CES, Best Buy & a $7k Alexa-enabled Toilet. Really?–Futurum Tech Podcast Episode 027
It’s CES week and on this edition of the Futurum Tech Podcast we poke some holes in the products that we saw plus the impact of US-China trade wars on PC sales, Apples’ impression of a company that can actually innovate, how Elon Musk is taking the rocket industry back to the ‘50s, a new data privacy risk and what we really think about the future of flexible phones. All this and more on this episode of Futurum Tech Podcast.
Our Main Dive
CES is now the biggest electronics show on the Vegas Strip, but are the Internet, Best Buy, and $7k Alexa-enabled toilets helping curb Strip trip? Um, yes, and here’s why.
Our Fast Five
We dig into this week’s interesting and noteworthy news:
- Alphabet draws an Android #MeToo lawsuit
- PC sales feel the US v China burn
- Apple’s innovation impression is wearing thin
- Foldable TVs & phones are so (not) cool
- Elon Musk goes ‘rocket retro’ with the new SpaceX Starship
US Mobile carriers reveal just how little they care about consumer privacy and safety; meanwhile Amazon’s Ring lets people see if the postman actually rings twice.
Crystal Ball: Future-um Predictions and Guesses
How many people will actually put a foldable phone in their pocket, and will parachute pants really make a comeback?
And did you know… CES was launched in the 1960s as the Computer Electronics Show in NYC, featuring the latest in pocket radios.
Olivier Blanchard: Welcome to this week’s edition of FTP, the Futurum Tech Podcast. I’m Olivier Blanchard, senior analyst with Futurum Research, and joining me today are Dan Newman and Fred McClimans. How are you guys doing today?
Daniel Newman: I’m doing good. I always prefer to be called Daniel. Just kidding, Oliver. But I don’t actually hear people call me Dan that often, so that was kind of… Well, I was like, “Well, who’s that?”
Olivier Blanchard: No. No, well, that’s one of the perks to working with you.
Daniel Newman: Who’s that guy?
Fred McClimans: Olivier, I’m doing well and I will not ever ask you to call me Alfred because there’s only one person alive that calls me Alfred and that’s my mother. And it’s usually followed by Joseph, my middle name, and then McClimans and I know I’ve done something terrible.
Olivier Blanchard: Yeah. See, I thought only Batman calls you Alfred.
Daniel Newman: I forgot that Fred actually had a full name, so that just goes back to the fact that, A, maybe I’m not paying attention and B, nobody names their kids Fred anymore. It is a more uncommon first name and so we don’t hear an Alfred very much. Actually, can I get public permission when I’m frustrated with you about anything, Fred, can I call you Alf? Can I have d-mark like where I text you if I say Alf you know I’m on fire or something like that?
Fred McClimans: Yeah, no.
Daniel Newman: No, that doesn’t work? Okay. Everybody, for the record, I cannot call Fred Alf in any circumstance.
Fred McClimans: I’m not sure there’s anybody that can get away with calling me Alf.
Olivier Blanchard: See, it’s funny. It’s Alfred but I would have figured it was Frederick because that seems like a more logical Fred.
Fred McClimans: And you would have been wrong.
Olivier Blanchard: I would have been completely wrong.
Daniel Newman: You could lose.
Fred McClimans: Yes, so in fact, you lost your bet.
Olivier Blanchard: All right.
Fred McClimans: Let’s dive in today gents.
Olivier Blanchard: Yes, let’s do it. Let’s get back on track. We’re going to start today’s show with a post-op discussion of CES, the big consumer electronics show that is closing this week, then we’ll share some of our favorite tech news stories of the week in our fast five segment, followed by tech bites in which we highlight one of the biggest tech related fails of the week, or maybe two in this case. And we will also end the show with our usual crystal ball. As always before we begin, it goes without saying that this show is intended for informational purposes only and no advice or insights provided here today should be taken as investment advice.
All right, so our main topic today is CES which, for the sake of disclosure, none of us attended this year. It was a deliberate choice to skip it. We didn’t feel like it was necessarily the best place for us to find out about a lot of the new relevant technologies that are coming this year. We usually have access to these technologies through other shows, other events and through our relationships as analysts with the industry. We skipped it this year but we followed it really closely from the sidelines thanks to this thing called the Internet.
And I was wondering if you guys, as I said, we’ll start with you Dan, had any big observations about the big winners and losers of this year’s CES including CES itself as a show itself. Is it still what it used to be? Is it really hitting the points and the lines that it needs to be effective as a purveyor of information for a technology coming in 2019. Dan, the floor is yours for a few minutes.
Daniel Newman: I think the winner is the media because there are a billion stories to write about. When you see all these articles written about this new technology and that new technology, basically the consensus of it being unnecessary overhyped, there weren’t nearly as many stories out there of like here’s a product that everybody’s going to use. It felt a lot of incrementalism. I think some of my predictions came true about AI being a massive hype. It was not a difficult prediction to make but it was very right. I think the foldable technology, as I suspected, was brought more to life.
And Samsung made a big announcement this week announcing a public sale on a foldable product at their Unpacked event in February, so that came true. 5G was huge and 5G was a big discussion point, and I think 5G was a bit of a winner. It certainly was a key element of many of the press junkets that I attended, whether it was the carriers like Verizon. I watched Samsung, Intel. I watched a lot of what they were doing. By the way, the Internet is super cool because you can watch these press media events from home. Just to anybody that doesn’t like Vegas like me, you can actually attend a lot of the event without ever setting foot on the floor.
But I think the winners are a combination of press media and tech junkies. I mean, I think if you really are a junkie and you want to see what’s new, you want to put your hands on things, you want to be amazed by what’s possible, like what did I see maybe even in your feed, Olivier, an airbag chest vest for cyclists, so when they fall and it makes contact, it senses your fall and it deploys and airbag around your torso. Very cool, probably not all that necessary. But it felt like that type of innovation was a lot of the hype. A lot of what people… shoes with sensors, a lot of healthcare talk, things that could… a belt that could measure your waistline and it could detect if you were falling.
That was a big thing this year, am I falling or not and can a sensor tell me that? But overall, Olivier, I read hundreds of pieces on CES this week and it was shocking to me how little actually resonated with me by the very end of it. I think Intel had a couple interesting pieces of news. If you’re a gamer, there was a couple of interesting pieces of news. But for me, nothing really stood out. It was more of the same one year later.
Olivier Blanchard: Fred?
Fred McClimans: Well CES, it’s an interesting show. It’s been around for a number of years. In fact you could position it as sort of one of the granddaddies of shows. It’s been there. It gets a lot of hype every year. This year I didn’t see anything that was really breakthrough and I think that speaks a bit about the fact that it’s hard to keep things secret these days. And it’s one of those just eventual evolutions of shows in just the news and the promotional cycle that people that really want to get news around a product, they usually don’t bring it out at CES if they’re a big major name out there in the industry.
They’ve got their own events. They want to get their own publicity. They want to keep things focused on them while they’re making the big announcements. But at CES this year, for the second year in a row, the head of the FCC did not attend the show which is kind of telling in and of itself. I was impressed with just the sheer number of things that now have Alexa attached to their name. I mean, you just look at that and it’s… not dozens, it’s hundreds of products saying, “Hey, we now have Alexa inside. We now have that embedded capability.” Yeah, there were just some odd things that came out this year.
There were a couple of things that… I actually went across FoldiMate and this was a company that I’d actually looked at their product about a year ago. They actually fold your laundry in a machine. You take your laundry, you place it face up or face down or however you want it and the machine sucks it in and pushes out a folded piece of laundry.
But, as usual, we had all sorts of just bizarre things. An intelligent toilet, great. We really need CES to show us an intelligent toilet kind of thing. But, in general, I think CES has lost a bit of its premier luster when it comes to shows like a lot of shows eventually do.
Daniel Newman: I got to jump in one more thing though. One is if some one thing had analyzed my bathroom wiping technique, think how valuable that could be. I’m totally kidding, by the way. I mean these IOT toilets, seriously, what is the deal? I don’t get it. I do want to just say, I pulled this up because I thought it’d be worth pointing out for everybody out there. SINA did a 10-favorite products and basically they went through TV, Car tech, smart home tech, assistant, beauty tech, emerging tech, health tech. Their rollable TV was the big thing. A Disney hollow ride with Audi which was a VR experience, a kitchen-aid smart display which is a recipe enabling.
I mean, you’d really go down this. It was an Acer PC. It was an alien-aware gaming machine. It was a watch, a gadget… a watch. I’m just saying you go there and you spend four days of your life walking this floor to basically discover a bigger TV, a bigger screen in your kitchen, a watch that has a screen on it. This really was 2016 in 2019 and everything’s just a little faster. One interesting partnership that did get announced, that is probably worth pointing out, was the Intel-Facebook chip that got announced at CES… building smart machine learning ships that are going to make AI easier for advertisers and Facebook users to benefit from AI.
I thought it was an interesting play to have Facebook be offering an embedded AI chip in their platform especially right now; both good and scary. But just going through this list I think points out, Olivier, everything you and everything Fred said. The reason we have smart toilets and other devices that are analyzing what we’re doing is because, really, we’ve run out of what innovative things to do so we just create everything. And then as journalists we don’t know what to talk about, as analysts we don’t know what to talk about, and as press and et cetera, so we talk about everything. And if it’s weird and surprising, it gets as much press as if it’s useful and good.
Olivier Blanchard: Right.
Fred McClimans: Well, we do have things to talk about and maybe it’s just simply telling that… We sat through the week looking at CES, looking at all the announcements, watching the live feeds and yet at the end we’re talking about a $7,000 commode that actually has both a personal dryer and Alexa baked into it. That’s where we are today.
Daniel Newman: Or is it, “Alexa, wipe my butt.”
Olivier Blanchard: Well, you don’t need to wipe it if he is running these toilets because it showers you… Okay, I’m not that critical of the smart toilets though because they’re ‘big in Japan’. I think that the issue with showing those toilets at a show is that you don’t actually get to experience them. You see them, all right? You see all the buttons, and you can put all the either purple LED lights on them that you want, but there’s no real way to experience the genius and an amazing value of these toilets that can be, from what I hear, life-changing if you can’t actually use them. I think it would make more sense for Kohler and companies like this to actually do real installation where people get to experience them for themselves.
Fred McClimans: Oh, no. I’m going to go on mute for a while here.
Daniel Newman: It’s almost like if anyone out there is slightly uncomfortable we are too. It’s just like how do you even talk about this stuff? It’s so personal.
Fred McClimans: It is. But we are talking about toilets.
Daniel Newman: -and you’ve experienced it. Yeah, I can understand the value but the point is we are doing a recap show as a group of enterprise analysts and smart toilets are one of the things that caught our attention.
Fred McClimans: Yeah. But they’re there every year. They were there last year.
Daniel Newman: Right. But it’s a little like how many times can we talk about autonomous vehicle tech and smart IOT wearable tech to the point where, I think, you had an article that really points out this is the most gratuitous example of technology for technology’s sake rather than technology with purpose. And so in our research, and surveys show this time after time, it’s not about technology available it’s about companies are not implementing technology to the level it could be implemented to truly help them. So what we end up with are these gadgets and gizmos because it’s the most simple way to just talk about tech without talking about any purpose.
Fred McClimans: Right.
Daniel Newman: And so, moving forward, I think one of the gaps we have is we need to talk more about the purpose behind all this technology, all this AI, all this machine learning, IOT. And the second thing that I think is just hugely being ignored is the industry. CES and CEA and the industry behind it need to talk about these privacy and data issues. And I read a few articles about that this week but that has been completely ignored. Nobody’s talking about it.
Every single one of these smart connected IOT sensor-driven devices is essentially taking our data, using our data, monetizing our data and most people, most laymen who are not in this industry, have no idea.
And many in this industry don’t seem to care that the industry itself has no real view on this except keep going, keep coming out with gadgets, keep innovating, keep creating more data and then we’ll figure it out later after you have 500 devices in your house that are all monitoring, listening and absorbing your most private and intimate details all day long not to mention enterprise and work implication.
Olivier Blanchard: And we’re going to talk about that briefly later on in the show, this kind of disconnect between, hey, look at all this cool stuff that you can buy if you really want to and the lack of security, or inadequate security I should say. I’ll just finish this segment with two points. One, as a semi-retired product manager, when I look at some of the reports that I saw, some of the favorites gadgets and technologies and ‘products’ that were demoed and introduced at CES, one thing that struck me is that as a product manager there’s basically two dimensions to a product.
On the one hand, it’s is anybody going to buy this? Like, does anybody actually need this particular product and why wouldn’t they buy it? Is there a reason why… something that we haven’t thought of that would preclude this product from being useful in the market? And, two, does the cost really match the value equation. And what I saw with a lot of the gadgets that were being shown is that they’re not actual products. They’re, at best, prototypes. It’s kind of like… there was this shoe that everybody was raving about the first day of the show. It was a shoe that that tracks whether or not you’ve fallen, which is like the belts that you mentioned earlier.
I guess it’s for senior citizen and I understand the whole ‘I’m falling and I can’t get up’ thing. Falls are actually a really serious problem. Tens of thousands of people fall and injure themselves every year and it’s especially grave when you’re in your later years. Your bones are brittle and you might even be alone in house and not be able to call 911 really quickly. But the thing is that the shoe was something like $400 a year, for a shoe that tracks whether or not you’ve fallen. But it never really answered the question, okay number one, if you’re not wearing the shoes then what’s your other device that’s going to call 911 or call you next of kin to let them know that you need help.
For 400 bucks a year, wouldn’t it make more sense to just get an Apple watch or some other device that’s cheaper or the same price but that you can wear all the time, including in the shower, when you’re not wearing shoes? There was this issue of these products are not even well thought out, they’re not going to work in the market and, two, the pricing is off. Some of the stuff I saw, nobody is going to buy for five or six times the price point that would be realistic in the real world. And yet these companies come to CES with these just outrageous price points for products that are inelegant and don’t actually solve problems.
It’s an interesting exercise as like a science fair but it’s not really all that serious. Even not as an analyst but as a consumer, I look at this stuff and it’s silly. And my second and closing point, and then we’ll move onto the fast five, is that you don’t really need to go to CES if [a] you follow our blog and our Twitter accounts because we are already covering and let you know what’s coming.
Fred McClimans: Well done.
Olivier Blanchard: Yes, of course. And, two, the real CES, the only CES that most people need, is their local Best Buy or Target store. If you want to know what’s out there that’s actually within the range of what you’re going to need at the right price point, go to Best Buy. Best Buy is an everyday CES. It’s going to have all of your drones, all of your smart home products, all of your computers, your future eight-K TVs. And if it’s not there or you can’t find something that’s within your price range, then, you can always go to Amazon or whatever. But I don’t know. I think CES needs to think about what kind of show it wants to be in the future.
Because if even people like us, and we weren’t the only ones not going this year, are starting to feel a little iffy about going because we don’t really find the value there, I think that’s the first sign that maybe CES has jumped the shark and isn’t really necessarily the show that it used to be.
Fred McClimans: Well, to your point Olivier, I am going to go to Best Buy because there were some things at CES… particularly in the AR space… some of the gaming innovations there from Lenovo. There was also a really cool, I think from Scully Tech, that basically adds AR through a camera system into your car with some really cool twist to it. We’re seeing the commercialization of things but these are all things that we expect anyway. So, yeah, Best Buy here I come.
Olivier Blanchard: Yeah and Home Depot even. All right, so that does it for our post-op on CES and we’re now going to switch to our fast five segment. Dan, since Fred just had the last word, what is your first bit of news, tech news, this week that caught your eye?
Daniel Newman: Yeah, so my first one is Google is under some fire. Well, you’ve probably heard that they’ve had some ongoing misconduct issues with executives being ejected and maybe not being dealt with. There were some walkouts that took place not too long ago. But this week, Alphabet Inc’s directors were sued by shareholders for approving a $90 million exit payment to Andy Reuben, the creator of the android mobile software, while helping to cover up his alleged misconduct and similar behavior by other executives.
This is just one that could possibly have fit well into our tech bites section but since we have so many to choose from just another big company under fire for not necessarily holding up its fiduciary responsibilities to its employees, to its customers. And to the credit of Andy Ruben, the genius building that platform, being smart and being successful should not be an excuse to act belligerently, and he clearly has. And to get paid $90 million and get the help of your board covering up your indiscretions is a little bit alarming. And I think that this is probably going to lead to a lot more press and a lot more outrage and certainly not positive morale for the company that’s already under fire for this ongoing behavioral issue.
Olivier Blanchard: Yeah, that’s not good. Not good at all. All right, well mine is since… We have these discussions before the show for our listeners where we select our stories and mine was actually stolen by somebody and I’m not going to name names so I had to go with something else. And I didn’t mean to speak or to pick Apple but this did catch my eye. So Apple, with whom you know I have ongoing issues… I used to like Apple a lot when it was a under Steve Jobs’ direction and now not so much so I hate to wrap against Apple all the time but I find very little to like of Apple these days unfortunately.
The news that caught my eye in the last few days was a ‘leak’. I don’t know if it’s a deliberate leak or a real leak… whatever, it’s hard to tell at this point, about 2019 iPhones. And one of the items that came up is that there were going to be three new handsets apparently, I think it’ll probably be more than that, one with a triple rear camera set up. And there’s also a rumor that Apple might switch to a different system or a different OLED display for 2020 which would make the cost of the iPhone go up. What actually is the story isn’t so much the leak itself or Apple’s direction, which is to apparently copy android and not really innovate, but just try to keep up with what its competitors are doing.
The story that I noted was reading the comments on several of those threads, several of those stories, so in the articles themselves and then the Facebook comments or Tech Crunch or Verge or the Washington Post posts those articles just to see what people’s reactions are. And even a year ago, a lot of these comment threads were pretty mixed between Apple users or Apple fans rather saying, “Wow, this is going to be great. I can’t wait,” and then Apple hater is basically saying, “Oh this is junk.” And they’re just, “Apple… blah, blah, blah.”
And what I’ve found kind of fascinating, this is early in 2019, is the proportion of those kind of 50 comments pro, 50% comments con have radically switched to almost all negative comments. I have a hard time finding anyone who’s defending Apple, especially on the iPhone, when it comes to its innovation and its products announcements. Everything is snarky. Everything is negative. Everything points out the fact that’s the pricing is way too high for the iPhone, that the iPhone no longer innovates, that all of the features that are on iPhones now, for the most part, we’re on the android three years ago.
And I don’t think it’s a good direction for Apple and I really wish that Tim Cook and his executive team would start listening to consumers because they are obviously not pleased with it. That’s my fast five for this week. Fred, what was yours?
Fred McClimans: Yeah, so my first fast five we’re going to dig back into a little bit of a conversation that we had about a month and a half ago on foldable, flexible, bendable phone technology and actually link this back to CES. At the show, there were two things that caught my eye in this particular space. The first, LG were displaying their signature series OLED TV which is a foldable screen TV. Literally the phone is rolled up and you unroll it upwards to actually view the TV. Their advantage here, they say is, well, we can allow you to use the TV and the sound in a slim mode if you’re just listening to music or you can pull up the whole screen if you want to watch TV.
And that’s interesting because I think that’s an unusual use case but also it highlights the fact that the use case… Yeah, it really doesn’t wow me in any way for the foldable technology. But the second one in the same venue here was a while back, right before Samsung teased their flexible foldable phone, Royole announced their Flexpai. And they actually had it at CES. It is a truly flexible bendable phone. It’s not cheap. It’s $1,320 which is, certainly, at the high end of the range but what I loved about it was the reviews of people that actually had hands on. I think the most well-articulated, I can say on the air, review was titled ‘the first bendable phone is an exciting piece of junk’ and it kind of highlights where we are with the flex technology here.
I still haven’t seen any really cool use case yet that says, “This is worth the extra money and we’re going to pay a lot of money for it.” I’m sure they’re coming within the next three to six months but we haven’t seen it yet.
Daniel Newman: Yeah, it feels too thick. It’s just not like… Like you said, when it’s like a sheet of paper that’ll be totally different.
Fred McClimans: Oh, sure when you get to that point there. But when you have a phone in your hand and for the last however many years, five, 10, 15 plus years, you’ve spent your entire existence with phones making sure you don’t bend them, it’s an odd feeling there. But, yeah, I think we’re still looking for the killer app for that.
Olivier Blanchard: Well, you know Apple has been pioneering bendable phones and tablets for a while.
Fred McClimans: Yes, I had a couple of those.
Olivier Blanchard: All right. Dan, what’s your second cool story of the week?
Daniel Newman: Oh, super-fast… not all that cool but interesting. A headline comes out today following some research from our compatriots over at IDC and Gartner that the PC sales stumble in Q4 or made CPU shortages and the China trade war. It was hosted in ZD Net today and they came out with some new numbers, basically 68.1 million PC units shipped in the fourth quarter down over 3%, close to 4%, from a year ago and one of the biggest declines since 2016. The good news is the decline doesn’t seem to be based upon any lack of interest or desire to buy PCs. It seems to be more based on a combination of politics and chip shortages that haven’t been easily able to be overcome.
A couple of noteworthy items from the research. One, Lenovo maintains the top spot in terms of PC shipments just ahead of HP who they passed in the last year who had passed them in the year before. Behind Lenovo and HP sits Dell and Apple in the fourth spot but in a tiny market share in comparison. So the 2018 market share for Apple is at 7.2% while Lenovo and HP hold close to 50% of the market share. That seems to be about where we’re sitting right now. I don’t look at those numbers as overly discouraging though. I look at them, like I said, as an artifact of a couple of world events going on. Chips are in demand, more chips will be in demand and I stay bullish on anything that requires a chip is going to see growth not decline in the coming years.
Olivier Blanchard: Yeah. I’m actually more excited about laptops in 2019.
Daniel Newman: Even potato chips.
Olivier Blanchard: Especially potato chips.
Daniel Newman: We populate more and keep getting chubbier.
Olivier Blanchard: Yeah. And Lupo is killing it. Their yoga line is amazing. I’m really looking forward to see what they’re going to come up with on the AC-PC front later this year. Anyway, so Fred, what is your second and final fast five of this week?
Fred McClimans: Yes, our final fast five I’m going to focus on a target here that we love to trash occasionally but I do have to admit is one of the reasons I still pay attention to Twitter and that’s Elon Musk who this week launched or …
Well, actually, sort of side note, today SpaceX put up their first rocket of the year and they launched their last mission for Iridium. It was a cool thing, watched it live and totally into the way the mechanisms work for the re-landing of the first stage which kind of brings us to this which is the starship. Earlier in the week Musk teased a bit with some renderings of what the starship might look like.
And a lot of people stepped back and said, “Yeah, that’s kind of cool but it looks like Buck Rogers’ Tintin spaceship from a Forbidden Planet kind of thing, back to the ‘30s, ‘40s, and ‘50s.” Well, today they announced and actually displayed the actual starship. Now, this is the star ship that’s being used for VETO, the vertical take-off and landing test. It is a sub-orbital ship but we’ve been told the final ship will look pretty much similar to this only a lot taller with a more sturdy frame that a won’t flex and so forth. But, literally, this thing you’ve got to go on Twitter…
You’ve got to find Elon Musk’s Twitter account and check this out. It is the shiniest silverest retro rocket that you have ever seen. Literally, it’s something… It looks like one of those things that you would pump up with water or air in your backyard and up into the sky with a little parachute attached but it’s really cool looking. And I do have to say, for all the things that we like to ding Musk on, when it comes to style he’s got it and this new ship looks absolutely fantastic. The actual full starship, we’re expecting that to actually run through its rocket tests and initial launches probably within the next three to six months. This is the ship product that they are expecting one day will go to Mars, land on Mars and take back off just like all of the 1950s Sci-Fi movies we grew up with.
Olivier Blanchard: Yeah. Now, it looks like a proper rocket. I like it. I hope it stays silver because it’s part of the look-
Fred McClimans: Yeah, absolutely.
Olivier Blanchard: -that we’re going for. Okay, so that does it for our fast five segment so now let’s switch over to our tech bites segment, which this week is a little bit different. Usually we pick one of several tech bite stories of the week, this week we’re going to merge two of them because they’re pretty much… They’re separate stories and they have nothing to do with one another except for the theme which is, obviously, tech companies behaving badly but also behaving badly specifically with regard to privacy of their users. The one half of it there was a report last week that cellular carriers, your Verizons and AT&Ts, are selling real time phone location data of their users.
So, basically, if you have a smart phone it’s very likely that your cell company, whoever you’re contracted with for your cell service to work, is selling real time location data to third parties. The story came out in the general public when a journalist hired a bounty hunter to see if he could find him or find his smart phone. And for $300 he was able to access that information and show him on his screen exactly where his phone was and that raised all kinds of concerns and alarms of consumer privacy because consumers aren’t necessarily aware that their carriers are selling this real time location data and they’re, in some cases, not really supposed to.
USL carriers vowed to stop doing that but there was no evidence that they actually are yet or that they will continue to do so if they are temporarily suspending this. And then the other thing is there was a report that also raised video privacy concerns because of Ring. Ring, as you may know, is the Amazon owned electronic doorbell… connected doorbell that has a little camera on it. And, evidently, the life feed of an untold number of customers with the Ring was available to workers in Europe who were able to basically monitor or tap into those camera feeds and monitor what their customers would be seeing on their own Ring devices.
Here you have these two items, your cell phone companies and then Ring which is a home camera security system, is essentially invading your privacy and potentially making not only your location but also video feeds available to employees and third party. I was wondering, really quickly, what kind of reaction I can get from you. Let’s go with you Dan. What do you think of this?
Daniel Newman: Well, obviously, it’s a two-fold thing much like when you bring Alexa in your house. We’re dealing with what are your expectations of privacy when you give a third party company that ultimately wants to market and sell you stuff, through one of the largest commerce markets on the planet, access to your information and then you go, “Holy crap. You mean they’re actually listening to me?” And you’re supposed to be surprised, right?
Olivier Blanchard: Yeah.
Daniel Newman: We have this lack of congruence going on between the way people feel about new emerging technologies, which goes back to a lot of what we talked about with CES, and the benefits that come from technology. I’ve long been the purveyor of this concept that nobody ever complains when we provide them with too much value so when technology provides a lot of value people tend to be okay with trading privacy and data. But we have hit this point now where the infiltration in our lives of these enterprises and companies, without really any governance or regulation, are able to do things because we, essentially, voluntarily opt in to giving all this data away without really any understanding of what the consequences may be.
So selling our location data, well, can you tell me that in your agreement with the carrier that you didn’t give them permission to do so? Because I’m pretty sure you did… I’m not sure to what extent and I’m not sure exactly how it works with third parties. You’d want the paramedics or the police to be able to find you if you fell off a mountain but at the same time you don’t necessarily want someone to be able to stalk you, track you, arrest you for something that you may or may not have done because someone’s decided to come after you through a series of false reporting or selling your data. Or, like I said, just voluntarily choosing to stalk you because they don’t like you or they want to find dirt on you. Which is what they’re saying here.
I can go to a bail bondsman and say, “Hey, I want to know where this person is because, essentially, I want to tag their location and go find them.” And in the case of a bounty hunter, they may want to come in and bring you in. It sounds a little bizarre but it’s true because the one thing that they know is that everybody has these devices. Criminals do too. Like I said, from a police and investigative standpoint, it makes sense. From a private average Joe citizen it’s a little scary to know that, “Hey, I want to know exactly where you are tonight, Olivier. For a couple hundred bucks, I could pay somebody and know exactly where you are without your permission to share with me, without looking at openly available published data by you.”
But then, again, what’s the difference from you posting on Foursquare, checking in and then me stalking you out via that contribution you made and your contribution as a subscriber to a certain network who has opted in to a policy to allow for your cell signal to be tracked and utilized for ‘service quality’. See the air quotes on holding up. Because they could say, well, allowing anybody to find you could be a service quality improvement because emergency and because if they deem that you are somebody of interest we can follow you. It’s really scary. It’s big mother, it’s big brother, it’s maybe even big butler but you have to read our next book if you really want to fully understand what all those things are.
Olivier Blanchard: Yeah, what I’d like to see was something like this… because you’re right. There’s a little bit of everything. What I’d like to see is a more obvious opt-in screen on phones where, essentially, you’re giving permissions to… Like the 911 and emergency location services, it’s by default it should be on but you might want to make yourself available for location services for commercial offers. Like if you’re at a shopping mall and you want local retailers to know that you’re in the shopping mall or within a certain mileage, walking distance from one of their stores, you might want to open yourself up to offers, right? 20% off this or whatever coupons they might want to send you through location services.
But when you want to turn that off because you’re at home or you don’t want to be bothered, you should be able to do that. And it’s the same thing being able to turn off location services if you don’t want to be stalked, if you’re going out, if you’re going on vacation, for instance, and you don’t want people to know that. Just by looking at the location of your phone you should be able, as a consumer, to turn that off and it should be an easy on/off screen just like you do for notifications on your phone.
Daniel Newman: But you understand my point. We’ll post a public picture of ourselves on Twitter, on vacation in real time and then we’re like, “Well, I don’t anyone to know I’m on vacation.” And it’s plain but then we optionally provide data to say, “I’m away from home.” You know that. Remember growing up guys, I’m sure your parents told you, “You never want to let anybody know you’re not home. Leave the lights on. Do this. Let people…” Nowadays, we’re posting. We’re like, “We’re away from home for the next six weeks. Here’s our address. You can just look it up because it’s all public information. Come rob me. By the way, these are my tech gadgets in the house. If you’re worried about it, just come with a mask on because my Ring doorbell is going to catch you at the door.” But…
Fred McClimans: Well, that’s why when you post something like that you go, “Hey, having a great time here in Oahu but want to send thanks out to my six-foot five nephew and our guard dog that he’s watching back in the house.”
Your points are all spot on here. I think that there are a couple of things in these particular stories that I think are very telling. If you look at the Ring example, Ring I think is very troubling because according to the news reports that came out they opted not to actually encrypt some of their feeds because they thought that would add too much cost into the product and lower the value of the company. Again, an interesting example here of a business, not for the first time clearly and likely not for the last time, making a decision that says profits and a retroactive fix are the right way for us to approach shareholder value when it comes to personal privacy.
And with Ring, the issue there is not just that somebody is watching a video feed. But if you look at the analytics tools and the visual recognition and facial recognition characteristics or capabilities that we have today, it’s very easy for somebody to not just watch a feed but to actually identify people in that feed and objects and start to build a list of who’s coming and going from your place. Yeah a long history, unfortunately, of companies putting profit before privacy. The issue with the wireless carriers, that’s kind of scary because you can turn off all of your app privacy and yet still be tracked by the cell phone carrier based on even something as basic as triangulating your cell signal into various towers.
In this case here, I look at this a bit like the move by a lot of these same companies, the AT&Ts, the Verizons of the world, to say, “Hey, we’re missing out on this data bandwagon for Internet access so FCC please allow us to monitor and monetize our users ISP traffic coming out of their home,” which they now can legally do. That’s kind of similar in this case here. They found a way to monetize your data and they’re not backing down on the Internet data. Here they are because, I think, it’s a bit more in the news perhaps but I have my doubts as to whether or not we’ve heard the last of this particular story.
And maybe at the end of the day what we need is a feature that you can, literally whether it’s an Alexa or a Google or a Siri, simply say, “Hey Alexa, privacy on,” and then from that point forward Alexa only listens to one word that they want to hear to reactivate the privacy in the system.
Daniel Newman: That would be so easy to do. And I know we’ve got to end this segment and get to the end of this show. I’m going to host myself, Olivier, and do your job for a second but the point is that wouldn’t be hard to do.
Fred McClimans: No.
Daniel Newman: That’s not hard. They don’t want to do that and that’s where it comes back to my point about having no regulatory. And listen, I’m not anti-capitalists and I’m certainly not a big government guy. In fact, in this group, I’m probably one of the least of the big government people and I’m not saying that anybody here is all for nationalized businesses. I just mean I’m not sitting here saying the regulation needs to take over business, I’m just saying there’s no regulation right now. There’s no control. There’s nobody pushing this. The interviews that were done with Mark Zuckerberg proved that we don’t have a freaking clue about what is actually going on in tech.
And the tech industry is not taking advantage of it in even a malicious way; it’s just there for the taking. They’re not like, “Ooh, we’ve found the end around. We’re going into the gray area.” There is no gray area. This is the Wild West. Bring your guns, bring your grenade launchers.
Olivier Blanchard: Sure.
Daniel Newman: Bring your Nukes. If you can do it, no one’s going to stop you because our lawmakers don’t even understand who makes Facebook versus who’s Google. They are so out of touch that without regulation we’re never going to expect this to stop because, like I said, someone’s going to have to tell Amazon. Because why in the world would they volunteer to stop collecting data when they’re not breaking any rules.
Fred McClimans: That’s right. You’re right.
Daniel Newman: They’re doing what they’re allowed to do. And to some extent it might be bad morally but business-wise it’s super smart and it’s what you learn at Harvard or Chicago or Northwestern or Duke or anywhere else you go. They teach you to take advantage of the blue oceans.
Fred McClimans: Yeah. Well, we definitely… I won’t go so far as to say we need lots of regulations. Regulations can certainly be stifling but at least, please, let’s figure out a way to put some basic rules of the road. You don’t just let people buy a car and drive any speed, any direction, wherever they’re going. There are certain fundamental things, guardrails that keep you in line, and they’re not hard to define. They are damaging to a few businesses but if you make it very clear, “Look, you cannot use user data for monetization unless it’s an opt-in.”
Olivier Blanchard: That’s right.
Fred McClimans: Just a simple principal. Just put it out there and let people deal with that because the challenge today is, Dan as you said, there are no regulations. There’s nothing that can’t be fought in court one way or the other to increase your profitability in this stuff. But it does need to end because we’re destroying the fabric of our society, we’re destroying trust in technology and we’re destroying trust in both businesses and the government along the way. And, unfortunately, I see a lot of people just simply throwing their hands up and saying, “Well, hey, they have all my data now, what’s another piece of information out here?”
And the only thing I’ll say to that is, if you think your data is not worth something, look at how much time and effort phishing and hacking attacks… how much these threat actors spend trying to get your next piece of data. It’s always valuable and it’s something that we do need to clearly, clearly protect. And we need to educate people on what that data is and the risks that are inherent with it.
Olivier Blanchard: Yeah. I think that the tech company that works in the smart home space that can convincingly make the case for the fact that their cameras and smart microphones and smart speakers do not and cannot allow somebody to spy on you will probably own that market and will help it get uninstalled because right now it’s kind of stuck. And one of the main reasons aside from price which is still a little bit high… But aside from the price point, if you can make people trust in your cameras and microphones and an all the other surveillance devices that are only supposed to pick up… that are, essentially, supposed to serve you. Just voice commands and gesture commands to operate things and form searches, what have you, if you can take out the hacking element out of it I think you’ve got a winner and you can make it scale.
Fred McClimans: Yeah. Well, I’ll tell right now the most secure assistant that I use is Siri and that’s because-
Olivier Blanchard: Why? Because it doesn’t work?
Fred McClimans: -it’s so poor I don’t use it.
Olivier Blanchard: That’s right. Exactly. Oh, wow. Okay, so I’m going to stop here because I actually got Fred to say something negative about Apple for once.
Fred McClimans: Oh, hey, I say a lot of negative things about Apple.
Olivier Blanchard: All right, cool. Well, since you just made me happy with that bit of snark there, let’s finish with our crystal ball and turn it back to something that you brought up earlier, the incredible folding phones. My crystal ball is a question that I’m putting to you guys. Since everybody seems, or at least the media seems, fascinated by these new folding or foldable phones is it thumbs up or thumbs down? Do you think it’s a really impressive piece of junk as you mentioned earlier, which I think is a good way to put it, or is it the future of smart phones or are we missing something? Is that something that’s going to revolutionize the smart phone industry or even the tablet industry for that matter?
Fred McClimans: Sure. Well, I don’t think that flexible technology is the future of the phones that we have today but it is definitely the future of how we interact and engage with technology in the future. And the biggest limitation we see right now is like with any new technology. You take a new tech and you, literally, do what you were doing before with that new technology and then you know it works so then you roll it out at scale and then sometime after the fact somebody starts to think of some really interesting ways that you can use that tech to truly be innovative. And we’re not even close to that innovation stage yet with flexible technology.
But the number of use cases for how you can use a flexible screen or a flexible device that doubles as a phone, as an information resource in any number of display configurations, I think there’s phenomenal future for that kind of technology down the road. But it’s not going to make me buy another Apple or another Samsung or anything like that in the near term.
Olivier Blanchard: Dan?
Daniel Newman: Yeah, I’m not buying one anytime soon. I do look forward to checking out what they announced at Unpacked. If you look at Cisco’s Spark Board and Microsoft’s Surface Hub and some of these large format displays that have been designed to be the killer app for room collaboration, there’s this huge trend in this space called breakout rooms or small meeting hub rooms, that kind of stuff where… huddle rooms is another term, where I can imagine like a poster board that you roll up and you can bring into a room and you can just roll it out, stick it to the wall and you stick it to the wall and it’s a killer app. It’s got integration, it’s got a large screen format, it’s high resolution, you can video on it, you can draw on it, write on it.
I mean that kind of thing, I could see making sense. A half inch thick foldable phone that ends up being an inch thick in your pocket, that doesn’t make a lot of sense to me. It’s like technology for the sake of technology. It’s cool Samsung is putting their flag in the ground. I like their company. I think they do some cool things and I think it’s kind of like, “Hey, look what we’ve done. We’re showing it off.” But when it’s a millimeter or two thick, it’s got all that embedded technology in it, it works anywhere, it’s always connected and it’s battery efficient, now you’re talking about something that makes a lot of sense to me.
But as long as it’s thick as an iPhone or an S9 and then you fold it in half and it’s twice that thick, I just don’t understand where it even goes unless parachute pants are coming back. You’re going to have to carry it around in a bag and at that point why wouldn’t you just carry a PC?
Fred McClimans: Yeah. Well, the one thing I will say to that is that, first off, parachute pants will not come back.
That’s my prediction this week. But a lot of these things that we’re seeing in the market, they are to an extent essential steps to get to where we want to be. They’re allowing these companies to experiment a bit. Personally if I’m Samsung or Apple and I’m putting out a flexible display, I’m writing all of that off as R&D. Everything that I do, everything that I use to promote the product, I’m not expecting any big sales. It’s a learning curve and I think that curve will tighten up a bit here but cargo pants, no. No, please no.
Olivier Blanchard: Well, I’m going to disagree with you on that.
Fred McClimans: You think cargo pants are coming back?
Olivier Blanchard: I think that… Well, cargo pants, first of all, never went away-
Fred McClimans: The parachute pants?
Olivier Blanchard: -but the parachute pants, I think, are definitely going to be begging to come back in the next 24 months. Mark my words, now that we’ve mentioned it they will be… And you know what? The first pair that you will see on the Washington Post or [inaudible] or wherever will be red and they will have zippers everywhere. Okay? So we’ll revisit this inside of 24 months, one way or the other. But on the foldable phones, yeah, I think it’s way too soon. And to your point, I think it’s a great tech achievement. I’m actually super impressed with how well they work and how well they seem to hold up after many, many folding.
I think as a product though it’s going to be a loser. Nobody is going to pay 150% of the price of a premium smart phone to carry a brick in their pockets that’s going to be a lot more glitchy than a regular phone and that eventually is, probably, going to break down faster than a smart phone. I understand the concept of turning it into a product to offset your R&D costs for a while by, maybe, generating some revenue but the risk, for me, is that if as a product it fails to find a market it will be interpreted by some executives as a failure and so they might be less likely to pursue that particular type of technology when they should be pursuing it specifically for what you guys pointed out.
Which is that when it gets thin enough and it functions more like fabric, I guess, that you can really roll up, fold, in your pocket, maybe wrap around your wrist or your forearm, maybe stick in the middle of something like in the middle of the book and allow it to take any shape it wants. I think when it gets to that point, it will be a real transition from rigid devices to flexible devices. But in the meantime, in this really weird dangerous transitional period that we have now, trying to productize it and trying to generate revenues and profitability from it is a really dangerous move and I don’t think it’s super smart.
Anyway, we will see. We’ll see if they do well this year or not or where we are next year with how thin and more effective they become. All right. But for now, that does it for this week’s edition of FTP, the Futurum Tech Podcast. Thanks a bunch for listening and catch us next week for another round of news and analysis. And in the meantime, please, don’t forget to hit that subscribe button, share this podcast with your friends and colleagues if they haven’t discovered us yet and have a fantastic week.
Photo Credit: Arabian Business
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.
Olivier Blanchard has extensive experience managing product innovation, technology adoption, digital integration, and change management for industry leaders in the B2B, B2C, B2G sectors, and the IT channel. His passion is helping decision-makers and their organizations understand the many risks and opportunities of technology-driven disruption, and leverage innovation to build stronger, better, more competitive companies. Read Full Bio.