Feb 1, 2019

Axios Login

Ina Fried

Situational awareness: Apple apologized for the FaceTime bug that had allowed callers to hear recipients before they picked up. The company said an update next week would fix the problem.

Apropos of nothing, Wired has a great piece on why your phone and other electronics shut down when it's freezing cold out.

1 big thing: Tech giants are the new gatekeepers

Illustration: Aïda Amer/Axios

Apple's move this week to lock out Facebook and Google employees from internal versions of their own iPhone apps was a strong stand on behalf of user privacy.

At the same time, it was a stunning display of the absolute control Apple has over what runs on the phones it makes, Axios tech editor Scott Rosenberg writes.

Why it matters: The squabble reminds us that all these companies have become gatekeepers with enormous power. One way to map the contours of their turfs is to examine where each can say "no."

Apple controls our phones (if they're iPhones).

  • If you have software to distribute to iPhone/iPad users, you are at Apple's mercy — if the company kicks you out of the store, you've got no customers.
  • Android has more users globally than iOS, and it's less tightly controlled by Google.

Facebook controls our access to people.

  • Through its billions-wide "social graph," it controls much of the world's interpersonal communication, so if Facebook removes your account, you can't connect to your personal network.
  • Others, like LinkedIn and Twitter, have more specialized versions of this power.
  • To be sure, email and phone calls remain an option.

Google controls our access to information.

  • It's the starting point for getting answers to nearly every question we have — via search, maps, YouTube's video trove and many other services.
  • If Google chooses to block some piece of content, it can render that information effectively invisible to much of the world.
  • Wikipedia and other websites still offer independent knowledge sources, but more often than not Google works as their prime distributor.

Amazon controls our access to goods and many software services.

  • Its online store is the most powerful funnel for purchasers around. If a product isn't listed there — or if it's listed too low — a huge number of us simply aren't going to buy it.
  • Through Amazon Web Services, Amazon runs the backend for a large chunk of the internet industry. That gives it the power to shut down apps and sites that depend on it — at least until they can move their products to some other cloud provider.

The big picture: The early, "permissionless" internet and web found a key to growth by connecting the world and bypassing gatekeepers. We've come nearly full circle in 2 decades.

  • Many innovators working in the crypto/blockchain world hope to reverse that trip — but haven't yet built systems and products that the mass of users are willing to embrace.
  • By contrast, most of the work in machine-learning-based artificial intelligence that's already beginning to be widely adopted depends on proprietary dragon-hoards of data controlled by large companies.

Go deeper: Read Scott's full story here.

2. 3D printing pioneer Carbon expands

Carbon CEO Joe DeSimone holding a football helmet with 3D printed inserts using the new L1 printer. Photo: Ina Fried/Axios

Carbon, whose unique 3D printing technology makes it suited to both prototyping and mass production, is moving into some new areas thanks to a larger version of its printer.

Why it matters: The technology, which builds parts Terminator 2-style from a pool of liquid resin, has already found a range of uses from car parts to sneakers to dental prosthetics.

Details: Carbon's new 3D printer, known as the L1, is 10 times bigger than the original and 5 times bigger than the current version (known as M2). That makes it better suited to both larger size parts and mass production.

  • Adidas has been using the new machines for the last year for their 4D line of running shoes, while new customer Riddell is using it to 3D print custom inserts for football helmets for NFL players.
  • The Carbon-printed pieces replace standard foam with a lattice structure that can be tailored based on a player's position and eventually to an individual's playing style. Linemen, for example, need more protection for front impact, while receivers are more likely to be hit from the side.

Yes, but: A big question is whether the new helmets make a meaningful difference in player safety.

  • "Everything we’ve tested makes us believe it's the safest helmet," says Carbon VP of business development Phil DeSimone. "That doesn’t necessarily mean the sport is safe as a whole," he said.

Meanwhile: The company expects to have 1,000 of its printers installed by the end of this year.

  • It doesn't sell them outright, but rather offers them on a subscription basis, along with its software and cloud service, with the M2 running at $50,000 per year.
  • Carbon hasn't disclosed pricing for the new L1. But, the average customer also buys around $20,000 per printer per year in materials.
3. Chart of the day: Switching between iOS and Android drops

As the smartphone market matures, customers are increasingly sticking with the same operating system when they buy a new model, as evidenced by new data from Consumer Intelligence Research Partners.

By the numbers: More than 9 in 10 U.S. consumers in 2018 were buying a phone running the same OS as their last one.

Expand chart
Reproduced from Consumer Intelligence Research Partners; Chart: Axios Visuals
4. Net neutrality heads back to court

Net neutrality protest in February 2018. Photo: Win McNamee/Getty Images

The net neutrality litigation cycle continues Friday as a three-judge panel considers a challenge to the Federal Communications Commission's repeal of its own previous regulations for internet providers, Axios' David McCabe writes.

Why it matters: From AT&T's purchase of Time Warner to Comcast's Netflix competitor, internet service providers are increasingly getting into the content game, raising questions about whether they will try to use their pipes to boost their content businesses.

The bottom line: Net neutrality backers, which includes public interest groups and tech companies, want to see the repeal struck down — restoring regulations from 2015. The FCC wants things to stay as they are.

  • The case is being heard by three D.C. Circuit Court of Appeals judges: Patricia Millett, Robert Wilkins and Stephen Williams.

The panel of judges is facing multiple questions:

  • Did the FCC rightfully change broadband's status under the law? In 2015, the agency treated it more like a utility, which gave it more authority to ban practices like blocking, throttling or creating fast lanes for content. FCC will say the Supreme Court affirmed its authority to treat ISPs the way it did and that this lower court shouldn't contradict its ruling.
  • Was the process the FCC used to repeal the rules appropriate? Regulators aren't allowed to make rules that are "arbitrary and capricious" and the FCC's opponents say that's exactly what happened. The FCC will say it met its obligations.

What they're saying: Both sides are — no surprise — projecting optimism.

  • "We are confident that the Restoring Internet Freedom Order will be upheld in court," FCC chief of staff Matthew Berry said in a statement.
  • “Net neutrality is an essential consumer protection that everyone online deserves, and this case is the fight to save it," said Danelle Dixon, the chief operating officer of Mozilla, the named plaintiff battling the FCC in court.
5. Amazon keeps on Amazon-ing

Amazon distribution center in Germany. Photo: Holger Hollemann/picture alliance via Getty Images

Amazon said Thursday that quarterly sales rose 20% from the same quarter a year ago to $72 billion, which is ahead of what most analysts were projecting. Profits also topped estimates, coming in at $6.04 per share, compared to an average analyst target of $5.56.

The big picture: The growth of Jeff Bezos' e-commerce behemoth shows no sign of slowing down.

  • Amazon said that Echo Dot, its entry-level Alexa-powered smart speaker, was "the #1 selling product on Amazon globally, from any manufacturer, in any category this holiday season."
  • Amazon Web Services, the company's hugely successful cloud computing unit — which has driven much of Amazon's recent growth in profitability — saw a 45% sales increase year-over-year, to $7.43 billion.

Yes, but: Amazon said it expected its spending to rise this year, spooking some investors.

6. Take Note

On Tap

  • A case over the FCC's net neutrality rules heads to court (see above).

Trading Places

  • Ripple has hired Stuart Alderoty, formerly general counsel for CIT, as its new general counsel. He will report to CEO Brad Garlinghouse.


Ina Fried