never

01:02:47   the quantities were never enough to keep up right.

01:02:50   There's no way for Motorola and IBM and the partners that were making PowerPC chips to

01:02:56   really sustain the advances that were necessary to keep up with Intel because the numbers

01:03:03   just weren't there.

01:03:04   And Apple couldn't have had no resources to do it on their own.

01:03:07   Whereas now, by making these wildly popular, massively selling devices that are using these

01:03:13   chips they're getting the economy of scale advantages with their A5 series, you know,

01:03:20   A6, A7, A8.

01:03:23   And by all accounts, you know, like at a non-tech in those places, faster and far more power-efficient

01:03:28   chips than the Snapdragon's that everybody else is using.

01:03:31   And they, you know, they're not sharing.

01:03:34   Nobody else gets to make a phone with these amazing systems on a chip.

01:03:38   How can they do more things like that?

01:03:40   Yeah, and so there's a hardware element to that and then there's a software element and

01:03:45   I think a lot of people and a services element too. I mean what can you know, I

01:03:51   Keep coming back to iCloud and I'm trying to think like bigger picture is is iCloud a success so far and there's you know

01:03:59   There's a lot of griping about little things here and there. I think it is sort of a success

01:04:04   I mean, you know, it backs up my phone every night and I don't even think about it

01:04:09   And it seems like they they're trying to do more with it

01:04:12   But that's the kind of thing where you know that could that could easily be a huge advantage over

01:04:18   over everyone else like

01:04:21   You know

01:04:23   Just back people stuff up. You know make sharing super easy

01:04:26   That's gonna be hard to be a it should be it should get better and they should keep I think it is

01:04:32   I think it's quietly getting a lot better

01:04:34   I think that they're nibbling at the problems around the edges

01:04:36   But it's never gonna be a sustaining advantage.

01:04:39   It'll be as a lock-in advantage where once you're there

01:04:42   and your backups are already there,

01:04:44   it's a lot easier to just buy an iPhone

01:04:45   and have your backup restored to the new iPhone

01:04:48   than it is to switch to Android.

01:04:50   But it's not really that big of a competitive advantage

01:04:53   because Google stuff is so good at those things.

01:04:56   That you're--

01:04:58   - Yeah, Google like, yeah, Gmail and Google Calendar

01:05:00   and Google Hangouts are really good,

01:05:02   but I don't know if Google Drive is really catching on

01:05:05   or anything like that.

01:05:06   So I don't know, anyway.

01:05:10   - Right, I think that Apple has a better chance.

01:05:12   I think that cloud stuff in general,

01:05:15   the best that they can hope for

01:05:17   is to be as good as the state of the art.

01:05:19   - Right, and I think a lot of the,

01:05:20   actually a lot of the people saying

01:05:22   that they should buy all these companies are saying,

01:05:24   oh, they'll learn how to be better at the cloud

01:05:26   if they own Twitter or Pinterest or something like that.

01:05:30   And I mean, there was probably a point

01:05:33   where I used to think that,

01:05:34   I don't think that would help right now.

01:05:35   No, I don't think so.

01:05:36   No.

01:05:37   No, I don't think that the problem is fundamental, just generic cloud.

01:05:41   I think the problem is just specific problems.

01:05:43   Yeah.

01:05:44   Yeah, and Pinterest, him saying that they should buy Pinterest, I mean, Pinterest is

01:05:47   a good company and they're doing interesting things, but it doesn't make any, again, the

01:05:52   same thing with Twitter.

01:05:54   I just don't see how that gives Apple any advantage in what they do.

01:05:59   If they think that Pinterest is a good investment today, it would make far more sense for like,

01:06:05   What's that come brayburn capital, you know the secretive Nevada company that that controls apples?

01:06:11   Investments, you know

01:06:15   Some of this stuff they do do, you know with the cash

01:06:17   You know, it would make sense for brayburn to just buy stock in Pinterest and just you know

01:06:23   Think it you know, they don't make money on it, but rather than have Apple buy them and control them

01:06:30   Yeah, well next time talk to em next time you talk to mg ask him if if he were running Apple ventures instead of

01:06:37   Working at Google Ventures what he'd be?

01:06:40   Doing with that hundred bill. Yeah

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01:09:33   All right.

01:09:34   What else do you want to talk about today?

01:09:36   Oh, well, something I want to talk to you about for a while, and that's the idea of

01:09:42   institutional taste.

01:09:43   I think this might be a group or term, I'm not sure.

01:09:46   But I've been thinking about it,

01:09:48   and as I've been kind of taking a look at companies

01:09:52   this year and writing about them at Quartz,

01:09:55   and I'm curious about a bunch of things,

01:09:59   but I guess first, how do you define institutional taste?

01:10:04   - I would say it's almost like a cultural value,

01:10:08   like a shared cultural value,

01:10:11   that you see things the same way

01:10:13   and you value things the same way.

01:10:16   One of the points, like a recurring theme in my work

01:10:20   in recent years is the idea that,

01:10:23   it's not just what your priorities are,

01:10:27   your top three priorities,

01:10:28   but it matters what order those top three priorities are in.

01:10:31   It matters which one you can say that you value.

01:10:40   just pick, you know, material. The materials you use, the shape and the weight. Or like

01:10:48   with Apple, like they value thinness, they value weight, they value battery life, they

01:10:54   value elegance, they value how it feels. But it's clear that Apple institutionally values

01:11:02   thinness and weight more than they value battery life because otherwise they you know they've

01:11:11   I here's here's my old iPhone 4 right here by my desk which is you know I think when

01:11:19   it came out was billed as being the world's thinnest phone and if it wasn't it was pretty

01:11:23   darn close and it's just a couple years ago so and you know if they valued battery more

01:11:29   than thinness, I think that today's iPhone 6s would be maybe not as thick as the iPhone

01:11:34   4, but they'd be thicker than they are and they would have used that thickness to put

01:11:38   more battery in there. It just matters what, you know, which order those priorities are.

01:11:45   Not that they don't care about battery life, but they obviously value thinness and weight

01:11:48   above that. I think institutional taste, that's just a sign of it and it propagates that it's

01:11:54   people who share those values and that taste that are drawn to work at the company and the company

01:12:00   recruits people who share those values and then it you know it it sustains itself i think it tends to

01:12:09   and and i'm sure you know and obviously like this is something that apple excels at you know whether

01:12:16   whether we can really define it or not or really um you know kind of explain everything that it

01:12:21   applies to this is kind of a pro-apple argument to be made. Are there other companies you see that

01:12:28   you think have good institutional taste? I know we can name a bunch that have bad, you know,

01:12:33   historically have had bad taste. Are there others that you think have good taste?

01:12:39   Tom Bilyeu: I think Google clearly does and I think that's why they have as rabid of fans as

01:12:47   Apple does but that they tend to be different people.

01:12:51   Most people who truly say they love Google either are ambivalent about Apple or they

01:12:56   have mixed feelings about Apple.

01:12:58   Probably mixed feelings is more common where they probably do use a MacBook.

01:13:01   A lot of them use MacBooks but that they feel more affinity for Google.

01:13:06   But Google's good taste is in things like simplicity and minimalism.

01:13:12   I mean, I think the fact that if you just go to Google.com and what you see on that

01:13:19   page here in 2014 is so close to what you saw back in 2002 or whenever, when Google

01:13:30   was a beta at Stanford, where it's just a box and two buttons.

01:13:35   And I mean, look at how much minimal crap they've added there.

01:13:40   And for all that we complain about Google and the advertising that they do, that they've

01:13:44   still resisted the urge to really put advertising on that homepage, that they still only show

01:13:50   it on results.

01:13:51   Imagine what they could charge for just one ad, something like the deck, just one thing

01:13:57   up in the corner on that page.

01:13:59   Imagine what they could charge, and they don't.

01:14:01   And I think it's a sign of Google's taste.

01:14:05   Do you think so – and I'll just throw this out there.

01:14:08   think that historically a company with bad taste has been Microsoft, which shows in everything from

01:14:16   their kind of visual design to the awkwardness of their stage presentations to product decisions and

01:14:25   all that kind of stuff. But I've actually been surprisingly, I guess, surprised at how...

01:14:33   I've been like their files even little things like their file formats like old versions like when you read how when somebody's backward

01:14:40   Engineered an old version of work, you know the word doc file. Yeah, it's so con it's just horrible

01:14:47   It's just it nobody would design a file format like that and if they had taste

01:14:52   Yeah, I don't and I don't know if it was satire

01:14:54   but like the Microsoft Bob logo is pretty much like emblematic of

01:14:59   Yeah of Microsoft

01:15:01   It seems like it's getting a little better. I don't know maybe you know, they're making some smart decisions now

01:15:07   Can this taste be taught or changed or is it you know in any sort of?

01:15:15   Timeframe that would matter or is it the kind of thing that's kind of too deeply ingrained in a company that to change I

01:15:22   Think you have to go through some sort of

01:15:25   Stressful transition to change and I think that's what we're seeing with Microsoft. I think you know

01:15:31   and it's even bubbled up to the point where,

01:15:34   not that, I don't think he got forced out,

01:15:37   but it's pretty close.

01:15:39   It's about as close as you can get to forcing out a CEO

01:15:42   of a wildly profitable major corporation, right?

01:15:47   I mean, and without any sort of impropriety

01:15:52   or anything like that, nobody accused Ballmer

01:15:54   of any kind of fiscal impropriety or crimes

01:15:58   or anything of the sort.

01:16:00   It was really, honestly, I think it really,

01:16:03   eventually his lack of taste caught up with him

01:16:05   and the market had moved on, right?

01:16:08   And so I think Microsoft is going through

01:16:10   that sort of transition and we definitely see it, I think.

01:16:13   I mean, it's Windows, the new version of Windows,

01:16:17   the stuff you see on the surface is,

01:16:20   it's absolutely positively not a copy of iOS

01:16:25   and it's good.

01:16:28   I don't think I would prefer it, I really don't.

01:16:30   It's been a long time, it's been a couple years

01:16:32   since I tried living with Windows Phone.

01:16:34   But I don't think it's to my liking.

01:16:37   But it certainly is, and it's in,

01:16:39   wherever it ranks in the world of OS design right now,

01:16:43   it certainly shows a taste that Microsoft

01:16:45   never had in the old days.

01:16:47   - Yeah, and at the same time, we've gone from a company

01:16:50   that used to say, oh, why would anyone

01:16:53   buy their kids an iPod to, hey, we've got Office for iPad,

01:16:58   or why would anyone buy their kids an iPod or whatever.

01:17:00   - Right.

01:17:01   - To now there's Office for iPad

01:17:03   and they're integrating Dropbox into PowerPoint

01:17:07   and all this kind of stuff.

01:17:08   And it seems really, I don't know,

01:17:12   maybe it's too short a timeframe,

01:17:15   but I'm a little excited about what I see there.

01:17:20   - I would go so far as to tie it together

01:17:23   with the first half of the show

01:17:25   and say that it's actually not even so much about taste,

01:17:28   but that Microsoft is institutionally backing away

01:17:31   from the view that they can do it all themselves

01:17:34   and that they should do it all themselves.

01:17:36   Like the Microsoft at its peak of industry dominance

01:17:41   did everything other than the hardware.

01:17:43   And they really kind of defined PC hardware

01:17:48   in a way that they, without making any PCs themselves,

01:17:52   they had enormous influence on it.

01:17:55   But they literally did everything.

01:17:56   They wrote their own operating system.

01:18:00   They wrote all of the major apps for that operating system.

01:18:04   They had their own developer tools.

01:18:07   They had their own eventually like with C#, their own developer and Visual Basic, their

01:18:11   own languages.

01:18:14   They went their own way in a route that it was just unprecedented and that nobody else

01:18:20   has ever really tried to do again.

01:18:22   And this is where I tie it with the first half of the show is to me the warning sign

01:18:27   for Apple like the biggest canary in the coal mine as we you know how is Apple ever you

01:18:33   know going to you know what am I looking for to see if Apple is maybe starting to lose

01:18:37   their edge are signs of hubris right I think that's the word that Microsoft had and that

01:18:42   that that's the today's Microsoft doesn't have that anymore like and all like all those

01:18:47   things you just listed you know where they're advertising the iOS apps they're

01:18:54   integrating with Dropbox I just saw I think the other day this week where now

01:18:59   that you can do they have a thing where they're running on Google's cloud

01:19:03   service oh yeah right you can run exchange and you know run Windows

01:19:10   servers and Google's cloud all of those things are signs that they now they're

01:19:15   they're off of that, you know, Microsoft only all the way down the stack.

01:19:22   And I guess we should also disclose they've also, you know, sponsored your

01:19:27   podcast and your app. Yeah, yeah, yeah. Which, you know, totally, exactly.

01:19:31   That's a good point. No, absolutely. Yeah, and I tell you the fact that Azure and

01:19:37   all the window, you know, all their cloud-based services are

01:19:40   are absolutely positively not designed as cloud services

01:19:44   for Microsoft client devices.

01:19:46   They are designed as cloud, what's the word, agnostic.

01:19:51   - Yeah.

01:19:53   - You know, they're just good cloud services.

01:19:55   - Yeah, so I'm very interested to see

01:19:59   what some of the most, you know, balmy Microsoft stuff,

01:20:04   what happens to that, like those stores

01:20:06   that were kind of crappy ripoffs of Apple stores.

01:20:09   You know, what happens to those now?

01:20:12   That kind of stuff.

01:20:14   But we'll see, it's only been less than a year, so.

01:20:18   - I'll tell you a company who I think

01:20:19   has a bad institutional taste is Amazon.

01:20:23   - Oh yeah, oh yeah, totally.

01:20:24   - Really, really bad taste. - You know what,

01:20:25   and I think that's what,

01:20:27   that's exactly what inspired me to ask you about this,

01:20:30   was thinking about that phone, man.

01:20:33   That Amazon phone. - The Fire phone?

01:20:36   - Oh yeah.

01:20:37   - Did you ever use one?

01:20:38   No, I haven't yet.

01:20:39   Yeah, I haven't either.

01:20:40   But boy, the reviews were bad.

01:20:43   And now that it's been on the market for a while,

01:20:45   and I've seen a little bit more random--

01:20:48   a few random people who just picked one up on a lark,

01:20:51   it's even worse.

01:20:54   The things I've seen from people who aren't gadget reviewers

01:20:58   from The Verge or whatever site, people who just review

01:21:02   a lot of phones, where the Fire Phone was, in my opinion,

01:21:05   very poorly reviewed in general.

01:21:07   But the just real people who don't do it,

01:21:09   who just bought it to see what it's like,

01:21:11   really just scorched it.

01:21:12   It's bad in every way.

01:21:15   - And it's funny because I like Amazon as a service.

01:21:19   Like I probably spend more money on Amazon

01:21:21   than any other place besides my,

01:21:25   whoever owns my apartment building.

01:21:27   But just the, they've never had a good looking website.

01:21:32   All their hardware stuff just screams out,

01:21:34   either we're just doing this to do it,

01:21:37   or we don't really care that much

01:21:39   about how good it is to use.

01:21:41   The scathing reviews of the Kindle,

01:21:45   the newest Kindle saying,

01:21:47   "Look, this is supposed to be

01:21:48   "the top-end e-reader in the world.

01:21:51   "Why don't you treat it like that?"

01:21:53   - They've never had good page turning on a Kindle, ever.

01:21:56   It's the most astounding thing

01:21:58   in all of consumer electronics.

01:22:01   And it's not astounding that the first one

01:22:03   or the second one, or maybe even the third one,

01:22:05   didn't have great page turning.

01:22:08   But it's astounding to me that it really has never gotten

01:22:11   just iteratively better year after year.

01:22:13   And at this point, after seven or eight years on the market,

01:22:18   that they don't have page turning down is crazy.

01:22:21   - Or even like justifying the text,

01:22:24   forcing it to be fully, the full width of the screen

01:22:29   and not letting you left justify it.

01:22:31   - I just, I wrote about this a few weeks ago.

01:22:34   It's a solved computational problem.

01:22:36   It's not easy, but it's solved,

01:22:38   and there are even open source solutions to it.

01:22:40   Tech, the T, lowercase e, capital X,

01:22:45   typesetting system that Donald Knuth created

01:22:48   back in the '70s.

01:22:52   There's an open, I linked to an academic paper

01:22:56   that one of his students wrote in like 1980

01:22:59   that just, and it's not, it's a solved problem.

01:23:03   to do proper justification without unseemly gaps between words and with

01:23:11   intelligent use of hyphenation. It's a solved problem and yet they don't do

01:23:15   it in the Kindle. It's crazy. Yeah well I have good fonts they don't you know the

01:23:21   font selection is atrocious and it's not like it's not like having good

01:23:26   fonts and good line you know layout isn't a core part of what the device is.

01:23:32   It's the whole point of the device.

01:23:35   - Yeah, exactly.

01:23:36   - It would be like if the iPods

01:23:38   didn't really have good music playback.

01:23:40   - Right, yeah.

01:23:41   Although maybe some argue that they didn't,

01:23:43   but still, if you're trying to make the best reading device

01:23:47   in the world, which I guess they're not,

01:23:49   they would certainly act more like it.

01:23:53   Or maybe they're doing the best they can,

01:23:55   which is where the institutional taste comes in,

01:23:57   is just that they don't.

01:23:59   The difference is that most people view a book as a string.

01:24:07   You know what I mean?

01:24:08   Like in programming terms.

01:24:09   That it's a string of text and that if you review somebody's novel, it doesn't really

01:24:15   matter what.

01:24:17   I've never seen, and it just indicates what I'm obsessed with, but I've never seen a book

01:24:23   review that includes a review of the layout of the book.

01:24:26   Whereas if I reviewed a book, I'd be tempted to do that.

01:24:31   To me, clearly it's not the main reason you read a novel.

01:24:34   I guess in general, I would rather read an interesting, well-written novel that's poorly

01:24:39   typeset than read a terrible novel that is beautifully typeset.

01:24:44   Of course, that's the difference.

01:24:47   Even me, as somebody obsessed with typography, would agree with that.

01:24:49   Whereas with music, nobody ever says, "I don't care if the music sounds bad," like

01:24:53   at a technical level.

01:24:55   fundamental to listening to music but as the person making the device it should

01:24:59   be you know you should that should be the obsession you know the people making

01:25:03   Kindles Lee at the top level of the design team should be people who are

01:25:07   obsessed with good typography it's criminal that they're not yeah but I

01:25:12   think it's a sign of app Amazon's institutional taste their priorities I

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01:27:10   All right, last bit.

01:27:12   So let's talk about Instagram, which just announced 300 million active users, which

01:27:20   is almost entirely likely more than Twitter has at this point.

01:27:26   Twitter has not yet released their December quarter numbers, and it's a little different

01:27:31   because they do the quarterly average.

01:27:33   Yeah, and if you look at the graph, though, it's pretty clear that Instagram is-

01:27:36   It's growing faster.

01:27:38   And it's pretty amazing.

01:27:40   I think it's you know, it's certainly the the number two or number three app that I check after I wake up

01:27:46   and

01:27:48   It's it's kind of cool that you know, even after Facebook bought them, although that kind of maybe gives them an edge to

01:27:55   Although Facebook hasn't really integrated as much as as it could have

01:27:59   Then it's still growing so quickly. I still feels like very much of its own thing

01:28:03   I think it totally does I would say as somebody who doesn't use Facebook and

01:28:08   Therefore was and for very specific reasons that it just doesn't appeal to me when they bought Instagram

01:28:12   I and I was a big fan of Instagram. I was very worried and they said oh, but we're not gonna mess with it

01:28:18   We're not gonna Facebook eyes it we're gonna let Kevin Systrom and his team, you know

01:28:22   Do we bought them because we love what they're doing and we're gonna have them keep doing what they're doing

01:28:27   And it's like I've heard that before right you hear that every time there's a popular thing gets acquired

01:28:32   You hear it's not gonna get we're not gonna mess it up and most of the time it gets messed up eventually

01:28:38   And it's I would say from the outside

01:28:41   As an Instagram user it's completely true. If you did if I didn't follow tech news, I would have no idea that Instagram was bought by

01:28:49   By Facebook, so I made it kind of a jerky tweet the other day

01:28:55   But one of the things that surprised me the most is you know and you and you could say like oh

01:29:00   Are they just kind of napping over there?

01:29:02   They've changed it so little that it almost could seem like it's negligence.

01:29:08   Not that I think that they should throw a bunch of features at it, but there's a lot

01:29:12   of little things that I think are still missing from Instagram that would really actually

01:29:18   make it better.

01:29:20   For example, something as simple as being able to have multiple users in the app.

01:29:26   I know a woman who runs four Instagram accounts for three restaurants and her personal one,

01:29:31   and every time you wanna switch accounts,

01:29:32   you literally have to sign out

01:29:34   and then sign in with your username and password.

01:29:38   - Conceptually, Instagram is very similar to Twitter.

01:29:41   And comparing Twitter to Facebook is difficult

01:29:45   because it's just different purposes, very different design.

01:29:49   But fundamentally, Instagram is Twitter for pictures.

01:29:51   - Yep.

01:29:52   - And combined with that, instead of having replies,

01:29:57   you have comments on the picture.

01:29:59   And so it's slightly different order.

01:30:00   The pictures are still Twitter order, newest at the top, oldest at the bottom.

01:30:05   The only real conceptual difference in the main timeline is that comments go under the

01:30:09   picture they're commenting on as opposed to Twitter where the replies are all in a chronological

01:30:14   stream as well.

01:30:15   Very, very similar.

01:30:17   And so therefore, I completely agree with you, it makes every bit of sense that you

01:30:21   could have multiple accounts in Instagram that it does in Twitter.

01:30:25   Right, and it's something like that where another one is like hyperlinks.

01:30:31   You can't even link a comment, you can't put a link in a comment or anywhere really, which

01:30:39   on one hand cuts down spam.

01:30:41   You don't have as much people spamming links.

01:30:43   On the other hand, you see people like both humans and companies saying, "Here's something

01:30:50   we did to access it.

01:30:53   go to our bio and click the link in our bio.

01:30:55   - Yeah, that's a very--

01:30:58   - And it's a hack, it's a clever hack,

01:30:59   but it's still, it's like, you know,

01:31:01   these are places where a competitor

01:31:03   could eventually catch hold.

01:31:05   Another one is shopping, like they're,

01:31:06   and now they're, in the US there's a company called Spring,

01:31:09   and in Japan there's a company called Origami

01:31:12   that are basically Instagram with a buy button

01:31:15   attached to it.

01:31:16   And even just a hyperlink from Instagram

01:31:19   do so much to make services like that unnecessary.

01:31:23   And I wonder if it's Instagram just keeping things really simple because that's what works

01:31:28   and it's really hard to argue with that.

01:31:29   You know, they've done so well.

01:31:32   Or if a few little features like that could really have gone a long way.

01:31:38   Dave Asprey Yeah, and if the hyperlinks work the way

01:31:42   they do in almost all Twitter clients where instead of bouncing you out to a third-party

01:31:46   browser, it opens a web view right there in the app, you're

01:31:49   not even losing the engagement. Because when they close the web

01:31:54   view, they're probably going to be right back where they were in

01:31:56   Instagram. So I don't think it's about like, engagement,

01:31:59   trapment. Right? I can only guess that it's a spam thing.

01:32:04   But even then, I feel like that's making us the users

01:32:08   suffer for a problem that they're supposed to solve.

01:32:11   Yeah, right. I mean, imagine if Twitter said, Oh, we're getting

01:32:14   rid of all links because of spam. I mean, you know, it's just no, right? You can't do

01:32:19   that. Sorry. Yeah. Yeah, I would think that the way that they would do it would be to

01:32:23   follow Twitter's lead and do their own Tico thing because that's that's fundamental to

01:32:27   Twitter's anti. I know that they do other things too. And that they're, you know, they

01:32:31   track all sorts of analytics through all the links that go through Twitter now that they're

01:32:34   all redirected through t.co. But part of it too, is that let's them centralized spam,

01:32:41   malware and that kind of stuff. Right. Right. Any kind of bat anything. I say spam, meaning

01:32:46   anything that would that is like, we should delete that and identify the user as a you know,

01:32:52   Yep. They turn it out the lights on you. I know I haven't been kicked out. You know,

01:32:56   it's funny. There's supposed to be another meeting in here right now. I emailed the person asking if

01:33:00   I can use the room so they might show up angrily any minute now. But so we could sign off on a

01:33:06   a moment to notice. But I heard I heard a loud click.

01:33:08   And I was missing the garbage can with my seltzer. Sorry about

01:33:13   that. So another feature is the you know, the equivalent of the

01:33:17   reblog the re gram. And I could totally see why they don't, why

01:33:22   they don't have that feature, because you know, then it's all

01:33:25   your photos, and it's it's more authentic, and it's not a bunch

01:33:28   of junk. But on the other hand, people are hacking that and

01:33:31   there are apps that will let you you know, do this regram even a

01:33:35   video with an overlay and that kind of stuff.

01:33:38   Have you seen those?

01:33:39   No, I haven't.

01:33:40   Okay.

01:33:41   Well, I see them.

01:33:42   I know what you mean though.

01:33:43   It's probably not even like 5% of the pictures in my feed, and I'm sure if there were regramming,

01:33:48   there would be more than that.

01:33:51   But it's still interesting that that's the kind of thing where pretty much every other

01:33:55   stream-based social network has added that feature, whether it's Tumblr's Reblog or on

01:34:02   on Vine you can re-vine, on Twitter you can retweet.

01:34:06   On Instagram you basically have to re-upload a photo.

01:34:10   - I would almost say it's the defining feature of Tumblr.

01:34:12   - Yeah, probably.

01:34:14   - Yeah, that's interesting.

01:34:15   And it's hard, you have to, and from a phone

01:34:18   you're kinda stuck 'cause you can't just save an Instagram

01:34:20   to your local thing and pick it out and put it back in.

01:34:24   You've gotta do goofy stuff.

01:34:25   I guess when I do say it, it's usually just a screenshot.

01:34:28   - It's a screenshot, and there are apps that do this.

01:34:30   it's like re-gram app or something like that.

01:34:33   And these are all I'm sure decisions that they've made

01:34:37   and they seem to have just decided no for all of them.

01:34:40   And again, it's really hard to argue with them.

01:34:43   Whatever they're doing is working so well

01:34:46   that you almost can't argue that they could be doing better.

01:34:50   And they've made little changes like the explore screen

01:34:54   is so much more interesting now that they are basing it

01:34:57   on your friends and people you follow, so that's great.

01:35:02   The image tools that they built, not just the filters,

01:35:06   but the different image tools are really, really,

01:35:09   really good, you know.

01:35:10   - I also think that they have excellent

01:35:13   notification controls because I easily,

01:35:17   and without any confusion, set up Instagram

01:35:20   so that I'm only notified when people who I follow

01:35:25   do something of interest.

01:35:27   Like I don't want notifications when any Joe

01:35:30   on the internet favorites one of my Instagrams.

01:35:32   I only want ones, you know, I get very few--

01:35:35   - Can you believe people leave that on?

01:35:36   Like I'll pick up someone's phone sometimes

01:35:38   and they'll have 40.

01:35:41   - I will not name names because I find it to be such

01:35:44   a curiously needy feature, but I have definitely seen people

01:35:49   who have that turned on.

01:35:50   - Well, I look at see who, you know, who likes my photos.

01:35:55   - I think that's one of the most interesting parts of that.

01:35:57   - Oh yeah, but I don't want notifications for it.

01:35:59   No, no, I'm not, it's not like I don't care

01:36:02   and I don't like look back at yesterday's thing

01:36:04   and then open up the list and see it,

01:36:06   but I don't want notifications for it.

01:36:08   - Totally, and then another one is like,

01:36:09   they don't have an iPad app.

01:36:11   - Yeah, that's a huge one.

01:36:12   - It drives me crazy because it's actually,

01:36:14   you know, at first people were like,

01:36:16   well, why would you use Instagram on an iPad

01:36:18   who's taking photos on an iPad?

01:36:19   Well, the answer is a lot of people take photos on an iPad

01:36:22   and I look at a ton of Instagram on the iPad.

01:36:26   And it's actually gotten better,

01:36:28   it's actually, well, it's really great on the iPhone 6 Plus

01:36:31   and it's gotten a little better over the years

01:36:33   as the 2X multiplication setup on the iPad

01:36:38   has gotten a little better, but still, it's like,

01:36:41   come on, is it really, is it that hard to make an iPad app?

01:36:44   Maybe it is, I don't know.

01:36:45   - No, not in broad strokes, not,

01:36:51   It might be depending on how your app was architected,

01:36:53   but if you're able to support the new iPhone 6 sizes,

01:36:58   then you're doing stuff that makes it really easy

01:37:02   to do iPad 2.

01:37:03   In fact, it's so easy that with this whole size class thing,

01:37:08   and it was a huge, huge point of emphasis

01:37:12   at WWDC this year, it's a huge part of iOS 8.

01:37:15   All of it clearly was about setting things up

01:37:17   so that apps were ready for the iPhone 6

01:37:19   with the two new sizes.

01:37:22   But it's so-- creating an iPad app now is really almost,

01:37:27   almost like just creating another bigger iPhone size.

01:37:32   If you can do the 6 and 6s, you can do the iPad.

01:37:34   And I say that even though Vesper, which

01:37:37   does support the 6 and 6s, still doesn't have an iPad version.

01:37:40   But if we really wanted to drop everything else

01:37:42   we were doing and do that, it actually

01:37:44   wouldn't be that much work.

01:37:45   And Marco even talked about that with Overcast,

01:37:48   where he got an, he called it an accidental version

01:37:53   of an iPad version of Overcast.

01:37:55   - Oh yeah, I remember, yeah.

01:37:56   - Because there was a bug where if you used a storyboard

01:37:59   for your startup screen, didn't matter if you also specified

01:38:03   in your XML that, hey, me, this app, I'm iPhone only.

01:38:07   So if I'm running on an iPad, run me in the iPhone mode.

01:38:11   The OS had a bug where if you had that storyboard

01:38:15   as your startup image, it would say,

01:38:17   You're a modern app. So I'll run you as an iPad app and it actually without him ever even intending it or trying it

01:38:23   It actually was was usable. So yes it there's

01:38:26   At this point it seems like there's no technical reason why Instagram should not have an iPad app and then one more is the icon

01:38:35   I mean, you know every literally every app on my iPhone home screen has

01:38:39   Done something a little more

01:38:43   Iowa seven inspired I can almost see it. I'm not an icon artist, but I can almost see

01:38:49   what the flat Instagram icon would look like. Keep the colors, keep the basic gimmick that it looks

01:38:58   like a Polaroid and just flatten it. Right. So is this, uh, you know, and they're not,

01:39:05   not doing these things to spite people. So I just wonder, and I guess I should probably be a good

01:39:10   journalists and ask them. And maybe I will, but it's still, it's as a frequent user, it has,

01:39:17   it has puzzled me over the years. And especially recently, as you see that it is,

01:39:22   you know, arguably the second or third most important social network in the world that,

01:39:29   you know, and I totally am on the side of simplicity and saying no and all that stuff. But

01:39:34   Yeah, well, I think that your your bucket list right there, your checklist of what Instagram

01:39:39   would should do is excellent because it does to me it doesn't add any complexity like supporting

01:39:46   the iPad doesn't make using Instagram more complex it just makes it better you know yeah

01:39:50   and and in addition I'll just throw out this point in addition to the fact that you're

01:39:54   right that a lot of people and Apple even admits it now that a lot of people use their

01:39:59   iPad as a camera for for producing iPad or Instagram content but clearly photo photography

01:40:05   is something that always looks better bigger always so it would be better if you had both

01:40:11   you know side by side it would always be better to look at instagram uh on the ipad i think when

01:40:16   they eventually do i think they will right they're going to come out with an ipad app i think when

01:40:20   they do people are going to be like wow this is amazing i can't believe that they didn't do this

01:40:25   before totally all right so if you're kevin cistram get on it man yeah you know what and i understand

01:40:32   As part of Facebook, they've had to build out

01:40:36   an advertising business.

01:40:37   And I find their ads to be totally fine.

01:40:40   I look at them and I see, oh, that's kind of cheesy,

01:40:43   so that's an ad, but I'm not mad that it's there.

01:40:47   And I know that they have to build a business,

01:40:49   so I'm happy that they're doing that.

01:40:51   And maybe they're waiting on adding hyperlinks

01:40:54   until they have a commerce business of some sort.

01:40:56   But it just makes me maybe a little bit more

01:41:01   maybe like them a little less, I guess.

01:41:05   - Yeah, I wonder if that's what they're holding out for,

01:41:07   that you're only gonna get,

01:41:09   you only get links if you pay for it.

01:41:11   - I don't know, but that doesn't make sense.

01:41:12   Yeah, I don't know if that helps anyone either, so.

01:41:15   Cool, all right, well, I love Instagram,

01:41:18   and I'm not trying to be a jerk, but.

01:41:22   - I think one way that you can measure,

01:41:24   and I know that this monthly active viewers thing

01:41:26   is like the industry standard numerically,

01:41:28   but I feel like the way that you can,

01:41:30   The better way to measure social networks

01:41:33   is when you're out in the real world

01:41:35   and you look at like the menu at the restaurant you're at

01:41:38   or the window of the place where you're gonna buy

01:41:40   baked goods or something like that.

01:41:44   Which icons do they have there, right?

01:41:47   And for a long time, it was just Facebook and Twitter,

01:41:50   a lot of places I saw.

01:41:51   - Or YouTube or, yeah.

01:41:54   - Yeah, yeah, depending on, yeah, sometimes YouTube.

01:41:57   But usually, the big one, it was Facebook and Twitter,

01:41:59   the pairing.

01:42:00   And, man, I see Instagram everywhere now.

01:42:05   I don't know.

01:42:06   I should – I'll actually – I'm going to make an effort now that if I see Facebook

01:42:10   and Twitter but don't see Instagram, I'll take a picture of it and start collecting

01:42:14   it and I'll bet I don't get many of them.

01:42:17   I see Instagram everywhere.

01:42:19   It's clearly on par with Twitter in terms of that.

01:42:24   And I would even add – going back to Eric Jackson's thing, I do see the Pinterest

01:42:29   logo a lot more places now, not as much as those as Facebook,

01:42:33   Twitter and Instagram, but it's growing.

01:42:35   Yep. Yeah, I think so. Especially anything with like a

01:42:38   visual component to it. Shopping food. You know, that sort of

01:42:45   stuff. Actually, I actually think, you know, not to get too

01:42:49   deep on this, but I actually think that companies make better

01:42:53   Instagrammers than they make Twitter users. I think that, you

01:42:57   I follow a lot of restaurants and stores

01:43:01   that I've been to on vacations and that kind of thing.

01:43:03   On Instagram, even places I may never go back to,

01:43:08   just to kind of remember them,

01:43:10   that I would never follow on Twitter.

01:43:11   'Cause on Twitter they're talking,

01:43:13   here are our daily specials or something like that,

01:43:15   or here's a link to a story that we were mentioned in.

01:43:19   Whereas on Instagram, they're showing photos of their shop

01:43:22   or of their neighborhood or of their products

01:43:24   or of their customers and that kind of stuff.

01:43:26   I find it really interesting

01:43:27   I follow the official Yankees account on Instagram and Twitter and on Twitter a lot of the time when they tweet

01:43:34   My my finger starts hovering towards the unfollow button

01:43:38   And on Instagram, it's almost always great

01:43:42   It's like a some kind of picture of you know

01:43:44   Either either something going on in the current Yankees season and from us from a staff member with incredible access, right?

01:43:51   Like, you know on the field at batting practice like a great angle

01:43:55   of something or it's like a piece of history,

01:44:00   like a history and it always makes me smile.

01:44:02   It's like exactly why I wanted to follow them on Instagram.

01:44:05   Whereas on Twitter, it's just a bunch of hashtags and shit.

01:44:08   - Yeah, where, you know, and this is like,

01:44:10   maybe to close out, you know, Evan Williams yesterday

01:44:13   was quoted, I think in Fortune saying,

01:44:16   "I don't give a shit if Twitter has more users

01:44:19   than Instagram," which is well put.

01:44:21   And by the way, aside, Evan Williams is working way harder

01:44:26   than Evan Williams needs to be working.

01:44:28   He's really done a great job with Medium.

01:44:30   And I'm really impressed by that.

01:44:33   Anyway, but I think he's right.

01:44:35   I think that Twitter and Instagram,

01:44:37   like comparing them because you have the same metric,

01:44:40   monthly active users, sure, that's fair,

01:44:43   but they really are different products.

01:44:45   And there's obviously bad blood

01:44:48   because Twitter probably could have

01:44:51   and should have bought Instagram and Facebook,

01:44:56   that kind of thing.

01:44:57   - Yeah, and I think in their buyer's remorse

01:45:00   over not having bought them is why they bought Vine,

01:45:03   and Vine is, I don't think it's a failure,

01:45:06   but it's not at that level.

01:45:07   Yeah, I don't see Vine. - Yeah, it still exists,

01:45:09   and it's doing some interesting stuff,

01:45:10   but it's not Instagram.

01:45:12   - Nobody's putting Vine logos on their restaurant windows.

01:45:15   No, I mean, it's not even a joke,

01:45:17   but it's a really good sign of real world awareness.

01:45:20   I'll tell you another thing I noticed about Instagram is I when I go to like

01:45:25   Sporting like a Yankee game or something like that

01:45:28   I see people taking instagrams and using Instagram more than on their phone more than I see them tweeting

01:45:34   Do you want to hear something funny is that while we've been taping this?

01:45:38   podcast about

01:45:41   20 people I work with have stopped by this conference room and taken pictures of me through the glass

01:45:47   And I bet they're gonna wind up on Instagram

01:45:49   and not on Twitter.

01:45:51   - If you see him, send him to me.

01:45:53   - Yeah, I will.

01:45:54   - We'll put him together and show him.

01:45:55   - Yeah, it's been very strange.

01:45:56   You know, the first couple, I was like,

01:45:57   "Aha, very funny."

01:45:59   And like 10 people have taken pictures of me.

01:46:02   But anyway, my bigger point is like Twitter and Instagram

01:46:06   are not really the same thing.

01:46:07   I mean, Twitter is like breaking news from the fronts,

01:46:11   you know, the war fronts in Ferguson.

01:46:16   Although I guess Instagram, people were posting photos

01:46:19   and that kind of stuff,

01:46:20   but Twitter is like the global pulse of information

01:46:24   and Instagram is, look how cool my life is,

01:46:27   that kind of thing.

01:46:28   So comparing them-- - Or look at this thing,

01:46:32   or look at where I am.

01:46:33   - Yeah, here's where I am.

01:46:34   If anything, Instagram has destroyed something

01:46:37   like Foursquare more than it has really affected Twitter

01:46:41   and Twitter's problems are its own problems.

01:46:44   There are so many things that Twitter needs to figure out,

01:46:47   but competing with Instagram, I don't think is the answer.

01:46:51   And being upset that, you know,

01:46:53   or people trying to make them look small

01:46:56   because Instagram has more users,

01:46:58   I don't think that has anything to do with it.

01:47:00   - Yeah, it's the same concept.

01:47:02   It's just you pick a list of people or certain companies,

01:47:07   and you will see a chronological stream of what they post.

01:47:10   Same concept as Twitter, but in practice,

01:47:12   because of the differences in what it is,

01:47:14   you know, photos versus text,

01:47:16   it ends up having a very different purpose.

01:47:19   And this fact, what you just said

01:47:20   is actually kind of interesting,

01:47:22   'cause it's almost like Instagram is a better fulfillment

01:47:24   of Twitter's original idea of its purpose,

01:47:27   the what am I doing right now, right?

01:47:30   It used to be like, what was the original prompt

01:47:32   for Twitter in the field?

01:47:33   - Oh, I don't know.

01:47:36   - It's like, what's up or, you know, what are you doing?

01:47:38   - What's going on?

01:47:39   - Yeah. - Or maybe that's

01:47:40   what it is now.

01:47:40   You know, and people used to tweet like in 2006.

01:47:42   - What's happening?

01:47:43   - Yeah, like @thedenist or something like that.

01:47:47   - Yeah, totally.

01:47:48   - And like, nobody would tweet that anymore, right?

01:47:50   - No.

01:47:51   - Like, nobody's gonna tweet @thedenist, just those words.

01:47:54   But I would--

01:47:55   - You know who will?

01:47:56   Steve Wozniak will.

01:47:58   - But I have definitely seen like, when I see like friends,

01:48:02   I see friends who take like a first person perspective

01:48:05   of their feet in the dentist chair.

01:48:07   - Yeah, right. - And it's like, oh,

01:48:08   you know, hope he's, you know, hope he's feeling,

01:48:10   I hope he doesn't have a bad, some kind of tooth problem.

01:48:13   - Yeah, totally.

01:48:16   - And it fits, you don't mind it

01:48:18   if you can compose it artistically.

01:48:20   - No, it's great. - I said this week

01:48:21   when that news broke, and again, like you said,

01:48:24   I don't think it's any kind of bad news for Twitter

01:48:26   that Instagram's bigger.

01:48:27   It's just an interesting sign.

01:48:29   It doesn't mean that they're even more valuable than Twitter.

01:48:33   It's just interesting.

01:48:35   But I do think, though, that part of their success

01:48:39   is that they've kept that simplicity and there's like a,

01:48:44   they know, the people running Instagram and designing it

01:48:46   and keeping it, they know exactly what it is

01:48:49   and they get it.

01:48:50   Whereas to me, part of Twitter's problem in recent years

01:48:52   is that the people running Twitter

01:48:54   don't seem to get what Twitter is.

01:48:56   They're just, they've seeming, to me they seem lost

01:49:00   and I think part of it is that they have this ambition

01:49:03   to be as big as Facebook and I think the problem is

01:49:08   that what Twitter is good for is fundamentally

01:49:12   never gonna be as big and as profitable

01:49:15   as what Facebook is.

01:49:17   And so can you live with that?

01:49:20   Why not if you're still profitable?

01:49:23   - Yeah, I think that's a great way of putting it.

01:49:24   - Like if you make, I don't know, toaster ovens

01:49:29   and you find out that the toaster oven business

01:49:35   is not as profitable as the automobile industry,

01:49:37   Should you start making cars?

01:49:39   No, I don't, just keep making good toaster ovens.

01:49:43   And just let it be the business that it is.

01:49:46   And I just think that Twitter is so obsessed with Facebook

01:49:50   that they've lost their way at a leadership level.

01:49:53   - Yeah, or, well, I don't know if it's,

01:49:56   I don't know if they think that way internally.

01:49:59   I think that the outside perspective,

01:50:03   especially among the investor community,

01:50:05   It's like, well, why isn't Twitter becoming as big as well?

01:50:08   - My evidence that I think that they do it internally

01:50:12   is the way that first person, or not first person,

01:50:14   first party Twitter clients,

01:50:17   meaning if you go to twitter.com

01:50:18   and you use the Twitter app,

01:50:20   that your timeline is no longer

01:50:23   just the simple chronological order

01:50:26   of here are the people you follow in their tweets,

01:50:28   that there's all sorts of other stuff

01:50:30   that's injected in there.

01:50:31   - Yeah, but I don't think that stems

01:50:34   from trying to be more like Facebook,

01:50:37   I think that is trying to solve the problem

01:50:39   that most people have a shitty timeline

01:50:41   because they don't follow enough people.

01:50:43   They signed up for Twitter.

01:50:45   They maybe followed, auto followed the people

01:50:48   that were suggested to them.

01:50:50   But getting people to keep following more Twitter accounts

01:50:54   is kind of essential to building a really great timeline.

01:50:56   Like I love my timeline.

01:50:58   I also follow 3,300 people.

01:51:01   And I even run out of stuff to read.

01:51:04   So how do you automatically pre-install

01:51:07   a really great timeline for someone

01:51:09   that's based on what they like?

01:51:11   And I think that's what they're trying to get at

01:51:12   with this algorithmic stuff.

01:51:15   And what I would like to see from Twitter

01:51:17   is exactly this pre-installed kit.

01:51:20   If you could go to the homepage and say,

01:51:22   "Show me soccer Twitter right now, boom,

01:51:24   "and I'm following 1,000 accounts

01:51:26   "that people are talking about really great soccer."

01:51:28   Or, "Let me see tech media Twitter

01:51:31   "around an Apple event," or something like that.

01:51:34   - Yeah, and don't be as simplistic as a hashtag, right?

01:51:37   Like what they've got now is if you use

01:51:38   the exact right hashtag, you can do it,

01:51:40   but only if all the tweets are using the hashtag,

01:51:43   whereas it seems, you know, Google web search

01:51:48   seems like existence proof that you could build something

01:51:52   where you could just say soccer, like you said,

01:51:54   and just get, figure it out, like here's some great

01:51:58   soccer tweets to follow.

01:52:00   - So I think that's what they're trying to get at,

01:52:02   And as is typical for Twitter, the worst thing they ever do

01:52:09   is explain themselves.

01:52:10   So they've done a typically poor job explaining why they're

01:52:15   doing any of this stuff.

01:52:16   And now with yet another product leader,

01:52:21   who knows what they're going to keep working on,

01:52:23   what they're not going to keep doing.

01:52:26   Although I will say, the new guy in charge of product, Kevin,

01:52:30   has been there forever.

01:52:32   And if there's anyone I as a user trust to not be a hoser,

01:52:37   it's him.

01:52:37   So let's, all right.

01:52:41   - Can't beat that.

01:52:43   - Yeah.

01:52:44   - Dan Fromer, thank you very much for your time.

01:52:48   - Yeah, thank you.

01:52:49   - Where can people find out more from Dan Fromer?

01:52:53   - Oh, follow me on Twitter, FromDome or on Instagram

01:52:58   if you wanna see cute dog photos, I guess.

01:53:01   Yeah, those are the best places to follow me now right now. I'm mostly writing at courts, which is QZ calm

01:53:08   But you'll find all the best at from dome linked from linking to the court stuff. Yeah everything everything I do, you know, wherever it is

01:53:17   Yeah, let's get you some Instagram followers. Yeah. Oh and they're getting rid of all the spam accounts. So we'll see how many

01:53:25   Spam followers I have ends up. I was not following you on Instagram. Oh

01:53:29   I'm decent on Instagram. Yeah, it's a little braggy. It's like hey look at me

01:53:35   I'm in Tokyo, but so what you know, I think that's what it's for. Yeah, I agree. I like it. Yeah

01:53:40   See, I didn't know you were in Tokyo. I'm not right now. I know I'm looking at the picture actually have some really great stories

01:53:48   I'm working on from Tokyo that I was reporting in Tokyo that I'll be publishing over the next few weeks

01:53:53   weeks. I did two already. One was, did you see that new OK Go video?

01:54:01   Yes, the one that was shot from a drone?

01:54:04   Yeah. So I went to, so I was in Tokyo, I think now three weeks ago, maybe something like that.

01:54:10   So I emailed Honda and said, "Hey, can I ride one of those things?" And so I got to meet the guy who

01:54:17   invented it and ride around one of those little scooters.

01:54:20   They're called a UniCub.

01:54:21   And that was awesome, that was super fun.

01:54:25   So if you search, well I don't even know

01:54:27   how you would find this.

01:54:28   I should put a link on my website

01:54:31   to these stories sooner than later.

01:54:33   And another thing is, Toshiba, like most Japanese,

01:54:38   old Japanese tech companies, is struggling with growth.

01:54:42   So they took an old floppy disk factory

01:54:46   in the suburbs of Tokyo and turned it into a clean room,

01:54:49   indoor lettuce farm.

01:54:51   So I toured that and posted a bunch of photos of that.

01:54:54   And that was super cool.

01:54:55   I had to put on kind of a half bunny suit

01:54:57   and sterilize my camera.

01:55:00   But it was awesome.

01:55:03   - That's a great shot.

01:55:04   - Yeah, it was very cool.

01:55:05   So that stuff is on my Instagram, I guess.

01:55:09   Actually it is.

01:55:10   And you can't link through to the stories

01:55:14   because Instagram doesn't allow any links.

01:55:16   Because they're not listening to Dan Frommer.