On this edition of the Futurum Tech Podcast, Apple and Qualcomm have finally settled their disputes. What does their new partnership mean for consumers, Intel, Apple, Qualcomm and the future of US technology? Also, the FTC’s investigation into Facebook heats up, how 3D scanning technology may help rebuild Notre Dame, Samsung folds very bad week, Zoom’s IPO, and much, much more on this edition of FTP.
Our Main Dive
Not even two days into opening arguments of the latest Apple vs Qualcomm litigation, the two US tech giants announced a surprise settlement and new long-term partnership and licensing deal around Qualcomm’s modem technology, surprising everyone with the exception of Intel, who promptly announced it was backing out of the commercial 5G modem market. We break it down and discuss the long-term market implications.
Our Fast Five
We dig into the week’s interesting and noteworthy news:
- The FTC’s inquiry into Facebook’s privacy problem may be nearing a settlement
- Twitter is testing a new “hide the trollish comment” feature for moderating Tweet replies
- Zoom Video IPOs to keep the 2019 market rush moving ahead ($ZM) while Zoom Technologies ($ZOOM) sees its penny stock go berserk as investors confuse the two companies
- Rebuilding the Notre Dame Cathedral just got easier thanks to Dr. Andrew Tallon who created an archive of digital scans and 3D models of the French landmark
- Russia sets its sights on a Great Chinese Firewall with legislation that would allow the country to block outside (foreign) servers at will from its Internet
Samsung’s new Galaxy Fold is in the hands of tech reviewers and it’s… breaking! This product has a serious case of “rush to market” with screen and folding issues that should not be occurring this late in the product launch. BTW, we love the idea of the foldable after seeing it in use.
Crystal Ball: Future-um Predictions and Guesses
When, oh when, will Apple ship its first 5G iPhone? Now that the Qualcomm dispute is settled we make our predictions (and no, we don’t agree).
Daniel Newman: Welcome to this week’s edition of FTP Futurum Tech Podcast. I’m Daniel Newman. I am your host today joined by my always smart, always savvy, analyst colleagues at Futurum. Olivier Blanchard and Fred McClimans. And if anybody caught that there, I did try to speak French but it was only Olivier’s name. Guys, how are we doing today?
Fred McClimans: I’m suffering from that French attempt.
Daniel Newman: Yes. That wasn’t good. But it’s been a big week for France, and not all good. And we will talk more about that later. We will tie that into tech just a little bit. But for now and before we do jump into this week’s show, where we will be talking about the big settlement. And if you don’t know what the big settlement is, that was the big moment that Apple and Qualcomm hugged, shook hands and were the personification of it’s just business. But first, I must always provide you with that ever pleasant warning that this show is for information and entertainment purposes only. And while we do talk about companies that are traded publicly, we talk about IPOs. And sometimes we even talk about what we think might happen to their stocks. We are not advising recommending or suggesting the purchase or procurement of any investments or equities.
All right, gentlemen. So two days into the trial, opening remarks not even finished, suddenly, judge calls a sidebar, and it is announced the case has been settled. Apple and Qualcomm, two plus years of feuding and two plus years of publicly feuding. And just like that. And I don’t know about you guys, but I remember I was driving in my car, a message comes across and said the case is over, it’s been settled and I seriously thought it was a joke. We’ve been so invested in this. If you follow this podcast for the last few years we have been talking about Qualcomm and Apple and the ongoing dispute frequently. If you read our blogs, our Twitters we’ve been adamant, and frankly, we’ve been very pro Qualcomm and we have to say Qualcomm is a client.
But we’ve been very pro Qualcomm because we believe in the contributions that they make to the innovation ecosystem. And we really have felt that in many ways, Apple had been, taking advantage of the legal system, of regulators around the world to try to make Qualcomm’s licensing model look abusive, and again, there’s still an FTC case to roll on, which we can talk more about later. But all things considered. I was in shock. I was in awe, I had not expected that to happen. And apparently only a few in the know people out there really did. So in my car, jaw dropped completely surprised, started texting and messaging and doing everything you’re not supposed to do while driving, because I was like, “Is this for real? Is this real?”
And I pulled over I pulled up my browser and I saw a CNBC article that said, “Case had been settled.” And I was like, “Holy crap.” Olivier, I know you and me have put a lot of heart and soul into this. And I’m not going to let Fred speak till last because he’s a fanboy. But you and I Olivier had been on this case for some time. When you heard this settlement took place. What was your gut? What was your first visceral reaction?
Olivier Blanchard: Oh, same as you I thought it was a joke. I didn’t think it was … I mean, I was in the middle of tweeting about day two of the trial. So I was basically just kind of fact checking some of the comments being made by Apple attorneys and kind of looking at the Qualcomm side which had just been talking I think for like 35, 45 minutes and kind of opening statements and semi rebuttals. And it seemed to me that … One of the reasons you’ve alluded to the fact that we believe in Qualcomm’s business model and its contributions to the tech ecosystem, and that’s true.
But there’s also another element, at least for me, which is that I always felt that Apple had a really no case here, it seemed like an overreach in an attempt to undermine Qualcomm to kind of force it into agreeing to really crappy terms. Essentially selling technology licensing to Apple for a fraction of its value.
And for the last, two plus years, Apple had been fairly aggressive and somewhat successful in attacking Qualcomm from a whole bunch of different angles on a global scale and weaponizing the courts and regulators and the press to try to get the upper hand and force Qualcomm into that position. And Qualcomm had weathered that storm actually fairly well and I felt through the middle of last year that Qualcomm had actually turned the corner and flipped the script on Apple and was starting to gain the upper hand. Qualcomm seem to have gained the initiative, and it was starting to win. It won an injunction or at least a preliminary injunction in China on the basis of patent infringement on the part of Apple, which stock it won a similar verdict in Germany, where iPhones were also banned from importation and sale certain models anyway. It had just won a jury verdict a few weeks ago in the United States.
And based on opening arguments by Apple attorneys on Monday and Tuesday, it seemed pretty clear that Apple was very likely to lose this case in San Diego as well. And so I always thought that Apple would settle eventually, but I didn’t think the settlement would come for a few more weeks, even a few more months. I thought that they were still going to try to win in court. And so when the news came out on Tuesday my first reaction was, well, was Tim Cook watching the trial and realizing how bad the Apple arguments were? And it turns out it’s not that simple. I think that there were negotiations going on in the background that nobody knew about. And I think that Tim Cook was ready to settle probably and knew that he was going to settle probably last week.
Daniel Newman: Yeah, I wanted to I wanted to give full attribution to the article on Market Watch that I’d written about Apple’s struggles the one that got me like 47 negative comments and several hundred-
Olivier Blanchard: Death threats.
Daniel Newman: Death threats, but I said the irony of it was only a few days later, my God, and like I said it all joking aside, the article surely didn’t force anybody’s hand. But I do think what some of the dilemmas that we were pointing out and Olivier, candidly helps me with these articles and help me, flush out some of these arguments. Some of the things that we did come up with I mean about their innovation dilemmas, implementations, their product quality. I mean, this stuff had picked up and I think this was one more front that some extent Tim Cook had to at least be looking and going, “God if we lose this, can we really handle what the outcome is going to be?” Because they are falling behind. They are a distant technologically to others. And yes, the fans will say, “Oh, no, we’re not it doesn’t matter 5G doesn’t do anything.”
Yeah, okay. Keep drinking the Kool Aid and keep believing that it’s okay to be two years late on every innovation. That’s not to say again, implementation and product quality isn’t there. It’s fine. Trust me most people they’re going to get by with their iPhone as Mac for $1500 and in those ear pods that look ridiculous. Did I say that out loud? Yes, I did. They do, they look stupid. I’m not saying they’re not cool. Listen, people wore jeans, they wear jeans with holes in them on purpose. There’s a lot of things that look stupid that people do that are trendy it doesn’t mean it looks good.
Okay. Digressing multiple times, Fred, throwing this your way. Beyond just not having to listen to Olivier and I, continuously argue against Apple’s innovation. Talk a little bit about, your response. You haven’t been quite as close to it on an everyday basis, but you are a strong advocate for Apple and you are a pretty big fan of the company. What do you think the settlement means? Were they giving in? Is it a good thing for them? What’s your take?
Fred McClimans: Well, if you look at the Apple situation here, I mean, you’re right, there are a number of areas where they have lagged a bit, and they’ve got some problems that they clearly need to fix that, I think a result of them just not being focused enough on what they can do to really innovate or transform their products as much as it is micromanage some of these products, for years beyond where they should be. But for this particularly thing, the first thing I have to say is, my first thought was what do we do with all the party snacks? What do I tweet about for the next hour? As you mentioned, kind of jokingly, because this was a surprise. I mean, this was not something that too many people had, picked up on or hinted. I mean, there was always the option that Apple and Qualcomm would settle.
But, at this particular point, I think it’s worth noting that Apple for their lack of innovation in certain areas, has been very fixated on the execution side. I mean, Cook, Tim Cook, he’s an operations guy, he’s an execution guy. He keeps things running smoothly there, and he’s doing a pretty decent job of it. But for this particular thing, I have got to believe that Apple, not in the last week, not in the last month, but maybe a year back, they have an equation, they have a formula that says, “Here’s where we need to be.” And in that formula, they have time to design, time to build, time to ship all the components and all the costs for everything that they’re going to put into that mix.
And at a certain point, that equation tipped into the settle side, and not the litigate side. And I think the decision was probably that simple. There are a number of factors in that equation. There’s the whole issue of Intel and their ability to actually deliver on the 5G modem technology. But it’s a formula. It’s an equation here. And it seems to be working out pretty well in Qualcomm’s favor at this point. But I’ve got to assume that Cook made that decision based on the financials, based on the numbers. And in fact, right now, Qualcomm has indicated they’re expecting about a $2 per share incremental earnings for the next quarter. UBS is suggesting somewhere around a $6 billion payment up front to Qualcomm with eight to $9 in royalties per iPhone. And that’s notable there because everybody had been kind of looking at this going, “Yeah, probably $5 per phone.” So overnight, Qualcomm’s getting a much better deal for this.
And overall I think this is a win-win, so to speak with Qualcomm, maybe a double win on this, but this needed to be put behind everybody. It was just too disruptive to the market. And for one, I’m glad it’s over.
Daniel Newman: Yeah, I think you made some really great things. And I think it’s worth the while to point out that Qualcomm stock was fluctuating under $60 a share in the high 50s for some time even into the mid-50s. And sitting today, I mean, it opened today at over 78 a share. Right now it’s up 81 cents at 79.89 a share. They’re up over 20 percent based on this, so the market clearly did not want them to be battling with Apple. So this was a huge win for all of Qualcomm shareholders. Apple is up. Apple is up over 203, their valuation continues to soar and to grow. The market was pleased although the jump wasn’t quite as big. I think the downside as investors saw for Apple was not as significant as the downside for Qualcomm had they lost this thing?
I will also point out though, that and a lot of people weren’t talking about this, and they weren’t listening to me when I talked about it. But equities analysts, the ones that you do listen to and take stock advice from had big ones like HSBC had recently downgraded Apple based upon their challenges in innovation, the shrinking demand for high end phones. And so I think that Apple was really reading the tea leaves and saying, we can’t afford to continue to incrementally improve our phones while our competitors are moving into the next generation for up to two years. And Fred, you mentioned Intel. And another key argument in a follow up piece I wrote on this settlement was that Intel is actually a winner here. And I’m going to take a second to frame this and I’m going to let you guys chime in on it.
But Intel for some time, right, I think that they were a unwelcomed recipient of the Apple business for high end smartphone modems. I don’t think they ever wanted to be in that business. And I speculate and maybe they saw it as an opportunity. But in comparison to the processor business they have with Apple, I think it’s a very small, in fact, I know it was a very small fragment. And although they never announced the specifics, that was, the things that people within Intel would say, it was a much smaller number than the processor business for them. I think they felt pressure to try because of the huge amount of business they do with Apple. I think they also saw it as maybe an opportunity if it came easier, which clearly it did not to get into this space after several past failed attempts.
But Intel has got a strong data center business and I think by focusing on that business, they will actually gain. And by the way, the market also agreed with that synopsis because Intel stock went up even after the company announced just hours after the settlement was reached, that they’re getting out of the modem business altogether. They are not going to play in smartphone modems, and it’s like Apple Qualcomm kissed and made up and Intel’s like wiping their hands, they’re doing the hula in the backyard saying, “This is good, we can get back to the business that we’re good at.” I mean, does this story jive Olivier? Do you think that Intel’s that’s just good spin?
Olivier Blanchard: Yes. No, no, I actually agree. So it was funny because I looked at the stock performance of Qualcomm and Intel simultaneously, in the hour after the announcement was made, and they were inverted. So Qualcomm shot straight up, and Intel shot straight down. And so you could tell that people already got it. So this was a bad week for Intel. It was a loss. They lost Apple’s business. They got a black eye. Basically, I think everybody understood that they’re a great company, but they weren’t really able to deliver they were too far behind. They just weren’t delivering what they needed to or what Apple needed to-
Daniel Newman: But hadn’t they already gotten the black eye, Olivier?
Olivier Blanchard: I mean, I think, yeah, the black eye was there. And I think in a sense, so to your point, I think that to the extent that a black eye would need a band aid the band aid needed to be ripped off. And the band aid got ripped off this week. So bad week for Intel. But I think by no longer having to deal with this nonsense and no longer having to try to create this path to a 5G modem, that was, even if it was going to happen, it was always going to be behind. They were never going to be able to catch up to Qualcomm or at least not anytime soon. Now Intel can focus on what it’s actually good at.
So yes, I think that in the short term, it was a painful week, but it’s for the best. And so when I look at all this, I think that pretty much almost everybody wins. On the one hand, Qualcomm definitely wins because it’s getting Apple’s business again, it has reportedly signed a chip supplier agreements, it’s not just the resolution of all the licensing and a royalty money, and all of that part of it. It’s also the fact that Qualcomm modems are going to be going into Apple’s iPhones again. So that’s a huge win for Qualcomm on every possible front. It’s a huge win for Apple because Apple is now going to be able to catch up to its competition with decent modems.
And by the way, it’s not just the modems, right? So Qualcomm’s SOCs, or System on Chips also improve power consumption, which means it improves battery life. So there’s going to be a whole slew of adjacent improvements to iPhones that were pain points for consumers with regards to the competition. So Apple wins here. They finally have really good technology and they can compete on the technology side with the Samsung’s and the Huawei’s and the Pixels of the world. It’s a win for consumers. There’s a huge amount of excitement and I think we’re going to touch on that in our crystal ball later. I mean, I felt this huge breath of relief from a lot of the people who follow what I talk about when I cover Qualcomm and Apple and my concerns and complaints about where Apple has been the last few years. That, oh, iPhones are finally going to get good again. Because they’re going to get better that I guess it’s going to be like better components in it.
So essentially an iPhone with Qualcomm technology inside of it software and hardware is a better iPhone. So that’s good for consumers. It’s good for competition. It’s again, we just talked about how it’s going to be good for Intel as well. I think the only losers in this equation, because there are always losers. And it’s a mixed bag for Intel, short term versus long term. But overall, the losers in this equation, I think, are Huawei and Samsung, who would have benefited from Apple continuing to be stalled with its innovation, Apple continuing to fall behind. Essentially, up until the settlements iPhone was going to be … Actually, no all of Apple was going to be a 4G company going into 2020, maybe 2021, while the Android ecosystem and companies like Huawei and Samsung were 5G companies.
And so with the prospect of Apple finally becoming a 5G company as well and being able to truly compete in the mobile world, Samsung and Huawei lose that potential advantage that I think they had. So I think they were the big losers this week.
Daniel Newman: And I think you hit a lot of those key points and I think you mentioning that it is more than the modem. Now, Apple was continuing to use IP from Qualcomm outside of the license agreement, which is part of what these lawsuits were about. They were still using some of it, but I mean, there is a lot of technology in the portfolio. I mean, it’s thousands 10s of thousands of patents.
Olivier Blanchard: I should also point out that there’s something that kind of gets lost in all this. Apple has never been the licensee of Qualcomm, the licensing was actually done through the contract manufacturers.
Fred McClimans: Right, right.
Olivier Blanchard: So Apple this week, finally, for the first time became a direct licensee of Qualcomm, which completely changes the equation. And one question that I had about this and I looked this up, so in case it’s a question for our listeners, in terms of who pays for what? Are the contract manufacturers still going to pay for the licenses? How does it work? The contract manufacturer is already paying for the licenses for all of the other clients that they have, all the other companies that they make components and phones for, the other OEMs. But Apple will be directly paying Qualcomm for the licensing now.
Daniel Newman: Which is a big change in the model.
Olivier Blanchard: Yes.
Daniel Newman: Of course, this also indicates to me that there will be significant volume co development and this kind of takes me to my next point, which Fred I want you to touch on before we move on to our Fast Five segment, which is the US innovation ecosystem. So Olivier, you mentioned that the losers were Samsung and Huawei and when I put my piece on Market Watch, I said the same thing. I said they had been enjoying watching this unfold, because who could do 5G besides Qualcomm and it was Huawei and Samsung. And so we talked a lot about innovation and innovation ecosystem. The US has long been a leader in the development of standards and of technologies and in mobile communications. We saw Apple’s content that came out is part of the early arguments and the opening arguments where they clearly said Qualcomm’s patents were far more valuable than those of the Europeans, right?
Fred McClimans: Yeah.
Daniel Newman: There extending Nokia. And so while they were trying to use that as an argument, they were contradicting themselves. But meanwhile, Huawei and Samsung were enjoying 5G, they’re enjoying that they can create it, they can make it, they can implement it in to some extent, because Samsung, of course, partners with Qualcomm, although they do have some of the capabilities in-house and Huawei has all the capabilities in-house, maybe not MIMO or MIMO but some things hurts, but either way, now that changes the whole playing field. Fred, how big of a success story or of a important settlement was this for the US innovation ecosystem?
Fred McClimans: I don’t want to position this as sort of East versus West rivalry here.
Daniel Newman: It’s okay if you do.
Fred McClimans: Certainly not going back to the early days of rap and hip hop for that. But, what we have here is a relationship that needed to be in place for 5G, for mobile technology for, all the great things that IoT, that 5G, that mobile tech, that wearables, everything can kind of benefit from. And we got that. I mean, that was clearly in my opinion, an outcome from this particular settlement. I think this is great for the potential and I say potential cautiously because we’re not quite sure what’s going to actually play out here. But the potential for Apple and Qualcomm to now get even closer to say, ‘Look, we’ve settled everything, we’re back together, we’ve been through, the divorce couple counseling program. Here we are. Let’s make this work. And let’s see what we can actually do to really turn up the innovation capability and start to think as partners rather than kind of off again on again, frenemies in this whole mix here, so I think this is a big thing there.
At the same time. This is also big for Intel, and I think, Olivier, you touched on this a few moments ago, Intel, I don’t think really ever wanted to be in this particular space. And they certainly were having difficulties delivering in this particular space. I mean, the fact that the 5G approach from Intel had been kind of dragging out a bit, that was a strain on Intel, that’s a strain on their management, their internal resources, their budget allocation, the works, as well as a strain on Apple. And what we saw in the market was a lot of uncertainty being removed from that mix. Now, when the news broke on Tuesday, yeah, Intel did take, a brief hit in the market, but they’re now up above where they were there. They’re I think this afternoon, 58.51 a share. They were in the 57 range, and they dropped down to the 55 plus range right after the announcement.
But I mean, clearly, the market seems to get that aspect as well. This removes a significant burden and uncertainty from Intel and lets Intel really focus on 5G for their IoT capabilities and everything else that they can really, really excel at. This, it’s like having a barrier removed, that you just can’t quite get through. It’s down for Intel. It’s down for Qualcomm and AT&T. So now the question becomes, what can these two companies or maybe even three companies or four companies really start to do to innovate? Because you’re right about Huawei. Samsung, yeah, that’s a threat out there, but Huawei out of China, as Dan, you put it, they have everything in their toolkit.
And that’s a very significant issue that, we’re going to be watching closely here because right now, Huawei, no competition in the US capability for them, but for the rest of the world, and that’s the rest of the world is where Apple really needs to excel, they’re going to need to get creative, they’re going to need to do some cost reduction, they’re going to have to come out with features in their products and distribute some of their manufacturing a bit more than they have to compete. And even there Huawei and Samsung are still crushing it in markets where Apple should be much stronger.
Daniel Newman: That some great insights, Fred, and thanks for chiming in on that. And guys, thanks for a great segment on this whole settlement. What exciting news. I would love to spend a whole special episode of talking about this for the next three or four hours. I couldn’t even sleep that night. It was so overwhelming to me, because it had been such a thing consuming me and my daughter’s I told them the news and they said, “So Dad, can we get iPhones again?” That was the first thing that came to their mind. And truth be told, this was and I want to wrap up on this concept. Sometimes it’s hard to separate business and we’ll just call it business negotiations from just pure spite. And I think the funny thing is as consumers and as those of us that were trying to educate and articulate the case to the market, we were just trying to educate, but the spite that came from the communities in some cases, Qualcomm but in many cases, Apple towards Qualcomm was incredibly revealing.
Because between the two companies, this was all business. Sure, there might have been some deep seated frustration that went throughout the ranks of these companies. But at the very top level, the court was just a negotiating move. And in the end, if all companies come out better, I mean, they didn’t even wait a day to announce their new partnership. They were moving forward together, skipping and holding hands. And trust me, you cannot skip when you’re not smiling. If you’re skipping, you’re smiling. And apple and Qualcomm are smiling right now. All right we’re going to move on to our Fast Five now, Olivier, you’re going to kick it off telling me something going on with the FTC.
Olivier Blanchard: Yes. So just as a reminder, the FTC has been investigating Facebook for the last year or so, specifically about the mishandling of its users personal information. And apparently according to two anonymous sources, and this is being reported by the Washington Post, somebody this investigating as focused specifically on Mark Zuckerberg, which is something that the FTC and federal agencies usually don’t do. They tend to focus on the behavior of the company, nonspecific individuals within the company. So it’s not verified but there’s some reporting that indicates that this may be the case. The reporting also states that settlements may be close between Facebook and the FTC. And that would be very interesting. And I’m just going to read from the article that I wrote from the Washington Post because it does a good job of kind of like putting everything together in one quickly digestible package.
And so, “Settling that federal inquiry now more than a year old could force Facebook to make significant concessions, including paying a fine ranging into the billions of dollars that’s expected. The post previously has reported. It could also result in the obligations targeting Zuckerberg specifically also. One idea that’s been raised could require him or other executives to certify the company’s Privacy Practices periodically to the board of directors.” And again, two people familiar with the matter sat along with heightened oversight by the FTC. So we could see Mark Zuckerberg and maybe some other executives actually being held to account to personally certify that Facebook is abiding by whatever new rules will come their way. And with accountability comes potential penalties if they fail to do so. So stay tuned.
But I thought that was a good update, especially given the news we had this week that there was another privacy, not really a data breach but an item of say gross negligence. Some people have characterized it as, with regard to Facebook, storing user passwords in plain text, again, to the tune of 1.5 million accounts.
Daniel Newman: Which was originally like 10,000. And normally I don’t comment on Fast Fives but let me just say, if anyone does listen to me and wants some advisory advice. It’s very simple. You need to split the board and the CEO. It just has to happen. It’s time I know that there’s somehow the guy Zuckerberg was able to create all the rules, and they need to be rewritten at this point. All right, Fred, when you need to talk about Facebook, you really can’t talk about Facebook and not talk about Russia. What’s going on?
Fred McClimans: Yeah. So Russia, Russia, and there’s a lot going on with Russia this week, a lot going on with Russia. And we’re not going to even get close to that we’re going to focus on something else instead. So the Internet, as we all know, and love is this ubiquitous, open resource for everybody. It’s there. It’s created through the kindness and the profit motives of private companies everywhere who have interconnected everything. And aside from some net neutrality issues, it’s pretty open access, except in China. China has this massive Chinese firewall around the Internet and they filter everything in and out, well, it looks like Russia is getting set to do the same thing. They have legislation that is swiftly passing through that, within three or four months here could result in Russia having the ability to filter out foreign servers from their network, that would be a big leap forward in terms of catching up with China’s ability to filter and control access.
Now, they say this is a result of them being concerned about the US and what they call the CIA overseen CIA initiative, Internet, as they put it, but, in reality, this speaks a lot more to the authoritarian control mechanism and the interest that we believe they have in controlling what people can actually see inside and outside Russia. So this overall, I think, is a bad move. I think it’s a bad move for just about everybody in the world as soon as we start to take the Internet, and we start to nationalize portions of it. As soon as we start to filter what people can and cannot see. And I’m not talking here about filtering out trolls or bad behavior, but just general access to the wealth of information that’s available online. As soon as we do that, we are all weakened a little bit and perhaps maybe a lot because if Russia does follow through on this, I would expect other countries with semi authoritarian leanings to potentially go down that same route under the guise of well, if they’re doing it, we have to protect ourselves as well.
So that’s what’s taking place there. We’re going to be watching this closely to see what actually transpires but just remember Russia is in the house and they’re starting to mess around with the net. So we’ll see where this goes.
Daniel Newman: All right, Russia.
Fred McClimans: Russia, Russia, Russia.
Daniel Newman: Let me get a little lighter and happier hearted. So Zoom video conferencing, had their IPO this week. CEO Eric Yuan is now a billionaire worth over 2.9 billion as the stock shot up for being a software company that went IPO that actually makes money I know it’s mind boggling. But with over, I believe it’s over 344 companies spending over $100,000 a year on the software, the company is doing quite well, the stock is performing quite well. And Yuan who was one of the early leaders of Cisco’s WebEx, and when it was WebEx before the Cisco acquisition left WebEx thought that the software was too kludgy, the solution didn’t work well enough and had a better idea. A couple of meetings later, he raised a seed round put it out to market and that was in 2011. On 2019, he’s now worth 2.9 billion based upon his holdings in the company.
And another quick funny note and Fred you shared this with me was there is a company named Zoom Technologies that also happened to benefit by seeing a nice bump in their stock price, simply on the fact that the Zoom conferencing Zoom video confused some investors who started pouring money into the other Zoom leading to some growth for them on the day. So I hope some of their big shareholders got out and took advantage of the bump on the day. So Zoom video though good tool, something we’ve actually used here for our video conferences in our recordings, and it’s something that I have had a pretty good experience with, so good on them.
And now I am going to move forward to the next one and Olivier, share with me how technology might help with the rebuilding of Notre Dame. And as I mentioned to you guys, we were going to talk about the Notre Dame.
Olivier Blanchard: I’m French so, it’s pretty decent, it’s pretty decent. So I’m going to go ahead and show off mine so Notre Dame which horribly, almost burned down this week, as the world watched in horror, can be rebuilt, will be rebuilt. And technology is here to help. And there’s a gentleman who is unfortunately dead now but before he died, had gotten into the habit of scanning certain buildings, some of them churches, other like historical buildings, with a laser scanner for whatever reason, and those scans exist and those scans are going to be able to or actually are going to be helpful anyway, in the rebuilding of Notre Dame, whether they’re rebuilding is aimed at trying to recreate an exact not replica but essentially to fix the parts of Notre Dame in the way that they were built originally, or if a new spin is being given to the construction.
Mr. Talon used a geo systems laser scanner, which sends out laser strobes that measure the distance between the scanner and anything the laser hits. And that laser consists of basically 100 … The data anyway, consists of over 100 billion … I’m sorry. One billion data points structured as point clouds, which software can render into images in three dimensional space. So it’s really interesting that a building that is over a thousand years old that is a historical marvel, a witness to the growth of Western civilization, may now be rescued by fairly new technology and human machine partnerships, which by the way, Plug is a subject of our upcoming book.
Daniel Newman: Actually called the human machine.
Olivier Blanchard: That’s right. And unfortunately, that particular example will not be in the book because it happened after we submitted the manuscript. That’s just another example of how technology which we, talked about how technology makes our life more complicated. And especially when we talk about Facebook, how it can be kind of weaponized against us. But technology, again, can be used for good. And this is a perfect example of that.
Daniel Newman: And most technologies have a lot of great applications and this is one of them and kudos to,
Olivier Blanchard: 3D.
Daniel Newman: Fred. I’m going to have you take us home here.
Fred McClimans: Yes.
Daniel Newman: What’s going on with Twitter’s … Twitter has had an interesting week, you’re going to talk about just one because you can’t possibly fit the whole Jack Dorsey as well as mine segment.
Fred McClimans: Well, Jack, maybe has not lost his mind. But earlier this week, he sat down with Chris Anderson and Whitney Pennington Rogers at Ted 2019 event and he did his best impersonation of melancholy and blue man I’ve ever seen. Just absolutely phenomenally spot on. But one of the issues that Jack and Twitter have faced is a lot of criticism about what Twitter is doing to control some of the trollish behavior, what they’re doing to actually improve the service. And Jack’s standard approach has been, yes, there’s a lot we can do. But we need to go deep, we need to really rethink. Over the past couple of years, on more than one occasion, he’s talked about needing to rethink fundamentally what Twitter is and what it isn’t. And that’s great for him, he can go off and do that, some of the suggestions that he’s come up with I don’t necessarily agree with this being that beneficial, but there is a somewhat beneficial note here.
Twitter is getting set to start experimenting in June of this year, with a reply hiding feature that would actually allow the creator of a tweet to temporarily or perhaps even superficially, or superficially hide certain replies that they think are not on point, are detrimental, are trollish, whatever you may term that. The way it would work is if you publish a tweet and or if you tweet a tweet, and somebody replies that you think that’s inappropriate, you can literally go down through a little tiered menu and flag that particular message to hide that one message. Now, it’s still discoverable. People who are following this could get a notification that this tweet has been posted here. But it wouldn’t appear to the casual person scrolling through. They would if they want to have the ability to click and hide or to literally show all of the hidden replies to that.
It’s an interesting thing. There are some pluses and some minuses to this here. I think anytime you add a moderation feature in, you start to change the openness and the transparency of Twitter and the threads that occur there. So I think the key is going to be, if they do implement this, it has to be really, really super easy for some other user to come across that tweet stream and say, “Look, just show me everything. That’s it. No, that’s my default setting. I want to see the comments that somebody else may not want me to see.” But it’s an interesting step we’ll be looking for this in June. And we’ll see if it actually add some value to the equation as Twitter still, all these years on tries to figure out what they’re going to be when they grow up.
Daniel Newman: I tell you what, I have been not reading the comments lately, especially when I’ve been writing any articles that challenge anything Apple does. But Chad, I think a lot of comments on the Internet are just pure waste. I think quality filters are important and I’m not sure if a complete hiding … but you know what, it’s giving people choice. You want to read the comments, do it at your own risk. So Fred, very interesting.
All right, so let’s talk about our tech byte section. And this one is sort of an interesting one. Samsung, another client of ours, someone we work with is, is going to be the honorary tech bytes of the week. I’m going to preface this by saying I’m on the fence. So the Samsung Galaxy Fold a highly popularized device from this year’s Mobile World Congress a foldable phone, a much better looking device than I envisioned it being. However, the early tests have gone out so sites like The Verge and TechCrunch, and the big journalists have gotten them, some of the analysts have gotten them. Our friend and advisor Patrick Moorehead got one. He’s been tweeting and sharing and Facebooking about it all week with great admiration. But an article did come out on The Verge that Samsung couldn’t be too pleased with, which was basically Galaxy old review, broken dream.
And I think when I actually pulled up the article itself, it was, don’t buy one. It was something like that, that came up. A lot of problems with the devices, Olivier, is this your moment to say you told us so?
Olivier Blanchard: No, no it’s not. Actually I mean, I’m actually kind of bullish on folding phones because once I realized that they’re not actually folding phones, they’re unfolding phones, that double as tablets. They’re not a gimmick. I used to think they were a fad. I think they’re actually going to be very helpful and I think they’re actually a threat to tablet makers because they’re going to work. It’s just right now maybe a little soon. It’s the first generation, the first generation of a new technology or a new application of technology isn’t always on point. And it seems that Samsung has a little bit of egg on face this week. Because almost simultaneously, some of the reviewers and tech editors from Quartz, CNBC, The Verge, and Bloomberg Tech, all had problems with their review models pretty much at the same time, and only after about 48 hours.
And I follow this guy who’s I think the tech editor for Quartz on Twitter, his name’s Mike Murphy, he’s actually a really good follow. And he seemed to be the first one to track this and to notice that everybody was having … Well, not everybody but a lot of kind of highly followed, highly respected technology journalists were having various types of quality issues with their review bottles, and I think that his was actually one of the screens started blinking on and off, it looked like a strobe light and I don’t think he was the only one. So Samsung appears to be going forward with their release. But I think it’s probably going to hurt their sales initially because everyone is wondering, am I really going to have a faulty phone that has quality issues and especially for that price? It’s somewhere between 1500 and $2,000, is it really worth it to spend that kind of money on a product that might fail on me very quickly.
Daniel Newman: What I can say is this is when Pat showed me, he’s been sending me screenshots of him doing two and three tasks simultaneously on the thing, I’m in for sure. If I still carried an iPhone because I’ve switched now between the S10 plus and the iPhone. If I wasn’t still carrying it, I would have that as my mega device because that would be way better way cooler when it works. And I’m also interested to see the Huawei one, I wouldn’t ever buy it, because I would never buy, this is just me I wouldn’t buy their products because I still have too many issues with the security until I hear for certain. But I do trust Samsung products. And I’m really hoping the device does turn out well. Fred, quickly, what are your thoughts on this? Do you think maybe … Let me ask you this way, Fred. Do you think maybe their attempt to get this out quickly to be first in market with the product maybe was a little too quick?
Fred McClimans: Bingo, straight on. They pushed this thing through and what you see here is an interesting combination of some issues with the folding mechanism, but then also issues with the screen itself. There’s a protective film that goes over the screen that is not sufficiently affixed to the screen, and some of the reviewers actually peeled it off. Thinking it was one of those little protective covers that you take off when you get a new device, to protect the screen. So these kind of all point to pushing a product a little bit too fast into the reviewers hands and maybe this one needs to go back and bake a little bit because like you guys, I think the potential is huge for this, and especially when they start to get the thickness issue down, and we have a little bit less of that double, triple the size of a normal cell phone in place. So they just need to bake this one a little bit longer in the oven.
Daniel Newman: I was super bearish. But I have to be frank, and you guys can still be Olivier and Fred, but I truly was pretty bearish on these devices. And when I saw them at Mobile World Congress, I became a little bit more positive and seeing them in the wild, I have to say I want one. I mean, it may not be great, it may not be perfect, and you may be better off getting a generation or two down the line. But I’ve always liked the idea of a tablet, but I had multiple iPads, I’ve had galaxy tablets. I don’t use a tablet, I use a laptop and a phone. But I truly think if the phone itself doubled as a tablet, I would open it up because I can’t tell you how many times I’m watching TV on my phone on an airplane and if the screen was twice as big, that would be pretty awesome. I mean, these are just the little simple, everyday applications that could rock and roll.
Speaking of devices, you would or would not buy and I know this is a device that Olivier you would not buy, and Fred you would likely but, but a 5G iPhone. We didn’t talk about this in the beginning. I want to talk about this now in our crystal ball section I want to take this home. Give me your best prediction of the quarter and gear, that now that Apple and Qualcomm are friends and they’re skipping and smiling this Apple 5G iPhone will hit the markets and every day schmoes like us can go buy one. Olivier, kick it off.
Olivier Blanchard: Okay, September 2020. It’s too late this year. We’re already in April for Qualcomm and Apple to put together a solution for the 2019 iPhone releases. It’s too late. So yeah, September 2020 is when you will see the first 5G iPhone and I think it will rock.
Fred McClimans: So September would be Q3 then. I’m going to go with Q4 of 2020 for the initial push out with some revenue boost noticeable in Q1 of 2021.
Daniel Newman: All right, I’m going go against the grain here and I’m going to say Q2 2020. And here’s why I’m going to say it, I’m going to be a little bit explanative here, but I feel like I get the right to be since I’m the host today. If they were secretly working on a settlement, I cannot imagine they might not have been secretly working on a design. So not everybody at Apple and Qualcomm were feuding this whole time. So I’m bullish on maybe an early release based upon some work that was done behind the scenes. So we’ve got a Q2, Q3 Q4. Let’s come back to this in about a year. Let’s hope our show is still rocking and that business is still humming.
But Olivier, Fred, I want to thank you guys for another great show, great topic, great week, right ahead of the Easter holiday. If Easter is something you celebrate Happy Holidays to you, if it’s not something happy weekend to you anyways. For future and research in the Futurum Tech Podcast, Daniel Newman here, your host today, want to thank you all. We will see you very soon.
There will be plenty of more tech topics and tech conversations right here on the FTP, Futurum Tech Podcast. Please be sure to subscribe to us on iTunes. Join us, become part of our community. We would love to hear from you. Check us out at futurumresearch.com. We’ll see you later.
Disclaimer: The Futurum Tech Podcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.
Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio