May 1, 2018

Axios Login

I'm up early to head down to San Jose for Facebook's F8 conference. Kia and I will both be there (she got up even earlier than I did), and we'll have live coverage in the Axios tech stream.

1 big thing: WhatsApp founder leaves on F8 eve

WhatsApp CEO Jan Koum. Photo: Lachlan Cunningham/Getty Images for Discovery

Facebook has yet another headache to deal with as it kicks off its F8 developer conference on Tuesday.

What's happening: On Monday, WhatsApp founder Jan Koum announced he was leaving the Facebook-owned messaging company. According to the Washington Post, which broke the story, Koum had reportedly clashed with Facebook executives over issues relating to user privacy.

The context: F8 was already shaping up to be a rather unusual developer conference. At a typical event, a company introduces all kinds of new tools for its developers. In this case, though, Facebook has actually been taking away various capabilities in an effort to make its platform more secure.

What they're saying: Facebook CEO Mark Zuckerberg put the best possible face on Koum's departure.

"I will miss working so closely with you. I'm grateful for everything you've done to help connect the world, and for everything you've taught me, including about encryption and its ability to take power from centralized systems and put it back in people's hands. Those values will always be at the heart of WhatsApp."

Our thought bubble: Most telling will be Facebook's actions, not Zuckerberg's words. It will be worth watching if Facebook uses encryption in more of its products, or if WhatsApp instead becomes more commercial along the lines of Facebook and Instagram.

2. Apple earnings: all eyes on iPhone demand

The Product (RED) version of the iPhone 8 was introduced in April. Photo: Apple

After skittish comments from several companies that supply iPhone components, everyone is keen to hear what Apple itself has to say about demand, when it issues its financial results later today.

Apple shareholders are also eager to hear promised details on how much money the company plans to return to shareholders through dividends and stock buybacks, especially after Apple brings back all its overseas cash.

Here's what Wall Street is expecting on various metrics:

  • Revenue (January–March quarter): $61.1 billion (Zacks)
  • Earnings (January–March quarter): $2.69 per share (Zacks)
  • iPhone sales: 53 million (Loup Ventures)
  • Revenue forecast (April–June quarter): $51.6 billion (Zacks)
  • Earnings forecast (April–June quarter): $2.11 per share (Zacks)
3. Closing shots fired in AT&T-Time Warner case

Illustration: Sarah Grillo/Axios

AT&T spent Monday trying to undermine the foundation of the Justice Department’s case to block its proposed $85 billion purchase of Time Warner, while government lawyers looked to cement their case by destroying the company’s credibility.

The bottom line: The closing arguments set the stage for Judge Richard J. Leon's decision after the more than 6-week-long trial. Whichever way Leon rules is likely to have major implications for the tech, telecom and media industries, as well as the millions of consumers who use their products.

What's next: Leon said he expected to deliver a ruling on June 12, although that date could be moved up if he makes a decision sooner.

Go deeper: David McCabe has more here.

4. Tech fights for Kansas LGBT adoption rights

A portion of the newspaper ad opposing the bill. Photo: Human Rights Campaign

In a full-page ad running in Kansas newspapers today, dozens of technology companies are urging voters to reject a bill that could limit the ability of LGBT families to adopt in the state.

Signatories include Airbnb, Amazon, Apple, AT&T, Cisco, Comcast, Facebook, Google, HP, Lyft, Microsoft, Oracle, Paypal, Uber and Verizon, to name just a few of the largest.

The context: Members of TechNet, a bipartisan tech industry lobbying group, earlier sent a letter to Kansas lawmakers saying passage of the bill could threaten their ability to invest in the state.

5. More video devices entertaining households
Expand chart
Reproduced from a Nielsen report; Chart: Axios Visuals

While 96% of U.S. homes have a television, other devices are slowly reaching ubiquity as well, according to Nielsen. Sara Fischer reports:

  • A majority of Americans now own a time-shifted television device, whether through a SVOD (subscription video on demand) or a DVD or DVR player. SVOD penetration has officially surpassed DVR penetration in the U.S.
  • Tablet and smartphone penetration levels have quickly grown to 63% and 89%, respectively, while PC ownership is slowly declining.
  • Roughly two-thirds of U.S. homes have an internet-enabled connected device that's capable of streaming content to a television set, which includes enabled smart TVs, multimedia devices and video game consoles.

Meanwhile, media publishers are turning to TV-like video programming to reach their audiences.

6. Take Note

On Tap

  • Apple reports earnings after the market close, as does Snapchat parent Snap.
  • Facebook's F8 takes place in San Jose.

Trading Places

  • Charlie Kindel is leaving Amazon after five years, most recently as director of its Alexa Smart Home group. The Kindle (no relation) remains at Amazon.
  • Tumblr founder and former CEO David Karp will serve as a board adviser to Future Now, a left-leaning political advocacy group.


7. After you Login

I was at the Giants game last night with a friend and I was telling them about After you Login. They asked, "What's tomorrow's?" I said, "Well, if the Sharks win it will be the winning goal. And if the Giants come back to win, it will be that."

With that, here's today's "After you Login" ... the Giants' walk-off hit!

Sadly, the Sharks lost in OT.