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Verizon is laying off 7 percent of its employees in its digital business as the phone company comes to grips with the hard realities of building a major media and advertising business to compete with Facebook and Google.
A spokesman for the company confirmed Wednesday that the company had laid off about 800 employees in its Verizon Media Business, formerly branded Oath. Verizon Media had a total of about 11,400 employees at the end of 2018.
‘These were difficult decisions, and we will ensure that our colleagues are treated with respect and fairness, and given the support they need,’ Guru Gowrappan, Verizon Media’s CEO, said in a letter to employees. ‘I want to be clear that we will continue to scale, launch new products and innovate. We are an important part of Verizon.’
He continued, ‘Now is the time to go on the offensive, go deep on our big priorities and do everything we can to advance the business.’
The layoffs come at a time when Verizon is struggling to make its transition from a wireless and broadband company into a media brand to create an alternative to digital advertising juggernauts Google and Facebook.
In 2017 it merged AOL and Yahoo into its business, creating the media division dubbed Oath. But the company admitted late last year that the assets weren’t as valuable as it had thought. The company announced in December it was writing down a $4.6 billion goodwill impairment in the fourth quarter as a result of the acquisitions.
Meanwhile, rivals AT&T and Comcast, which have bet big on their own media transformations are seeing their strategies take shape. AT&T spent $85 billion buying media giant Time Warner and also acquired satellite TV provider DirecTV to help distribute content. The company is betting heavily on the move to streaming services, having offered two options — DirecTV Now and AT&T Watch — on top of the various streaming services tied directly to core properties like HBO. AT&T CEO Randall Stephenson said he plans to launch another one this year.
Success in Verizon’s media business is important given competition in its core wireless business continues to be fierce. The company has had to fend off assaults from smaller wireless companies T-Mobile and Sprint, which have been picking customers away from the bigger players.
The Verizon Media Group includes media properties, advertising and technology. In addition to Yahoo and AOL, it also includes properties, such as HuffPost and Tumblr.
‘Our goal is to create the best experiences for our consumers and the best platforms for our customers,’ a Verizon spokesperson said in an email to CNET. ‘Today marks a strategic step toward better execution of our plans for growth and innovation into the future.’
‘People have a really hard time understanding URLs,’ Adrienne Porter Felt, an engineering manager on Chrome’s security team, said in a Wired interview published in conjunction with Chrome’s 10th anniversary on Tuesday. ‘We we want to move toward a place where web identity is understandable by everyone — they know who they’re talking to when they’re using a website and they can reason about whether they can trust them … It’s important we do something, because everyone is unsatisfied by URLs. They kind of suck.’
It isn’t surprising Google wants to fix the problems of URL addressing. But changing something built this deeply into the web is hard. It could be that URLs are more like what Winston Churchill said about democracy: the worst option out there, except for all the others.
And it isn’t clear exactly what the team has in mind, but Porter Felt tweeted on Tuesday, ‘People don’t look at them when they ought to. And when they do, they don’t know which part to look at. We are exploring ways of drawing attention to the right identity indicators at the right times.’
URLs are a security problem since carefully crafted but bogus URLs can fool people into thinking they’re visiting a legitimate website where they enter passwords or other sensitive information.
URLs have lots of elements. Among them: the HTTPS label that indicates a private, tamper-proof connection between your browser and a website; broad and detailed address information for the specific page; and an infinite number of possible parameters used for everything from passing a search query to Google to tracking your presence as you move around the web. URLs can be far longer than even a wide-screen browser can show, and stuffed with alphanumeric gobbledygook that even web browsers find difficult to understand.
Porter Felt knows change will be controversial. ‘That’s one of the challenges with a really old and open and sprawling platform,’ she told Wired.
In the Chrome address box’s ‘resting state’ — in other words, when you aren’t typing in it or otherwise interacting — Google now hides the HTTP or HTTPS prefix and strips out website domain qualifiers like the initial ‘m.’ that indicates a website geared for mobile devices. That’s because long web addresses can be confusing, especially to people new to the web.
In this week’s Apple Core rundown, we’ll take a look at how Apple fits into the foldable phone trend, the hurdles it has to clear to make an iPhone bend, and how soon the company could release a competitor to Samsung’s Galaxy Fold. We’ll also learn about the latest health feature rumored to be coming to the Apple Watch, the latest non-Apple product that could be getting Apple Music support, and the 10 winning pics from Apple’s Shot on iPhone Challenge photography contest have been revealed.
Will Apple launch a foldable iPhone?
The foldable phone trend has taken 2019 by storm, with companies such as Samsung, Huawei and FlexPai unveiling the bendable devices that will soon be in consumers’ hands. The verdict is still out on whether these foldables represent the future of smartphones, but if it is, a flexible iPhone can’t be too far behind.
There’s been plenty of evidence that Apple is interested in making a foldable phone. The company has foldable phone patents that date back to 2011, with blueprints for a hinged phone that can bend in half similar to Samsung’s Galaxy Fold. Apple even got its first patent for a foldable device approved in 2014, according to the United States Patent and Trademark Office. This year Apple registered what seems to be an extension of those original designs, with more details that show the device folding out as well as in. But Apple may choose to take it a step further. Another patent discovered by My Smart Price shows a flexible device with a wraparound display that can take different shapes. And in case you’re having a hard time picturing a bendable iPhone, Dutch industrial designer Roy Gilsing created some pretty realistic renders published in Foldable.News that show what this could look like.
Still, there are a few hurdles the company has to clear before a foldable iPhone becomes a reality.
The first and perhaps the most important one is Apple’s screen issue. It’s no secret that Apple relies on Samsung for some of the OLED screens for its newer iPhones. According to Goldman Sachs analysts cited in Business Insider, Samsung is not willing to share its foldable screen tech just yet, especially not with its biggest rival.
In the meantime, Apple has reportedly chosen LG as a secondary screen manufacturer, a company that has also been experimenting with foldable screen technology for TVs, but it may be a few years behind Samsung when it comes to phones.
Then there’s the issue with materials. Most of the foldables phones announced so far use some kind of polymer blend to cover their screens, aka plastic. But given Apple’s long-standing relationship with glass-maker Corning, it’s doubtful the company would cover its screens with plastic, even if it means waiting until the company can develop a bendable glass solution to fit their needs. Based on our recent trip to Corning’s HQ, we know the company has already developed bendable glass, but it still cant fold completely in half like the plastic on some of these other devices coming to the market.
And lastly, there’s the user experience. It’s unlikely Apple would choose to launch a foldable iPhone unless the software was in place to support it. This means the company would first have to open up the platform to developers to start envisioning what this foldable experience would look like on an iPhone.
All this to say, we’re not getting a foldable iPhone in 2019. Some say 2020 could be an option, but even that seems like a stretch given these limitations. Apple will inevitably be late to the bendable phone game, but it may not be that bad. Our own Roger Cheng pointed out in his commentary that foldable phones right now are a bit of a tease, with hefty price tags, limited availability and potentially buggy software.
The Apple Watch will soon track sleep
The next Apple Watch may finally be going to bed with you. Apple is rumored to be testing out its new sleep-tracking features in secret sites around its Cupertino HQ, according to a recent Bloomberg report.
But don’t expect to see overnight results. The report says also says that these sleep feature may not come until 2020. Before launching any new health feature, Apple is known to put it through rigorous laboratory testing, which could take a while. Plus the company would still have to figure out a way to extend the battery life on the Apple Watch to accommodate 24-hour tracking. The current Apple Watches can barely make it a full 24 hours between top-ups, and still require overnight charging while other competitors with similar sleep-tracking features can go up to one week on a charge. Samsung, Garmin and Fitbit have had a sleep-tracking features that measure both the quantity and quality of your sleep in their wearable devices for years now, but the only way to analyze your zzz’s on the Apple Watch has been with third-party apps.
Will Apple Music get a new Home?
For a very brief moment in time, Google Home users could have caught a glimpse of Apple Music on the Google Home mobile app. And though the button to link the account didn’t actually work, it got everyone thinking that maybe Apple Music would be coming to the Google Home. Shortly after the news broke, though, Google dismissed that idea in a statement to Bloomberg, saying it was all due to a software bug and that the company had nothing to announce. In an earlier statement, Google mentioned that Apple Music is currently only available for Google Assistant users on mobile phones.
Either way, Apple Music on the Google Home wouldn’t be too much of a stretch, as Apple continues to grow its services business beyond Apple products. Android users have been able to download the Apple Music app for a while, and it recently became available on the Amazon Echo. This year Apple also announced that new Samsung Smart TVs will be getting access to iTunes, and Airplay 2 will become available in other smart TVs in 2019.
Results from the Shot on iPhone competition
Ten lucky iPhone users will soon have their pictures displayed on billboards and in Apple stores all over the world. This week Apple published the results of its #ShotOniPhone photography competition, where regular users were invited to submit their best shots.
The group of winners came from different countries including Germany, Israel, Singapore, Belarus and the US, and not all were photographers by trade. The shots ranged from black-and-white landscapes to colorful close-ups of water drops on glass, and not all of them came from the latest iPhone model. Two were shot on the iPhone 7, and one was shot on the iPhone 8 Plus.
After a bit of controversy over the fact that the competition didn’t mention compensating the artist, Apple said the winners will receive a licensing fee for their work, but didn’t reveal the exact amount.
The US Federal Trade Commission’s case against Qualcomm is now in the hands of a judge.
On Tuesday the two sides presented their hour-long closing arguments in a case that could have big implications for the technology world. The FTC has accused Qualcomm of operating a monopoly in the mobile chip market, which hurt rivals and caused handset makers to raise their prices.
For the FTC to win the case, it has the burden of showing that Qualcomm had a monopoly, that it had market power and that it used that power in negotiations with handset makers to command high royalties. The FTC also has to show that Qualcomm’s conduct hurt competitors and that the anticompetitive actions continue or will start again in the future.
FTC attorney Jennifer Milici kicked things off Tuesday afternoon by detailing how Qualcomm used its power in the 3G and 4G chip market to force handset makers like Apple to sign licensing agreements with excessively high royalties. If Qualcomm isn’t stopped, she said, it’ll do the same thing in the 5G market.
Qualcomm ‘acquired monopoly power in the modem chip market and instead of simply competing on its merits’ put up ‘roadblocks’ that hurt rivals, Milici said. ‘It’s beyond dispute the conduct is ongoing.’
Qualcomm attorney Robert Van Nest of law firm Keker, Van Nest & Peters, argued during his closing that the FTC didn’t meet its burden in the case and that Qualcomm won business ‘through superior innovation and better products.’
‘High royalties alone is not the basis for their complaint of harm,’ Van Nest said. ‘They have to show harm to competition.’ But he said such harm hasn’t occurred: Intel now supplies all modems for Apple’s iPhones, MediaTek is the world’s second biggest wireless chipmaker, and Samsung and Huawei have developed their own modems.
‘If the task is to decide whether Qualcomm maintained its position through innovation, skill, technology or through licensing practices, it’s a lay-down hand,’ Van Nest said. The FTC hasn’t ‘proven anything with respect to licensing practices that had impact on advancement of this technology.’
Qualcomm has been battling the FTC in a San Jose, California, courtroom since Jan. 4. The FTC wrapped up its antitrust case against the company on Jan. 15, and Qualcomm rested its defense Friday. The trial has revealed the inner workings of tech’s most important business, smartphones, showing how suppliers wrestle for dominance and profit.
Judge Lucy Koh will now decide the outcome of the case. She noted earlier in the trial that she likely won’t be issuing her normal speedy decision, as she has a lot of evidence, testimony and case law to consider. Still, the FTC on Tuesday asked for a possible timeline for the decision. It’s facing another government shutdown in mid-February and would have to justify keeping lawyers on the clock if a verdict was impending.
Koh said she didn’t know how long it would take but asked the FTC to check in again before a potential shutdown.
‘I’m generally fairly fast,’ Koh said. ‘[But] something of this magnitude is going to take longer’ than other average motions.
Qualcomm is the world’s biggest provider of mobile chips, and it created technology that’s essential for connecting phones to cellular networks. The company derives a significant portion of its revenue from licensing those inventions to hundreds of device makers, with the fee based on the value of the phone, not the components.
Because Qualcomm owns patents related to 3G, 4G and 5G networking technology, as well as other features like software, all handset makers building a device that connects to cellular networks have to pay it a licensing fee, even if they don’t use Qualcomm’s chips.
But the FTC lawsuit could break that model. The US government has accused Qualcomm of operating a monopoly in wireless chips, forcing customers like Apple to work with Qualcomm exclusively and charging ‘excessive’ licensing fees for its technology, in part by wielding its ‘no license, no chips’ policy. Qualcomm’s practices prevented rivals from entering the market, drove up the cost of phones and in turn hurt consumers, who faced higher handset prices, the FTC said.
Qualcomm says the FTC’s lawsuit is based on ‘flawed legal theory.’ It’s also says customers choose its chips because they’re the best and that it’s never stopped providing processors to customers, even when they’re battling over licenses.
‘The FTC hasn’t come close to meeting its burden of proof in this case,’ Don Rosenberg, executive vice president and general counsel of Qualcomm, said in a statement Tuesday following closing arguments. ‘All real-world evidence presented at trial showed how Qualcomm’s years of R&D and innovation fostered competition, and growth for the entire mobile economy to the benefit of consumers around the world. Our licensing rates — which were set long before we had a chip business, and revalidated time and again — fairly and accurately reflect the value of our patent portfolio. Qualcomm’s technology has been the foundation of a thriving, competitive industry.’
No license, no chips
During the trial, the FTC called witnesses from companies like Apple, Samsung, Intel and Huawei and had experts testify about the alleged harm Qualcomm’s licensing practices have caused the mobile industry.
Qualcomm, meanwhile, called company executives, representatives from handset makers and chip rivals, and economics experts to dispute the FTC’s allegations in the case. The company sought to show that competition is healthy in the mobile chip market and that Qualcomm hasn’t hampered the industry.
The company has argued that its broad patent portfolio and innovations justify its fees. CEO Steve Mollenkopf, who took the stand early in the trial, defended the company’s licensing practices, saying the way his company sells chips to smartphone makers is best for everybody involved and is the simplest way to license the technology.
The heart of the FTC’s case against Qualcomm is a so-called ‘no license, no chips policy.’ Qualcomm sells processors that connect phones to cellular networks, but it also licenses its broad portfolio as a group. For a set fee — based on the selling price of the end device, typically a phone — the manufacturer gets to use all of Qualcomm’s technology. It’s phone makers that pay the licensing fee, not chipmakers.
To get access to Qualcomm’s chips, which are broadly considered to be on the bleeding edge of wireless innovation, a phone maker first has to sign a patent licensing contract with Qualcomm. The company has long been the leader in 4G LTE, and it’s ahead of rivals in the nascent 5G market. The highest-end phones, like those from Samsung, have tended to use its modems. But the FTC argues such a requirement hurts competition and cements Qualcomm’s monopoly power.
Apple Chief Operating Officer Jeff Williams testified that his company felt it had to sign contracts for amounts it thought too high — a royalty of $7.50 per iPhone — to maintain access to Qualcomm’s chips.
‘We were staring at an increase of over $1 billion per year in licensing, so we had a gun to our head,’ Williams said as he explained why Apple signed another licensing agreement in 2013, despite being unhappy with the terms. He added that Apple has wanted to use Qualcomm’s chips for its newer devices, but Qualcomm refused to sell processors for the iPhone.
Other companies, like Huawei and Lenovo, made similar comments during their testimony. And during the trial, the FTC has pointed to communication from a former Qualcomm licensing executive, Eric Reifschneider, to mobile chip customers like Motorola and Sony Mobile as evidence of threats to cut off supply.
In one instance, Reifschneider wrote in an email to a Sony Mobile executive that ‘QCT (Qualcomm’s chip business) has been shipping chips to SMC (Sony Mobile) for almost three weeks now without a license in place. It will not be possible for that to continue.’
But Qualcomm and executives from some companies have testified that Qualcomm has never cut off chip supply during contract negotiations. Some of those executives have said in live testimony and video depositions presented by Qualcomm that its rivals didn’t have the technology required for their devices.
Matthias Sauer, an Apple executive and a witness called by Qualcomm, testified earlier in January that Intel’s modems didn’t meet the technical standards required for the company’s iPhones in 2014. Though Intel also couldn’t meet Apple’s chip requirements for the iPad, it would’ve used them anyway, he said, had Qualcomm not offered incentives to stay with its chips. His remarks echoed comments from colleague Tony Blevins early in the trial.
On Tuesday, FTC attorney Milici argued that the no license, no chips policy ‘put up roadblocks for competitors.’ She said there was ‘consistent’ testimony from handset makers such as Apple, Samsung, Lenovo, Motorola and LG that they worried they’d lose access to Qualcomm’s modems if they didn’t sign licenses under terms they didn’t like.
‘Qualcomm has stated unambiguously that it has never threatened chip supply,’ Milici said. ‘This is just a semantic trick.’ In ‘example after example,’ she said, Qualcomm demanded tough terms, the customer resisted, then Qualcomm said if the two sides didn’t reach agreement, the customer wouldn’t be able to buy chips anymore.
‘Customers who heard these statements certainly viewed them as threats,’ she said. ‘Internal Qualcomm documents show Qualcomm executives knew their comments would be taken as threats, and they were intended to be taken that way.’
Milici added that ‘the fact they didn’t have to cut off chip supply is proof of market power.’ Customers had no other viable modem options, so they had to sign licensing deals with Qualcomm to get its chips.
‘We don’t know and can’t know what the market would look like without’ Qualcomm’s licensing practices hurting rivals, Milici said. She said there’s no way to know if Qualcomm would’ve been first in LTE had it not thrown up obstacles for chip competitors. ‘The entire market was affected by roadblocks,’ she said. ‘We don’t know how successful [Qualcomm’s rivals] would have been.’
Qualcomm attorney Van Nest, meanwhile, said during his closing arguments that the companies that testified did so because they want to pay lower licensing rates.
‘They’re all big sophisticated companies with their own leverage,’ he said. ‘Their testimony was, ‘Oh yeah, we felt threatened and had to do what we did.’ I would say this testimony was presented to this court in a very misleading fashion.’
Van Nest noted that the FTC presented video testimony from companies like BlackBerry and Lenovo, where executives said they felt threatened by Qualcomm. But Qualcomm couldn’t present contradictory testimony — where the executives said they never actually received threats or had their chip supply cut off — until it was its turn to present its defense.
He also said the FTC failed to show that Qualcomm had any market power after 2016. That September was the first time Apple used Intel chips in the iPhone. And competition in mobile chips has only gotten more fierce since then, with Qualcomm losing share in that market and MediaTek and Intel saying they’ll soon have 5G chips available.
‘We know 5G is going to be competitive,’ Van Nest said. ‘There is no evidence of plausible chip leverage.’
Both sides presented economics experts throughout the course of the trial to back up their arguments.
In the case of the FTC, Carl Shapiro, a professor of economics at the University of California, Berkeley, provided the key testimony about Qualcomm’s impact on the mobile market. His testimony sought to show that Qualcomm’s ‘unusually high’ royalty rates hurt competitors, handset makers and consumers.
Losing access to Qualcomm’s modems would impose costs on handset makers, including not being able to supply to consumers, Shapiro said in his initial testimony.
‘That’s a very heavy hammer that Qualcomm is bringing down, at least as a threat, in those negotiations,’ Shapiro said.
As part of its defense, Qualcomm last week called three economics experts to rebut Shapiro’s claims. They testified that Shapiro’s methodology was flawed and that he didn’t consider what was happening in the real world.
Aviv Nevo, a University of Pennsylvania economics and marketing professor, on Friday called into question Shapiro’s use of theory to determine the damage allegedly caused by Qualcomm’s licensing practices. Instead, Nevo said he examined the ‘real-world’ agreements Qualcomm had with companies to determine that the rates weren’t excessive.
Nevo testified that the FTC’s theory that Qualcomm uses its power in the chip market to charge excessive royalty rates ‘is just not born out of actual market data.’ He said ‘there’s no support for the theory in the data.’ Nevo also testified that the mobile industry is strong.
‘At a high level, this is a thriving industry,’ Nevo said. ‘Prices are declining. Quantities are skyrocketing.’
Nevo also said there were legitimate business reasons for Qualcomm’s licensing policies. ‘One is reduction in transaction cost,’ he said. ‘The other is allowing rival chipmakers to operate freely with access to tech without a need for a license.’
Shapiro on Monday said some of Nevo’s methodology, conclusions and assumptions were ‘fabricated,’ ‘outrageous’ and ‘all messed up.‘ He noted that Nevo’s methodology had ‘measurement problems.’ He also said that Nevo fell short by not doing a test to determine when Qualcomm had market power.
Last Tuesday, Edward Snyder, dean of the Yale School of Management and a professor of economics and management, criticized Shapiro’s methodology and said the problems Qualcomm’s rivals had were due to choices they made that had nothing to do with Qualcomm.
He noted that three factors explain a company’s success or failure: foresight, investment and execution. Snyder evaluated Intel, MediaTek, Broadcom and others to examine their position in the market and how they performed based on those three factors.
Intel, for one, ‘exhibited … poor foresight about the industry. They invested inefficiently, and they encountered execution problems,’ said Snyder, who at one time worked for the Justice Department’s antitrust division. MediaTek had good foresight and investment, but it had some execution problems, Snyder said. It has now resolved those, helping it become the No. 2 modem supplier in the world. Broadcom, for its part, failed on all three, Snyder said, causing it to leave the modem industry.
And Tasneem Chipty, a specialist in competition policy and antitrust economics from consultancy Matrix Economics, attacked Shapiro’s definition of the market and of market power.
She accused Shapiro of taking a ‘shortcut’ when evaluating whether the mobile chip market was competitive and said he ‘has overstated Qualcomm’s market power.’ She said there’s no ‘evidence of consistent and unconstrained market power of the type’ that would hurt competition or ‘coerce OEMs [handset makers] into onerous business terms that would rob them of billions of dollars.’
The FTC has said Qualcomm’s refusal to give licenses to its chip rivals is part of its efforts to maintain its monopoly. Judge Koh in November agreed and ruled that Qualcomm has to license its wireless chip patents to its chip competitors like Intel.
But Dirk Weiler, head of standards policy at Nokia, testified last week that it has long been industry standard to license technology to handset makers, not chipmakers. Along with his role at Nokia, Weiler also serves as chairman of the European Telecommunications Standards Institute. The nonprofit standards body’s Intellectual Property Rights Policy requires companies to give licenses for equipment.
‘What is my understanding of the industry practice is in the case of the cellular business, this means these companies license, for example, the handset and not any subpart of the handset,’ Weiler said.
And Nevo on Friday said if Qualcomm doesn’t license at the device level anymore, things could get complicated fast. If the company switched to simply licensing at the chip level, it would need to offer multiple tiers, because some of the technology would apply to an overall phone and not just the processor.
‘The number of license agreements would be large,’ Nevo said. But the real issue ‘is the fact each negotiation now will become a lot more complex. Parties, chipmakers and OEMs, would have incentives to point to the other party as the one actually practicing on the license.’
According to Spotify’s website, the ‘Premium for Family’ plan can be shared with up to six people who live in the same household.
To make sure that family plan members actually shared the same household, Spotify sent out emails asking members to confirm their location via GPS, as reported by Quartz.
A number of people had issues with this. Not all families live under the same roof, as Quartz points out. Families can be separated or have members living far away; that doesn’t disqualify them from being a family. But Spotify explicitly says that its family plan must be shared by people with the same address.
Now Spotify says that it no longer requires family plan members to confirm their location. A Spotify spokesperson sent the following statement to CNET:
Spotify is currently testing improvements to the user experience of Premium for Family with small user groups in select markets. We are always testing new products and experiences at Spotify, but have no further news to share regarding this particular feature test at this time.
The location request was just a test conducted by Spotify and is no longer in use. It’s not a long-term way of enforcing the same-household policy. Still, even if the location request is no longer active, it shows that Spotify is cracking down on its family plan.