(^34) Best columns: Business
Apple may have sparked the smartphone revolution,
but “Android was the essential ingredient that made
the devices ubiquitous,” said Shira Ovide. Panicked
after the iPhone debuted in 2007, Google made its
open-source mobile operating system available for
free to telecoms and phone makers, in exchange for
the right to “latch its lucrative online advertising
machine to most any phone running Android.” This
gave every phone maker the power to “churn out any
iPhone-like product and, if it wanted, customize it
before branding it as its own.” Software companies
“no longer had to create a zillion versions tweaked
for a vast sea of mostly crummy proprietary operat-
ing systems.” Consumers benefited, too. If Steve Jobs
had fulfilled his pledge to “destroy Android” in 2010,
it’s possible that the smartphone would have stayed
“confined mostly to the relatively affluent parts of the
globe, as the PC was before it.” Instead, Samsung,
which joined with Android in 2009, began making
phones “at every conceivable price tier.” Since 2010,
Android has powered more than 8 in 10 new devices
worldwide. Technologists today are looking beyond
the smartphone, and “the biggest platforms for cloud
computing, driverless cars, and voice-activated digital
assistants are proprietary systems,” not open-source.
Sadly, we may never see anything like Android again.
Tech companies are tripping over themselves to
cozy up to the U.S. government, said Kevin Roose.
Exhibit A is Peter Thiel, the Trump-backing venture
capitalist. “Seeing him lecture anyone on patriotism
is rich.” This is a man who once supported a move-
ment to “flee the United States and build a floating
city in international waters.” Then there’s Facebook
CEO Mark Zuckerberg, who has been decrying
China’s growing tech prowess. He conveniently
forgets to mention that “he has spent much of the
past decade trying desperately to curry favor with
the Chinese” in an effort to gain access to their mar-
kets. “Amazon and Apple, two tech giants that love
America so much that they have gone to elaborate
lengths to avoid paying taxes to its Treasury, are
also promoting themselves as national champions.”
And Google just sent its CEO, Sundar Pichai, to the
White House to “reassure the president that Google
does not discriminate against conservatives.” This
“patriotic posturing” is questionable, but it may be
smart. Lawmakers understand the importance of
technologies like 5G and artificial intelligence to this
country’s national security. However, they should
also be “appropriately wary of Silicon Valley’s charm
campaign.” It’s dangerous to conflate what’s good
for Big Tech with what’s good for the nation. Xin
hu
a^ N
ew
s^ A
ge
ncy
/ey
ev
ine
/Re
du
x
Android, not
Apple, made
our world
Shira Ovide
Bloomberg.com
Big Tech
wraps itself
in the flag
Kevin Roose
The New York Times
Three months after its public debut,
Uber posted a $5.2 billion loss that’s
“impressively vast” even for a com-
pany whose business model is based
on outspending the competition, said
The Economist. Much of this quar-
ter’s loss—$3.9 billion—is a one-time
cost from stock-based compensation
linked to Uber’s IPO. Still, “from its
inception Uber has now lost a cumula-
tive $14 billion.” All that money is
being spent on “efforts at becoming
the ‘Amazon of transportation,’” but
this is far more money than Amazon
ever lost. Meanwhile, Uber’s revenue
growth has slowed to its lowest rate ever “as competition for
passengers holds down fares.” This is a company that “relies
on rapid growth to keep investors happy.” Now those investors
have to decide “whether it’s worth backing a firm splurging vast
sums.” Uber still has $13.7 billion on hand, said Tom McKay in
Gizmodo.com, so it still has “about two years before it exhausts
its current funding.” But clearly the company can’t keep burn-
ing money at its current rate. It’s laid off 400 people from its
marketing staff and put a hiring freeze on new engineers—not
“a good sign for the future of an organization.”
When Masayoshi Son, the CEO of tech investment giant
SoftBank, “wrestled his way into Uber a little more than a year
before the IPO,” it was seen as a triumph, said Tim Culpan in
Bloomberg.com. Now, however, the stock is down more than
20 percent since Uber’s May 10 IPO, and the public markets
have shown themselves less willing to “invest in big unprofitable
businesses with the promise of future
growth.” That makes Uber “among
the biggest weights around the neck of
the SoftBank Vision Fund.” SoftBank
is even looking at investing in some of
Uber’s competitors, said Jesse Pound
in CNBC.com. But Uber CEO Dara
Khosrowshahi believes Uber and Soft-
Bank are very much still on the same
side. When Son “puts money into com-
panies, it’s because he believes in them
and he thinks they’re going to be cate-
gory leaders,” says Khosrowshahi. “We
are their single largest investment.”
Uber has claimed that its biggest rival is car ownership, said
Patrick Sisson in Curbed.com. “For roughly the last decade,
Uber and Lyft and other technologies have been the focus of
wild claims of growth and guarantees that they would revolu-
tionize how we get around, reduce traffic, and cut emissions.”
Now many of those claims look suspect. Uber’s and Lyft’s own
studies show that drivers cruising around the streets increase
congestion. Uber was heavily subsidized by venture capital, cut-
ting the cost of rides and turning them into “affordable luxu-
ries.” Its mounting losses, though, have exposed the problems
with the model. “Not only is it difficult trying to disrupt the way
Americans travel, it’s also very, very expensive.” Uber and its
competitors face high costs to recruit drivers, while “passengers
are very price-sensitive when booking rides.” All this invites a
question that’s even bigger than Uber: Has the tech solution that
so many investors bet on distracted us from better and cheaper
ways of fixing our transportation infrastructure?
Transit: A giant loss raises questions about Uber
Uber shares sank to a new low after a weak quarter.
michael s
(Michael S)
#1