Apr 17, 2019

Axios Login

By Ina Fried
Ina Fried

Greetings from Vancouver. Or, as they say in Canada, I'm sorry.

1 big thing: Apple-Qualcomm deal reshapes U.S. chip business

Illustration: Rebecca Zisser/Axios

Apple's surprise deal with Qualcomm not only resolved one of the biggest legal disputes in the tech industry, but changed the balance of power in the chip industry.

What's happening: Just hours after announcing the settlement — which included a multiyear agreement for Qualcomm to supply chips to Apple — Intel said it was scrapping plans to release a 5G modem chip next year.

  • Intel added it will re-evaluate whether there's enough business making modem chips for PCs and internet-of-things devices to justify continued investment.

Why it matters: The shakeup comes as the U.S. seeks to increase its role in 5G and future cellular generations.

  • The deal strengthens Qualcomm's position as the dominant U.S. player in 5G but likely diminishes the chances that Intel remains a significant player going forward.
  • Given that all of the key equipment suppliers (Ericsson, Nokia, Samsung and Huawei) are from outside the U.S., chips remain the country's primary influence in the cellular industry.

The big picture: This is another big setback for Intel, which had already missed out on being a player making the core processor for phones, despite spending several years and billions of dollars in a catchup effort.

  • Modems gave Intel a shot to win a smaller, but still significant role in the iPhone.
  • Intel had been gaining ground amid Apple's dispute with Qualcomm.
  • In 2017, Apple split the iPhone modem chip business between Apple and Qualcomm and, for last year's new iPhones, Apple gave the entire business to Intel.

There had been reports that Intel was behind on the 5G chip, though. If true, that certainly could have been a key factor in pushing Apple to the bargaining table with Qualcomm.

Yes, but: In settling with Qualcomm and agreeing to a new chip deal, Apple practically guaranteed a dim future for Intel in modem chips. Most other companies prefer to get the modem and core processor in a single chip, something Intel neither offered nor had plans to do.

  • Intel's exit isn't ideal for Apple either, as the company would prefer to have two modem chip suppliers.

What they're saying:

"Given the announcement’s timing, it’s clear that Intel management lost interest in — or couldn’t deliver — mobile 5G, which forced Apple to settle with Qualcomm, not that Apple’s settlement forced Intel to exit 5G modems."
— Tech analyst Avi Greengart, on Twitter

What's next: The big questions are around the future of Intel's modem business.

  • If Intel jettisons it, does Apple emerge as a potential buyer in hopes of one day making its own modem chips?
  • Or, having agreed to pay Qualcomm for its patents, does Apple relent and get all its modem chips from them as well?
2. Zuckerberg remains in charge, knuckles bared

Illustration: Sarah Grillo/Axios

New in-depth reports on Facebook portray CEO Mark Zuckerberg as a tough negotiator and shrewd wielder of corporate power — miles from the geeky whiz kid image that kicked off his public life, Axios' Sara Fischer and Scott Rosenberg report.

Driving the news: NBC's Olivia Solon and Cyrus Farivar reviewed 4,000 pages of documents — including emails, web chats, presentations and meeting summaries, mostly from 2011 through 2015 — leaked from the proceedings of a U.K. lawsuit brought by the maker of a now-defunct app against Facebook.

  • The NBC story concludes that Zuckerberg personally oversaw plans years ago to use consumer data as leverage to disadvantage competitors, and that he worked with Facebook's communications team to help spin the narrative that changes to its policies were attributable to privacy concerns.
  • NBC reports that the documents show evidence Zuckerberg was less concerned about the privacy implications of the handling of users' data than about the financial implications.
  • The report finds examples in which Zuckerberg, along with other high-level Facebook executives, discussed rewarding companies they liked by giving them access to users' data.

Between the lines: Zuckerberg has insisted that Facebook has never sold user data to advertisers or other companies, and that seems to continue to be literally true.

  • What these documents suggest is that the company's leader has long viewed users' personal data as a business asset — and that, at one point, he seriously considered putting a price tag on other companies' access to such information.
  • That point will be of great interest to the antitrust regulators circling Facebook, both at home in the U.S. and in the EU.

Meanwhile, a Wired account of Facebook's crisis-plagued last year sheds new light on the company's seeming paralysis in the aftermath of the Cambridge Analytica revelations a year ago, when it took Facebook leaders 5 days before responding to the controversy.

  • For one thing, Nicholas Thompson and Fred Vogelstein write: "Executives didn’t want a repeat of Zuckerberg’s ignominious performance after the 2016 election when, mostly off the cuff, he had proclaimed it 'a pretty crazy idea' to think fake news had affected the result."

Since then, Zuckerberg has been on a roll. Now, he's reorganizing Facebook around private, encrypted communication, and launching a PR offensive that includes hosting a series of conversations on the future of technology and society.

The big picture: Despite Facebook's endless trials, Zuckerberg has never been more in charge. And his power won't be reined in by either his board or his shareholders as long as he controls a majority of the company's voting shares.

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3. The digital babysitter generation

Illustration: Lazaro Gamio/Axios

Parents are relying more than ever on digital babysitters and device-led playtime to entertain their children — and the wide range of content is making it increasingly difficult to monitor what their kids are seeing, Axios' Kim Hart and Sara report.

Why it matters: This goes beyond the old challenges of kids watching too much TV. Modern parents struggle to keep up with the immense variety of kids programming across a multitude of apps. Plus, controlling what kids are exposed to on platforms like YouTube can feel like an unwinnable battle with algorithms.

  • While the impact of technology on kids is still relatively unknown due to a lack of long-term research, researchers attribute more screen time to increased demands on parents and the convenience of always-on smartphones and tablets.

Not all screen time is created equal, as experts have pointed out that some educational programming, interactive features and personalized content can be beneficial for kids.

  • But mediating what children are exposed to across platforms is getting more challenging and can feel out of parents' control, said Shelley Pasnik, director of the nonprofit Center for Children and Technology.
  • "The curatorial lift for parents is not insignificant, it requires thought and time to make those selections," she said. "That can feel daunting, along with the fear of missing out and the fear of choosing well for their kids. There's no shortage of opportunities for parents to feel bad."

Adding to those fears are reports about the dangers of exposing children to user-generated videos online.

  • A new Wall Street Journal report finds that many of the most popular YouTube playtime videos are often made by unidentifiable sources.

Streaming TV plays a role in this, too. A recent Reuters piece describes the onslaught of streaming services targeted towards kids as part of the problem. "Children are the original binge-watchers, with an endless appetite for repeats," it notes.

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4. Hacking guides are cheap, plentiful and old

Photo Illustration: Scott Olson/Getty Images

Hacking guides for sale on criminal markets are cheap, plentiful, and often only a decade out of date, according to a new report from intelligence firm Terbium Labs.

The big picture: The guides, often sold as giant caches of manuals, are often padded with irrelevant material. For instance, one included ''Cabinetry for Dummies," Terbium VP of research Emily Wilson says. And plagiarism runs rampant.

  • But if you power through the scams and thievery by the vendors, there's plenty of good information on scams and thievery for would-be hackers, Axios' Joe Uchill writes.

By the numbers:

  • Only 5% of the 44,000 individual documents Terbium purchased came from 2018 or later. More than 25% were a decade old, with the bundled documents including a range of files from the 1990s and around a thousand copies of the same transcription of "The Anarchist's Cookbook."
  • Less than a quarter of the files for sale were unique.
  • But, at an average cost of $0.01 cent per file, nascent fraudsters could afford to be taken for a few rides as long as they find an occasional gem.

Details: "When the guides were current, the techniques would be effective," Wilson says.

  • The study looked at both multipacks of guides, which averaged $12.99, and individual files, averaging $3.88 a piece. Cost was not indicative of quality, she adds.

Threat level: "One of the things that make these guides dangerous is that they are recipes for digital crime sold alongside the ingredients," Wilson says.

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5. Take Note

On Tap

Trading Places

  • Varsha Rao, a former Airbnb executive and current COO of Clover Health, is joining direct-to-consumer health company Nurx as CEO.

ICYMI

  • Netflix reported better-than-expected first quarter earnings, but its outlook for the current quarter was weaker than many analysts were expecting. (Axios)
  • Speaking at TED, Twitter CEO Jack Dorsey said that automated systems are now detecting 38% of abusive tweets, up from zero a year earlier when the only means of detecting abuse was through customer reports. (Axios)
  • The T-Mobile-Sprint deal is unlikely to be approved in its current form, the Wall Street Journal reported. (Axios)
  • The Trump campaign is spending nearly half (44%) of its Facebook ad budget to target users who are over 65 years old, far more than the Democratic candidates. (Axios)
6. After you Login

I’ve never wanted a coffee table. Until now.

Ina Fried