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Talking Qualcomm, Stellantis, Honeywell, Box, DOJ, Elon & Twitter, Six Five Summit – The Six Five Webcast
by Daniel Newman | April 19, 2022

On this episode of The Six Five Webcast hosts Patrick Moorhead and Daniel Newman discuss the tech news stories that made headlines this week. The six handpicked topics for this week are:

  1. Qualcomm Announces 14 Brand Stellantis Auto Win
  2. Honeywell Aerospace UAS/UAM Tour
  3. Box Announces Canvas
  4. DOJ Proposes Patent Protection Changes
  5. Elon Goes Hostile on Twitter
  6. Apple’s Tim Cook Heads to Washington
  7. Six Five Summit 2022 Event Overview

For a deeper diver into each topic, please click on the links above. Be sure to subscribe to The Six Five Webcast so you never miss an episode.

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Disclaimer: The Six Five Webcast is for information and entertainment purposes only. Over the course of this webcast, 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.

Transcript:

Daniel Newman: Hey everybody. It’s Friday and welcome back to another episode of the Six Five Podcast. Hosting today, Daniel Newman, principal analyst, founding partner, Futurum Research, joined by my always esteemed, always clever, never misses a beat, Mr. Moorhead. How are you doing this week?

Patrick Moorhead: I’m doing great, Daniel. It’s been a super week. Didn’t have to travel, got caught up on papers, administrative stuff. It’s nice to sleep in my own bed for a week. It’s good to be here.

Daniel Newman: The last part sounded good, the papers and administrative stuff. I’m not so sure about that. Yeah. I only had one day of travel. I headed out to Phoenix on Monday night, did a trip you did a week ago to go check out some urban air mobility. We’ll talk about that this week, but no. It’s great. It’s kind of a weird Friday in the sense that it’s a holiday for some, not for all.

Monday’s a holiday for some, not for all. Some people work and some people not. We kind of live in this world now where I don’t know what drives a holiday calendar. We’ve completely lost any consistency. I guess if the market’s not open though, I’ll probably get it at a holiday. If the banks aren’t open, the market’s not open, the post office is not open, maybe you take the day off of work. Maybe that’s a sign.

Patrick Moorhead: Yeah. Listen, it’s going to even get more complex. The California State Assembly has put forward a four-day work week and given a lot of our clients are in California, that would make it interesting. I guess that would mean we have a four-day work week, Daniel.

Daniel Newman: We do. I’m thinking about maybe just doing four-day work weeks every week for myself, not anyone that works with me. Just kidding. So we’ve got a great show today. We’ve got a week full of topics. Some bigger, broader topics this week. Some weeks there’s a lot of products and launches and announcements. We’re giving analysis.

This week, there’s a little bit of that. But we’ve got what I would say, some thematic stuff. Major changes in the transportation space, both on the ground and in the air. We do have a little bit of a product launch from our friends at Box. We’ll talk about that. We’ve got some discussion on patents, which we haven’t done that in a while with some new legislation/policy initiatives from the D.O.J.

Elon Musk is in focus. We kind of flirted with him last week, but this week, we’ve got to talk about this. I don’t care. Basically, it doesn’t matter if your show’s about agriculture or politics or tech, we’ve got to talk Elon Musk this week. And then of course, Tim Cook went to Washington. So a little bit more policy. We’re going to cover it all here. We’re going to have a little fun, then we’re going wrap up. We’re going to share some updates and news on our exciting Six Five Summit.

If you’re listening to the show, you didn’t see it, but I just… Yeah, Pat, you’re not promoting anything. You’re just promoting more insights. It’s pretty awesome. It’s pretty awesome. Yeah, we’ve the big summit coming up.

Patrick Moorhead: If my founder-in-crime would get me a hat, I would wear it on the show. I promise.

Daniel Newman: Okay. Well, I’ll take that as an needed. I’m on it.

Patrick Moorhead: Just a kind ask.

Daniel Newman: Quick reminder of everybody out there, The Six Five Podcast is for information and entertainment purposes only. And while we will be talking about publicly traded companies, please do not take anything that we say here on the show as investment advice. Just a reminder if it is your first time tuning in, the way The Six Five podcast works is we pick six topics, hand selected based upon the most interesting news and topics in tech on the week that we can find and then we provide deep analysis.

We don’t regurgitate the news. We let everyone else do that, but we tell you what it means, why it matters and what in the world is going on, that you should care about and how to assess the situation. Mr. Moorhead, are you ready to dive in?

Patrick Moorhead: I am ready to dive in.

Daniel Newman: All right. The first topic today and it’s going to go your way, at least to get started, you wrote a great article on Forbes, in the show notes everybody, on another massive win in the Qualcomm automotive business.

Patrick Moorhead: Yeah. So I had a chance to catch up with Jim and S.VP Nicole Dugal. We’ve had him on the pod a few times. He runs the automotive business, worked for Chris Yano and he had some big news. A little bit of backstory though.

Qualcomm is best known for its handsets and 5G. Two years ago, the company really kicked off a business diversification path that added RF that added IoT and automotive to the mix. It’s working pretty well so far in the most recent quarter. 38% of its business was non-handsets. The automotive business is on a billion dollar run rate and currently has a $13 billion design win pipeline. It’s literally working with every major automaker.

I’ll admit, I cover auto tech, but I had to do a double take. Stellantis is a merger between Peugeot and Fiat. This happened in 2021 and essentially consists of 14 brands. Some high volume brands like Dodge and Chrysler and some real epic brands like Maserati, Alfa Romeo. Kind of brands on both sides.

Essentially Stellantis up all 14 of its brands to lock in and commit to Qualcomm’s digital chassis, specifically the in-car experience and 5G telematics. The first car coming out that supports this will be a Maserati in 2024. It’s interesting, it takes a full three to four years for a design. So the companies must have been working on this before. And in full disclosure, Qualcomm was directly working with PSA and FCA even before the two companies got together.

But if I combine this, Stellantis, with GM, with recent BMW, it really, really shows how well Qualcomm’s diversification play is taking off.

Quite frankly, if you talked to the experts a decade ago, Qualcomm really wasn’t even in the mix. The experts in our industry said it would be some of these classic semiconductor companies that have been there, kind of these slower lumbering ones that you rarely hear about. But two things happen that I think work in Qualcomm’s favor.

First off, the dynamics of the automobile industry are very similar to what the smartphone industry. It takes scale. It’s leveraged R&D. It really is a systems challenge versus being kind of a point play. Qualcomm has delivered, they have all of that. In talking with many of Qualcomm’s customers and reading their press quotes, I can really boil it down to customers appreciating Qualcomm’s open approach. Its full stack capabilities, its true partnering for the long term, right?

If the customer has a piece of software that they want to slot in into the stack, they accommodate that. And finally, they service every range of car from the lowest end to the highest elite at the very high end and everything in between with multiple levels of compute and connectivity. I’ll also add, there were some wording in the press release that talked about supply chain, that Qualcomm was agreeing to supply chain assurance for strategic components. Given the chip drought that we had, particularly with cars, we see automakers desiring a direct relationship with designers, but also a direct relationship with the foundries that produce it.

Daniel Newman: It feels like we’ve kind of had one of these about every six weeks for Qualcomm and every one of them deserves the attention and the conversation. There’s a couple of big macro forces at play. I think the first is Qualcomm knows the importance of the market, understanding its dynamics and the shifting dynamics that it isn’t just a chip maker for handsets in the mobile space as companies like Apple continue to threaten to do more of their own chips, homegrown.

Qualcomm knows how important it is that the market appreciates its diversification. We’ve seen it rise to being number one in mobile RF front end. We’ve seen the company grow a multi-billion dollar IoT business unit and now it holds a 13+ billion dollar design pipeline in the automotive space. It’s approaching it in a way that is a little bit different than Intel mobile, Nvidia, taking this sort of digital chassis building block approach that says, “We will work in concert with you to help you make iterations to your vehicle fleet in the shorter term using this building block approach. But we will also give you a full stack of tools for infotainment, telematics, ADAS, with the acquisition Arriver, to give you the full capabilities, to build technologically driven vehicles, to compete with the likes of Tesla and Lucid and Rivian that are going to be born on cloud vehicles.”

And that’s really going to be the challenge as we move into this world of mobility is that there are companies that have basically been built from the ground up to take advantage of a fully digital cloud approach for putting together vehicles. And these legacy OEMs have so much technical debt, it’s kind of like SaaS companies started in cloud versus companies that have massive on-premise data centers and ERP systems and lifting into the cloud.

There’s a little bit of that same sort of parallel here going on in the automotive space. Stellantis is another big subset of brands. We’re talking about a company that’s won Ferrari, Volvo, Reno, BMW and GM all in about the last 12 to 18 months.

Qualcomm is flexing here and it’s a good flex. This space is pretty early for actual revenue. If you look at their books and the numbers on a quarterly basis, but if you look at that design pipeline, this is going to really start to backfill revenue. It secures the company even if some of these things like the Apple fallout ever is to happen, but overall the TAMs and most of Qualcomm’s business areas are growing. So I think it’s a pretty encouraging space and it was a really good win for Qualcomm.

So let’s jump into the next topic, because I think we’re just going to kind of do like a mobility run down here to start the show. You and I over the last week have had the opportunity to both jump over to Phoenix, Arizona to see Honeywell’s new open innovation center.

I don’t know the exact terms. I don’t think there’s been an official naming, but it’s an innovation center, executive briefing center focused on advanced and urban aerial mobility technologies. And so Pat, first thing first, when I got there, I kind of said to myself like, “I’m not really a drone guy. This isn’t really my thing.” Not sure, we do a lot of work with Honeywell. We’ve worked closely on the quantum business that’s now Quantinuum. We’ve worked closely on the HCE business for Forge, IoT edge and technologies and data, but the aerospace stuff it’s like, “I don’t know.”

But let me tell you something, as I spent a little bit more time there beyond having the opportunity to sit in the cockpit of some of these simulators, flying future aerial mobility devices, and I’m not talking about drones, I’m talking about flying planes and helicopters. I sat down and I started to be able to make some parallels that were really important. So Honeywell itself, I think is almost the side topic of this.

It’s the fact that Honeywell is building technology that’s in the guts of almost every flying object in the world. Things like avionics, things like the ability to detect and have autonomous flight to miss a potential crash. The technology that’s being built at Honeywell is really important.

And so what I started to really make a parallel of though is that the aerial mobility story and the ground mobility story, this thing that we’re talking about all the time with autonomous vehicles with Robotaxis, there’s a huge opportunity in the sky. If you think about the challenges that lie ahead for mobility on the ground, we’re talking about urban mobility, we’re talking about things like Moovit and we’re talking about Waymo and we’re talking about Uber.

Right now, by the way, the solution to policy, the ability to re-engineer cities, to create a space for cars to move freely so that autonomy can happen in full safe, meaningful, productive ways is re really hard. Guess where it’s not going to be as hard? It’s actually in the air. Why? Well, traffic in the air is more simple and it’s 3D. The grid is… There’s less of it.

And so you’ve got some different things in play, but you’ve got a 200 billion addressable market for a company like Honeywell. You’ve got the opportunity to focus on taxi, focus on middle mile, focus on kind of last mile. That creates a huge amount of TAM for the company. And you’ve got this chance, Pat. And all I can think about is every time I land at JFK airport, I’m 11 miles away from the city of Manhattan and it takes me two hours to get there. Think about how on a scale from the most, I guess you’d say, affluent people all the way down to more of a socioeconomic or an economic creator that you could take that kind of technology and expand urban footprints, make housing more affordable, get people from point A to point B more seamlessly and do it using air transfer, regional mobility, super commuting, which are all things that Honeywell is focused on in this advanced aerial mobility center and this particular business.

They’re also focused on making it safer, tying avionics to technologies we understand. I’m going to pause cause I could go on and on. But the tech itself is interesting. The economics though, Pat, are what interests me the most. Just imagine if you could live an hour or two outside of a city, get there in a 10 minute aerial ride, maybe subsidized by the government, bring more talent in because in this next wave of hybrid work, it’s not going to be all work at home.

We’re going to have to find a way to get people in and out of urban centers, keep economic productivity high and do it safely and it’s not all going to be autonomous transportation on the ground.

Patrick Moorhead: No, it’s great analysis. The first thing that I want to talk about is a little backdrop for this. Honeywell’s very much a tech company. Daniel, you and I have talked about HCE and their data platform and the ability to essentially control buildings and factories with your smartphone. We’ve talked about quantum, with Quantinuum, that’s in the far right. But the UAS, UAM business is another one of these breakthrough innovations with a $7 billion pipeline over the next five years and a 54 billion pipeline out to 2030.

This isn’t playtime, this isn’t research, this is real commerce. It’s funny. Sometimes when I go on trips, Daniel, I’m not too sure what I’m getting into and this was absolutely one of them, but I’ve got to tell you, man, I learned a lot. First of all, people might say, “Duh.” The ability to have an electric unmanned aerial vehicle in some ways is a higher probability than an L5 car for all the reasons that you talked about.

So instead of having all of the cameras, instead of having all of radar, LIDAR and a camera, let me show you a picture of the radar unit that, by the way, you could put your hand over it, this attaches to the bottom of a drone, essentially giving you the ability to not run into things, the ability to know when bad weather is ahead and the ability to know where to land, if you wanted to land on somebody’s driveway.

Now, anything beyond that, you have to fine tune this. But I thought, wow. Radar is all that’s required for some of these basic collision avoidance capability and doing it at a mass scale. One of the other big things that I learned was, this is a flight computer. And I put the water bottle in front of it not because I like ugly pictures, but it just shows how small these are getting.

This would be the computer unit that would be inside one of these aerial electric drones as comparison in a large, let’s call it a 777 class airplane, it would be the size of a bookshelf. And by the way, you would have seven of these. Miniaturization is big. Here’s another thing I learned. GPUs aren’t certified in the air for stuff like machine learning. So they do it on CPUs and they do it on GPUs. And one of the challenges that I learned is the auditability of GPUs and the consistency by which they operate.

And then I was thinking, “Well, wait a second. L5 cars are pretty much based on all GPUs. How is it not good for the air, but it’s okay for the ground?” One final thing. I want to show you and yes, I know. I like pictures.

This is essentially an engine. It’s a joint venture between DENSO and Honeywell. And if you know anything about DENSO, they do a lot of the electric engines that are out there. Picture having multiple of these on a UAV.

That is why some of these numbers are so high. Imagine 215 horsepower and you have four to six of these when you’re looking at one of these hauling vehicles. But all in all, it was a fun tour. It was only four hours long, but I’d never seen anything like it. And as an analyst, you like to see stuff you haven’t seen before.

Daniel Newman: Yeah. It was a super interesting, Pat and thanks for filling in some gaps, talking about some of the specific technology that was developed. I do think there’s a very thought provoking conversation to be had about aerial mobility. Of course, it’s going to be expensive. So figuring out subsidies to do it at scale is going to be a challenge.

But we’ve got a lot of beautiful places that people could live if they didn’t need to be so close to work, as we know. If we could find ways to get people to and from. And of course, by the way, you could reduce some of this congestion on the ground by taking advantage of all that space in 3D. All right. Let’s keep moving, Pat. You’ve got an update from Box, made an announcement of Canvas.

Patrick Moorhead: Yeah. So Box made a bunch of announcements coming up. I’ve got an analysis that I’m working on, but if you’re not familiar with Box, it’s essentially a full end-to-end content cloud management system. They’re very successful and highly regulated industries. They keep your content safe. Daniel, you and I many times receive very confidential documents over Box from vendors, NDA presentations, watermark stuff that gets updated on the day of launch. But what’s happening is Box is getting into collaboration, with it’s collaboration suite.

That includes a product called Box Canvas, Box Notes, Box Hubs and content analytics. I’ll put my article in the show notes as soon as it’s ready, but I really wanted to focus in on Box Canvas. So Canvas is a collaboration and whiteboarding tool inside of the Box platform. Has the same security, compliance, governance capabilities that are in the entire Box platform.

You might be like, “Wait a second. Why do we need another whiteboarding tool?” Well, the huge value add here, first of all, it’s super simple. I saw some demos. I haven’t personally used it, but it looks very, very simple to use and the second thing is you can use this whiteboarding tool across every kind of content that you have inside of Box, whether it’s Adobe, Microsoft, Google and if you look at the way that those folks like you to do it, you have to do it inside of their whiteboarding tools.

But if you’re a company and you have some Google tools, Microsoft, Adobe and Deso or something else, why do you want to use different whiteboarding tools across your entire company? I think that is a major benefit out there.

Yeah, and then adding to is some updates to Box Notes, which is exactly what you would expect, which adds kind of it’s not as complex as Notes, but a lot more features and let’s say, sticky notes, inside of a window. And Box Hub and Box Insights is exactly what it is, giving you…
Box Insights is all about how content is being used with analytics and Box Hub is essentially a new way to look at a folder hierarchy structure that is a lot simpler than quite frankly, folders and something that Gen Z will likely appreciate. Because Gen Zs don’t like file structures. In fact, a big long tail of content, they typically dump into a single platform. So good stuff coming from Box.

Daniel Newman: It’s a really interesting set of… I like the governance, the compliance, the privacy, the focus on the biggest challenges that companies have around sharing documents safely. We’re going to head into an era where companies are going to be expected to keep better records, to track more of how conversations and data is exchanged and shared. We’re going to need companies to come up with solutions that are going to fix that. So it sounds like some of that’s going to get done here. Of course, Box has been a bit of a highlight company over the past several years as a potential to take private, as a potential hostile.

They’ve got some different things going on, but the innovation is what’s going to put them in the best position going forward. Pat, I appreciate you pushing this one forward and getting this one on the list. Let’s keep moving though.

Interesting news coming out of the D.O.J. as they’ve proposed some changes to the patent protection laws, let’s jump into this one. Basically, what started here was I was kind of perusing the web and I came across a few tweets and there was a new article by Gordon Chang that came out basically saying that there is some new policy recommendations being made as it relates to patent protection laws that could have been written in Beijing. That’s what the actual headline of his article was.

I dug into this a little bit more and I was kind of reading about it and here’s the long and the short. Right now, it’s been kind of quiet with everything going on in Ukraine with Elon Musk and other topics that’ll come up here. But they’re looking at changing the patent protection laws in such a way that effectively, there would be no injunctive relief for companies when patent infringement was to take place.

Now, there’s a lot of fundamental and underpinnings of a patent discussion, there’s SEPs, which are the standard essential patents for things like… For communication standards. And then there’s non-SEPs, which are patents that companies create for innovation. They’re not considered standard, but are essential in that same way. But either way, the protection elements are really important. And so over the years, one of the only mechanisms that companies have really had to deal with patent infringement has been filing for injunctive relief and taking it to the federal courts.

Of course, one of the biggest infringers we have out there is China that is able to take our US based patents and kind of work around them and oftentimes force companies that are trying to protect their IP, to use the courts to try to stop, to create an injunction, to not allow products to be exported or shipped into other countries where this particular injunctive relief exists.

The long story short, Pat, is with the proposed changes to the law, that injunctive relief that companies have been able to get to stop others would be basically off the table, which would allow companies to copy and the courts to do what the courts do. But here’s a sub theme, Pat. Five years is the average amount of time the average patent case takes to make it through the courts.

So if you don’t agree, you’re going to spend a better part of five years to try to get that situated. In my opinion, that doesn’t work. We have a couple of big things at stake here. First thing we have at is US innovation leadership. The second thing we have at stake is companies that are going to invest and spend money to develop next generation technologies. There’s often a 5-10-15 year runway.

So you could talk about 10 years of a development cycle and research cycle. And then if a company decides to just infringe on it and take their product to market with no protection from the D.O.J., from our policy leaders, it could take another five plus years to fight it in court. And then you’re hoping that you actually have a judge in the court that’s going to be pro-patent protection.

A lot of this comes back to trolls and saying that companies create patents and trolls slow innovation. And at the underpinnings of all this, I think maybe there’s some fundamental belief in the current administration that innovation is being stunted by patent trolls or by patent protection laws. But long story short, I think we need to keep our patent laws strong. We need to keep innovators feeling that they can invest for decades in technology and that they will be rewarded in the long run because it is such a risk, you feel.

Patrick Moorhead: Yeah, I’m going to net this out. First off, we’ve gone through multiple cycles over a hundred years with varying degrees of protection for inventors. It goes way back into patent law and stuff like that. The cycle we seem to be headed in is that the biggest tech gets protected. By the way, that biggest tech doesn’t do the research ironically to create the inventions.

What they do is they take advantage of the inventions and they productize it. They’re implementers. And that’s not to say the biggest tech aren’t innovative, they’re just not doing a lot of the R in R&D. It’s companies like IBM, like Qualcomm, Ericsson, people who are doing the hardcore research and for that matter companies like Huawei.

And for other companies to come in and be able to ride on that research money, which by the way, has at least a 50% chance of complete failure, I think is a step in the wrong direction. If you, again, play this out, it’s very, very simple. That if you don’t reward people, they’re not going to do the work. Let’s move to the next topic, which is Elon gets hostile on Twitter. Unless you’ve been sleeping under a rock, Elon Musk has invoked a hostile takeover of Twitter in a $41 billion…

Sorry, $43 billion deal, but really sent out some, some juicy stuff. Essentially saying, “Hey, it’s a 54% premium over the day that they started investing and a 38 premium over the day before it was publicly announced. This is my best offer. Take it or leave it, or I’ll have to reconsider my position as a shareholder.” In other the words dump the stock and then the stock goes down in value.

Essentially, he’s doing this because he doesn’t agree that Twitter is moving in the right direction. Essentially what that is at least based on what Elon Musk has said, based on the things that he’s wants to do. He wants it to be more open.

And what’s interesting is that really created a Twitter storm of at least from my point of view, that said to have more freedom, we need to have more censorship, which we call content moderation. It’s just like, maybe it’s because I’m a Gen Xer or something like that. Just doesn’t compute with me at all.

But I really think it’s testing this whole idea of “free speech” and the fact that four or five platforms dominate the public discourse.

Daniel Newman: Yeah. It’s a super interesting proposition. This is a saga and Elon Musk is a tremendous utilizer of the court of public opinion to move agendas forward and around. He’s very popular. When this first happened, you saw, I think there was something like that, almost a 60% jump in the stock price from the time, from the moment before his initial announcement. It went up almost 40% from that point, when he first announced he was taking a stake and then when offered the premium, it was a 20% premium above where the shares were trading at the moment that that offer was made.

There’s a couple of portions of his offer that require a little investigation or a little more depth. First of all, it was non-binding. Second of all, it was financing contingent. He of course has the money, but it’s mostly tied up in collateral of his Tesla stock.

Patrick Moorhead: Hey, when you say that, is that saying… Are you questioning if he has the capability to fund this?

Daniel Newman: I’m saying that a bank or someone would have to be willing to collateralize his stock and his stock trades at an extraordinarily high PE ratio and has held up extremely well, given the pullbacks of most growth in the market.

Now, again, I’m not doubting anything. I’m just saying, he’d have to find the right financing partner to come up with the cash to make this deal. It’s not going to be done. Because it’s non-binding, the board for Twitter is in a bit of a precarious situation where you’ve got this offer and you really would be pretty irresponsible to not put it in front of your shareholders when you see the stock prices more than kind of doubled in his presence.

And the other thing about it is he really does have the company in a stranglehold right now, because of exactly what you said, that he’s basically saying, “If you don’t take my offer, not only am I not going to negotiate with you on this offer, but I will very likely sell the 9%+ that I’ve acquired in the public markets.”

As I said, it is kind of fun. I was in an interview. I talked to The Wall Street Journal and a few others. And I said, “Depending on what side you’re on, on this deal, you’re either A, if you think the deal is going to happen and the stocks trading at 45, and again, not financial advice, just my opinion, you should buy as much as you can. You’ve got like a 20% upside and that’s going to be like a pretty quick money maker. You say you can make 20% if you believe this deal’s going to happen.”

I said, “On the other side of this though, is if you think this deal’s going to bomb out, this could be one of the best short opportunities in history because the stock has been way pumped up under Musk’s presence in it.” And if he pulls out, I imagine all his co-investors, everybody, when I say cohort of investors that follow him anywhere, he goes, will all sell with him and this thing could be back in the 20s in a matter of a couple of days.

It’s a pretty interesting juxtaposition for Twitter right now. And they have to take him serious. He is absolutely serious. To your point though also, this isn’t about driving stock price up. This is about one, a absolutism. This is about trying to build a better town square, a better platform, less algorithms, less focus on monetization of extremism and trying to rebuild it. But that’s the thing is a lot of people think [One A] and absolutism is all about just letting people say whatever they want.

I think he wants to reinvent a platform to have real debates on real topics. We’ve become so binary that we basically say, “You’re either A or you’re B.” On everything. And if you’re A, then we’re only going to show you more A stuff or B stuff that’s going to absolutely inflame you to your A side of the argument. That’s been a real downfall of social for media. We need to be able to have real debates about anything from supply chain, to legislation and laws, to policy that could influence our lives, to how we handle critical issues in our country and around the world.

He wants that. I think it would take a long time to rebuild. Going private would give him more runway to do that. The fact that he doesn’t need it to return to him immediately, financially could give a chance for Twitter, which only has about 300 million users to actually build a platform that would have the user base, the size of others like TikTok, Facebook, but at the same time, deliver meaningful and improved experiences with less algorithmic influence and more real open dialogue.

So it’s interesting. I’m not sure it’s achievable, but it’s going to be a lot of fun to watch this play out. So let’s take this to… I think we’re at our final topic and kind of staying on this policy bend, Pat, I’ll kick it off.

But Tim Cook went to Washington. Now, my favorite meme you’ve ever shared was the one that had Tim Cook looking a little bit like Montgomery Burns in the Simpsons. If you don’t remember that he’s got the hands in the mouth, looking a little devilish. Apple’s at this interesting crossroads. I had the chance to talk to John Schwartz over at Market Watch about this. He was covering this.

So Tim Cook went to Washington to essentially talk about privacy and how Apple’s solving the privacy issues and how some of these global laws such as the European Union’s Digital Markets Act that’s supposed to go into effect and it’s supposed to stop companies like Apple from being able to charge excessively for commissions on their app store. He’s basically saying there’s a ton of risk in this.

Pat, here’s where I stand as someone who’s A, a privacy advocate; but B, technologically knowledgeable and I say, this is a real crossroads. Because Apple has spent a lot of time, energy and money to get to a place in their technology that they believe they can keep people’s data more secure.

They’ve gone right after the likes of Meta and other social platforms using their, what called their ID for Apple, to slow down how companies like that are able to aggregate data without our permission to utilize it to target. Apple’s been somewhat of a hero in that capacity. But at the same time, it’s all been in the name of building its own advantage.

Like don’t for a minute, think that this is all just some sort of altruistic Apple. Apple is building out service is and products to compete with almost every part from streaming to media, to of course, their app store’s revenue streams, hardware. They want to own everything.

It’s not “We’re doing this because we like people. We care about privacy.” At least not in my opinion. I think it’s more about Apple wants to control the ecosystem. So having an app store and having a methodology for keeping apps secure and having certain criteria to allow an app to be downloaded does provide a certain wave of privacy protection and data protection that you would open up risk when you side load.

Think about like a PC when you can… What originally was the PC versus the Mac and what kept Mac safe for a long time was it was a smaller ecosystem and that’s kind of what these app stores are.

It’s a tighter, smaller, more controlled ecosystem. But at the same time, anytime you do a tighter, more controlled ecosystem, you are literally controlling that and you’re charging certain commissions. Long story short, this new DMA law would create an extremely expensive proposition for Apple in all the fines they would see if they decided to not open up some of these things like the side loading, but at the same time, if they open all this stuff up, they could create a lot of new vulnerabilities into the Apple ecosystem and the Apple app store that could create risk.

In the end, boiling this down, Tim Cook is fighting for control, to be able to keep charging excessive commissions in the ecosystem, that they have done a good job of creating a more safe and secure space. Having said that, I still stand by my word that Apple has the most outright obvious case of antitrust violation in the market right now, with the app store and some sort of door has to be opened to not allow them to just continually raise these commissions to an excessive level to where they price so many companies out. Pat, I’ve got a lot more. We don’t have enough time. I’m going to pass the mic to you on this one.

Patrick Moorhead: Yeah. I’m just going to cut to the chase. This is essentially Tim Cook defending monopoly using privacy. It’s very simple. I think the idea that Apple couldn’t come up with a wrapper technology for side loaded applications that gives users the ability to run their own privacy is just complete BS.

This is the company that is smart enough to make their own processors, that they didn’t invent the smartphone category, but they monopolized the profits in it. And one of the reasons for their monopolism is that they lock people in, they lock developers in, they lock users in and even under the banner of things like courage, if Apple had courage, it would do a few things. It would open up iMessage to Android.

It’d probably lose 10% market share in North America off the bat. I know I’d move my entire family over there. But second of all, it locks in that they should open up to a side loading and put an extra level of security in there and privacy. They have the technology to do this.

I’m almost embarrassed for Apple and I’m embarrassed for Tim Cook, that he would go up to do this. But listen, I think that shows how important this topic is to maintaining Apple’s monopoly activity and monopoly status.

Daniel Newman: Yeah. You make a great point. I think the only debate for us to have here is can the technology that can be built outside to make sure what is brought in through side loading is as secure as the current. Because again, that is the story about protecting user privacy and data. That’s going to be a real challenge, but of course they have unbelievable resources at their disposal and they could be spending money on that.

Of course, they’re not because instead what they’re doing is raising rates on app developers so they can keep hoarding more and more of the profit. I think that’s why it’s hard to feel bad for them.

Having said that, I do feel genuine concern that other ways around systems, most people are not knowledgeable enough to know that they’re being phished or scammed. And so they’re going to have to really step up.

By the way, this isn’t Apple’s fault. Apple is malicious in their intent here for sure, because they can be. They’re, like you said, monopolistic. This is the government’s fault. We have antitrust regulators trying to need go after Amazon’s 1% market share of private label, which again, you need to pay attention to. But they’re focused on that instead of what?

This is one of the most obvious cases. I don’t know what Alina Conn is doing here, but this is the one maybe she should put some of her attention on. All right. So let’s end on some good news. What do you say, Pat?

Patrick Moorhead: This is good news. This is good debate. There’s nothing bad about these conversations. I mean, there’s a lot of attacks going on and you know the way that I’ve characterized, Department of Justice is going after inventors. Elon’s getting hostile on Twitter. Tim Cook defending his monopolism with privacy. There’s a lot of stuff going on.

Daniel Newman: This is juicy, man. This is juicy. I just meant like… Let’s go light because we were going deep. We just got deep. Everything got deep at the end. There let’s go light and talk about something exciting, fun and something that we are trying to monopolize, which is the best online event for technology enthusiasts on the planet and it’s called the Six Five Summit.

Patrick Moorhead: Tell me more about the Six Five Summit.

Daniel Newman: June 7th and 9th, we’re 53 days, one hour, 58 minutes and 35 seconds away from our next iteration of the Six Five Summit, third year. Growth goes on, endless innovation. Couldn’t be more exciting.

We’ve got more than 12 tracks, Pat and we finally were able to put together a who is attending. So last week we talked a little bit about not who’s attending. Who’s going to be presenting at this year’s summit. We’ve got 12 tracks though, Pat.

We’ve expanded from a show that had a handful of tracks and a handful of speakers to a bigger show that we did last year to a monumental show this year where we’re going to have… What are we up at about? 60 speakers now and we’re probably going to have about 80 when it’s all done.

Patrick Moorhead: Yeah. We’re almost two months away. We already have 60 speakers that we talked about, some of the lead speakers. But as you can see from all of these different brands whether it’s the connected intelligent edge, automation, AI, automotive, cloud and infrastructure, collaboration, customer experience and contact center, ESG, intelligent edge devices, the Metaverse, quantum, enterprise software in SaaS security and semiconductors, we are going end to end this year. We’ve added new tracks. We added quantum. We added Metaverse. We added ESG. We added automotive. We’re back. It’s big and it’s going to be amazing and we’d love for you to sign up at the sixfivesummit.com.

Daniel Newman: Yeah. We’ll throw that link in the notes and just to kind of give you a heads up. We talked last week, we’ve got Arvin Krishna CEO of IBM kicking it off. We’ve got CEOs of Ericsson North America, we’ve got Honeywell CEO, we’ve got the CEO of what? Splunk. We’ve got… Oh, I forgot. We’ve got Matt Murphy, CEO of Marvell. I’m going down the list here. I’m just kind of looking at all these names, Pat, but we’ve got, I think something like 15 to 18 CEOs already set up to join us.

HPE’s Antonio Neri will be joining us. Lattice Semiconductor, Global Foundries. Just so many top executives. Of course, we’ll have a epic semiconductor track because that’s an awesome area that’s got a ton of attention. Semis are having a moment, but we’ve got Microsoft, we’ve got Salesforce.

We’ve got up and coming companies like C3 AI. I can’t do justice here because I could literally sit here and read all of them and talk about how awesome they all are. But Pat, this is going to be a really amazing year. Cause we’ve got so much diversity, diversity of thought, diversity of topic, diversity of people. We’ve got topics that’ll be more product-centric. We’ve got market and innovation and visionary topic coming out of this show.

We just hope you sign up. Last year, we had almost 10,000 people sign up. We had over a million people view these sessions and this year, it’s going to be better. We’re going to make absolute certain of it. Pat, I’m putting all the responsibility of everything I just said on you.

Patrick Moorhead: Well, that’s too bad because this is a group effort here. If you’re just putting it on me, you’re going to get half a show. Maybe you won’t get a show at all. I was super happy with last year. I mean 2.7 million session views. We had 70 citations from major news outlets like Baron and Bloomberg, Nasdaq, CNBC, Reuters market watch. I mean it was pretty awesome. Totally unexpected last year.

And then we don’t just let that content sit there. We get it out there on social. We had a 269 million social media impressions last year. Did we invest a ton? Yeah we did. But you know what? You’ve got to give something to get something, but getting that out there, getting people to view it, getting them into the content, I think you and I are both very proud of the content and I think our sponsors are as well and they should expect everybody to work their hardest to get this content out there.

This is a thought leadership show. This is not a chest-thumping, “My product, my widget is better.” It’s not a bake off. Right. Everybody’s going to be talking thought leadership and strategic point of view. Quite frankly, you’re going to get that automatically because of the caliber of speakers that we brought in there.

Six months ago, we had a strategic question. Are we going to go do a face to face event or are we going to keep this digital? We decided, “Hey, we want the best content. We want the best speakers. We want the Davos of tech.” And to do that, we had to do this digital.

Daniel Newman: Yeah, absolutely. I love that analogy. I’ve used it a few times myself. It’s very exciting. It’s going to be absolutely one of the events that we should not miss. We, you and I, cannot miss, but you out there as our listeners, just sign up. We promise it’ll be worth it. It’s going to be very exciting.

June 7th and 9th, check out the link, thesixfivesummit.com, sign up. Speaking of sign. It’s going to be time now to sign off. It is Friday before Easter. If you do celebrate the holiday, have a good holiday. If you do not, hopefully your company gave you a long weekend. We do appreciate our listeners here in the States and all around the world and we know everybody’s got different things. Whatever your thing is, we hope it’s a great weekend to you.

Patrick Moorhead: And Passover as well. Happy Passover.

Daniel Newman: Happy, happy. Joy, joy. Have a great weekend all.

About the Author

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