 Hey, so special treat today, Eric Johnson is in town. Eric's generally out in California, right? Yeah. He is our tech columnist, tech guru, knows everything there is to know basically about all things technology, which is why I asked him to hang out with me, because I know nothing. All right, so we're going to start with some three big stories that are happening in tech right now. All right. All right. You mentioned the battle of the platforms. I like this. But we're really talking about like Amazon versus Google versus who? We're talking about cloud infrastructure platforms. It's been a booming market over the last several years. I was like a lot of corporations move workloads that were previously in their own data centers to these giant like cloud infrastructures that Amazon, Microsoft, Google, IBM, various other companies have created. And they just like the convenience of not having to manage their own infrastructures. They also just like the speed at which they can load new apps or load new services that they might want to deploy. They also like all the advanced services that some of these platforms not provide in areas like IoT or analytics, various other areas. And the market's just been growing very rapidly. And it's been good news for Amazon and to a lesser extend Microsoft and Google. Who's winning? Amazon is easily the biggest of the bunch. I think they're on something like a $14 billion annual run right now for Amazon web services. Wow. They're a cloud infrastructure platform. And I think they're estimated to have like something like a 40% plus share of cloud computing and storage and like other basic infrastructure services. Holy cow. And like no one else is even at 10% right now. I think Microsoft might be around 7% or 8%. And then everyone else is smaller than that. I don't know if people associate Amazon with all that stuff. Yeah, it's funny how like AWS, as they call it, was built out. They originally built out. Wait, what is AWS? Amazon web services. OK. They originally built out this infrastructure just for their e-commerce business. They needed their own servers and their own storage or whatever else. And they realized there's value in leasing the stuff out to other people that other people will pay if they provide a high level of service. They can allow people to run these workloads faster than they could if they had to build out their own server infrastructures. And the business just quickly took off. It's amazing. Amazon's everywhere. I mean, it's in all aspects of our lives and aspects that we don't even know about because I think people like me presume Amazon is prime mainly because the delivery guy comes to my house like every day. And who knew about all the back stuff? Yeah, I mean, their ambition is clearly limitless. And it's often like the four or five giant consumer tech companies that everyone knows about. Apple, Google, Facebook, Amazon. I feel like Amazon is the one that has the most unconditional love among people. Agreed. In terms of how people just seem to swear by, Apple has its loyalists, but there are other people who don't care for it. It's just everyone is obsessed with Amazon. Right, and almost don't care that it doesn't make a lot of money either. Yeah, I mean, you get to buy like all the time, doesn't it? That's by design. I think analysts know that Amazon could produce billions in cash flow if they wanted to. They're just investing so much in their fulfillment infrastructure and their video content and building out the data centers for AWS and in so many other things. People trust Jeff Bezos and his lieutenants to eventually make a payoff. So if you had to pick a stock right now, would you pick, which one would you pick? Which tech company in general. Yeah, Amazon, you said Amazon, Google, Microsoft, IBM. Who wins? Who do you pick? These companies have large businesses outside the cloud infrastructure. It's just not about that. But of those companies, I'd say like Microsoft and Google might be the ones I'd be more partial to right now. Amazon's a great company. It's just had such a huge run up. The valuation's a little high because of that. I feel like Google, the multiples are still fairly reasonable. It might be a little stretched right now. They've had a bit of a run up too, but it's not too much for how dominant they are in their core search ad business. Then you also factor in things like YouTube and all these other platforms that have over a billion active users. Do you place any weight in Amazon handmade, especially with the holidays coming up? Do I personally feel? Is it gonna make or break? No, it's a small percentage of your business. I feel like Etsy is still the leader when it comes to like craft and vintage goods. Amazon, I think they saw an opportunity to get in on that business a little bit, but it doesn't seem to be a large percentage of there like e-commerce volumes right now. I mean, the margins must be there though, why get in it? You know, they can make decent margins when they're providing these services to third-party sellers, like they already with handmade. They'll collect a commission. They might provide shipping services as well. They might provide advertising services that the sellers can promote themselves. So they can make some money out of it. I just don't think it's that large of a business. Is it all part of like this notion that it's the one-stop shopping? So like now I could buy fruits and vegetables on Amazon Fresh. I could order my kid new sneakers. And if I need a little cute homemade gift for the holidays, I go there too. I never have to leave. Yeah, there is something to do that. You know, they want to be a one-stop shop. They want people to load the Amazon app, just buy things via Prime and not like look at any other website, just assume everything's taken care of through that app. So that mindset, I'm sure, played a role in launching something like handmade. It kind of is taking care of like, I mean, at least in my house, I feel like. A lot of other houses too, I'm sure. I have to order light bulbs now. And I'm amazed that they come and they're not broke. Like they're so well-packaged. It's amazing. Okay, so second topic you brought up was autonomous driving. I love this idea because someday I am not actually gonna have to drive kids to school. Yeah, I mean, if you live in an urban area, you live in an area with a ton of traffic where you know, rush hours a nightmare, you know, it can be just a lot more convenient. You know, it can save a lot of time. If you can, you know, devote that time that you were previously driving to doing other things. Right. You know, you're pulling out your laptop maybe and getting some work done or whatever else. You know, I don't think, you know, we've fully thought through all the social and economic impacts, you know, it could have a long run. You know, how much parking space it could also get rid of, you know, if you have these fleets of like autonomous cars, they can call on demand and they don't cost much because there's their driver there. You know, that's another factory, you know, that could like. Oh, so that you're saying then people won't own cars anymore? Yeah, some people, you know, I'd say more in urban areas. You know, like if you, I think if you live in suburban or rural areas, it's going to take a longer time for people to give up their cars. But you know, if you live in an area where the distances aren't that long, you know, and you know, you can have like a thick network of these autonomous like cars that are like all over the place, they can call on demand whenever. I mean, trusting it, making sure it's safe that conversation aside, doesn't that, that challenges Uber and Lyft, doesn't it? Yeah, and that's one big reason Uber's been investing so much in autonomous driving. I feel like they're behind Google and Tesla there, but they, you know, see it as a major long-term threat. You know, if they don't control the technology, if their technology isn't good enough and they have to like depend on a third party like Google or Tesla, then there's a risk that those companies could like support some other, you know, ride-sharing platform, you know, offer their technology to them. And then Uber would be kind of left out of the picture. I'm just thinking as a mother, right? Like if you could, if you get this autonomous driving thing down, it's safer for me to put my kids in a car with no one than a driver that I don't know what he or she is gonna do to my kids. Yeah, safety is definitely gonna be one of the big selling points, you know? Right. You know, some people have speculated a long run. They could even like ban regular human driving. Hope that doesn't happen. I like driving, but, you know, it's good. Oh, you can take it. I'm over it. Yeah, I mean, it's a possibility for sure, you know, that down the line, you know, if, you know, autonomous cars are just much safer, you know. So, when are you talking like, you know, what's down the line to you? Is it next year? Is it five years? You know, I think we might be like just few years away from having like something around like level four autonomy. Which is, it can level four autonomy is when a car can mostly take over for drivers, not all the time, but like in a solid majority of situations, it can take over for them. And, you know, I think we might be a few years away from seeing that, you know, Google and Tesla have been both making a lot of progress in that direction. But Google is gonna be rolling out this fleet of like self-driving cars that will actually have no human driver inside of them, even to monitor anything in Arizona. You know, it's just a test for now, but it shows that like even on, if they're doing that on a limited set of roads. It's close. Yeah, you know, it's. I would think though, like, if you're driving highway for a long period of time, that's probably an easy thing, not easy, but that's something an autonomous car could probably handle. Yeah, it's something that, you know, like Tesla cars at times do now, you know, where, you know, if you're going from one spot to another on the highway, you know, they can just take care of that. Then you might need to drive in the local roads. So what do you do? Hop over into the passenger seat, or do you just let the car go? Yeah, I think, you know, you just activate the autopilot mode on the Tesla car. You know, Tesla recommends you keep your hands on the wheel while you're doing that. So you activate it, but meanwhile you can check your phone. Yeah. Sort of. Yeah, I mean, they tell people, you know, put your hands on the wheel, but in practice a lot of people don't. So who's winning the autonomous driving world right now? Like I've said, I feel like Google and Tesla are like, you know, ahead of like everyone else right now, just in terms of the R and D investments they've made, in terms of how many miles, you know, their self-driving cars have logged. And, you know, a ton of other companies are also like investing in the space. You know, most of the big automakers have kind of like realized that autonomous driving will eventually happen. Right, I mean, think of trucking, right? The whole trucking world could be changed forever. Those guys all could be added. As it is, they can't find people to drive trucks now, right? But the whole trucking business could be turned on its head. Right, I mean, you know, it's one of the things Tesla was promoting when they unveiled their truck, you know? It's still away from being fully autonomous, but you know, they really are, you know, talked up like the autopilot features, you know, that can like allow a truck to stay in its lane, that it can prevent jackknife thing, that can, you know, automatically hit the brakes, you know, if something goes wrong. Right, those poor guys, they fall asleep, they're driving for hours. That's pretty cool though, but so, you know, my kids are in high school, so you're saying they will see it by the, you know, by the time they get out of college, they'll see something. Yeah, I think Dodds are pretty good, you know. Like I said, I think level four is a pretty good possibility by that point. It's pretty crazy. All right, and the other big thing that you and I were talking about before is this infamous iPhone, I don't know what we call it. Do we call it the 10? Oh yeah, Apple insists on it being called the 10. Everyone's calling it the X anyway. Right, because it's the Roman numeral X. What, I mean, look, why do that? Actually, why cause the confusion? If you pay $1,000 for it, you should be able to call it whatever you want. I'm telling you, I think you should call it for dinner too. Like I think you should be able to make you dinner. Tell us about this phone and do you think it's worth it? Well, I think, you know, if you're, you know, a high end iPhone user, you know, and you're someone who really puts a lot of value in like your smartphone experience, you know, your people, you know, will often spend four or five hours a day, you know, their phones at one point or another. You know, if you're doing that, and it's, you know, that big part of your life, then it might be worth it, you know, just given the quality of the display, given the quality of, you know, all the other features they added, like this advanced front camera that can handle like face on, you know, that can unlock the phone just by pointing it at your face, you know, they call it Face ID. Yeah, yeah. You know, and just Apple put a lot of work into getting the little details right, I feel, with the interface, you know, it takes a little bit of adjusting. But you were saying you're not an iPhone user. No, I have an LG V20 myself. But yet you're impressed with it. Yeah, I mean, I feel at this point, you know, both, you know, iOS and Android have some unique strengths, but they get the beach, get the job done, their own ways for the vast majority of smartphone users. And Apple has, you know, sky high customer loyalty rates. And if you're hooked on the Apple ecosystem, you know, if you're a longtime iPhone user, you know, and if you can afford the phone, then it could be worth getting. Because we're talking a thousand dollars. Yeah. Do you think that this will be like the hot seller this holiday? Yeah, it's gonna be one of the big ones, you know. Supply constraints are still kind of an issue, but they have been improving a little bit. Which means the phone will be available for people? For most people, yeah. Like right now, the shipping times are down to two to three weeks, you know, early on. Like they were around four to six weeks. So gradually they're getting better. So if you had to pick, would you buy the phone or the stock right now? That's a tough question, you know. It's, I feel like some of the easy money has been made with Apple, but the stock is still pretty cheap. You know, it's still only trading like around 15 times, you know, forward earnings. That's before accounting for all the cash they've got offshore. So it's still not a bad deal, you know, especially when you look at some of these consumer stocks that are trend for over like 20 times forward earnings, you look at like McDonald's or Nike, companies like that. And they've probably got less growth, you know, in the near term than Apple does, just because of the iPhone cycle. So the stock is, you know, still pretty reasonable. You know, I feel like it's not gonna like double as easily as it did like the last week. 15 months, but I don't, it's unlikely that it's, you know, gonna, you know, crater either. What's the competitor to the iPhone X or 10, whatever we're calling it? Is there a similar phone out there? You know, there are phones with edge-to-edge displays, you know, like Samsung's Galaxy Note 8 and the S8. There's some various other Android phones that have created edge-to-edge displays. I feel like Apple, there's, they're, the iPhone X's design is a little sleeker in some ways. Because I think they're always accused of like being a step behind. I don't know, I feel like in terms of the front camera, they are a step behind, you know, the true-depth camera that, you know, can do like 3D face-sensing. That's something Android makers might not have for a couple years. You know, I think they're all like scrambling now to match Apple. In terms of display quality, I think Samsung's up there with Apple right now. Yeah. You know, I thought like, in terms of the user interface, Apple did some unique things that arguably put them ahead of Android, you know, in terms of like getting rid of the home button at the bottom, but still not also having any soft keys at the bottom like Android phones do. Right. Taking up space. So they're, you know, various things Apple's done in that respect. The processor inside of the iPhone X and also the iPhone 8, the 810 Bionic, that's easily the fastest smartphone processor right now. So they're, things like that, Apple has an advantage, but at the same time, you know, a lot of people love Android, you know, it's, you know, different strokes or different folks in some ways, you know, that, you know, some things appeal. No, I think you're either on the Apple side of the fence or the Android, right? The two don't meet. Yeah. They don't seem to cross over. Your house is either Android or Apple, I feel like. Yeah, it can be, you know, I mean, now and then you'll have some people switch, but you know, loyalty rates are pretty high for both. Right. And part of it's just because, you know, people download so many iPhone apps or so many Android apps, you know, they'll get hooked on various services that come with each OS. And so there's a switching cost involved if they want to trump to the other one. All right, well, we're gonna have to see how this does or how many Christmas trees this phone ends up under this holiday season. Eric, next time you're in town, we gotta do this again. Sounds good. Thank you.