Oct 31, 2018

Axios Login

By Ina Fried
Ina Fried

Happy Halloween. Quick note: Please take our end-of-year subscriber survey. It's very short and can be found here.

Situational awareness: Shares for Sprint were rising in early market trading after it reported Q2 earnings and revenue that were better than analyst expectations. But, as CNET points out, it also revealed a slight slowdown in numbers of customers as it awaits T-Mobile's takeover.

1 big thing: Takeaways from Apple event

Tim Cook at Apple's event. Photo: Apple

Apple used its Brooklyn event yesterday to offer significant updates to its iPad Pro, Mac Mini and MacBook Air lines, helping round out its product lineup for the holidays.

What's new: In revamping the Mac Mini and MacBook Air, Apple breathed new life into 2 popular product lines that had suffered from not seeing significant refreshes in some time.

  • The new iPad Pro, meanwhile, takes its design cues from the latest iPhones, replacing the home button with gestures and Face ID for authentication. (The new iPad Pro also does away with the headphone jack, though the Air still has one.)
  • Apple also released an update to iOS 12 that adds support for promised features including new emoji, group FaceTime and dual SIM cards in the latest iPhones.

The big picture: Beyond the specific updates, we noticed three larger trends...

1. Things are getting more expensive

  • Apple had let the Mac Mini and MacBook Air languish for a while now. While fans of these products now have freshly updated gear, the products are more expensive than the ones they replace.
  • This isn't that uncommon for Apple. It often raises the prices slightly when it makes a significant update to a product line and later brings down the cost alongside more modest updates.

2. Apple is betting big on USB-C

  • Apple is known for betting on 1 key technology when it comes to connectivity and, for now, USB-C is that technology.
  • The new iPad Pro replaces the Lightning connector with a more versatile USB-C port while the MacBook Air replaces older USB ports with 2 Thunderbolt ports (think USB-C with a few added capabilities).
  • Of the new products, only the Mac Mini offers both traditional USB and the newer USB-C ports.
  • The big question: Would Apple ever ditch the Lightning port on the iPhone? Doing so would add consistency, but mean incompatibility with lots of existing iPhone add-ons. (Because the Lightning connector is proprietary, Apple also gets a nice stream of revenue by getting a cut from every authorized accessory, which it would likely lose out on if it moved to USB-C.)

3. Recycle, recycle, recycle

  • Apple is using recycled aluminum for the new Mac Mini and MacBook Air casing.
  • No, that doesn't mean it's turning Coke cans into computers. Rather, it's taking shavings from the aluminum used to make other products and refashioning them into the exterior housing of these products. It's still a win for the environment.
2. Google CEO apologizes as accused exec leaves

Rich DeVaul. Photo: Alphabet

There was more fallout last night as Google continues to respond to criticism of its past handling of sexual harassment issues.

  • As first reported by Axios, Rich DeVaul, a director at Alphabet's X unit, has left the Google parent company following reports of sexual harassment. DeVaul resigned yesterday, according to a source familiar with the matter, and did not receive an exit package.
  • Later Tuesday, Google CEO Sundar Pichai sent an email to all employees, acknowledging the company had not sufficiently apologized for its past actions, vowing to take a "much harder line" going forward and pledging support for employees who choose to take part in a planned walkout on Thursday.

Why it matters: Google has come under fire for paying large severance packages or continuing to employ those found to have engaged in improper conduct.

  • All this follows a New York Times article that highlighted several instances of reported misconduct, including the one involving DeVaul, who allegedly propositioned someone applying for a job.
  • The same article noted a $90 million payout to former Android chief Andy Rubin after he had been accused of inappropriate conduct.

Our thought bubble: Pichai is in a precarious position. He's clearly trying to draw a contrast between himself and prior top Google executives who have not handled incidents of sexual misconduct properly.

  • On the other hand, if Pichai is seen as too readily taking employees' side on business decisions, he could face challenges with the board or his Alphabet bosses.
  • Over the past year or so, the company has faced internal uproar on a range of controversies from former employee James Damore to doing business in China to working with the U.S. military.
3. Zuckerberg sees "stories" slowing growth

Photo: Thomas Trutschel/Photothek via Getty Images

Facebook CEO Mark Zuckerberg warned Tuesday that the company is in for another bumpy transition as it changes its apps so that feeds share the spotlight with "stories."

"Revenue growth may be slower in that period just as it was when we transitioned to mobile.”
— Mark Zuckerberg on call with reporters

Details: Zuckerberg gave that revenue growth warning to investors yesterday on a call to discuss the company's 2018 Q3 earnings. He also discussed Facebook's move to Snapchat-style stories, which he called "the future."

  • However, adding the stories format to the flagship Facebook app hasn't gone as smoothly as bringing it to other apps that Facebook owns, like Instagram and WhatsApp. In part, that's because stories rolled out on Facebook later, and the feature wasn't as high in quality as on the other apps, he said.
  • Earning revenue from stories by placing ads on them is still in progress, he added.
  • Zuckerberg predicts that people will share more on stories than they will in feeds, as they come to prefer sharing content they know won't be online forever.

Read more of Axios' Kia Kokalitcheva's full story on Facebook's conference call.

Separately, Facebook confirmed yesterday it's banning far-right extremist group The Proud Boys from its services, citing a policy against hate groups.

4. Group calls for AI oversight by government

Robots at Beijing International Consumer Electronics Expo. Photo: Zhang Peng/LightRocket via Getty Images.

A public interest group is calling for a new federal authority to oversee how the government approaches artificial intelligence technologies as they become central to the economy.

Driving the news: In a paper released today, Public Knowledge lays out a proposal for a new government body that would work with existing sector-specific regulators on common questions and fill in gaps in agencies' AI expertise.

Why it matters: Autonomous machines are gaining footholds in our daily lives and across industries, but there's no clear or consistent approach to governing AI and the policy challenges that are already starting to emerge.

  • To be sure: The proposal doesn't suggest an overarching regulator, nor does it call for sweeping new rulemaking authority.
  • The idea is to create a body that would support existing agencies to "help sector-specific regulators confront major repeatable policy challenges that cut across their domains," according to the paper.

Go deeper: Axios' Kim Hart has more here.

5. Take Note

On Tap

  • Earnings reports this afternoon include Fitbit and Zynga.
  • Small humans in disguise are expected to engage in a nationwide candy search this evening.

Trading Places

  • Enterprise technology learning platform Pluralsight added Google VP Bonita Stewart and former Citigroup executive Leah Johnson to its board of directors.


6. After you Login

Now that is a frightening jack-o'-lantern. Happy Halloween and may all your devices be charged.

Ina Fried