CALL TO EARTH

The $3.50 go-anywhere ticket to fight climate change

Westbahn Klimaticket promo train (2)
 
 
(CNN) — You wake up in suburban Innsbruck, the snowcapped peaks of the Austrian Tyrol glistening in the distance. After breakfast you hop a tram to Innsbruck Hauptbahnhof, the city’s main railway station and climb aboard an Austrian Railways ÖBB Railjet bound for Vienna.
After more than four hours crossing some of the prettiest scenery in central Europe, you arrive beneath the undulating zig-zagged roof of Wien Hauptbahnhof, from where you head down into the curving tunnels of Südtiroler Platz metro station.
After rumbling through six stops of the city’s U1 metro line, you reach Praterstern, not far from the shores of the Danube River. From there, it’s a short stroll to catch a regional train on the S4 line, heading north a further nine stops to Korneuburg.
 
We’re not done traveling yet.
Here you climb aboard bus 853 for the final leg, a gentle 20-plus minute trundle through quiet, leafy streets, past compact one-story homes, until it’s time to finally disembark beside the plain clocktower in the village of Enzersfeld.
Give or take the occasional stop for refreshments — perhaps a bosna sausage and a cream-topped Viennese coffee — you’ve been on the go, on public transport, for more than eight hours, clocking up hundreds of miles across bus, rail, tram and metro services.
And how much has this epic ride cost you? Just $3.50 (or €3).
Fifteen years after it was first proposed, Austria’s new Klimaticket, or climate ticket, goes live on October 26. Offering seamless travel across all modes of public transport it is intended to galvanize the Alpine nation’s fight against climate change.
The annual pass, priced at $1,267 (€1,095), works out at just $24 (€21) per week or $3.50 a day. If all goes according to plan, it should encourage people to swap their cars for more climate-friendly forms of getting around.

Surge in demand

Trams and local buses are included in the price of the Klimaticket.
 
 
Trams and local buses are included in the price of the Klimaticket.
Figurniy Sergey/Adobe Stock
Public transport is already popular in Austria. Its combination of reliable, high-quality, integrated services, simple ticketing and attractive pricing have long made it a winner for commuters and leisure travelers.
Yet even though Austrians travel more kilometers by train every year than everyone in Europe except the Swiss, according to official government figures only 16% of journeys in 2018 were made by public transport.
It’s hoped that Klimaticket will change that by making it much more affordable and convenient, especially for regular users.
The signs are positive, with initial interest in discounted early bird tickets so strong that the booking website www.klimaticket.at immediately crashed.
 
Spearheading the initiative is Austria’s Green Party „superminister“ Leonore Gewessler, whose responsibilities include climate action, environment, energy, mobility, innovation and technology in the current coalition government.
„I think you can see how happy I am,“ she said after announcing the deal. „This is a big day for the climate and for transport. If this summer has shown us anything, it is that the climate crisis has already arrived with us.“
National passes and discount cards are nothing new in Europe. Switzerland, Austria and Germany, among others, offer monthly travel passes, half-fare cards and other discounts to encourage public transport use.
What makes Austria’s new offer different is its remarkably low price.
Switzerland’s General Abonnement (GA) travelcard offers unlimited use of the Confederation’s entire public transport network, but costs three times as much. A similar annual ticket for buses, trains and metro in the Netherlands is more than $3,500 (€3,066).

Hassle-free

Vienna's Hauptbahnhof railway station.
 
 
Vienna’s Hauptbahnhof railway station.
Omar Marques/SOPA Images/LightRocket/Getty Images
„One of the things I like about Klimaticket is that it is valid on all modes of public transport, a concept that should be replicated elsewhere as it removes the hassle of having to find and buy multiple tickets,“ says European rail travel expert Andy Brabin.
„It is potentially revolutionary, removing some of the barriers to using public transport and making spontaneous trips much easier as you don’t have to worry about buying tickets, which can often be expensive at short notice for longer journeys.“
No less than $278 million (€240 million) of federal government funding has been agreed to support the new initiative. Ongoing costs are expected to be around $175 million (€150 million) a year. Despite this, the ticket is regarded as central to Austria’s ambition to become climate neutral by 2040 — backed by the European Union’s post-Covid „Green Deal.“
 
The Austrian government’s 2030 Mobility Master Plan aims to reduce private car use from 70% of total annual kilometers traveled to 54% by 2040, at the same time increasing public transport’s share from 27% to 40% and doubling active travel (walking and cycling) from 3% to 6% of the total.
A passenger on an electric train requires just 55% of the energy used by a battery electric car for the same journey, according to the master plan, meaning big carbon emission cuts can be made with a relatively small percentage shift to more sustainable modes of travel.
Of course, it hasn’t exactly been a smooth journey to get to this point. Klimaticket is the result of 18 months of often-heated negotiations between federal and regional governments, transport organizations and providers.
Even the €3 per day cost is a compromise — the Green Party’s manifesto pledge at the last federal elections was to slash travel costs to just €1 a day within any region and €2 across any two regions.

Two-year battle

Vienna's U-Bahn network is covered by the ticket.
 
 
Vienna’s U-Bahn network is covered by the ticket.
Andrew Michael/Education Images/Universal Images Group/Getty Images
„Klimaticket is an impressive political achievement'“ says Keith Barrow, editor of UK magazine Today’s Railways Europe, pointing to remarkable levels of cooperation among Austrian provinces and their regional transport authorities.
„The provinces have different politics, different geographies and different priorities. Then there are municipalities and numerous public transport operators — 40 in the Vienna region alone. It is remarkable that all these different parties have managed to find common ground on this issue.“
They very nearly didn’t.
 
The past two years saw Intense debate and criticism, especially from more rural regions where public transport density and usage is at its lowest. Opposition parties have welcomed the introduction of the ticket but said it was only a first step toward meeting climate goals.
Johannes Margreiter, transport spokesman for the liberal Neos party, said: „Price isn’t the reason why people do not switch to public transport. In many places, the problem is the lack of availability because of poor or absent connections.“
The Vienna region, home to 50% of the country’s population and 60% of its public transport journeys (around 300,000 people commute into Vienna on a normal weekday) was also late to sign up to the scheme, raising fears that the new ticket would be compromised from the outset.

Blueprint for change?

Cross-country trains are also covered.
 
 
Cross-country trains are also covered.
Matthias Balk/picture alliance/dpa/Getty Images
However, the last-minute deal confirmed Klimaticket’s status as a truly national travel pass.
Its coverage stretches from Bregenz on the shore of Lake Constance in the west to the outskirts of the Slovakian capital Bratislava in the east.
Whatever the reservations, a nationwide ticket removes one of the biggest barriers to using public transport — trying to figure out which tickets are needed for which journeys. That’s particularly the case for foreign visitors.
The framing of the ticket as an environmental initiative has also been important.
It’s hoped it will compel Austrians to think about the environmental impact of how they travel, while making the low-carbon option more accessible and attractive.
 
But, if successful, does Klimaticket have the potential to become a blueprint for other countries looking to drastically cut transport emissions?
Austria has perhaps succeeded because it’s a relatively small country with a well-funded, cohesive and popular public transport system already in place. Others without this could struggle to emulate its achievement.
„There are two things you need before you can launch into an initiative like this — network density and service frequency,“ says railway magazine editor Barrow.
„Austria has invested heavily in building capacity on its main rail corridors so it can accommodate more fast inter-city services as well as regular-interval regional services, frequent S-Bahn networks in city regions and increasing volumes of freight.
„It has the infrastructure it needs to accommodate more passengers, or it is in the process of constructing it.“

Who’s next?

Germany's transport network could be a candidate for a similar scheme.
 
 
Germany’s transport network could be a candidate for a similar scheme.
 
Could similar initiatives happen elsewhere?
Barrow says the Netherlands could be a contender, benefiting from an already interlinked public transport network that operates with high frequency. The densely populated country faces a pressing need to find solutions to transport challenges.
Germany is also in the frame, he adds.
„I think there is an appetite for something like Klimaticket in Germany. The Greens‘ success in the recent federal election might spur them to emulate their counterparts in Austria and push for a national annual public transport pass.“
The problem in Germany, say Barrow, is state-level variations in commitment to public transport. Bavaria, the south, is relatively pro-road whereas neighboring Baden-Württemberg has been actively improving public transport for a long time.
And will it succeed in Austria?
 
The country certainly has the requisite core rail network and urban transport systems around major cities such as Vienna and Graz. These have benefited from a policy of continuous development, broadly supported across the political spectrum.
At the periphery of the system the story is less positive.
Decades of rural rail closures have cut many smaller towns off from the national network — but on secondary lines that remain, there now seems to be more willingness to improve infrastructure, enhance timetables and replace polluting diesel trains with electric, battery or hydrogen trains.
Klimaticket could boost improvement prospects still further, especially when coupled with targeted investment in feeder bus routes and active mobility. Green campaigners have called for the offer to be expanded to include cycle hire and e-scooter rental, providing a wider range of seamless travel options.
Klimaticket is just one plank of Austria’s plan to meet its carbon reduction targets, but if it delivers positive results quickly, as its supporters believe it will, pressure could grow to develop similar products in other countries around the world that make mobility without a car easier and more cost effective.
 
Top image credit: Westbahn
 

Apple Watch Series 7 Review: The best smartwatch you can buy, by far

The Apple Watch Series 7 might just be the perfect smartwatch. Sorry to give the game away this early, but there are no secrets or surprises here — and that’s a good thing. A smartwatch should be an extension of your smartphone, yet also needs to be able to function reliably and usefully on its own. It should provide extensive, motivational, and informative health and activity tracking without alienating those who aren’t athletes. It should look great, and be easily customized to match your mood, style, and environment. It shouldn’t require constant supervision or have complex or gimmicky features that overshadow basic everyday usefulness. New models need to also improve over the previous version, so everyone can consider upgrading if they want.

The Apple Watch Series 7 delivers all this and more. Let’s talk about it.

Design

It’s pretty much impossible to tell the difference between the Series 7 and the Series 6 just by glancing at them. The 1mm increase in case size — 45mm and 41mm for the Series 7 versus 44mm and 40mm for the Series 6 — is only clear if you get a tape measure out, and the slightly greater curve at each edge is only evident if you put the two watches next to each other and look really closely. The speaker on the left-hand side of the case is a single slit rather than the dual slit on the Series 6, but that’s about as obvious as the visual alterations get.

Apple Watch Series 7 on the wrist.
Andy Boxall/Digital Trends

What you do notice are the much smaller 1.7mm bezels, down from 3mm on the Series 6, and the increase in viewing area. Apple says there’s 20% more screen area visible compared to the Series 6 and the Watch SE, and 50% more than the Apple Watch Series 3. The Ion-X glass over the screen has a contoured edge, so the screen appears to curve toward the case, just like a curved screen on a smartphone.

The version in our photos is an aluminum model in Midnight, which is black in color with a hint of blue, and I chose it as it’s easier to match with more strap options, unlike the blue or green versions. If you have a strap collection from an existing Apple Watch, they will all fit with the Series 7 perfectly, just in case you are worried the 1mm size increase would make them look odd.

Apple Watch Series 7 from the side.
Andy Boxall/Digital Trends

It would be easy to chastise Apple for not changing the design much, but it hasn’t done so because it doesn’t need to. The Series 7 looks fantastic, and the Apple Watch has become a style icon, in my opinion. The gentle curve of the case makes it very comfortable to wear, regardless of which strap you choose, and it’s really light at 38.8 grams without the strap, meaning you can wear it day and night.

While this is also true for some fitness bands, the difference is that the Apple Watch looks good, and it’s incredibly easy to change the complete look of it if you get bored. Apple’s watch faces have evolved a lot, especially in WatchOS 7 and WatchOS 8, becoming classier and more visually exciting, rather than just adding complications. Build a small collection of straps and bracelets, and the Apple Watch is ready to go with anything you’re wearing, and suited to any time of the day.

Apple Watch Series 7 on wrist from the back.
Andy Boxall/Digital Trends

It’s this versatility that makes the Apple Watch such a joy to own. It turns it from a piece of technology to something that’s truly yours. No other smartwatch provides the ease of customization in the same way. You can even just choose the wear-and-forget Sport Loop strap, which is one of the best basic straps you can get, and be set for the duration of your ownership.

The Apple Watch Series 7 doesn’t wear any differently from the Series 5 or Series 6 Watch, and that’s fine. It’s still the most comfortable, most personalized, easiest to live with smartwatch you can buy.

Screen

If the slimmer bezel hasn’t changed the design much, has it changed the screen? Yes, it has, but don’t expect coming from the Series 6 to feel like picking up a Galaxy Note 20 Ultra. The increase is much more subtle, but Apple has emphasized the difference through WatchOS 8 by using new watch faces like Contour, offering larger fonts, and making better use of the additional space.

App menu on the Apple Watch Series 7.
Andy Boxall/Digital Trends

Buttons are larger and easier to quickly locate, wider notification cards include just that little bit more information, more text fits on screen at once, and you can see more at one time. Swipe up to show the quick settings, and activating a Focus mode takes a less precise action, making it faster than before. But perhaps the best indication of how much screen the Series 7 has gained comes from the three additional font sizes available on it compared to older models.

Apple says the screen is brighter indoors, but I haven’t noticed any difference. However, this may be because I never have any issue reading what’s on it, regardless of whether I’m in sunlight or darkness, or whether it’s showing the main screen or the excellent always-on watch faces. It’s sharp and colorful, and isn’t absurdly reflective either. The Ion-X glass over the top is also tougher and more resistant to cracks than before, but to get the reportedly more durable sapphire glass displays, you have to buy the stainless steel or titanium models.

The smaller bezels make the Series 7 look more modern, too, even when put next to the Series 6, a smartwatch that can hardly be described as old. If you’re coming from a Series 3 watch, the Series 7’s smaller bezels and larger viewing area will transform the experience for you. In this case, the Series 7 is a huge upgrade. I’ve used a Series 6 for the last year, and the additional screen real estate was obvious the moment I started using the Series 7.

Health and activity tracking

The Apple Watch Series 7 takes your heart rate and electrocardiogram (ECG) readings, measures blood oxygen levels, warns of heart rate irregularities, sends out an emergency alert if you fall down, reminds you to start a workout if it notices you’re not moving or cycling, tracks your swimming activity, and automatically starts a timer when you wash your hands. I’m only scratching the surface here, as I haven’t mentioned sleep tracking, dozens of workout plans, Apple’s Fitness+ service, noise alerts, and the mindfulness app yet.

Heart rate on the Apple Watch Series 7.
Andy Boxall/Digital Trends

The health and fitness tracking is comprehensive, detailed, accurate, and in my case, total overkill for my needs — and that’s a good thing. It means should I decide to do more, the Watch will be ready without the need to upgrade. The Series 7 tracks my walks, sleep, and workouts at home without a problem, and it’s so fast and simple to set it in motion I don’t even need to go to the workout app sometimes, as the Watch recognizes I’m doing more than usual and suggests a tracking mode. Or I use the app selection mode by pressing the lower button on the Watch to leap straight into the workout app. It takes seconds, which as a casual exerciser, is what I want.

I also appreciate the “silent” features. Heart rate, blood oxygen, and even noise are all monitored in the background, so should something change, it will let me know. I don’t have to do anything even at setup, as most of these features are active by default. Apple’s Activity Rings give me a clear indicator of my daily activity, and are suitably motivational, with reminders to move around and animated screens when I achieve a goal.

Data is presented in Apple’s Health app. It shows helpful trends that inform about whether you’re doing more or less than usual, overviews of your most recent workouts (including GPS maps), and offers the option to dig deeper. I love the All Health Data list view, which instantly tells you the most up-to-date information, and combines it with historical data, too. Tap each section to see a more detailed breakdown of the data. It’s superbly laid out, very informative, and extremely simple to digest.

Although it’s all very attractively presented with bright colors and neat graphs, the app can feel dense and complicated. But it highlights just how much ability the Watch has and how it can benefit those who are far more focused on fitness than I am. I’d quite like the Health and the Fitness app to be incorporated into one, as I often forget about the Fitness app, which contains further information on daily activities.

The Apple Watch Series 7 is as much of a fitness partner as you want it to be, and it performs just as well regardless of the amount of effort you put into exercise. It has all the ability, data, and motivation you want — or as little as you want — all without irritating messages about pushing yourself to the limit either on the Watch or in the marketing. This ties in with the design and customization, too, as it does all this while looking as sporty or not sporty as you want. It’s excellent.

Software and performance

Apple’s WatchOS 8 software, which was released in September, comes installed and is compatible with all Apple Watch models since the Series 3. It operates in the same way here as it did on the Series 6, and I summed up my experience with the software in an earlier article.

It’s fast, responsive, and feature-packed. I receive notifications from my iPhone 13 Pro without a problem, and I can respond to most of them directly from the Watch. Most messages can be replied to using the keyboard, which has a new QuickType swipe-typing feature. It’s surprisingly accurate and makes it much quicker to type on the Watch’s small screen. I also like how a pop-up will appear on the iPhone, letting you enter text on the phone rather than on the Watch, all without finding the relevant message. Not all messages have such deep interaction. For example, tweets can only be liked or retweeted, and Outlook emails can’t be replied to on your wrist, only flagged or marked as read.

It’s still the most comfortable, most personalized, easiest to live with smartwatch you can buy.

The Watch Series 7’s processor may be called the S7, but it’s only a name change, and it has the same performance as the S6 inside the Series 6. What this does mean is it offers 20% more performance than the S5 chip inside the Apple Watch SE, which Apple still sells alongside the new Series 7. You can buy the Series 7 with a cellular connection, and provided you pay extra on your monthly carrier plan, the Watch will make and receive calls and receive messages even when not connected to your phone.

Twitter notification on the Apple Watch Series 7.
Andy Boxall/Digital Trends

Using WatchOS 8 on the Apple Watch Series 6 and Series 7, I have not had any problems with responsiveness or apps at all. During the setup of the Series 7, I did have trouble using the Set up as a new watch option, but it activated without issue when I chose the Restore from a backup option. It’s the first time I have encountered this, and suspect it may have been to do with setting up the Series 7 on launch day and the associated server delays.

Battery

I’ve worn the Apple Watch Series 7  for 24 hours a day for the last week, and when I wake up in the morning after tracking my sleep, the Watch has consistently still had between 20% and 30% power remaining, depending on whether I tracked a workout the day before. This means a single, full day’s use is no issue. With 30% remaining, it has continued on until the end of a workday if I didn’t track a workout. Alternatively, if you don’t activate sleep tracking and you turn it off overnight, two days or even more will be achievable.

Apple Watch Series 7 on charge.
Andy Boxall/Digital Trends

The Watch Series 7 has a new charger, complete with fast charging, and is easily recognizable compared to the older versions due to the silver case. It provides an 80% charge in 45 minutes according to Apple, but when plugged into the Apple fast charger, it exceeds this, getting to about 88% in that time. It reaches 100% in an hour. There is also has a handy feature where an eight-minute charge will return eight hours of sleep tracking.

If you use an old charger with the Series 7, then it charges at normal speed, which is understandable but unfortunate for anyone who has splurged on a stand like the Belkin 3-in-1 MagSafe charger, as you won’t get the benefit from the new charger’s speed increase.

Price and availability

The Apple Watch Series 7 starts at $399 for the 41mm model and $429 for the 45mm model. Add $100 for the GPS + Cellular version, and even more depending on the strap you select. For example, if you want the Product RED Braided Solo Loop strap in our photos, prices start at $449.

In the U.K., the 41mm Apple Watch Series 7 in aluminum starts at 369 pounds, and the 45mm model from 399 pounds. Prices increase depending on the strap you choose, and you must add 100 pounds to the price if you want the GPS + Cellular model.

The Series 7 looks fantastic, and the Apple Watch has become a style icon, in my opinion.

Outside of the standard Apple Watch models, you can buy special Nike versions, which cost the same but come with Nike-branded straps and exclusive watch faces. You can also pay more for the Apple Watch Series 7 to get a stainless steel case and sapphire crystal over the screen. Prices start at $699 or 649 pounds. The titanium Apple Watch Edition starts at $799 or 699 pounds, and the Apple Watch Hermés starts at $1,229 or 1,179 pounds. Functionality and specification is identical across the range, so all these offer only material and strap differences.

Our take

Smaller bezels and a 1mm case size difference have made a big impact on the Apple Watch Series 7, increasing its attractiveness and overall visual appeal. Faster charging and that helpful eight-minute zap for overnight use means the relatively short battery life is much less of an issue, and you can use and enjoy the Watch 24 hours a day. WatchOS 8 is reliable and easy to use, the health tracking remains second-to-none even without any hardware changes, and the massive amount of customization makes it fun to own.

It’s everything you want a smartwatch to be, as it perfectly integrates with the iPhone, yet has enough power to be used on its own if you choose, and never feels superfluous due to a lack of features or poor app support. The Apple Watch Series 7 has improved over the Series 6, even managing to feel like a worthwhile upgrade to last year’s model for those who don’t mind spending the money. It’s also worth mentioning that Apple has not changed the price either, keeping it the same for the last few generations despite hardware and software improvements.

The Apple Watch Series 7 does everything I want, and I’m very aware it can do a whole lot more, making it feel like a safe purchase even for those who are just beginning with a smartwatch. The fact that it’s not difficult to use also makes it great for newcomers, and the two sizes and various versions means you’ll find one that suits you. It’s really superb, and I struggle to find a reason not to recommend it wholeheartedly.

Is there a better alternative?

It’s not often I get to say this, but if you own an iPhone and want a smartwatch, there is no better alternative to the Apple Watch. There’s usually some alternative, but in this case, by buying an Apple Watch Series 7, you’re getting the best available option. This year, the Apple Watch SE is less of a good deal than it was in 2020 due to the lack of always-on screen, larger bezel, standard charging speed, and less capable health tracking.

If you own an Android phone, you cannot use the Apple Watch in any meaningful way, so take a look at our recommendations for Android smartwatches.

How long will it last?

The Apple Watch Series 7 has an IP6X dust-resistance rating, water resistance up to 50 meters, is swimproof, and has stronger, more crack-resistant glass over the screen. Straps are easily and cheaply replaced, should they get broken or dirty. Apple should support the Watch with new software updates for up to five years. Keeping the Apple Watch Series 7 for five years may be a stretch if you’re wating to keep up with tech trends, but for everyone else, it’s perfectly achievable given the Series 7’s ability, performance, and toughness.

Should you buy one?

Yes. It’s not only the best smartwatch for your iPhone, it’s the best smartwatch available today.

What Apple has lost—and gained—since Steve Jobs died 10 years ago

By multiple standards, the company is doing better than even an optimist would have predicted in 2011. But it still has a Steve Jobs-shaped hole in it.

What Apple has lost—and gained—since Steve Jobs died 10 years ago
Fans use smartphones to photograph a makeshift shrine in London after Steve Jobs’s death from pancreatic cancer at the age of 56 on October 5, 2011. [

Ten years ago today, I happened to be attending a trade show in Tokyo when a tech journalist friend back in California phoned to ask if I’d heard Steve Jobs had died. I hadn’t: Apple had just made the sad announcement and it hadn’t yet overtaken Twitter, news sites, and—it would soon seem—every other form of media.

Rather than continuing with my trip as planned, I spent the rest of it writing multiple pieces about Apple’s cofounder and his impact on his company and the world. Throughout, I did my best to avoid coming to any snap judgments about what an Apple without Jobs would look like. Even a year after Jobs’s death, I marked its anniversary by arguing that it was too soon to judge how Apple was faring, in part because the company was still releasing products that he’d had a hand in shaping.

Nine years after that, I have no excuses. Tim Cook has been Apple’s CEO for more than a fifth of the company’s history. Comparing his Apple to Steve Jobs’s legacy remains tricky, since we’ll never know how Jobs would have handled the same decisions Cook has made. But since it’s no longer premature to ponder such matters, I’m going to give it a shot. And I’m going to divide my musings into four broad categories.

Apple as a business

This one’s easy.

advertisement

When Jobs died, some who weighed in about Apple’s future—including Oracle CEO Larry Ellison, a close Jobs friend—expected the worst. You didn’t have to think Jobs was irreplaceable to guess that Cook would have his hands full dealing with threats such as the growing popularity of phones based on Google’s Android operating system.

Still, many observers concluded that Apple stood a good chance of flourishing under Cook. Hedge fund manager James Altucher, who had already predicted that Apple would be the first $1 trillion company, doubled down on the prognostication after Jobs’s passing.

But even Altucher didn’t talk about Apple becoming the first company to reach a valuation of $2 trillion, a feat it achieved less than nine years after Jobs’s death. Apple is now worth more than six times what it was on October 5, 2011. As the smartphone market matured, Cook turned out to be one of the best CEOs in the history of business, adroitly keeping Apple growing through strategies such as bolstering its services portfolio.

From a Wall Street perspective, the unanswerable question that feels most pertinent is not “would Apple have been more successful if Steve Jobs was still CEO?” Instead, it’s more like “would an Apple run by Steve Jobs have matched Tim Cook’s history-making financial results?”

The next big thing(s)

For the first year or two of Tim Cook’s tenure as Apple CEO, some pundits helpfully explained that Jobs had unveiled an epoch-shifting gadget every couple of years—and that Cook would be a failure if he didn’t continue that pace. As I wrote back then, this was silly. For one thing, even Jobs didn’t change history with anything like the frequency that people thought he did. For another, Cook deserved more than two years to prove how much vision Apple would have under his leadership.

Enough time has passed that it’s now fair to compare Cook’s biggest products to Jobs landmarks such as the Apple II, Mac, iPod, iTunes, iPhone, and iPad. Apples biggest all-new product since 2011 has unquestionably been the Apple Watch, which is now worn by 100 million people, including a third of iPhone users in the U.S. Judged purely as a revenue generator, the smartwatch deserves to be mentioned in the same breath as Jobs’s signature products: It’s a bigger business than the iPod was at its height.

The other obvious megahit of the Cook years are AirPods, which defined the modern wireless-earbud category and still lead it; they’re as iconic as wired iPod earbuds once were—and vastly more profitable for Apple.

Any Apple rival would salivate at the prospect of creating a business as successful as the Apple Watch and AirPods have been. Still, neither is culturally transformative in the way that Jobs’s biggest successes were. Rather than changing everything about our relationship with technology in one or two fell swoops, the Apple Watch has done well because Apple has patiently took something that initially felt like a tiny computer for your wrist and refocused it on fitness and health. Meanwhile, AirPods, delightful though they are, are ultimately an accessory, at least for the time being. And there’s a limit to how much an accessory can reshape human life.

But if Apple hasn’t managed to shift any epochs lately, that’s understandable. Neither has anyone else in the consumer electronics business:

  • On the smartphone front, pricey folding phones from Samsung and Microsoft cater to a niche that doesn’t feel like it’s about to explode.
  • Amazon’s Alexa has done more than Apple’s Siri to propel AI-infused voice interfaces to prominence, but it hasn’t rendered smartphones any less important.
  • Thanks to Facebook’s Oculus, virtual reality has made great strides, but a heck of a lot of people still haven’t strapped on a headset even once.
  • On the consumer hardware front, augmented reality has inspired some notorious flops; its successes, such as Pokémon Go and Google Lens, have gained traction by leveraging smartphones rather than replacing them.
  • From Facebook and Twitter to TikTok, social media has changed the world over the past decade, but it feels less like an invention than a virus that got out of control.
  • You might make the case that Elon Musk’s Tesla has had an Apple-like impact on the automotive industry, but the electrification of passenger vehicles remains a story in progress.

It’s even clearer in retrospect than it was during Jobs’s life that it might be impossible to top the iPhone by coming up with an even more popular, profitable gizmo. Had Jobs gotten another decade as Apple CEO, he might have chosen to pour most of the company’s energy into the evolution and expansion of the iPhone and iPad—just as Cook’s Apple has done. Incremental improvements to existing products, after all, were just as key to Jobs’s success as the great leaps forward.

One other thing: All evidence suggests that Apple hasn’t given up on trying to reinvent additional product categories. It’s just tackling ones that are hyper-ambitious even by its own standards—such as VR/AR headsets and cars—and is happy to chip away in private rather than hype stuff that won’t appear for years. Which means that it’s still too early to declare that we’ve seen the last history-making new Apple product.

The little things

Steve Jobs was not an inventor so much as an editor. None of the products he’s remembered for were the first in their category, and every one of them bulged with work done by people who had skills that Jobs did not possess. But he had a near-superhuman ability to know what to put into a product and what to leave out. He could make the seams between hardware and software nearly vanish. He made hard decisions that were often questioned, but almost always prescient and—eventually—widely imitated.

No single person has taken on that responsibility in the Cook era, and it shows. Compared to earlier days, the company has released more than its share of half-baked products, such as 2013’s iOS 7, whose newly minimalist look felt like a rough draft. In 2014, it had to create a $10,000 Apple Watch to learn that such a device made no sense. Instead of making touch-screen Macs, it replaced the MacBook Pro’s function keys with a skinny touchscreen in 2016, seemingly making very few people happy. Right now, the odd changes which the company decided to make to its Safari browser—and has only partially unwound—seem like an instance of inadequate editing of its raw ideas.

In all these cases, I’m not going to say “Steve Jobs would never have allowed that,” because . . . well, he might have. His own mistakes were often doozies. But present-day Apple does feel like it’s lost the final polish that Jobs gave almost everything.

Still, even if Apple errs in public more than it once did, it usually gets to a good place eventually. In the post-Jobs era, the iPhone lineup has had some false starts—remember the proudly plasticky iPhone 5c?—and grew confusing as Apple added more and more variants. But the four new iPhone 13 models—and the still-available iPhone SE—make for the most comprehensible iPhone line since the days when it consisted of a grand total of one phone. And by making the new iPhones slightly thicker and heavier to allow for larger, longer-lasting batteries, Apple abandoned Jobs’s thinner-is-better instincts to achieve a sensible goal. That’s an infinitely smarter act of editing than asking “what would Steve do?”

Steve Jobs the industry presence

We didn’t just lose Steve Jobs the business executive, strategic thinker, and product polisher 10 years ago. We lost the guy who may have been the single most memorable personality the consumer-tech business ever produced:

When most of us envision Jobs, what we see is the man onstage at the product presentations so inextricably associated with him that they were known as “Stevenotes.” Even if you steadfastly refused to get sucked into his reality distortion field, these demos were remarkably compelling. It wasn’t just because he was one of the best explainers the tech industry has ever seen, or even because he occasionally did reveal stuff that blew your socks off. Up there on stage—often by himself—he came off as human, even vulnerable, in a way that few business executives would choose to make themselves. That was true all along, and even more so in his final years as each appearance was an opportunity for public speculation about his health.

For a few years after Jobs’s death, Apple product launches were overseen by Cook and other longtime Jobs associates, and felt like Stevenotes that had been stripped of their most important ingredient. As people noted with increasing frequency that the same handful of white guys represented Apple at every event, the company began to switch things up, calling on a larger, more diverse group of Apple employees to divvy up the presenting. With the COVID-19 pandemic and the shift to virtual events, the company ventured even further away from the Stevenote approach. Even if it returns to live product launches in 2022, it seems likely that high-production-value canned videos will play a larger part than when almost everything that mattered was happening in front of a live audience.

Steve Jobs is in no danger of being forgotten. But more and more, when Apple does things that he wouldn’t have, it’s not a sign that the company has lost its way. Instead, it’s evidence that Apple is still restlessly looking forward rather than obsessing over its past. And what could be more Steve Jobs-like than that?

How Facebook Undermines Privacy Protections for Its 2 Billion WhatsApp Users

WhatsApp assures users that no one can see their messages — but the company has an extensive monitoring operation and regularly shares personal information with prosecutors.

 

Series: The Social Machine

How Facebook Plays by Its Own set of Rules

Clarification, Sept. 8, 2021: A previous version of this story caused unintended confusion about the extent to which WhatsApp examines its users’ messages and whether it breaks the encryption that keeps the exchanges secret. We’ve altered language in the story to make clear that the company examines only messages from threads that have been reported by users as possibly abusive. It does not break end-to-end encryption.

When Mark Zuckerberg unveiled a new “privacy-focused vision” for Facebook in March 2019, he cited the company’s global messaging service, WhatsApp, as a model. Acknowledging that “we don’t currently have a strong reputation for building privacy protective services,” the Facebook CEO wrote that “I believe the future of communication will increasingly shift to private, encrypted services where people can be confident what they say to each other stays secure and their messages and content won’t stick around forever. This is the future I hope we will help bring about. We plan to build this the way we’ve developed WhatsApp.”

Zuckerberg’s vision centered on WhatsApp’s signature feature, which he said the company was planning to apply to Instagram and Facebook Messenger: end-to-end encryption, which converts all messages into an unreadable format that is only unlocked when they reach their intended destinations. WhatsApp messages are so secure, he said, that nobody else — not even the company — can read a word. As Zuckerberg had put it earlier, in testimony to the U.S. Senate in 2018, “We don’t see any of the content in WhatsApp.”

 

WhatsApp emphasizes this point so consistently that a flag with a similar assurance automatically appears on-screen before users send messages: “No one outside of this chat, not even WhatsApp, can read or listen to them.”

Given those sweeping assurances, you might be surprised to learn that WhatsApp has more than 1,000 contract workers filling floors of office buildings in Austin, Texas, Dublin and Singapore. Seated at computers in pods organized by work assignments, these hourly workers use special Facebook software to sift through millions of private messages, images and videos. They pass judgment on whatever flashes on their screen — claims of everything from fraud or spam to child porn and potential terrorist plotting — typically in less than a minute.

The workers have access to only a subset of WhatsApp messages — those flagged by users and automatically forwarded to the company as possibly abusive. The review is one element in a broader monitoring operation in which the company also reviews material that is not encrypted, including data about the sender and their account.

Policing users while assuring them that their privacy is sacrosanct makes for an awkward mission at WhatsApp. A 49-slide internal company marketing presentation from December, obtained by ProPublica, emphasizes the “fierce” promotion of WhatsApp’s “privacy narrative.” It compares its “brand character” to “the Immigrant Mother” and displays a photo of Malala ​​Yousafzai, who survived a shooting by the Taliban and became a Nobel Peace Prize winner, in a slide titled “Brand tone parameters.” The presentation does not mention the company’s content moderation efforts.

WhatsApp’s director of communications, Carl Woog, acknowledged that teams of contractors in Austin and elsewhere review WhatsApp messages to identify and remove “the worst” abusers. But Woog told ProPublica that the company does not consider this work to be content moderation, saying: “We actually don’t typically use the term for WhatsApp.” The company declined to make executives available for interviews for this article, but responded to questions with written comments. “WhatsApp is a lifeline for millions of people around the world,” the company said. “The decisions we make around how we build our app are focused around the privacy of our users, maintaining a high degree of reliability and preventing abuse.”

WhatsApp’s denial that it moderates content is noticeably different from what Facebook Inc. says about WhatsApp’s corporate siblings, Instagram and Facebook. The company has said that some 15,000 moderators examine content on Facebook and Instagram, neither of which is encrypted. It releases quarterly transparency reports that detail how many accounts Facebook and Instagram have “actioned” for various categories of abusive content. There is no such report for WhatsApp.

Deploying an army of content reviewers is just one of the ways that Facebook Inc. has compromised the privacy of WhatsApp users. Together, the company’s actions have left WhatsApp — the largest messaging app in the world, with two billion users — far less private than its users likely understand or expect. A ProPublica investigation, drawing on data, documents and dozens of interviews with current and former employees and contractors, reveals how, since purchasing WhatsApp in 2014, Facebook has quietly undermined its sweeping security assurances in multiple ways. (Two articles this summer noted the existence of WhatsApp’s moderators but focused on their working conditions and pay rather than their effect on users’ privacy. This article is the first to reveal the details and extent of the company’s ability to scrutinize messages and user data — and to examine what the company does with that information.)

Many of the assertions by content moderators working for WhatsApp are echoed by a confidential whistleblower complaint filed last year with the U.S. Securities and Exchange Commission. The complaint, which ProPublica obtained, details WhatsApp’s extensive use of outside contractors, artificial intelligence systems and account information to examine user messages, images and videos. It alleges that the company’s claims of protecting users’ privacy are false. “We haven’t seen this complaint,” the company spokesperson said. The SEC has taken no public action on it; an agency spokesperson declined to comment.

Facebook Inc. has also downplayed how much data it collects from WhatsApp users, what it does with it and how much it shares with law enforcement authorities. For example, WhatsApp shares metadata, unencrypted records that can reveal a lot about a user’s activity, with law enforcement agencies such as the Department of Justice. Some rivals, such as Signal, intentionally gather much less metadata to avoid incursions on its users’ privacy, and thus share far less with law enforcement. (“WhatsApp responds to valid legal requests,” the company spokesperson said, “including orders that require us to provide on a real-time going forward basis who a specific person is messaging.”)

WhatsApp user data, ProPublica has learned, helped prosecutors build a high-profile case against a Treasury Department employee who leaked confidential documents to BuzzFeed News that exposed how dirty money flows through U.S. banks.

Like other social media and communications platforms, WhatsApp is caught between users who expect privacy and law enforcement entities that effectively demand the opposite: that WhatsApp turn over information that will help combat crime and online abuse. WhatsApp has responded to this dilemma by asserting that it’s no dilemma at all. “I think we absolutely can have security and safety for people through end-to-end encryption and work with law enforcement to solve crimes,” said Will Cathcart, whose title is Head of WhatsApp, in a YouTube interview with an Australian think tank in July.

The tension between privacy and disseminating information to law enforcement is exacerbated by a second pressure: Facebook’s need to make money from WhatsApp. Since paying $22 billion to buy WhatsApp in 2014, Facebook has been trying to figure out how to generate profits from a service that doesn’t charge its users a penny.

That conundrum has periodically led to moves that anger users, regulators or both. The goal of monetizing the app was part of the company’s 2016 decision to start sharing WhatsApp user data with Facebook, something the company had told European Union regulators was technologically impossible. The same impulse spurred a controversial plan, abandoned in late 2019, to sell advertising on WhatsApp. And the profit-seeking mandate was behind another botched initiative in January: the introduction of a new privacy policy for user interactions with businesses on WhatsApp, allowing businesses to use customer data in new ways. That announcement triggered a user exodus to competing apps.

WhatsApp’s increasingly aggressive business plan is focused on charging companies for an array of services — letting users make payments via WhatsApp and managing customer service chats — that offer convenience but fewer privacy protections. The result is a confusing two-tiered privacy system within the same app where the protections of end-to-end encryption are further eroded when WhatsApp users employ the service to communicate with businesses.

The company’s December marketing presentation captures WhatsApp’s diverging imperatives. It states that “privacy will remain important.” But it also conveys what seems to be a more urgent mission: the need to “open the aperture of the brand to encompass our future business objectives.”


 

I. “Content Moderation Associates”

In many ways, the experience of being a content moderator for WhatsApp in Austin is identical to being a moderator for Facebook or Instagram, according to interviews with 29 current and former moderators. Mostly in their 20s and 30s, many with past experience as store clerks, grocery checkers and baristas, the moderators are hired and employed by Accenture, a huge corporate contractor that works for Facebook and other Fortune 500 behemoths.

The job listings advertise “Content Review” positions and make no mention of Facebook or WhatsApp. Employment documents list the workers’ initial title as “content moderation associate.” Pay starts around $16.50 an hour. Moderators are instructed to tell anyone who asks that they work for Accenture, and are required to sign sweeping non-disclosure agreements. Citing the NDAs, almost all the current and former moderators interviewed by ProPublica insisted on anonymity. (An Accenture spokesperson declined comment, referring all questions about content moderation to WhatsApp.)

When the WhatsApp team was assembled in Austin in 2019, Facebook moderators already occupied the fourth floor of an office tower on Sixth Street, adjacent to the city’s famous bar-and-music scene. The WhatsApp team was installed on the floor above, with new glass-enclosed work pods and nicer bathrooms that sparked a tinge of envy in a few members of the Facebook team. Most of the WhatsApp team scattered to work from home during the pandemic. Whether in the office or at home, they spend their days in front of screens, using a Facebook software tool to examine a stream of “tickets,” organized by subject into “reactive” and “proactive” queues.

Collectively, the workers scrutinize millions of pieces of WhatsApp content each week. Each reviewer handles upwards of 600 tickets a day, which gives them less than a minute per ticket. WhatsApp declined to reveal how many contract workers are employed for content review, but a partial staffing list reviewed by ProPublica suggests that, at Accenture alone, it’s more than 1,000. WhatsApp moderators, like their Facebook and Instagram counterparts, are expected to meet performance metrics for speed and accuracy, which are audited by Accenture.

Their jobs differ in other ways. Because WhatsApp’s content is encrypted, artificial intelligence systems can’t automatically scan all chats, images and videos, as they do on Facebook and Instagram. Instead, WhatsApp reviewers gain access to private content when users hit the “report” button on the app, identifying a message as allegedly violating the platform’s terms of service. This forwards five messages — the allegedly offending one along with the four previous ones in the exchange, including any images or videos — to WhatsApp in unscrambled form, according to former WhatsApp engineers and moderators. Automated systems then feed these tickets into “reactive” queues for contract workers to assess.

Artificial intelligence initiates a second set of queues — so-called proactive ones — by scanning unencrypted data that WhatsApp collects about its users and comparing it against suspicious account information and messaging patterns (a new account rapidly sending out a high volume of chats is evidence of spam), as well as terms and images that have previously been deemed abusive. The unencrypted data available for scrutiny is extensive. It includes the names and profile images of a user’s WhatsApp groups as well as their phone number, profile photo, status message, phone battery level, language and time zone, unique mobile phone ID and IP address, wireless signal strength and phone operating system, as a list of their electronic devices, any related Facebook and Instagram accounts, the last time they used the app and any previous history of violations.

The WhatsApp reviewers have three choices when presented with a ticket for either type of queue: Do nothing, place the user on “watch” for further scrutiny, or ban the account. (Facebook and Instagram content moderators have more options, including removing individual postings. It’s that distinction — the fact that WhatsApp reviewers can’t delete individual items — that the company cites as its basis for asserting that WhatsApp reviewers are not “content moderators.”)

WhatsApp moderators must make subjective, sensitive and subtle judgments, interviews and documents examined by ProPublica show. They examine a wide range of categories, including “Spam Report,” “Civic Bad Actor” (political hate speech and disinformation), “Terrorism Global Credible Threat,” “CEI” (child exploitative imagery) and “CP” (child pornography). Another set of categories addresses the messaging and conduct of millions of small and large businesses that use WhatsApp to chat with customers and sell their wares. These queues have such titles as “business impersonation prevalence,” “commerce policy probable violators” and “business verification.”

Moderators say the guidance they get from WhatsApp and Accenture relies on standards that can be simultaneously arcane and disturbingly graphic. Decisions about abusive sexual imagery, for example, can rest on an assessment of whether a naked child in an image appears adolescent or prepubescent, based on comparison of hip bones and pubic hair to a medical index chart. One reviewer recalled a grainy video in a political-speech queue that depicted a machete-wielding man holding up what appeared to be a severed head: “We had to watch and say, ‘Is this a real dead body or a fake dead body?’”

In late 2020, moderators were informed of a new queue for alleged “sextortion.” It was defined in an explanatory memo as “a form of sexual exploitation where people are blackmailed with a nude image of themselves which have been shared by them or someone else on the Internet.” The memo said workers would review messages reported by users that “include predefined keywords typically used in sextortion/blackmail messages.”

WhatsApp’s review system is hampered by impediments, including buggy language translation. The service has users in 180 countries, with the vast majority located outside the U.S. Even though Accenture hires workers who speak a variety of languages, for messages in some languages there’s often no native speaker on site to assess abuse complaints. That means using Facebook’s language-translation tool, which reviewers said could be so inaccurate that it sometimes labeled messages in Arabic as being in Spanish. The tool also offered little guidance on local slang, political context or sexual innuendo. “In the three years I’ve been there,” one moderator said, “it’s always been horrible.”

The process can be rife with errors and misunderstandings. Companies have been flagged for offering weapons for sale when they’re selling straight shaving razors. Bras can be sold, but if the marketing language registers as “adult,” the seller can be labeled a forbidden “sexually oriented business.” And a flawed translation tool set off an alarm when it detected kids for sale and slaughter, which, upon closer scrutiny, turned out to involve young goats intended to be cooked and eaten in halal meals.

The system is also undercut by the human failings of the people who instigate reports. Complaints are frequently filed to punish, harass or prank someone, according to moderators. In messages from Brazil and Mexico, one moderator explained, “we had a couple of months where AI was banning groups left and right because people were messing with their friends by changing their group names” and then reporting them. “At the worst of it, we were probably getting tens of thousands of those. They figured out some words the algorithm did not like.”

Other reports fail to meet WhatsApp standards for an account ban. “Most of it is not violating,” one of the moderators said. “It’s content that is already on the internet, and it’s just people trying to mess with users.” Still, each case can reveal up to five unencrypted messages, which are then examined by moderators.

The judgment of WhatsApp’s AI is less than perfect, moderators say. “There were a lot of innocent photos on there that were not allowed to be on there,” said Carlos Sauceda, who left Accenture last year after nine months. “It might have been a photo of a child taking a bath, and there was nothing wrong with it.” As another WhatsApp moderator put it, “A lot of the time, the artificial intelligence is not that intelligent.”

Facebook’s written guidance to WhatsApp moderators acknowledges many problems, noting “we have made mistakes and our policies have been weaponized by bad actors to get good actors banned. When users write inquiries pertaining to abusive matters like these, it is up to WhatsApp to respond and act (if necessary) accordingly in a timely and pleasant manner.” Of course, if a user appeals a ban that was prompted by a user report, according to one moderator, it entails having a second moderator examine the user’s content.


 

*£%#£$&@+*&+@@@£#+@&§_$£&£@_§##*$#$§+&+@&&%_$$@@

In public statements and on the company’s websites, Facebook Inc. is noticeably vague about WhatsApp’s monitoring process. The company does not provide a regular accounting of how WhatsApp polices the platform. WhatsApp’s FAQ page and online complaint form note that it will receive “the most recent messages” from a user who has been flagged. They do not, however, disclose how many unencrypted messages are revealed when a report is filed, or that those messages are examined by outside contractors. (WhatsApp told ProPublica it limits that disclosure to keep violators from “gaming” the system.)

By contrast, both Facebook and Instagram post lengthy “Community Standards” documents detailing the criteria its moderators use to police content, along with articles and videos about “the unrecognized heroes who keep Facebook safe” and announcements on new content-review sites. Facebook’s transparency reports detail how many pieces of content are “actioned” for each type of violation. WhatsApp is not included in this report.

When dealing with legislators, Facebook Inc. officials also offer few details — but are eager to assure them that they don’t let encryption stand in the way of protecting users from images of child sexual abuse and exploitation. For example, when members of the Senate Judiciary Committee grilled Facebook about the impact of encrypting its platforms, the company, in written follow-up questions in Jan. 2020, cited WhatsApp in boasting that it would remain responsive to law enforcement. “Even within an encrypted system,” one response noted, “we will still be able to respond to lawful requests for metadata, including potentially critical location or account information… We already have an encrypted messaging service, WhatsApp, that — in contrast to some other encrypted services — provides a simple way for people to report abuse or safety concerns.”

Sure enough, WhatsApp reported 400,000 instances of possible child-exploitation imagery to the National Center for Missing and Exploited Children in 2020, according to its head, Cathcart. That was ten times as many as in 2019. “We are by far the industry leaders in finding and detecting that behavior in an end-to-end encrypted service,” he said.

During his YouTube interview with the Australian think tank, Cathcart also described WhatsApp’s reliance on user reporting and its AI systems’ ability to examine account information that isn’t subject to encryption. Asked how many staffers WhatsApp employed to investigate abuse complaints from an app with more than two billion users, Cathcart didn’t mention content moderators or their access to encrypted content. “There’s a lot of people across Facebook who help with WhatsApp,” he explained. “If you look at people who work full time on WhatsApp, it’s above a thousand. I won’t get into the full breakdown of customer service, user reports, engineering, etc. But it’s a lot of that.”

In written responses for this article, the company spokesperson said: “We build WhatsApp in a manner that limits the data we collect while providing us tools to prevent spam, investigate threats, and ban those engaged in abuse, including based on user reports we receive. This work takes extraordinary effort from security experts and a valued trust and safety team that works tirelessly to help provide the world with private communication.” The spokesperson noted that WhatsApp has released new privacy features, including “more controls about how people’s messages can disappear” or be viewed only once. He added, “Based on the feedback we’ve received from users, we’re confident people understand when they make reports to WhatsApp we receive the content they send us.”


 

III. “Deceiving Users” About Personal Privacy

Since the moment Facebook announced plans to buy WhatsApp in 2014, observers wondered how the service, known for its fervent commitment to privacy, would fare inside a corporation known for the opposite. Zuckerberg had become one of the wealthiest people on the planet by using a “surveillance capitalism” approach: collecting and exploiting reams of user data to sell targeted digital ads. Facebook’s relentless pursuit of growth and profits has generated a series of privacy scandals in which it was accused of deceiving customers and regulators.

By contrast, WhatsApp knew little about its users apart from their phone numbers and shared none of that information with third parties. WhatsApp ran no ads, and its co-founders, Jan Koum and Brian Acton, both former Yahoo engineers, were hostile to them. “At every company that sells ads,” they wrote in 2012, “a significant portion of their engineering team spends their day tuning data mining, writing better code to collect all your personal data, upgrading the servers that hold all the data and making sure it’s all being logged and collated and sliced and packed and shipped out,” adding: “Remember, when advertising is involved you the user are the product.” At WhatsApp, they noted, “your data isn’t even in the picture. We are simply not interested in any of it.”

Zuckerberg publicly vowed in a 2014 keynote speech that he would keep WhatsApp “exactly the same.” He declared, “We are absolutely not going to change plans around WhatsApp and the way it uses user data. WhatsApp is going to operate completely autonomously.”

In April 2016, WhatsApp completed its long-planned adoption of end-to-end encryption, which helped establish the app as a prized communications platform in 180 countries, including many where text messages and phone calls are cost-prohibitive. International dissidents, whistleblowers and journalists also turned to WhatsApp to escape government eavesdropping.

Four months later, however, WhatsApp disclosed it would begin sharing user data with Facebook — precisely what Zuckerberg had said would not happen — a move that cleared the way for an array of future revenue-generating plans. The new WhatsApp terms of service said the app would share information such as users’ phone numbers, profile photos, status messages and IP addresses for the purposes of ad targeting, fighting spam and abuse and gathering metrics. “By connecting your phone number with Facebook’s systems,” WhatsApp explained, “Facebook can offer better friend suggestions and show you more relevant ads if you have an account with them.”

Such actions were increasingly bringing Facebook into the crosshairs of regulators. In May 2017, European Union antitrust regulators fined the company 110 million euros (about $122 million) for falsely claiming three years earlier that it would be impossible to link the user information between WhatsApp and the Facebook family of apps. The EU concluded that Facebook had “intentionally or negligently” deceived regulators. Facebook insisted its false statements in 2014 were not intentional, but didn’t contest the fine.

By the spring of 2018, the WhatsApp co-founders, now both billionaires, were gone. Acton, in what he later described as an act of “penance” for the “crime” of selling WhatsApp to Facebook, gave $50 million to a foundation backing Signal, a free encrypted messaging app that would emerge as a WhatsApp rival. (Acton’s donor-advised fund has also given money to ProPublica.)

Meanwhile, Facebook was under fire for its security and privacy failures as never before. The pressure culminated in a landmark $5 billion fine by the Federal Trade Commission in July 2019 for violating a previous agreement to protect user privacy. The fine was almost 20 times greater than any previous privacy-related penalty, according to the FTC, and Facebook’s transgressions included “deceiving users about their ability to control the privacy of their personal information.”

The FTC announced that it was ordering Facebook to take steps to protect privacy going forward, including for WhatsApp users: “As part of Facebook’s order-mandated privacy program, which covers WhatsApp and Instagram, Facebook must conduct a privacy review of every new or modified product, service, or practice before it is implemented, and document its decisions about user privacy.” Compliance officers would be required to generate a “quarterly privacy review report” and share it with the company and, upon request, the FTC.

Facebook agreed to the FTC’s fine and order. Indeed, the negotiations for that agreement were the backdrop, just four months before that, for Zuckerberg’s announcement of his new commitment to privacy.

By that point, WhatsApp had begun using Accenture and other outside contractors to hire hundreds of content reviewers. But the company was eager not to step on its larger privacy message — or spook its global user base. It said nothing publicly about its hiring of contractors to review content.


 

IV$ “W+ Kill P_op%§ Base@%On$Met§data”

Even as Zuckerberg was touting Facebook Inc.’s new commitment to privacy in 2019, he didn’t mention that his company was apparently sharing more of its WhatsApp users’ metadata than ever with the parent company — and with law enforcement.

To the lay ear, the term “metadata” can sound abstract, a word that evokes the intersection of literary criticism and statistics. To use an old, pre-digital analogy, metadata is the equivalent of what’s written on the outside of an envelope — the names and addresses of the sender and recipient and the postmark reflecting where and when it was mailed — while the “content” is what’s written on the letter sealed inside the envelope. So it is with WhatsApp messages: The content is protected, but the envelope reveals a multitude of telling details (as noted: time stamps, phone numbers and much more).

Those in the information and intelligence fields understand how crucial this information can be. It was metadata, after all, that the National Security Agency was gathering about millions of Americans not suspected of a crime, prompting a global outcry when it was exposed in 2013 by former NSA contractor Edward Snowden. “Metadata absolutely tells you everything about somebody’s life,” former NSA general counsel Stewart Baker once said. “If you have enough metadata, you don’t really need content.” In a symposium at Johns Hopkins University in 2014, Gen. Michael Hayden, former director of both the CIA and NSA, went even further: “We kill people based on metadata.”

U.S. law enforcement has used WhatsApp metadata to help put people in jail. ProPublica found more than a dozen instances in which the Justice Department sought court orders for the platform’s metadata since 2017. These represent a fraction of overall requests, known as pen register orders (a phrase borrowed from the technology used to track numbers dialed by landline telephones), as many more are kept from public view by court order. U.S. government requests for data on outgoing and incoming messages from all Facebook platforms increased by 276% from the first half of 2017 to the second half of 2020, according to Facebook Inc. statistics (which don’t break out the numbers by platform). The company’s rate of handing over at least some data in response to such requests has risen from 84% to 95% during that period.

It’s not clear exactly what government investigators have been able to gather from WhatsApp, as the results of those orders, too, are often kept from public view. Internally, WhatsApp calls such requests for information about users “prospective message pairs,” or PMPs. These provide data on a user’s messaging patterns in response to requests from U.S. law enforcement agencies, as well as those in at least three other countries — the United Kingdom, Brazil and India — according to a person familiar with the matter who shared this information on condition of anonymity. Law enforcement requests from other countries might only receive basic subscriber profile information.

WhatsApp metadata was pivotal in the arrest and conviction of Natalie “May” Edwards, a former Treasury Department official with the Financial Crimes Enforcement Network, for leaking confidential banking reports about suspicious transactions to BuzzFeed News. The FBI’s criminal complaint detailed hundreds of messages between Edwards and a BuzzFeed reporter using an “encrypted application,” which interviews and court records confirmed was WhatsApp. “On or about August 1, 2018, within approximately six hours of the Edwards pen becoming operative — and the day after the July 2018 Buzzfeed article was published — the Edwards cellphone exchanged approximately 70 messages via the encrypted application with the Reporter-1 cellphone during an approximately 20-minute time span between 12:33 a.m. and 12:54 a.m.,” FBI Special Agent Emily Eckstut wrote in her October 2018 complaint. Edwards and the reporter used WhatsApp because Edwards believed the platform to be secure, according to a person familiar with the matter.

Edwards was sentenced on June 3 to six months in prison after pleading guilty to a conspiracy charge and reported to prison last week. Edwards’ attorney declined to comment, as did representatives from the FBI and the Justice Department.

WhatsApp has for years downplayed how much unencrypted information it shares with law enforcement, largely limiting mentions of the practice to boilerplate language buried deep in its terms of service. It does not routinely keep permanent logs of who users are communicating with and how often, but company officials confirmed they do turn on such tracking at their own discretion — even for internal Facebook leak investigations — or in response to law enforcement requests. The company declined to tell ProPublica how frequently it does so.

The privacy page for WhatsApp assures users that they have total control over their own metadata. It says users can “decide if only contacts, everyone, or nobody can see your profile photo” or when they last opened their status updates or when they last opened the app. Regardless of the settings a user chooses, WhatsApp collects and analyzes all of that data — a fact not mentioned anywhere on the page.


 

V. “Opening the Aperture to Encompass Business Objectives”

The conflict between privacy and security on encrypted platforms seems to be only intensifying. Law enforcement and child safety advocates have urged Zuckerberg to abandon his plan to encrypt all of Facebook’s messaging platforms. In June 2020, three Republican senators introduced the “Lawful Access to Encrypted Data Act,” which would require tech companies to assist in providing access to even encrypted content in response to law enforcement warrants. For its part, WhatsApp recently sued the Indian government to block its requirement that encrypted apps provide “traceability” — a method to identify the sender of any message deemed relevant to law enforcement. WhatsApp has fought similar demands in other countries.

Other encrypted platforms take a vastly different approach to monitoring their users than WhatsApp. Signal employs no content moderators, collects far less user and group data, allows no cloud backups and generally rejects the notion that it should be policing user activities. It submits no child exploitation reports to NCMEC.

Apple has touted its commitment to privacy as a selling point. Its iMessage system displays a “report” button only to alert the company to suspected spam, and the company has made just a few hundred annual reports to NCMEC, all of them originating from scanning outgoing email, which is unencrypted.

But Apple recently took a new tack, and appeared to stumble along the way. Amid intensifying pressure from Congress, in August the company announced a complex new system for identifying child-exploitative imagery on users’ iCloud backups. Apple insisted the new system poses no threat to private content, but privacy advocates accused the company of creating a backdoor that potentially allows authoritarian governments to demand broader content searches, which could result in the targeting of dissidents, journalists or other critics of the state. On Sept. 3, Apple announced it would delay implementation of the new system.

Still, it’s Facebook that seems to face the most constant skepticism among major tech platforms. It is using encryption to market itself as privacy-friendly, while saying little about the other ways it collects data, according to Lloyd Richardson, the director of IT at the Canadian Centre for Child Protection. “This whole idea that they’re doing it for personal protection of people is completely ludicrous,” Richardson said. “You’re trusting an app owned and written by Facebook to do exactly what they’re saying. Do you trust that entity to do that?” (On Sept. 2, Irish authorities announced that they are fining WhatsApp 225 million euros, about $267 million, for failing to properly disclose how the company shares user information with other Facebook platforms. WhatsApp is contesting the finding.)

Facebook’s emphasis on promoting WhatsApp as a paragon of privacy is evident in the December marketing document obtained by ProPublica. The “Brand Foundations” presentation says it was the product of a 21-member global team across all of Facebook, involving a half-dozen workshops, quantitative research, “stakeholder interviews” and “endless brainstorms.” Its aim: to offer “an emotional articulation” of WhatsApp’s benefits, “an inspirational toolkit that helps us tell our story,” and a “brand purpose to champion the deep human connection that leads to progress.” The marketing deck identifies a feeling of “closeness” as WhatsApp’s “ownable emotional territory,” saying the app delivers “the closest thing to an in-person conversation.”

WhatsApp should portray itself as “courageous,” according to another slide, because it’s “taking a strong, public stance that is not financially motivated on things we care about,” such as defending encryption and fighting misinformation. But the presentation also speaks of the need to “open the aperture of the brand to encompass our future business objectives. While privacy will remain important, we must accommodate for future innovations.”

WhatsApp is now in the midst of a major drive to make money. It has experienced a rocky start, in part because of broad suspicions of how WhatsApp will balance privacy and profits. An announced plan to begin running ads inside the app didn’t help; it was abandoned in late 2019, just days before it was set to launch. Early this January, WhatsApp unveiled a change in its privacy policy — accompanied by a one-month deadline to accept the policy or get cut off from the app. The move sparked a revolt, impelling tens of millions of users to flee to rivals such as Signal and Telegram.

The policy change focused on how messages and data would be handled when users communicate with a business in the ever-expanding array of WhatsApp Business offerings. Companies now could store their chats with users and use information about users for marketing purposes, including targeting them with ads on Facebook or Instagram.

Elon Musk tweeted “Use Signal,” and WhatsApp users rebelled. Facebook delayed for three months the requirement for users to approve the policy update. In the meantime, it struggled to convince users that the change would have no effect on the privacy protections for their personal communications, with a slightly modified version of its usual assurance: “WhatsApp cannot see your personal messages or hear your calls and neither can Facebook.” Just as when the company first bought WhatsApp years before, the message was the same: Trust us.

Correction

Sept. 10, 2021: This story originally stated incorrectly that Apple’s iMessage system has no “report” button. The iMessage system does have a report button, but only for suspected spam (not for suspected abusive content).

https://www.propublica.org/article/how-facebook-undermines-privacy-protections-for-its-2-billion-whatsapp-users

New superconducting magnet breaks magnetic field strength records, paving the way for fusion energy

This large-bore, full-scale high-temperature superconducting magnet designed and built by Commonwealth Fusion Systems and MIT’s Plasma Science and Fusion Center (PSFC) has demonstrated a record-breaking 20 tesla magnetic field. It is the strongest fusion magnet in the world. Credit: Gretchen Ertl, CFS/MIT-PSFC, 2021

It was a moment three years in the making, based on intensive research and design work: On Sept. 5, for the first time, a large high-temperature superconducting electromagnet was ramped up to a field strength of 20 tesla, the most powerful magnetic field of its kind ever created on Earth. That successful demonstration helps resolve the greatest uncertainty in the quest to build the world’s first fusion power plant that can produce more power than it consumes, according to the project’s leaders at MIT and startup company Commonwealth Fusion Systems (CFS).

That advance paves the way, they say, for the long-sought creation of practical, inexpensive, carbon-free power plants that could make a major contribution to limiting the effects of global climate change.

„Fusion in a lot of ways is the ultimate clean energy source,“ says Maria Zuber, MIT’s vice president for research and E. A. Griswold Professor of Geophysics. „The amount of power that is available is really game-changing.“ The fuel used to create comes from water, and „the Earth is full of water—it’s a nearly unlimited resource. We just have to figure out how to utilize it.“

Developing the new magnet is seen as the greatest technological hurdle to making that happen; its successful operation now opens the door to demonstrating fusion in a lab on Earth, which has been pursued for decades with limited progress. With the magnet technology now successfully demonstrated, the MIT-CFS collaboration is on track to build the world’s first fusion device that can create and confine a plasma that produces more energy than it consumes. That demonstration device, called SPARC, is targeted for completion in 2025.

„The challenges of making fusion happen are both technical and scientific,“ says Dennis Whyte, director of MIT’s Plasma Science and Fusion Center, which is working with CFS to develop SPARC. But once the technology is proven, he says, „it’s an inexhaustible, carbon-free source of energy that you can deploy anywhere and at any time. It’s really a fundamentally new energy source.“

Whyte, who is the Hitachi America Professor of Engineering, says this week’s demonstration represents a major milestone, addressing the biggest questions remaining about the feasibility of the SPARC design. „It’s really a watershed moment, I believe, in fusion science and technology,“ he says.

Collaborative team working on the magnet inside the test stand housed at MIT. Research, construction and testing of this magnet has been the single largest activity for the SPARC team, which has grown to include 270 members. Credit: Gretchen Ertl, CFS/MIT-PSFC, 2021

The sun in a bottle

Fusion is the process that powers the sun: the merger of two small atoms to make a larger one, releasing prodigious amounts of energy. But the process requires temperatures far beyond what any solid material could withstand. To capture the sun’s power source here on Earth, what’s needed is a way of capturing and containing something that hot—100,000,000 degrees or more—by suspending it in a way that prevents it from coming into contact with anything solid.

That’s done through intense magnetic fields, which form a kind of invisible bottle to contain the hot swirling soup of protons and electrons, called a plasma. Because the particles have an electric charge, they are strongly controlled by the magnetic fields, and the most widely used configuration for containing them is a donut-shaped device called a tokamak. Most of these devices have produced their magnetic fields using conventional electromagnets made of copper, but the latest and largest version under construction in France, called ITER, uses what are known as low-temperature superconductors.

The major innovation in the MIT-CFS fusion design is the use of high-temperature superconductors, which enable a much stronger magnetic field in a smaller space. This design was made possible by a new kind of superconducting material that became commercially available a few years ago. The idea initially arose as a class project in a nuclear engineering class taught by Whyte. The idea seemed so promising that it continued to be developed over the next few iterations of that class, leading to the ARC power plant design concept in early 2015. SPARC, designed to be about half the size of ARC, is a testbed to prove the concept before construction of the full-size, power-producing plant.

Until now, the only way to achieve the colossally powerful magnetic fields needed to create a magnetic „bottle“ capable of containing plasma heated up to hundreds of millions of degrees was to make them larger and larger. But the new high-temperature superconductor material, made in the form of a flat, ribbon-like tape, makes it possible to achieve a higher magnetic field in a smaller device, equaling the performance that would be achieved in an apparatus 40 times larger in volume using conventional low-temperature superconducting magnets. That leap in power versus size is the key element in ARC’s revolutionary design.

The use of the new high-temperature superconducting magnets makes it possible to apply decades of experimental knowledge gained from the operation of tokamak experiments, including MIT’s own Alcator series. The new approach uses a well-known design but scales everything down to about half the linear size and still achieves the same operational conditions because of the higher magnetic field.

A series of scientific papers published last year outlined the physical basis and, by simulation, confirmed the viability of the new fusion device. The papers showed that, if the magnets worked as expected, the whole fusion system should indeed produce net power output, for the first time in decades of fusion research.

Martin Greenwald, deputy director and senior research scientist at the PSFC, says unlike some other designs for fusion experiments, „the niche that we were filling was to use conventional plasma physics, and conventional tokamak designs and engineering, but bring to it this new magnet technology. So, we weren’t requiring innovation in a half-dozen different areas. We would just innovate on the magnet, and then apply the knowledge base of what’s been learned over the last decades.“

That combination of scientifically established design principles and game-changing magnetic field strength is what makes it possible to achieve a plant that could be economically viable and developed on a fast track. „It’s a big moment,“ says Bob Mumgaard, CEO of CFS. „We now have a platform that is both scientifically very well-advanced, because of the decades of research on these machines, and also commercially very interesting. What it does is allow us to build devices faster, smaller, and at less cost,“ he says of the successful magnet demonstration.

Proof of the concept

Bringing that new magnet concept to reality required three years of intensive work on design, establishing supply chains, and working out manufacturing methods for magnets that may eventually need to be produced by the thousands.

„We built a first-of-a-kind, superconducting magnet. It required a lot of work to create unique manufacturing processes and equipment. As a result, we are now well-prepared to ramp-up for SPARC production,“ says Joy Dunn, head of operations at CFS. „We started with a physics model and a CAD design, and worked through lots of development and prototypes to turn a design on paper into this actual physical magnet.“ That entailed building manufacturing capabilities and testing facilities, including an iterative process with multiple suppliers of the superconducting tape, to help them reach the ability to produce material that met the needed specifications—and for which CFS is now overwhelmingly the world’s biggest user.

They worked with two possible magnet designs in parallel, both of which ended up meeting the design requirements, she says. „It really came down to which one would revolutionize the way that we make superconducting magnets, and which one was easier to build.“ The design they adopted clearly stood out in that regard, she says.

In this test, the new magnet was gradually powered up in a series of steps until reaching the goal of a 20 tesla magnetic field—the highest field strength ever for a high-temperature superconducting fusion magnet. The magnet is composed of 16 plates stacked together, each one of which by itself would be the most powerful high-temperature superconducting magnet in the world.

„Three years ago we announced a plan,“ says Mumgaard, „to build a 20-tesla magnet, which is what we will need for future fusion machines.“ That goal has now been achieved, right on schedule, even with the pandemic, he says.

Citing the series of physics papers published last year, Brandon Sorbom, the chief science officer at CFS, says „basically the papers conclude that if we build the magnet, all of the physics will work in SPARC. So, this demonstration answers the question: Can they build the magnet? It’s a very exciting time! It’s a huge milestone.“

The next step will be building SPARC, a smaller-scale version of the planned ARC power plant. The successful operation of SPARC will demonstrate that a full-scale commercial fusion power plant is practical, clearing the way for rapid design and construction of that pioneering device can then proceed full speed.

Zuber says that „I now am genuinely optimistic that SPARC can achieve net positive energy, based on the demonstrated performance of the magnets. The next step is to scale up, to build an actual power plant. There are still many challenges ahead, not the least of which is developing a design that allows for reliable, sustained operation. And realizing that the goal here is commercialization, another major challenge will be economic. How do you design these power plants so it will be cost effective to build and deploy them?“

Someday in a hoped-for future, when there may be thousands of fusion plants powering clean electric grids around the world, Zuber says, „I think we’re going to look back and think about how we got there, and I think the demonstration of the magnet technology, for me, is the time when I believed that, wow, we can really do this.“

The successful creation of a power-producing device would be a tremendous scientific achievement, Zuber notes. But that’s not the main point. „None of us are trying to win trophies at this point. We’re trying to keep the planet livable.“

https://phys.org/news/2021-09-superconducting-magnet-magnetic-field-strength.html

Steve Jobs Summed Up Apple’s Entire Strategy Using Just 6 Bullet Points. Each One Teaches an Amazing Lesson

In a recently published meeting agenda, Apple co-founder Steve Jobs teaches a master class in how to write a strategic plan.

Steve Jobs.

Steve Jobs.
 Getty Images

On October 24, 2010, Apple CEO Steve Jobs sent a very important email.

It contained the agenda for the company’s upcoming „Top 100“ retreat, a top secret and super exclusive offsite management meeting that was reserved for 100 of Apple’s most influential employees.

The agenda, part of an email which was recently published in connection with the ongoing Epic v. Apple lawsuit, is long and detailed, with tons of lessons for business leaders. But it’s the first point on the agenda, entitled „2011 Strategy“ and assigned to Jobs himself, that stands out most.

Jobs’s agenda point consists of only six major bullet points, but each one teaches an amazing lesson.

The six points are as follows:

  • Who are we?
  • What do we do?
  • Post PC era
  • 2011: Holy War with Google
  • 2011: Year of the Cloud
  • 2015: New Campus

Let’s break each of them down.

Be intentional

Jobs begins with two very important questions:

  • Who are we?
  • What do we do?

Upon first glance, these questions might surprise you. After all, Jobs had been back as CEO of Apple for over a decade at this point, and had conducted one of the greatest turnarounds ever.

But Jobs knew well how easy it is to fall from the top. Apple had experienced huge success in the past, only to lose itself in a flurry of products and initiatives.

To keep history from repeating itself, Jobs knew Apple needed to continually question who it was and what it did. It had to clearly identify company leadership, values, and focus — and make sure to align its goals with its desired culture and purpose.

Takeaway: Your company will change as time goes on. Keep questioning yourself, and make those changes intentional, not accidental.

Identify your strengths

The next bullet point, „Post PC era,“ did two important things. First, it early identified the consumer shift of purchasing more mobile devices.

Just as important, though, it highlighted Apple’s strength in this nascent market.

„Apple is the first company to get here,“ Jobs wrote — which was entirely true, as the iPhone and iPad had proven revolutionary. Mobile products now accounted for 66 percent of the company’s revenues, with the iPad alone having outsold the Mac within six months.

The key for future success, as Jobs outlined, would be to leverage this shift through continued improvement of mobile devices, communication, apps, and cloud services — a strategy that Apple is continuing to follow over a decade later and that has transformed it into a trillion-dollar company.

Takeaway: Identify what your company does well in the context of the overall market. Then, double down on doing those things better.

Learn from competitors

The next bullet point encapsulated Jobs’s view of the competition:

2011: Holy War with Google

While it was true that the iPhone and iPad were revolutionary, Google had begun to surpass Apple in some ways — and Jobs knew it. Later in the agenda, he highlighted how Google’s Android operating system excelled at deeply integrating Google’s cloud services, admitting that Android was „way ahead of Apple“ in cloud services for contacts, calendar, and mail.

The goal, then?

„Catch up to Android where we are behind…and leapfrog them.“

Takeaway: Focus on your strengths, but ignore your weaknesses at your own peril.

Focus on one big thing

Jobs next clearly establishes the single most important priority for 2011, which he terms „the year of the cloud.“

Apple „invented“ the digital hub concept, writes Jobs, by using the PC as a hub for digital assets like contacts, calendars, photos, music, and videos. But the digital hub was shifting from the PC to the cloud, and Apple had to move fast.

„Google and Microsoft are further along on the technology,“ he wrote, „but [they] haven’t quite figured it out yet…. [We need to] tie all of our products together, so we further lock customers into our ecosystem.“

Identifying and executing on this priority was pivotal in helping shape Apple’s strategy for years to come, and in helping the company keep up with — and, in some ways, surpass — its competitors.

Takeaway: There are countless things you could be working on, a few things you should be working on, and only one thing that should be your top priority.

Figure it out, and make sure everyone is working to support it.

Look to the future

Jobs’s final bullet point is only three words:

2015: New Campus

Of course, this was a reference to what eventually became „Apple Park,“ the company’s 175-acre campus and futuristic office complex that now serves as the its corporate headquarters. This was one of the final projects pitched by Jobs, a workplace that would embody the spirit of Apple and inspire employees to continue to „think different.“

Sadly, Jobs didn’t live to see construction on Apple’s new campus begin. However, he set the plans in motion and was heavily involved in the design of the campus, reportedly specifying even small details about building materials and other features.

And in April 2017, two years later than originally planned, Apple Park was opened to employees.

Takeaway: Focus on the here and now. But always, always plan for the future.

There it is.

A single agenda topic. Six major bullet points. Just enough words to form a few paragraphs, at most.

Yet, those few words contain a master class in business strategy:

1. Be intentional

2. Identify your strengths

3. Learn from competitors

4. Focus on one big thing

5. Look to the future

Take a page out of Steve Jobs’s playbook and use those five steps to help plan your business strategy.

Source: https://www.inc.com/justin-bariso/apple-steve-jobs-how-to-write-a-meeting-agenda-email-apple-vs-epic-business-strategy-how-to-write-a-strategic-plan-apple-ecosystem.html

How Tim Cook has grown the Apple empire in his decade as CEO

When Tim Cook took over as chief executive of Apple, it was a corporate transition unlike any other. He stepped out from the shadow of one of the best-known American CEOs and took the reins of one of the world’s biggest tech companies facing some uncertainty about how much more successful it could be.

Ten years into the job, Cook now leads the most valuable company in the world — technology or otherwise — and it remains among the most influential. More than a billion people worldwide use its devices and tens of millions of developers have built businesses on its software platforms.
Cook took over as CEO from Steve Jobs on August 24, 2011, less than two months before the Apple founder passed away. Since then, Apple’s (AAPL) market capitalization has grown around 600% to nearly $2.5 trillion, and its annual revenue has more than doubled.
If Jobs was known for his ability to create groundbreaking devices that redefined consumers‘ experience of technology, Cook may come to be known for expanding the Apple ecosystem — building a suite of subscription services and other hardware products that complement the core iPhone business Jobs launched.
Under Cook, Apple has gone from a premium device maker to a massive, multifaceted company with businesses ranging from payment services to an Oscar-nominated TV and film production studio. He’s overseen the acquisition of more than 100 companies, including the $3 billion Beats purchase in 2014 and the $1 billion acquisition of Intel’s smartphone modem business in 2019.
Inside Apple, Cook inherited a company culture known for being relentlessly demanding and he’s now managing at a time where tech workers have been increasingly vocal about social issues. (Cook himself, who in 2014 became one of the first leading CEOs to come out as gay, has been involved in LGBTQ+ rights advocacy.)
Cook has also been at the helm for major corporate missteps such as „Batterygate“ and allegations of poor labor conditions at its suppliers‘ factories. A recent announcement around a new child protection initiative also turned into an unexpected PR nightmare. And he has navigated a host of external threats to Apple’s business over the years, including, recently, feuds with the Trump administration, the US-China trade war and the Covid-19 pandemic.
What Cook hasn’t done is launch another product as successful and disruptive as the iPhone, but he’s found ways to keep Apple growing without that.
„It’s possibly the most successful handoff from strength to strength in corporate history,“ Mike Bailey, director of research at FBB Capital Partners, said of the transition from Jobs to Cook. „Apple, frankly, needed a cheerleader and a politician, possibly more than a micromanaging, stressed out founder.“
Bailey added: „You’re maintaining the empire, as opposed to building one.“

The growth of services

A month after taking over as CEO, Cook announced the launch of the iPhone 4S. Since then, Apple has released nearly two dozen more versions of the iPhone at a wider range of price points, along with new generations of the iPad, Mac and MacBook. Cook has also overseen the introduction of new hardware products — most successfully, the Apple Watch in 2015 and AirPods in 2016.
But even more important than the new devices brought to life under his leadership is the growth of Apple’s services business.
„From a hardware standpoint, I think you can make the argument that it’s been more iterative than revolutionary, but I think that diminishes his contribution to the company,“ said D.A. Davidson analyst Tom Forte, adding that Cook expanded the notion of what Apple is. „He said … ‚What can Apple be? Apple can be a music subscription service, Apple can be a fitness subscription service, Apple can be much more than the App Store.'“
Even in the first five years of his tenure, Apple was making meaningful revenue from its Services division, which included products such as iCloud, which launched in October 2011; Apple Podcasts, which launched in 2012; and Apple Music, which launched in 2015. In January 2016, Apple revealed for the first time that it had generated $20 billion in services sales in the previous year.
A central piece of Tim Cook's strategy has been expanding Apple services such as Fitness+.

Since then, Apple has launched even more services, including Apple Arcade, Apple TV+ and Apple Fitness+, along with a subscription bundle, which have further boosted the business. In the 2020 fiscal year, Apple generated nearly $53.8 billion in services revenue, accounting for around 20% of the company’s total sales. (Apple doesn’t break out sales for individual services.)
Apple’s focus on services has allowed it to be less reliant on iPhone sales, which can be volatile from quarter to quarter and have begun to plateau, even dipping at times under Cook. A key focus for Cook has been offsetting that slowing iPhone growth.
„He kept the iPhone party going, but he solved a boom-bust problem by exploding their services business,“ FBB’s Bailey said.
Apple still brings in hoards of cash each year from iPhone sales. But now, it also has the more consistent, higher margin profits from subscription services to act as a buffer as customers hold onto their devices for longer. Services also give consumers yet more reasons to choose Apple hardware over others, and helps the company eke out more dollars from each person that buys one of its devices.

What’s next?

Cook has already said he doesn’t plan to be at Apple in another 10 years. But most followers of the company expect him to stick around for at least a few more.
In that time, he’ll have plenty on his plate that could shape the future of the company, including the long rumored release of an Apple car and AR glasses, as well as its continued efforts to build its own chips for its devices.
But he’ll also face major challenges, including Apple’s current antitrust fight with app developers and regulators. Forte also questioned whether Apple will be able to maintain its leadership position if the growth in internet of things devices means consumers become less reliant on smartphones. Apple has yet to gain the same traction in connected home devices as Amazon’s Alexa, and earlier this year killed off its original HomePod in favor of the cheaper mini version.
„An argument can be made that they’re [still] heavily dependent on the iPhone,“ Forte said. „I’m still trying to envision what the future looks like and what happens when the smartphone is no longer the center of the universe.“
Under Cook, Apple has also been working to address its impact on the environment, including plans to become carbon neutral by 2030. But given that the company is dependent on a complex global supply chain and non-renewable rare earth metals to build its products, Cook will likely have to push the company’s efforts further in the coming years, as climate change poses an increasingly existential threat.
Then there’s the question of who will take over leading the world’s biggest company when Cook does step down. Jeff Williams, Apple’s current chief operating officer, who has been dubbed Tim Cook’s Tim Cook in the tech press, would be an obvious choice if he were taking over now. But at just two years younger than Cook, that succession plan could be more questionable in even a few years, Bailey said.
„It doesn’t look like there’s another insider, number two, ready to go, so I do think that’s something Apple’s going to have to start to address over the next two years,“ he said.

DuckDuckGo’s Quest to Prove Online Privacy Is Possible

illustration of orange tool box with tools and green bowtie in it
This year, DuckDuckGo plans to significantly expand its privacy offerings.Illustration: Sam Whitney; Getty Images

I was driving up through Pennsylvania last summer, somewhere along US Route 15 between Harrisburg and Williamsport, when I saw a familiar face: a goofy cartoon duck wearing a green bowtie. It was the logo for DuckDuckGo, the privacy-focused search engine, along with a message: “Tired of Being Tracked Online? We Can Help.”

The sight of a tech company on a billboard in rural Pennsylvania was surprising enough to lodge in my memory. Highways in and out of Silicon Valley may be lined with billboards advertising startups, where they can be easily spied by VCs and other industry influencers, but the post-industrial communities hugging the Susquehanna River will never be confused with Palo Alto. Far more typical are road signs advertising a fireworks store, a sex shop, or Donald Trump. I found it hard to imagine that the other drivers on the road were really the audience for an internet company that occupies a very specific niche.

It turns out DuckDuckGo—itself based in Valley Forge, PA, about 90 miles east of Route 15—knew something I didn’t. According to the company’s market research, just about every demographic wants more data privacy: young, old, male, female, urban, rural. Public polling backs that up, though the results vary based on how the question is asked. One recent survey found that “93 percent of Americans would switch to a company that prioritizes data privacy if given the option.” Another reported that 57 percent of Americans would give up personalization in exchange for privacy. Perhaps most telling are the early returns on Apple’s new App Tracking Transparency system, which prompts iOS users to opt in to being tracked by third-party apps rather than handing over their data by default, as has long been standard. According to some estimates, only a tiny minority of users are choosing to allow tracking.

The problem for a company like DuckDuckGo, then, isn’t making people care about privacy; it’s convincing them that privacy is possible. Many consumers, the company has found, have basically thrown up their hands in resignation, concluding that there’s no way out of the modern surveillance economy. It’s easy to see why. Each new story about data privacy, whether it’s about the pervasiveness of tracking, or a huge data breach, or Facebook or Google’s latest violation of user trust, not only underscores the extent of corporate surveillance but also makes it feel increasingly inescapable.

DuckDuckGo is on a mission to prove that giving up one’s privacy online is not, in fact, inevitable. Over the past several years, it has expanded far beyond its original search engine to provide a suite of free privacy-centric tools, including a popular browser extension, that plug up the various holes through which ad tech companies and data brokers spy on us as we browse the internet and use our phones. This year it will roll out some major new products and features, including a desktop browser and email privacy protection. And it will spend more money than it ever has on advertising to get the word out. The long-term goal is to turn DuckDuckGo into an all-in-one online privacy shield—what Gabriel Weinberg, the company’s founder and CEO, calls “the ‘easy button’ for privacy.”

“People want privacy, but they feel like it’s impossible to get,” Weinberg says. “So our main challenge is to make the idea that you can get simple privacy protection credible.”

Whether that mission succeeds could have consequences far beyond DuckDuckGo’s bottom line. DuckDuckGo is operating to some extent in the shadow of Apple, which has already made privacy a core part of its pitch to customers. But DuckDuckGo’s ambition is to provide a suite of protections that are even more extensive and intuitive than Apple’s. And it is offering them to the millions of people who don’t want or can’t afford to use Apple products: Google’s Android operating system accounts for about 50 percent of the mobile market in the US and more than 70 percent worldwide. Perhaps most important, if DuckDuckGo succeeds at bringing simple privacy to the masses, it will mean that the future of privacy might not depend on the relative benevolence of just two corporate overlords.

Founded in 2008, DuckDuckGo is best known for its search engine. Which means that it has always been defined as a challenger to Google. It has not shied away from the comparison. In 2011, Weinberg, then the company’s sole employee, took out an ad on a billboard in San Francisco that declared, “Google tracks you. We don’t.” That branding—Google, but private—has served the company well in the years since.

“The only way to compete with Google is not to try to compete on search results,” says Brad Burnham, a partner at Union Square Ventures, which gave DuckDuckGo its first and only Series A funding in 2011. When the upstart launched, Google already controlled 90 percent of the market and was spending billions of dollars, and collecting data on billions of users, to make its product even better. DuckDuckGo, however, “offered something that Google couldn’t offer,” Burnham says: “They offered not to track you. And Google’s entire business model is, obviously, built on the ability to do that, so Google couldn’t respond by saying, ‘OK, we won’t track you either.’”

Neither DuckDuckGo nor anyone else came close to stopping Google from dominating search. Today, Google’s market share still hovers around the 90 percent range. But the pie is so enormous—advertisers spent $60 billion on search advertising in the US alone last year, according to eMarketer—that there’s quite a bit of money in even a tiny slice. DuckDuckGo has been profitable since 2014.

Like Google Search, DuckDuckGo makes money by selling ads on top of people’s search results. The difference is that while the ads you see when searching on Google are generally targeted to you in part based on your past searches, plus what Google knows about your behavior more broadly, DuckDuckGo’s are purely “contextual”—that is, they are based only on the search term. That’s because DuckDuckGo doesn’t know anything about you. It doesn’t assign you an identifier or keep track of your search history in order to personalize your results.

This non-creepy approach only protects you, however, while you’re on DuckDuckGo. “You’re anonymous on the search engine, but once you click off, now you’re going to other websites where you’re less anonymous,” Weinberg says. “How can we protect you there?”

DuckDuckGo’s first answer to that question rolled out in 2018, with the launch of a desktop browser extension and mobile browser that block third-party trackers by default wherever a user goes on the internet. It was good timing: 2018 was a banner year for raising privacy awareness. Facebook’s Cambridge Analytica scandal broke that spring. The GDPR took effect in Europe, throwing into relief how little the US regulates data collection. That summer, the Associated Press revealed that many Google services were storing your location data even if you explicitly opted out. Data collection and privacy were firmly in the national conversation. Since then, congressional inquiries, antitrust lawsuits, Netflix documentaries, and a growing feud between Apple and Facebook have kept it there.

“One of the funny things about DuckDuckGo is that the single best marketing we’ve ever had has been the gaffes that Google and Facebook have made over the years,” says Burnham. “Cambridge Analytica, for instance, was a huge driver of adoption for DuckDuckGo. There is an increasing awareness of how this business model works and what it means—not just in terms of the loss of privacy and agency over our own data, but also what it means for the vibrance and success of an open marketplace.”

Man looking at his computer being surrounded by eyes that represent data snatchers

Awareness is one thing, action another. DuckDuckGo was in position to capitalize on the rising tide of scandal because it has a reputation for building products that work. In 2019, for instance, it added a feature to its extension and browser that directs users to encrypted versions of websites whenever possible, preventing would-be hackers or ISPs from, say, looking over your shoulder as you type a password into a web page. While other encryption tools work by manually creating lists of tens of thousands of websites in need of an upgrade, DuckDuckGo crawled the internet to automatically populate a list of more than 12 million sites. The Electronic Frontier Foundation recently announced that it would incorporate DuckDuckGo’s dataset for its own HTTPS Everywhere extension. Similarly, Apple uses DuckDuckGo’s Tracker Radar dataset—a continuously updated, publicly available list of trackers assembled using open-source code—for Safari’s tracking prevention.

Weinberg is particularly proud of DuckDuckGo’s tracker prevention. Surveillance is so built into the infrastructure of the web that many sites will stop functioning if you block all cookies. Take Google Analytics, which is found on the vast majority of websites. “If you just straight-up block Google Analytics, you’ll break sites,” Weinberg says. As a result, mainstream browsers with tracking prevention, like Safari and Firefox, allow trackers to load, then try to restrict the data they can gather.

“They’re more inclined to err on the side of not breaking websites,” explains Bennett Cyphers, a technologist at the Electronic Frontier Foundation. “They will try and do this middle ground thing where they’ll load resources but restrict what Google can do once it’s in your browser.”

The problem is that even allowing a tracker to load in the first place can allow it to gather highly specific data about the user, including their IP address. So DuckDuckGo, like some other privacy extensions, works differently. It simply prevents the cookie from loading at all. To avoid the broken-site problem, it replaces some trackers with a dummy that essentially tricks the site into thinking the cookie has loaded, a technique called “surrogates” pioneered by the ad blocker uBlock Origin.

Ultimately, DuckDuckGo probably owes its success less to the technical aspects of its tracker prevention, which very few people are in any position to understand, than to the fact that the company does a pretty good job honoring its slogan: “Privacy, simplified.” Its products don’t require a user to toggle any elaborate settings. They simply include encryption, tracker blocking, and private search automatically.

Since their launch, the extension and mobile browser have experienced rapid user growth. According to DuckDuckGo, the extension and browser have together been downloaded more than 100 million times since 2018, and more than half of those downloads took place over the past twelve months. That growth has in turn helped juice the use of the original search engine, which is built into mobile app. The company estimates that its search user count doubled over the past year to between 70 and 100 million. (It’s an estimate because they don’t track users.) According to StatCounter, DuckDuckGo now has the second highest share of the US mobile search market, edging out Bing and Yahoo. (A distant second, that is: 2 percent to Google’s 94 percent.) DuckDuckGo says its annual revenue is over $100 million.

This year, the company plans to significantly expand its privacy offerings. It is introducing a desktop browser, incorporating the same features as the existing mobile app. Currently, even someone with the DuckDuckGo privacy extension can’t stop Google from gathering some data on them if they’re using Chrome, for example.

DuckDuckGo is also adding two new features to its existing extension and mobile app. The first is email privacy protection. Weinberg says that his company’s researchers found that some 70 percent of emails have some sort of tracker embedded in them. That includes not just corporate promotional emails, but just about any newsletter or fundraising email that’s sent using an automated service. In nearly a third of those cases, Weinberg says, the trackers are sending users’ plaintext email addresses over the internet, potentially exposing them to any number of marketers, data brokers, and shadier actors. The email tool is designed to thwart that by forwarding messages through a DuckDuckGo email address, which will remove the trackers before sending them along to inboxes. It also will allow people to generate random email addresses whenever they have to use email to sign up for something.  (Apple recently announced a similar feature for the Mail app on iOS.) In theory, DuckDuckGo could have created its own email client, but Weinberg recognizes getting users to switch their email providers is prohibitively difficult.

“Our goal is simplicity, right?” he says. “We want to make privacy simple and seamless without sacrifice for users.”

The final new tech DuckDuckGo is unveiling this year operates on a similar principle. A new feature within its Android app will operate in the background, even when the app itself is not in use, to block third parties from tracking you through any other app on your phone. It does that by using the phone’s VPN permission to route all traffic through DuckDuckGo, so that, as with the email trackers, it can block requests from anyone on its tracker list before they have an opportunity to gather any user data. (Again, this is somewhat analogous to Apple’s App Tracking Transparency on iOS. It will not stop first-party data collection, meaning the app you’re using can still collect your data. But it won’t be able to pass that data through to other companies, including Facebook, which currently tracks users through a vast number of unrelated apps.)

Taken together, the new features, which the company says will be available in beta this summer, represent DuckDuckGo’s evolving mission to create what Weinberg calls “the privacy layer of the internet.”

“The ideal case for that from a user perspective is, you download DuckDuckGo and you’re just protected wherever you go online,” he says. “We’re obviously not there yet, but that’s the product vision.”

So, about those billboards.

The company’s reliance on old-school advertising mediums—in addition to billboards, DuckDuckGo is partial to radio ads—is partly of necessity: As a privacy-focused business, it refuses to do any microtargeted online advertising. (Even when it advertises on a social media site like Twitter, Weinberg says it doesn’t set any demographic targeting parameters.) But the strategy also stems from the company’s market research, which has found that precise targeting would be a waste of money anyway.

“People who care about privacy, who act on privacy, who would adopt a DuckDuckGo product—they’re actually not a very niche audience,” says Zac Pappis, head of the company’s user insight team. “People who act and care about privacy don’t fall into a particular age group or demographic or have a particular psychographic background, so that makes them easier to reach.”

To put it in advertising parlance, this means DuckDuckGo spends its marketing budget on brand awareness. Ordinary people around the country don’t need to be convinced to care about privacy, the theory goes—they just need to learn that a solution exists. “Our current top business priority is to be the household name for simple online privacy protection,” Weinberg says. “So when you think about privacy online, we want you to turn to DuckDuckGo.”

To that end, the company is investing in its biggest marketing blitz to date this year, devoting tens of millions to an advertising push—so expect more billboards and more radio ads during those summer road trips. Weinberg believes the time is ripe. He points out the fact that tech giants like Apple, Facebook, and Google have all been raising the salience of privacy through very public battles over their policies and products. Plus, the ongoing antitrust lawsuits against the tech giants will draw more attention to those companies’ business practices, including around user privacy. One of the cases, brought by the Department of Justice, could even give DuckDuckGo a direct boost by preventing Google from being set as the default search engine on phones.

DuckDuckGo has competition. Companies like Ghostery offer tracking protection. Brave has a well-regarded privacy browser. The Netherlands-based Startpage offers search without tracking. But in the US, at least, DuckDuckGo has a strong position in the privacy market. In a sector where users have to trust that your product works the way you say it does, a decade-long track record without any privacy scandals establishes important credibility. “They’re probably the biggest name right now, probably because of the popularity of their search engine,” says Jon Callas, director of technology products at the Electronic Frontier Foundation.

But being the biggest name among people with a special interest in online privacy still amounts to being a big fish in a small pond. Weinberg believes DuckDuckGo can change that. He is convinced that the pond is actually huge. It just doesn’t know it yet.

Source: https://www.wired.com/story/duckduckgo-quest-prove-online-privacy-possible/

Tesla Is Dead (And Elon Musk Knows It) – The $600+ billion company is a game-changer, but it won’t exist in 50 years

I will never forget the first time I drove a Tesla Model X. My producer rented one when we met up with a movie star to record narration for a film I was directing. “This better not be tacked onto the film budget,” I griped.

He grinned and tossed me the Tesla-shaped key. “It’s your birthday present.”

I dropped the body to its most ground-hugging setting, set the acceleration to Ludicrous Mode, and roared out of the airport. It was one of the most exhilarating rides of my entire life — almost as fun as the time I drove 150MPH with no plates and no insurance on a toll road as an idiot teenager.

Driving a Tesla X is a pure pleasure, but it doesn’t mean Tesla Inc. will survive.

In fact, forces are aligning that could easily wipe Tesla off the map. Here are seven reasons why Tesla probably won’t exist fifty years from now:

1. It doesn’t make money from selling cars

As professor Scott Galloway recently pointed out, if you subtract Tesla’s Bitcoin ponzi profits and emissions credits, Tesla actually loses money:

“Tesla posts an accounting profit, but in its most recent quarter, it was emissions credits (a regulatory program that rewards auto companies for making electric rather than gas vehicles) and — wait for it — $101 million in bitcoin trading profits that morphed earnings from a miss to a beat. What Tesla did not do last quarter was produce a single one of its two premium cars, the Model S or the Model X.”

Losing money doesn’t seem to worry speculators during peaks of irrational exuberance, but when the rubber meets the road and the stock bubble pops and corporate credit constricts, real investors will want no part in money-burning businesses.

And it won’t take a full market meltdown for Tesla to become a money-losing entity: If the global crypto ponzi bubble pops due to more countries banning or regulating it, or regulators do away with emissions credits, Tesla once again becomes a money-bleeding company.

Image credit: The Martian

2. Elon Musk is too distracted to remain CEO

One thing you’ve got to appreciate about Elon Musk is that he’s voraciously curious and wants to solve some of humanity’s biggest challenges.

But that’s not who you want as CEO of a publicly-traded company.

One of the reasons you don’t see most Fortune 500 CEOs on Joe Rogan and SNL and, you know, running five other companies, is because they’re heads-down focused on running one company. When he ran Disney, Bob Iger woke up at 4:15 AM every day. Apple’s Tim Cook gets up at 3:45 AM and reads 800 emails. Elon Musk also puts in absurd hours — I personally question if sleep deprivation is what rational shareholders are looking for in any CEO — but in Elon’s case, it’s spread across too many projects to be sustainable for decades to come.

3. Elon is already diversifying

Have you ever heard of Dan Schulman?

Me neither.

He’s a former AMEX guy, now the CEO of Paypal.

Elon is brilliant at getting out early and pivoting hard.

He did it with Zip2, and then Paypal, and now he’s putting out feelers to do it with Tesla:

SpaceX.
SolarCity.
Hyperloop.
The Boring Company.
Neuralink.
BTC and DOGE. (Side note: Elon knows he’s the king memer and could easily add $100 billion to his net worth by launching his own altcoin.)

It’s only a matter of time before one of these side hustles takes off and he steps down as Tesla’s CEO, if only because…

4. More regulation and oversight are on the way

Elon once again put Tesla in the crosshairs when he started manipulating the cryptocurrency markets.

Never forget how close he came to getting banned from leading a publicly-traded company by the SEC.

If he keeps up these sorts of shenanigans — and he needs to in order to keep the stock price pumped — it’s only a matter of time before government regulators and progressive politicians renew their efforts to rein him in.

Speaking of lawsuits: There are already rumblings that his SNL Asperger’s announcement should have been disclosed to investors — when the stock tanks, expect to see this admission somewhere in the shareholder lawsuit, whether it’s fair grounds or not.

5. The stock price is wildly overvalued

Cue the angry comments from hodlers. (But please note that I automatically delete comments if the poster doesn’t disclose their TSLA holdings.)

As a sound investment, $TSLA stock is one of the worst picks in the world. As a fun gamble/speculation, it’s one of the best. But, just like Bitcoin, small investors are going to lose hundreds of billions of dollars when the price bubble pops.

Because let’s face it: Tesla is a story stock.

Don’t believe me? Just look at who’s been buying shares:

Image credit: Tulips to Tesla

Tesla stock is clearly being pumped by unsophisticated investors who haven’t done their due diligence regarding the company’s actual long-term worth.

The end result: When thousands of Tesla speculators lose their life savings, many will turn their backs on the company, if not become actively hostile.

What is $TSLA actually worth?

First, we need some context. The price-to-earnings (P/E) ratio is considered the benchmark number for comparing one company’s stock price to another. The ratio is based on the current stock price divided by the trailing 12-month earnings per share. If a stock price is $10/share, and the P/E ratio is 10, it means that company is earning $1 per share. If you buy a $10 share with a P/E of 20, it’ll roughly take you 20 years to break even.

  • Warren Buffett likes to buy stocks with a P/E of around 12.
  • The S&P 500’s long-term median P/E ratio is around 15.
  • The S&P 500’s current P/E ratio is around 44 — nearly triple its century-long average — despite the pandemic and a looming joblessness crisis. (#Bubble)
  • Apple’s P/E is typically <30.
  • Amazon hovers around 60.

Tesla’s P/E ratio is currently over 600.

That’s $0.99 worth of earnings for every $625 invested. Would you buy a business with an ROI of 0.001584%? Would you acquire a company that will take 600+ years to break even?

Cue the irrational exuberancers: “But Tesla’s future potential is huge!”

No, it’s not, not compared to its current price. To fall in line with the S&P’s historical averages and provide a reasonable rate of real return, Tesla would need to 40X its earnings. To provide a 10% annual return, it would need to 63X its earnings. Well over $2 trillion in annual revenue… 4+X more revenue than the largest revenue-earning company on earth. Not gonna happen.

Objectively, Tesla is wildly overpriced even compared to the overall market bubble. It’s a double bubble — the overall market bubble + the Musk fanboy story stock bubble. Tesla may very well be 13Xs better than the average S&P company right now, but that just means Tesla’s price bubble is that much more inflated once you scrub out all the irrational exuberance.

Tesla’s market cap is currently over $600 billion. If it traded at the same P/E as Amazon — arguably one of the strongest companies on earth — Tesla’s market cap drops to $60 billion. If you compare Tesla to Apple, which is a fair comparison and a far more rational P/E, it means that in reality, Tesla is probably only worth a measly $20 billion.

6. Volkswagen+ will come roaring back

To put things in perspective, Tesla’s market cap is currently higher than Mercedes, BMW, GM, Ferrari, and Ford, plus all the major airlines… combined.

Image credit: The Martian

But does Tesla have more customers, wider distribution, better engineers, deeper pockets, and more political connections than the rest of the auto and airline industries?

Absolutely not.

All his major competitors have deeper capital pools, wider distribution networks, and far more customers. Musk has nowhere near the political power. And the innovation gap is closing rapidly. That’s why Elon is constantly seeking new capital and pulling out all the stops to keep pumping the stock, even going so far as to manipulate people’s psychology through stock splits.

Elon Musk has unquestionably (and rightly) created a Thucydides Trap in the automotive industry, but is Tesla really the Athens that can best Sparta?

The question is almost irrelevant because another company is about to out-Athens Tesla and stuff Elon in his own Thucydides trap:

7. Apple will drop an atomic bomb

When Apple releases an electric car — and you can bet your bottom dollar it will — we can safely assume it will rival Tesla for looks and coolness and will likely beat it on price, too.

Follow the money with me…

  • When Apple makes a car play, it could easily pop Tesla’s 600 P/E bubble…
  • If Tesla deflates to an Apple-level P/E of 30, Tesla is suddenly only worth $20 billion…
  • Which makes it instantly ripe for acquisition by one of the majors, be it Apple, Amazon, BMW, Mercedes, or even an old-school company like GM. (Never forget: Ford once bought Jaguar and Fiat once owned Maserati.)

To be clear, Tesla is an amazing company at a $20 billion valuation, and if Elon can’t keep the $TLSA stock price inflated indefinitely, an acquisition is inevitable. Never mind the bite in Apple’s logo… someone could chomp Tesla whole.

In Conclusion

I adore Tesla. Like Russia and HBO, it punches way above its weight.

I also like Elon, minus his market manipulation. He’s an extremely important person in the carmaking space. I’ll say it loudly: Elon Musk is the best thing to happen to the auto industry since Henry Ford. As a maverick agitator, he awoke the slumbering giants who’d happily relied on fossil fuel combustion for more than a century. We’re better for having him.

But, in the same way that Paypal will continue to lose ground to companies like Wise and Stripe, expect Tesla to lose ground to Volkswagen and Apple and whatever innovators come next. If things play out the way I predict regarding an eventual acquisition, fifty years from now Tesla probably won’t even exist.

In the meantime, don’t buy into the stock hype and endanger your family’s future.

Just rent a Model X for a weekend and enjoy the ride.

Source: https://medium.com/surviving-tomorrow/tesla-is-dead-and-elon-musk-probably-knows-it-2858c86589d0

Bitcoin is a Giant Ponzi Scheme – It’s time to get brutally honest about trust-based currencies

had an interesting conversation with an activist short-seller yesterday. He’s taken down more than a dozen corrupt companies, exposing billions of dollars of fraud, literally saving lives, sending criminals to prison, and personally reaping millions in his efforts to make the world a more ethical place. I asked him if there were any similarities between all of the fraudulent companies, and his answer was immediate:

“Oh, that’s easy. At the end of the day, they were all a variant of a Ponzi scheme.”

Charles Ponzi

The Ponzi scheme was the brainchild of an Italian thief with the grandiosely magnificent name of Carlo Pietro Giovanni Guglielmo Tebaldo Ponzi.

Ponzi guaranteed his investors he could double their money within 90 days, telling them he was an expert in IRC coupon arbitrage. In reality, Ponzi simply paid his earlier investors with the investments of later investors.

Such schemes obviously cannot last forever — doubling your profit every quarter forever is mathematically absurd. For a while, Ponzi lived like a king, buying himself a mansion, honeymooning in Italy, opening a winery, even buying a macaroni factory on the side. When one reporter grew suspicious of Ponzi’s rapid rise, the con man sued for libel and won $500,000.

In the end, Ponzi’s scheme ran for just over a year before collapsing, shuttering six banks and costing thousands of investors the equivalent of $250 million in today’s money.

Ponzi went bankrupt in the court cases that followed and was sentenced to more than a decade in prison. Upon release, he set up a Florida swampland scheme that also eventually failed. After serving another seven years in prison he was deported back to Italy, before eventually dying in poverty in Brazil.

Charles Ponzi in 1920

How All Ponzi Schemes End

According to my new activist short-seller friend, giant financial frauds typically end in one of three ways:

  1. The company eventually gets shut down and the CEO goes to jail.
  2. The company gets bought out by a bigger company — either a sucker company or a larger fraudulent firm.
  3. The company uses a Black Swan event — like a pandemic or a housing crash — as an excuse to “naturally” go bankrupt, which allows the founder to save face… and then start a new company. After all, who could’ve predicted a recession? Let’s give the guy another chance. (Following 9/11, Bernie Madoff was gleeful that a giant war would give him enough cover to collapse his Ponzi scheme, but when the markets quickly rebounded, he had to keep the charade going.)

Does this sound in any way familiar?

Photo by Moose Photos from Pexels

Right now, Bitcoin is a textbook Ponzi scheme:

  • It has no intrinsic value. You can’t eat it, wear it, or heat your house with it. Unlike gold — which at least feels nice and looks shiny on your spouse’s ring finger — you can’t even see Bitcoin.
  • It is not a productive asset. It’s not a factory that produces an item. It’s not a field that produces cucumbers. It’s not a firm that offers a service. It contributes nothing to society.
  • It has zero underlying value. None. It’s not backed by land or commodities or — as with national currencies like USD or GBP — the threat of violence (in the form of wage garnishment, asset seizure, and imprisonment.)
  • It has minimal utility. Because the price fluctuates so wildly (what healthy currency doubles in a month?), it’s virtually ineffective as a safe representation of value or means of trade.
  • Its value is solely derived from the trust that the price will continue to rise indefinitely. That there will always be new investors to buy out the old ones.

The evidence is crystal clear, and don’t trust any online Bitboy who tells you otherwise:

Bitcoin is a Ponzi scheme… for now.

How Does It End for Bitcoin?

Certainly not like your usual Ponzi scheme.

  1. Bitcoin’s “CEO” Satoshi Nakamoto — whoever he/she/the team might be — might already be dead or imprisoned in Guantanamo. (Heck, Bitcoin might be an invention of the NSA or advanced artificial intelligence for all we know.) Either way, Bitcoin isn’t a company, so it won’t be shut down.
  2. It’s unlikely that anyone will ever “acquire the company” by cornering the market on Bitcoin. (And to do so would make the currency completely worthless because you’d have no one to trade with.)
  3. And since it’s mathematically impossible for Bitcoin to grow forever, that leaves us with option three: A Black Swan event causes its demise as an investment. This is the only likely outcome. Perhaps a wildly superior cryptocurrency makes Bitcoin as irrelevant as the Model T versus a Tesla. Perhaps nations or groups of nations make a concerted effort to destroy Bitcoin, or more likely, Bitcoin owners. Or maybe Bitcoin simply levels out when it reaches max coinage, shedding its identity as an investment and becoming a stable trust-based currency. In doing so, it will drive away all the exuberant speculators who are currently propping up its inflated price. No matter how it happens, at some point, millions of Bitcoin investors are going to lose billions of dollars.

Don’t get me wrong, I am NOT a Bitcoin hater.

Cryptocurrency is a revolutionary technology. Bitcoin is downright brilliant. And there’s the outside chance that Bitcoin might eventually become THE global currency of the Internet. And I really, really hope it does.

But as nations start to roll out their own digital surveillance currencies — China just launched theirs last month — expect governments to do absolutely everything in their power to wage war on trust-based currencies like Bitcoin.

The major problem here is that most unsophisticated investors currently view Bitcoin as an investment. It’s not — it’s a currency, a vehicle of trade, a means to an end. Currency is the oil that keeps the engine running smoothly, but it’s not the engine itself.

The reality is that the majority of current Bitcoin holders see themselves as investors, not users, and have fallen prey to investment bias, sunk cost fallacy, money illusion, escalation of commitment, and a host of other cognitive biases. Not many of us say we’re “invested” in USD or CAD or GBP, because we understand that’s not a national currency’s primary purpose.

As a currency, Bitcoin is an extremely intriguing innovation.
As an investment, it is the biggest Ponzi scheme ever invented.

Bitcoin can only be considered an investment if you treat it like a Ponzi scheme. Which millions of people are currently very happy to do — because the price keeps going up, buoyed by market hysteria akin to the Dutch Tulip Mania.

It’s a story stock, a legal fiction, a collective fantasy.

But at some point, the Ponzi scheme will need to implode in order for Bitcoin to become what it was meant to become: a truly useful and profoundly accountable global currency.

Fraudulent investment, or a useable means of trust-based trade.

We can’t have it both ways.

The Problem is Trust

There are essentially three forms of currency in the world today:

  1. Violence-based currencies (national government currencies)
  2. Trust-based currencies (private and distributed cryptocurrencies)
  3. Asset-based currencies (the future)

Governments like America and China do not have the moral right — nor the permission of the people — to create the violence-backed currencies of today or the digital surveillance currencies of tomorrow.

Private enterprises like Facebook and JP Morgan have not earned the trust to create corporate currencies like Libra.

Both forms of currency must die.

Money was invented to facilitate trade: I have bread, Michelle has cheese, and Andrew has wine. Humans invented money to represent the contrasting value between bread, wine, and cheese, not to say that money is bread, wine, and cheese.

People treat today’s money as though the physical paper (or digital line of code) is the actual thing of value, and not the underlying asset it supposedly represents. No one gets full on francs, drunk on dollars, and fat on colóns.

(In the case of Bitcoin, it’s even worse: almost no one truly trusts it because it isn’t asset-backed, and it has no way to enforce value the way countries can.)

It’s time to eliminate violence and trust from currency.

The reality is that our global family desperately needs an international, accountable, distributed, non-violent, non-surveilled, non-trust-based, enforceable, verifiable-asset-backed currency to serve as a means of facilitating global trade.

Bitcoin isn’t that currency. Not yet, anyway.

In Conclusion

Is Bitcoin’s current price grossly overvalued in relation to its actual present intrinsic worth? 100% absolutely.

Could the price still rise by 5X, 20X, 100X? Absolutely.

Could the price eventually drop to mere pennies on the dollar? Absolutely.

And will a real value-backed currency eventually crush BTC and ETH? Hopefully.

This isn’t an article about whether or not Bitcoin will continue to grow or crash and burn. That will depend on the public’s irrational exuberance versus the iron will of hundreds of governments who want to continue to oppress and control their citizens with a monopolistic currency stranglehold. It will be one of the most violent battles of our time. I hope crypto wins.

All I’m saying is that it’s time for both sides to be honest:

  • The haters need to admit that Bitcoin is a brilliant trust-based currency.
  • The lovers need to admit that Bitcoin is currently being treated as a Ponzi scheme. Because it’s quite simple: The only way to turn a profit on Bitcoin is to sell it to someone else for more than you paid. That’s a Ponzi scheme.
  • Both sides need to take rapid steps toward creating a blockchain-based asset-backed cryptocurrency that actually functions as a currency and not as a speculative investment.

Don’t put your trust in money of any form. Avoid hysteria in all its disguises. Don’t believe the absurd hype on one side, nor the doom-and-gloom on the other. Especially don’t trust people with conflicts of interest. Always ask “who profits?”

Stay safe out there.

source: https://medium.com/personal-finance/bitcoin-is-a-giant-ponzi-scheme-ae4263008220