Google – Cookie crumbles

Reply to this post

RFM AvatarSmall

 

 

 

 

 

I see no solution to Google’s problems in Android O.

  • Google has released a developer preview of the upcoming Android Oreo (Android 8.0) software, but I can’t see anything here that will help solve either the endemic fragmentation or Google’s chronic inability to update its own ecosystem devices (non-Pixel).
  • The preview of Android O headlines with a series of tweaks that provide incremental improvements to the user experience as well as API upgrades to enable developers to write better apps.
  • A few of these upgrades include:
    • Notifications: tweaks to make notifications easier and more consistent to manage.
    • Autofill framework: includes browser like autofill for commonly used data such as name and email.
    • Picture in Picture mode which is already available on Android TV will now be available to phones as well.
    • Adaptive Icons which can change their appearance depending upon which device they are being displayed.
  • These are all well and good and represent steady improvements in the user experience, but they do nothing to solve the two big issues that continue to hamper the Android user experience thereby keeping usage lower and users less loyal when compared to iOS.
  • These are:
    • First endemic fragmentation: There are thousands of different implementations of Android which behave differently and result in variations in the user experience.
    • RFM research indicates that this variation creates user frustration, lower usage and lower loyalty.
    • Second software distribution: Google has no control over the updates that are applied to the devices that run its ecosystem on Android.
    • This means that it takes up to four years for new software to fully penetrate its user base.
    • This gives rivals plenty of time to copy Google’s innovations and put them into their devices long before Google’s own innovations reach the hands of users.
  • I have long believed that both of these problems are largely responsible (more than demographics) for the much lower usage experienced by Android devices in general.
  • Google’s Android revenues are dependent on usage and I think that these issues are substantially limiting Google’s monetisation potential on Android.
  • This is why I have long held the opinion that Google must take Android fully proprietary to fix these problems and begin to realise its full potential when it comes to monetisation (see here)
  • I am still hopeful that we will see announcements that quietly take Android in this direction at Google i/o this year but the indication from this preview is that i/o 2017 could be yet another year of ignoring the elephant in the room.
  • I remain pretty cautious on Google, preferring instead Microsoft, Baidu and Tencent.

Samsung – Edge dancer pt. II

Reply to this post

RFM AvatarSmall

 

 

 

 

 

I think Bixby will struggle against Google Assistant.

  • Samsung has launched its offensive on the digital assistant market but I think it will still be dancing around the edge of the main act on the Galaxy s8: Google Assistant.
  • Samsung has announced that its new digital assistant, Bixby will be present on the Samsung Galaxy 8 with its own dedicated key on the side of the device.
  • Bixby promises to offer:
    • First, completeness: This promises to give users complete control of enabled apps rather than the few tasks offered by other assistants.
    • Second contextual awareness: Samsung is promising that Bixby will be aware of the context within which it has been triggered, making it more relevant and useful.
    • I suspect that it will do this using the hooks in Android that Google wrote to enable Google Assistant to do the same thing.
    • Third natural language recognition: Bixby should be able to understand complex, multi-part questions as well as prompt the user to clarify the pieces that it does not understand.
  • These features are very similar to those promised by Viv, the artificial intelligence company that Samsung purchased in October 2016 which is clearly the source of this product.
  • If Bixby can truly fulfil the promises that it is making, then it will almost certainly will be better than Google Assistant.
  • However, I think that this is a very big ask given that RFM research has found that AI excellence to date has been a factor of time and data volume.
  • Viv was founded in 2012 and has no data from commercial products while Google has been crunching data for 20 years and has orders of magnitude more data than its nearest rival.
  • Consequently, I think that compared to this highly ambitious billing, Bixby is going to fall very far short of the promises that it has made.
  • Furthermore, Samsung’s delivery of Bixby is going to be hobbled by the 2014 agreement that it made with Google where it agreed not to compete in the ecosystem (see here).
  • This is why I suspect that Bixby has been relegated to a button on the side of the device whereas it will be Google Assistant that is sitting on the all-important home button.
  • As a result I think on the smartphone, Bixby will lose out to Google Assistant but on other devices it has some chance.
  • Samsung has a good portfolio of other electronic devices, which combined with its SmartThings offering, could allow Bixby to offer intelligent and intuitive control of other Samsung devices.
  • This could help Samsung to encourage greater ownership of Samsung devices across its range but again this will depend on how good Bixby really is.
  • Over 20% of all Google mobile searches are already done using voice meaning that many users are already conditioned to pressing the home button and asking as well as being used to Google’s quality of service.
  • Consequently, I think that the odds are heavily stacked against Samsung having much success with Bixby but as long as it can continue to outsell Huawei by more than 2 phones to 1, the profitability of its handset business should remain intact.
  • I still pretty cautious on Samsung as I am not convinced that the full fall-out from the Note 7 disaster has been felt in terms of market share, which is what makes the Galaxy s8 launch so important.
  • I prefer Baidu, Tencent and Microsoft.

 

LeEco – Electric millstone.

Reply to this post

RFM AvatarSmall

 

 

 

 

 

I think, LeEco must exit automotive to survive.

  • It looks very much like LeEco is giving up its grand plans for a 12,000 employee eco-headquarters in return for hard cash in order to give the ecosystem strategy time to succeed.
  • Despite these radical actions, I still think that LeEco’s only chance is to give up its automotive ambitions and focus on its core business: the ecosystem.
  • LeEco has recently raised $2.2bn (see here) which I calculated would leave $622m free to support the fledgling ecosystem of products and services.
  • However, the sale of the 48 acres it purchased from Yahoo to Genzon Group, the Chinese real estate developer this increases my estimate of free cash for investment to $1.132bn.
  • This is because to reach the $622, I took off $250 for purchasing the land but this outflow is now an inflow of $260m, improving cash flow by $510m.
  • This will give the company time to develop its offering but I remain concerned that its automotive ambitions remain a major problem.
  • LeEco’s automotive strategy is centred on an electric vehicle start-up called Faraday Future in which its founder is the major backer.
  • It broke ground on a huge 3m square-foot factory in Nevada in April 2016 but because contractors have not been paid, work has since ground to a halt.
  • Furthermore, Faraday Future has now reduced the size of the planned factory by 80% to 600,000 square-feet, cut the number of models from seven to two and delayed the factory opening by at least 1 year.
  • Faraday Future’s problems do not end there as senior management turnover has been high in the last 9 months and there could be as much as $300m in unpaid bills.
  • As Apple (see here) and even Tesla have found, building cars is a difficult business that requires a lot of time and very deep pockets.
  • I am pretty certain that Faraday Future has none of these things making its chances of long-term solvency very slim.
  • This is why I think that LeEco’s best interests will be served by not having this millstone hanging around its neck.
  • Faraday Future clearly needs hundreds of millions of dollars of new investment which LeEco simply cannot afford if it is to have any chance at delivering on its ecosystem ambitions.
  • These ambitions begin with a media consumption strategy that needs both heavy investment in terms of content and attention to detail when it comes to software and the user experience.
  • Furthermore, management needs to be focused on delivering on these ambitions rather than being distracted by building self-driving cars.
  • RFM research has found that currently, the user experience in the automobile has no effect on the user’s decision on where to live his Digital Life and therefore building a car to deliver one’s ecosystem makes no sense at all.
  • This combined with the difficulties, cost and poor profitability of automobiles, is why I think that Apple backed off (see here).
  • Hence, I think that for LeEco to have the best chance of succeeding, it needs to extract itself from Faraday Future and forget about self-driving cars.
  • Building a thriving ecosystem is difficult enough and throwing in cash constraints and management distractions can only make it next to impossible.

 

Spotify – Patience pays.

Reply to this post

RFM AvatarSmall

 

 

 

 

 

I think shareholders will see more value by being patient.

  • Spotify is closing in on finally doing a deal with the record labels that I think will remove the last obstacle to the company going public.
  • Spotify and three of the largest record labels have been dancing around each other for a significant period of time without coming to any definitive agreement.
  • This is crucial because without the content from these three labels. Spotify would be unable to provide its current service.
  • I have long argued that as Spotify’s user base grows, so does its negotiating power and that the longer it took to arrive at an agreement, the better it is for Spotify (see here)
  • However, the time for Spotify to go public is approaching fast and I suspect that without a deal with Universal, Sony and Warner, any valuation that Spotify would achieve at IPO would be materially impacted.
  • Furthermore, with this hanging over its head, the stock would be very volatile in the public market as, in theory, the labels could wipe Spotify out at any time by pulling their music from its service.
  • In practice, this is never going to happen because with every month that passes, the labels need Spotify more than it needs the labels and I am pretty sure that if they were going to pull their music from Spotify, they would have done so ages ago.
  • This is because streaming is now the only source of growth in the music industry without which the labels would lose what has become their most important route to market.
  • Spotify is unique in that it is the only major platform to have a free-tier and adding in those users takes Spotify’s total user count well north of 100m.
  • This is hugely significant, as although these users do not pay Spotify directly, they generate vast amounts of data which can be used to improve and train its algorithms.
  • This is critical because it is those algorithms that allow Spotify to both understand the music it has on its platform as well as accurately match it to the users that it has.
  • In the long-term, I think that this gives Spotify the opportunity to cut the labels out completely which would have the effect of substantially enriching both artists as well as shareholders of Spotify.
  • I think that this is why Spotify is not keen to do a deal with the labels that limits the provision of music to free users as data collection and algorithm training would most likely be impacted.
  • The other side of the coin is that I suspect that Spotify has guided its investors to a time when it can IPO, giving existing shareholders visibility as to when they will see a return on their investments.
  • I believe that doing an IPO without a signed deal with all three of the biggest labels has difficulty written all over it which is why Spotify is considering caving in to some of the labels’ demands.
  • Although this will bring some short-term benefits to Spotify and its shareholders, I think that a deal in the short-term could delay Spotify’s ability to supplant the labels which I have long believed is where the real upside lies.
  • This is because I see that this is how Spotify goes from earning $0.30 on the subscription dollar to $0.50 or more.
  • Hence, I think that the best outcome for shareholders will be achieved by being patient and letting the IPO exit window slip for as long as required for Spotify to become powerful enough to dictate terms to the labels.
  • I continue to see only a minor threat from Apple Music as Spotify is still adding paid subscribers much more quickly and shows every sign of having better artificial intelligence with which to differentiate its service.
  • Whether Spotify can convince its shareholder of the merits of delaying their exit remains to be seen.

Amazon vs. Google – Homefront pt. II.

Reply to this post

RFM AvatarSmall

 

 

 

 

 

Amazon is pre-emptively moving to keep Google out.

  • Amazon is pulling out all of the stops to ensure that it is Alexa, rather than Google Assistant, that ends up becoming the nerve centre for controlling the smart home.
  • In its latest move, Amazon is offering credits for AWS that are likely to ensure that connecting one’s smart home device to Alexa remains free in almost every circumstance.
  • As the scope of Alexa improves and users can do more with Alexa, it is likely that creators of smart home devices will require more space on AWS that will require them to start paying Amazon.
  • Most device developers are small start-ups with very limited funds meaning that this will be a big incentive to do more with Alexa.
  • At the moment, the free tier gives developers 1m AWS Lamda requests and 750 hours of EC2 compute time per month.
  • Beyond that, developers end up incurring a monthly charge which is something that Amazon is wisely keen to avoid.
  • With this new program, Amazon is offering a one-time credit of $100 as well as $100 per month towards any charges that they incur as a result of usage of their devices.
  • This is likely to ensure that almost all developers of smart home devices will not have to pay anything to Amazon until they are generating so much usage that they are making plenty of money themselves.
  • I think that this is a very shrewd move as it encourages more developers to sign up to make their devices work with Alexa and also encourages them to make the skills deeper and more intuitive.
  • Currently, most skills are very basic and as a result they suffer from usability problems which in most cases makes it easier to turn the device on manually rather than using Alexa.
  • This looks like a pre-emptive move to keep Google at bay as I see Google making rapid moves to improve its Google Home developer program after being all but wiped out at CES 2017.
  • Even though Amazon has close to 10m devices installed in the houses of users compared to Google at 0.5m – 1m, the Google Home experience is so superior to Alexa that I still see a risk of Amazon losing this race (see here).
  • This is why I see Amazon doing everything that it can to show developers love and support which is something that to date, Google has badly neglected.
  • The result is that very few of the smart home device developers are making sure that their devices works with Google Home giving many users more reason go with Amazon’s Echo devices rather than Google.
  • Amazon is also very fortunate that the market’s view of Alexa is so positive as a side by side test of the Amazon Echo against Google Home shows how inferior Amazon is compared to Google.
  • This is why it is still Google’s battle to lose but Amazon is clearly doing everything that it can to ensure that it is Alexa rather than Google that dominates the potentially extremely lucrative market for intelligent home automation.
  • From an investment perspective, neither of these two companies are desperately appealing leaving me preferring Baidu, Microsoft and Tencent with Apple for long-term income based investors.

 

Yahoo – Earned asset

Reply to this post

RFM AvatarSmall

 

 

 

 

 

This time Marissa has really earned her payoff.

  • Following the sale of the Yahoo core business to Verizon, Marissa Mayer will step down as CEO of Yahoo and will receive a severance package worth $23m.
  • This has once again raised the issue of excessive payoffs to failed senior executives, but I think that for the first time since she became CEO, she has earned every penny of her severance.
  • Yahoo has completely failed to build a digital ecosystem but it has successfully sold an asset that can easily be argued to be worth nothing for $4.48bn.
  • While the core business is cash generative, it is in decline and has also suffered two of the worst security breaches in Internet history.
  • I think that these breaches could easily trigger a mass exodus of users.
  • Over the last 12 months, Yahoo has admitted that around 1.5bn user accounts have been compromised in two very large break ins.
  • This is more accounts than Yahoo actually has, implying that every account that Yahoo has been compromised with a good number of its users having suffered the indignity twice.
  • If this was not enough, Yahoo’s Q4 16 results showed improving margins solely due to cost cuts which deflected attention away from the fact that revenues are still falling, albeit more slowly than before.
  • For the last 10 years, Yahoo has neglected its Internet assets but it has still managed to enjoy high usage and engagement in the fixed Internet despite its failure in mobile.
  • It is this engagement that Verizon is paying $4.48bn for.
  • However, recent events have given users the perfect excuse to finally close their Yahoo email account and move to something else.
  • Following the disclosures of these hacks, Verizon attempted to have the price cut by $925m but Yahoo managed to beat it down to a much smaller $350m discount.
  • Furthermore, Yahoo will only shoulder half of the liability for any class action lawsuits that result.
  • If I was Verizon, I would have been looking for Yahoo to shoulder all of the liability as it was due to Yahoo’s inattention and neglect that allowed the breaches to occur in the first place.
  • Despite is very poor business performance, Yahoo’s management has done a superb job in capitalising on Verizon’s apparent desperation to build a digital ecosystem and on its belief that it needs Yahoo’s assets to do that.
  • I have long thought that there was a very real chance that Verizon would walk away from this transaction leaving Yahoo with a fast depreciating asset and a potentially large liability.
  • Consequently, I think that Marissa Mayer has probably enriched shareholders by more than $1.5bn making her $23m payoff look very reasonable indeed.
  • With Yahoo’s shares now at $46, there is still some upside left but much less than the last that I valued the shares at $50.4 (see here).

Intel – Auto ambition

Reply to this post

RFM AvatarSmall

 

 

 

 

 

Intel must break out of the mould that success has cast for it.

  • The acquisition of Mobileye by Intel highlights both Intel’s determination not to miss the next big trend as well as the concentration of Google’s competitors around HERE.
  • Intel will buy Mobileye for $15.4bn and merge it with its existing autonomous driving business to create one of the leading supplier of autonomous driving systems.
  • Intel already has a substantial effort in this space but adding Mobileye gives it a very strong position in visual sensors and most importantly, gives it direct access to 80% of the automotive market.
  • These doors were already open for Intel but I think that going in with Mobileye will ensure that the automotive industry takes it much more seriously.
  • I think that missing the boat in mobile has damaged Intel’s reputation to the point where some potential customers think that Intel has little to offer beyond chips for PCs and chips for servers.
  • In reality, this is very far from the truth but dispelling that impression is one of the most important tasks that Intel faces over the next few years.
  • The fact that Intel will soon become one of the top 4 shareholders of HERE will also help in improving its credibility in both location and automotive.
  • This is because HERE is the only realistic alternative to Google in high definition maps for autonomous driving which are now recognised as essential for a car to drive itself.
  • Even Mobileye, which early in 2016 was adamant that a HD map was not needed, has caved in and is now working with HERE to use its HD map in its systems.
  • In addition, other ecosystems such as Tencent, Baidu, Facebook and Amazon are also working with HERE for their location data, all of which will benefit Intel as it tries to break the mould that the market has set for it.
  • Mobileye represents that second largest acquisition in Intel’s history underlining the need for semiconductor companies to move into markets beyond consumer electronics and PCs.
  • This is why Qualcomm is buying NXP and why Samsung is buying Harmon.
  • Intel has now armed itself with the potential to offer an end to end solution for autonomous driving but the key to success will be how well it can execute on that offering.
  • History is not in Intel’s side but I detect a change in the way Intel thinks about its place in the world that just might allow it to break the x86 mould that history has cast for it.

Autonomous autos – One of two.

Reply to this post

RFM AvatarSmall

 

 

 

 

 

Regulations ease but liability remains.

  • There are signs that the regulatory environment for autonomous driving is coming together but the thorny issue of liability still needs to be solved before these vehicles make it onto the roads.
  • The California Department of Motor Vehicles (DMV) has updated its guidelines for autonomous vehicles removing a regulation proposed 15 months ago that obviated half of the use case for self-driving cars (see here).
  • The California DMV originally proposed a law that requires a person who is licenced to drive the vehicle to be present at all times while the vehicle is in motion.
  • If this had become law it would have completely destroyed the promise of freedom for those that can’t drive, the promise of releasing parents who become taxi services for teenage children and any form of automated delivery service.
  • On Friday, the California DMV altered this proposal in removing its requirement for a licenced driver to be present and also the requirement for conventional controls to be present.
  • I think that this is significant as the California DNV serves as a yardstick for the rest of USA which is likely to be one of the first to deploy these vehicles.
  • However, while regulators appear to have seen the light on autonomous driving, the issue of liability remains.
  • I think that liability is the biggest problem that faces autonomous driving as sending an algorithm to prison is not a practical option.
  • When an autonomous vehicle crashes (and they will), the question arises as to who is responsible for the crash.
  • There are many potential answers to this question including:
    • The driver: If the driver as was asleep at the time of the incident can he really be to blame?
    • The current stance is to solve this problem by pushing all liability onto the driver.
    • The problem with this is that it completely destroys the use case of a self-driving vehicle.
    • Any driver who will be held liable for a death that results from software glitches in his vehicle is unlikely to take his hands of the wheel.
    • The auto maker: This would instantly make the automotive industry one of the riskiest industries on the planet.
    • Furthermore, many automakers will not create the entire system themselves.
    • Cameras, silicon chips, software, servo motors and so on will come from third parties and if they fail, they have the potential to cause a crash.
    • For most automakers writing software means creating hugely detailed specifications against which suppliers bid with the lowest winning.
    • If part of the AI is written on the cheap and causes the car to crash, whose fault is it?
    • The supplier: If the liability is to fall upon the supplier, then it is almost certain to claim that the auto maker didn’t install the software or component properly or otherwise made modifications that caused it to fail.
    • This is one of the biggest problems when systems get complex is that there is a combinatory explosion of possible outcomes in any one scenario.
    • It is clear that in any one fatal incident, the blame game has the potential to go on for years and there are likely to be fatal incidents on a daily basis. (35,092) people died in 2015 in road vehicle crashes in the US)
  • Liability is the main reason why I continue to think that the technology for autonomous autos will be ready long before the market is ready to receive it.
  • Many automakers have set a deadline of 2020 by when they expect to have a commercial offering in the market but I think that it is doubtful that these vehicles will leave the factories at that time.
  • This is good news for the automotive industry which is notoriously slow to adapt to and implement new technology as it will have more time to defend its position against the new entrants.
  • With things taking much longer than expected to come to fruition, I can see lots of ventures struggling to keep the lights on and being acquired by the larger, slower moving companies.
  • I am sticking to my 2030 target for this becoming a real commercial reality.

Intel vs. ARM – Juicy target.

Reply to this post

RFM AvatarSmall

 

 

 

 

 

Intel’s 60%+ gross margins are a juicy target.

  • To date, Intel has been able to brush aside any threat to its dominance in processors for the data centre, but with Microsoft deciding to port Windows Server and Azure to ARM, the threat is back.
  • The data centre has long been the saviour of Intel’s financial performance as it has been supporting the company as the legacy PC business has been going through its rough patch.
  • ARM has taken pot shots at the data centre before with semiconductor makers announcing chips, but this has never gotten off the ground.
  • I have long been convinced that the main reason for this is software as many servers run huge amounts of legacy software that will need to be ported in order for an ARM based server to work.
  • Until now, no one has been willing to do this.
  • This is why the demonstration of Windows Server running on the ARM based Qualcomm Centriq 2400 is so significant.
  • If this can shown to run with similar performance characteristics to Intel, then it would make a lot of sense for Microsoft to begin migrating its servers over.
  • There are some signs of this already and Hewlett Packard mentioned weakness in a large customer on its most recent earnings call which is widely believed to have been Microsoft.
  • However, this solution is still internal only to Microsoft and I doubt that it will be willing to take any risks until it is sure that it can work just as well as Intel.
  • The key to this is performance and here Intel has historically beaten ARM-based processors hands down time and again.
  • This is not because ARM processors are weaker than Intel per se, but because the implementation of x86-based software on ARM involves a translation step to convert x86 instructions to ARM instructions.
  • This translation step adds complexity to an implementation meaning that substantial performance overheads often result leading to a poor user experience.
  • In the data centre, performance is critical and so it is a very big stretch to say that Intel is beaten.
  • In fact, I think that there is a very long road ahead for ARM to make a real impact in servers but with the company now privately owned, there is plenty of money for investment.
  • I think the real risk for Intel here is not so much market share but margins.
  • Group gross margins are still way above the industry average at over 60% and if real competition comes into the server market, these are going to come under real pressure.
  • I think that Qualcomm is highly motivated to make this work as its core markets are now saturated leaving it needing other avenues with which to pursue further growth.
  • This is what lies behind its acquisition of NXP as well as its aggressive push into other areas such as automotive.
  • As always, the outcome of this battle for the data centre will be determined by execution and while I see no immediate threat to Intel, Qualcomm and Microsoft represent its greatest threat to date.

Android Security – Swiss cheese pt. V.

Reply to this post

RFM AvatarSmall

 

 

 

 

 

Leaks look dated but still push Google towards proprietary Android.

  • Even if Google could quickly fix the vulnerabilities in Android that are being exploited by state sponsored hacking, it would be around 4 years before the majority of Google Android users were protected.
  • WikiLeaks has released 8,000 pages of documents that supposedly reveal all the tricks and hacks used by UK and US security services to turn ordinary consumer electronics products into surveillance devices.
  • iPhones, Android smartphones and Samsung TVs appear to be most specifically targeted but I have a feeling that this data is not comprehensive and may actually be considerably dated.
  • This is for two reasons:
    • First: there is no evidence in the leaked documents that any of the Android exploits apply to any version later than 4.4 (KitKat) meaning that 65.5% of Android devices may be unaffected by any of these revelations.
    • This leads me to think that these documents might in fact be very dated as I find it very hard to believe that vulnerabilities in Android suddenly went to zero with the release of version 5.0 (Lollipop) in 2014.
    • Whether these exploits were already known and have already been patched or whether these are new vulnerabilities is unclear at this time.
    • Second: Experts that have looked at the leaked iPhone vulnerabilities have stated that almost all of the leaked vulnerabilities are known and have in all likelihood already been patched.
    • Consequently, it seems likely that anyone running iOS10+ is already immune to these exploits.
    • Again, I find it difficult to believe that the occurrence of vulnerabilities has ceased and that these leaks could relate to pretty old data.
  • Mobile security firm Check Point is of the opinion that this leak may be snapshot of exploits used in early 2016, but I think the Android data indicates a much earlier point in time.
  • To make matters more difficult, assuming there are new exploits in this leak, no code has been released meaning that Google will have to search through millions of lines of code to find the exploits referred to before they can be patched.
  • Furthermore, even when Google has found these vulnerabilities and fixed them, it will then take around 4 years for these fixes to make into the hands of all Google Android device users.
  • This is for two reasons:
    • First: Most Android devices are not updatable.
    • Android is a commoditised, brutally competitive market meaning that in the mid-range, every cent of cost matters.
    • Making a device updateable means that extra resources have to be added to the device which are never reflected in the price.
    • Consequently, the vast majority of Android devices are not updateable to later versions of Android as there is no incentive for the device maker to add this capability.
    • Second: Google has no control over the update process for any of the devices that run its services.
    • It can update Google Mobile Services (GMS) from Google Play but lower level system updates (Android) are controlled by either the maker of the device or the mobile operator.
    • Google has no power compel these entities to update their devices and only has control of updates for its own, Pixel and Nexus devices.
  • It seems possible that this data leak represents some of the oldest and least relevant tools used by state sponsored hackers which is going to put even greater pressure on Apple, Google, Samsung to ensure that their software is watertight.
  • I think that this represents yet another reason for Google to take Android proprietary as having complete control over the code will enable it to quickly fix and distribute any vulnerabilities it identifies.
  • It will also enable Google take greater control of the user experience resulting in a more consistent, fun and easy to use experience for its ecosystem users.
  • I continue to hope to see signs of this at Google i/o in May this year.
  • I still think that Google is more than fairly valued and prefer Microsoft, Baidu and Tencent with Apple for long-term, income based investors.