December 10, 2018
A potluck invitation somehow got sent to all 25,000 Utah state works. An epic "reply-all" situation ensued.
1 big thing: Chinese court bars some iPhone models
A Chinese court has banned the sale of a number of recent iPhone models citing infringement of two Qualcomm patents, the San Diego chipmaker said on Monday.
Why it matters: The preliminary injunction blocks the sale and import of iPhones into China, but not the manufacture or export of the devices, so the direct impact is limited to the domestic Chinese market. Still, it represents a significant disruption to Apple's business and could bring the two parties to the negotiating table in their long litigation war.
- The order prevents the sale and import of the iPhone 6s, 6s Plus, 7, 7 Plus, iPhone 8, 8 Plus and iPhone X.
- The injunction relates to a pair of patents, one covering the way applications are managed on a smartphone and the other about how customers adjust and reformat photos.
Be smart: Companies will often change their software in such cases, where possible, to avoid infringement rather than halt sales of a key product.
The big picture: The two companies have a range of litigation in courtrooms around the world on issues ranging from patents to the breaking of contracts and other issues. Apple recently said in a San Diego court that the two sides have not been in talks and a trial in that case was set for April.
What they're saying:
- Apple: "Qualcomm’s effort to ban our products is another desperate move by a company whose illegal practices are under investigation by regulators around the world. All iPhone models remain available for our customers in China. Qualcomm is asserting three patents they had never raised before, including one which has already been invalidated. We will pursue all our legal options through the courts.”
- Qualcomm: "Apple continues to benefit from our intellectual property while refusing to compensate us. These court orders are further confirmation of the strength of Qualcomm’s vast patent portfolio.”
2. Huawei case strains U.S.-China tech bonds
Speaking of China, the arrest in Canada last week of Huawei's chief financial officer, for allegedly circumventing sanctions against Iran, might sound like an arcane dispute. But it's becoming a lightning rod for the many conflicts between the U.S. and China.
Why it matters: Repercussions from the dispute could do lasting damage to the deeply interconnected trade channels and supply chains between the two countries, whose relationship is the foundation of today's hardware business.
Because of security fears, the U.S. has long sought to reduce Huawei's position domestically, and this year it ramped up efforts to counter the firm's international reach.
- But Huawei remains one of only three main cellular equipment makers globally — and the lowest-cost provider of the three.
- The major American cellular networks are already prohibited from buying Huawei gear, and the U.S. has been trying to convince its allies to enact similar prohibitions.
The U.S. is also increasingly worried about China's tech industry more broadly.
- Historically, such concerns had largely been of an economic nature, and centered around intellectual property protections.
- Those issues remain, but added to that are concerns around eavesdropping and security.
The two countries' tech industries are deeply interwoven.
- China has long been concerned about how much it relies on U.S. technology, especially semiconductors, to power its gear.
- The company has made an aggressive national effort to close the gap in chips and other areas to reduce its dependence on U.S. and Western technologies.
- Meanwhile, the U.S. remains highly dependent on China to manufacture much of its electronics, from cellphones to computers.
The big picture: The U.S. and China are also in the midst of a trade war involving escalation in existing tariffs and threats of more.
- That both heightens the stakes and limits the ability of each country to take punitive action, since they're already pointing large tariff guns at one another.
The bottom line: Two decades ago, U.S. business and political leaders dreamed of ushering China into the World Trade Organization and strapping its economic growth engine firmly into the global economy. With tech in the lead, it all worked just as planned — but now both nations are viewing all this interdependence with dismay.
The latest: Hearings are under way in Canada to decide if Huawei's CFO should be extradited to the U.S. Meanwhile, China has waged a diplomatic protest against both the U.S. and Canada over the arrest.
3. Google's turn under the spotlight
After months of dodging requests to testify on Capitol Hill, Google CEO Sundar Pichai will get his turn in the hot seat on Tuesday.
Why it matters: Pichai, making his first appearance before Congress, will face the same grandstanding anger Facebook CEO Mark Zuckerberg encountered when he testified in April. The hearing will provide a fresh gut check on Washington’s willingness to clamp down on tech and start regulating it.
What to watch: Axios' David McCabe writes that Google, once a favorite of the Obama administration, is now a target of both parties. Democrats and Republicans on the House Judiciary Committee have made clear that they don't plan to go easy on the tech giant in Tuesday's hearing.
- “Americans put their trust in big tech companies to honor freedom of speech and champion open dialogue, and it is Congress’ responsibility to the American people to make sure these tech giants are transparent and accountable in their practices,” Judiciary Chairman Bob Goodlatte (R-Va.) said in a statement.
- “We need to restore competition and protect our rights online,” committee member Rep. David Cicilline (D-R.I.) told the New York Times: “The promise of an open internet is fundamentally threatened by the ability of a few powerful gatekeepers to bully competitors, cripple innovation and exploit consumers. This must be a top priority going forward.”
The big picture: Google has spent more than a year keeping its head down while rival Facebook took the brunt of America’s outrage toward Big Tech after the Cambridge Analytica data leak scandal and Russia's online election meddling.
- China, privacy, and competition are all issues that are likely to come up.
Be smart: Even when Google is acquiescing to the demand that it send its top leadership to Washington to answer questions, it has found a way to keep founder and longtime CEO, Larry Page, out of the spotlight. (Google is a subsidiary of Alphabet, the holding company that Google's owners set up in 2015. Page is the CEO of Alphabet.)
4. Elon Musk: "I do not respect the SEC"
After his Tesla-related tweets got him in hot water, CEO Elon Musk reached a settlement with the Securities and Exchange Commission in late September that requires the automaker to pre-approve any of his company-related communications — including tweets.
Yes, but: In a "60 Minutes" interview, Musk confirmed what his Twitter stream clearly shows: that he has yet to start doing so. What's more, Musk continues to express open contempt for the agency that regulates publicly traded companies, of which he heads two (Tesla and Square).
"I want to be clear," Musk said. "I do not respect the SEC."
Asked by Leslie Stahl about his apparent penchant for being erratic or impulsive, Musk said: "I'm just being me."
Why it matters: The settlement came after Musk falsely tweeted that he had "funding secured" for a potential buyout of the company.
Our thought bubble: As Axios' Dan Primack points out, Tesla and Musk technically had 90 days to implement the oversight rules, so it's possible that things could change within the next month. "60 Minutes" didn't ask, Musk didn't volunteer it, and a Tesla spokesman declined comment.
5. The effect of screen time on kids
The first data from a decade-long study of the effects of screen time shows that those who spent more than two hours each day on portable screens (smartphones, tablets and video games) scored lower on thinking and language tests, according to a report from "60 Minutes."
The big picture: In extreme cases, researchers also said that some brain scans of 9- and 10-year-olds who spend more than 7 hours a day using electronic devices show a thinning of the brain's cortex, which usually happens later in development, Axios' Khorri Atkinson reports.
The study was conducted on more than 11,000 U.S. children by the National Institutes of Health.
Caveat: It's worth noting these are early results that have not yet been published in a peer-reviewed journal, so they shouldn't be viewed as definitive. As NIH's Gaya Dowling told "60 Minutes," "We don't know if it's being caused by the screen time."
6. Take Note
- As noted above, Google CEO Sundar Pichai is now set to testify before the House Judiciary Committee on Tuesday. His appearance was scheduled last week, but postponed for the George H.W. Bush national day of mourning.
- There are few other big events scheduled, but experience tells me I'd be a fool to predict a quiet week.
- Jon Carvill, who has done chip PR for Qualcomm, Intel and AMD, has rejoined Intel as a VP of marketing after recent gigs at Vevo and Facebook.
- Snap has hired 21st Century Fox chief communications officer Julie Henderson to serve in the same role. She will report to CEO Evan Spiegel.
- Uber and Lyft both filed confidentially with the SEC in order to go public next year. Lyft announced its move Friday morning, and the Wall Street Journal reported Uber's filing later that day.
- The big and powerful are getting bigger and more powerful — and the clear and dominant winners are big cities, with technology playing a role. (Axios)
- Qualcomm has cut more jobs from its already scaled-back effort to supply chips for data centers. (The Information)
- The FBI is taking a deeper look at all those fake anti-net neutrality comments submitted to the FCC. (BuzzFeed News)
7. After you Login
With condolences to Walt Mossberg and Dan Primack, check out this amazing play from Sunday that turned a sure win into a crushing loss for the New England Patriots.