 Many of you have supported independent tech news directly for five years. You like them? Become a DTNS member at Patreon.com slash DTNS. This is the Daily Tech News Show for Friday, July 5th, 2019. In lovely Cleveland, Ohio, I'm Rich Strafilino. And I am the guest producer, Amos. And we're really happy today to be welcoming our wonderful guest. He's been on the show before. He's been on the show with me, so that makes him an extra special rarity. It is Keith Towns and the CTO advisor. Keith, thanks for being here. Thanks for having me again, Rich. All right, let's get it started with a few tech things you should know. Alphabet subsidiary Waymo received a three-year permit from the California Public Utilities Commission to participate in the state's Autonomous Vehicle Passenger Service Pilot Program, catchy name. As part of the program, Waymo may not charge passenger for rides and a human safety driver is required. Waymo is now the fourth company to join the pilot programming, joining Zooks, AutoX Technologies, and Pony AI. So Waymo kind of the most popular name, the name that would get the most recognition, I guess, from the general public there. Waymo initially plans to provide rides to employees and guests within a limited service area in the South Bay. But a spokesperson said that over time, this may expand to more riders. Google suspended Trends Alert notifications in New Zealand after it published the name of a murder suspect in violation of a court order. There's a suppression order there for those types of things in the media. The incident occurred in December 2018, so it's been a little while now. And when the name was sent, it was in the subject line of an email to anyone that subscribed to the What's Trending in New Zealand alerts. So kind of shocking there for a country with not a ton of violent crime. Microsoft's SwiftKey keyboard is rolling out a new feature called Puppets, which uses artificial intelligence, buzzword bingo there, to replicate facial movements in a 3D animated character. If that sounds familiar, it's because you've seen Apple's Animoji. At launch, users can record 30 seconds of video and choose from a panda, cat, dinosaur, owl, or dog. Clearly, dinosaur is the right option there, but it's dealer's choice. Puppet is currently only an Android feature, and I didn't see anything in the press coverage that said when or if it was coming to iOS. And finally, in everyone's and everything's fine news, MoviePass shut down services to customers as of July 4th at 5 a.m., so Independence Day from being a business, I guess. According to CEO Mitch Lowe, the shutdown will last several weeks to complete work on a new app. So they're just kind of redoing everything on a technological front. During that time, the service won't accept new signups or charge existing customers. Subscribers who have already paid for the month and are kind of in the middle of their cycle there will be automatically credited for downtime once MoviePass resumes service. And they're maintaining that they are going to resume service. Let's get into a little bit more discussion here, Keith. I wanted to talk to you about this. A new report from Apple analyst, Ming-Chi Kuo, claims that Apple will move away from butterfly keyboard switch mechanisms with the refreshed MacBook Air coming out later this year and then later into the MacBook Pro by 2020. That'll give basically a five-year lifespan to their butterfly keyboard switch tri that's been somewhat problematic. I think we can all agree. The new keyboards will be based on scissor switches, which will offer better key travel and durability, but the speculation is that they can't make those quite as thin as the outgoing butterfly design. So, Keith, it seems like every other month or so, every time there's new MacBook outs, we hear some complaints that they, or we hear speculation from Apple that they've fixed the issue with the butterfly. And then our good friend Tom Hollingsworth manages to break another keyboard, and he's back at Apple for another repair. They have official, they have an official keyboard return service basically for all MacBooks that have this keyboard. Is this just finally Apple just throwing the towel in here? If this report is true? Yeah, I would say so. What is this like the third redesign that they're on now? I have a 2017 model, which gets into a really interesting conversation around reliability, et cetera, et cetera. I literally have a surface book as a backup to my MacBook Pro because I'm a writer. And if I can't write, one, the keyboard is a horrible keyboard. And then two, if I can't write, I don't make money. So I'm sure I'm not the only one in that situation. So I'm glad that they've finally thrown in the towel. Can I get into Rich's conspiracy theory? Oh yes, Anthony, something there. No, that was a blip, go ahead. Okay, if we can get into like Rich's theory about the timing of this report, because, you know, makes you close a great track record when it comes to, you know, kind of sussing out the Apple rumor tree as it were. And the idea being that this, you know, this kind of gets leaked out or she's putting out the speculation here. Obviously she has sources within Apple. They know that when they tell her stuff at some point it's going to be reported, especially comes right after Johnny Ives announced that he's stepping down. So maybe this is, you know, kind of changing the narrative around a little bit of Apple design with the new, you know, with the new management cast kind of in place. They've already been in place for a couple of years, but I think it's interesting that maybe they get a little benefit of the narrative going forward. Next up, Keith, this is right in your alley here. Bloomberg reports that Broadcom is in advanced talks to acquire the security stalwart Symantec. The Financial Times reports that a potential acquisition price could be around $15 billion. So not exactly small change. Symantec is the largest vendor of security software with over $4 billion in sales. This will be Broadcom's second major software acquisition after acquiring CA technologies in 2018 for just under $19 billion. So, you know, if this goes through with looking at $30 billion invested in software alone, Symantec would reportedly follow the pattern of that transaction operating it more as an independent subsidiary, although coming in with some cost cutting measures to basically help them recoup their investment a little faster. So, you know, Keith, I think everyone's like, no Symantec, like, okay, that's security. Why is Broadcom all of a sudden betting heavy on software? Yeah, I think this is obvious. They're playing a game of monopoly. I'm waiting for them to buy, literally buy a railroad now. The acquisitions from kind of a synergies perspective other than obviously back off as HR really don't make any sense. The Symantec, CA actually have competing products. We don't have to get into that level of detail. But this is, they're buying cash rich or cash positive companies for something bigger. I don't know if they're gonna take another play at another chip manufacturer as the part of their core business, or if they're just getting big to save off being acquired themselves. But this is obviously just a financial play than it is one of synergies or technology strengths. Yeah, and it's interesting to note that a couple of years ago Intel tried to play like this when they acquired McAfee. Now, their plan wasn't to operate as a subsidiary. They wanted to like integrate it on a silicon level that basically flopped. They spun it out since then and kind of took a bath on that. But I also think it's interesting in the light that we're seeing the chip market kind of consolidate over the last couple of years. And maybe all of the uncertainty around Huawei in that situation is causing them to wanna have some other cash flow. That's not dependent on silicon either. Yep, and then you have Qualcomm, so there you go. Yeah, exactly, exactly. Well, yeah, and let's see if they try and buy each other again. Next up, I saw this all over the place. Sony announced the WF-1000XM3 noise canceling wireless earbuds, it's another catchy name. The buds use four microphones for active noise cancellation with each bud connecting to the source audio over Bluetooth 5 rather than having one bud connected and relay it to the other earbud, which can kind of be unreliable. Each earbud has a touch panel to control various functions, includes NFC for pairing and a quick attention mode to let an ambient sound without removing earbuds. That real life is rated at six hours with noise canceling enabled, eight hours without and includes a charging case that offers up to 24 hours of noise canceling power. The WM-1000XM3 costs $230. Creators are open now, shipping expected sometime in August, there weren't, I didn't see a lot of specifics there. Keith, you travel a lot for business. You know, the noise canceling headphone was basically made for the airplane. Is this tempting to you as a business traveler? You know what, there's no shortage of $250 earbuds, obviously. And I'm not a fan of Bluetooth headphones in general. I'll use them to run in, but I love wired headphones. I do have a pair of Bose, the older earbuds. Plus on top of this, these earbuds only designs just don't stay in my ear. I run and I would like to run in a pair of $230 headphones if I buy them. So no, they're not tempting me at all. I'll just continue with my $200 Bose wired headphones that don't run out of, that can still use even if the battery runs out. I've seen these kind of positioned as air pod competitors, air pods with the charging case are $199. So pretty price competitive, if you factor in the noise canceling. What's interesting here though is Keith, to your kind of use case that you were pointing out, these aren't any kind of water or sweat resistant or anything like that. So they're really not designed for that kind of, that kind of active lifestyle. I guess the power beats, this isn't really Sony trying to compete in that market. But I still think it's interesting that it's getting a lot of press. I think Sony deserve it or not, still gets a little bit of a benefit of the doubt when it comes, especially when it comes to audio. And we'll see if the proof with these Bluetooth earbuds is always in the connection. If it can have that reliable connection, if it's not dropping out, and supposedly with Bluetooth 5, streaming to both ears is supposed to be a lot more reliable. I think that's gonna really be the key to see if this is successful. Because if you look at the reviews of any of these other headphones, it's usually the connection was a nightmare by air pods because of those work. All right, next up the European Union voted against a European commission proposal to establish a Wi-Fi based standard for connected cars. The Wi-Fi standard was backed by Volkswagen, Renault, Toyota and NXP Semiconductor and voted on by the European Commission back in April. The vote by EU member states opens the door for a 5G connected car standard backed by BMW, Daimler, Ford, Intel, Huawei and Qualcomm. The 5G standard would allow both cars and devices in environments to interact with broader range of potential application support down the road. European Commission stated the reason they backed the Wi-Fi standard in part because it could be implemented immediately to help improve road safety. Surprising here to see the EU kind of turn their back against an European Commission proposal there, Keith? Yeah, you know what this stuff is, European commission and regulatory stuff always amazes me because it seems like more than any other big regulatory entity, they're able to ram things through that frankly from our US perspective, never makes sense to me. This is one of those things that probably didn't on a surface, I thought I read the article, didn't make any sense to me. The 5G standard seems to make more sense since, you know, you have more, one, you have more participants and then two, you have much better penetration in distance, I just, I kind of scratched my head as to why the Wi-Fi thing was even a thing. Well, the idea with Wi-Fi, it makes somewhat sense if you're, the only thing you're worried about is really that local network, right? If you're able to kind of dynamically put together some kind of mesh of all of these connected cars in a very specific area, you really don't, you know, if it's just for road safety, you know, for maybe navigation lane avoidance, that kind of stuff and you're only concerned about, you know, the areas maybe within, I don't know, a couple of car lengths of you, I think Wi-Fi theoretically could do that, although all that switching back and forth, again, I'm sure is a nightmare from a connectivity perspective. On a technology front, I mean, 5G is all about, right? It's all about speed and providing like tons of bandwidth with just like a single access point, right? It seems like it's kind of designed for the use cases of a connected car. It does, the story, this came from a Reuters report that I was reading this about and, you know, they mentioned, you know, that broader application support and some of it was like navigation. Oh, that makes sense. But then there was like entertainment. I don't want to use my 5G connected car for entertainment purposes necessarily or maybe I'm thinking too narrowly, Keith. Yeah, and plus I have a big investment in the zine of DVD players. I have like a thousand of them waiting on the driverless car theme to do. I hope I didn't miss the market. All right. And in May, Amazon became the lead investor and minority owner in a food delivery startup called Deliveroo because it was named by children, evidently. Now the UK's competition and markets authority, the CMA issued a preliminary order forbidding any integration between the two companies following an investigation into breaches of competition rules. In the order, the CMA stated at grounds to believe the companies were planning to merge and have quote, cease to be distinct. Until further investigation and a decision by the CMA, Deliveroo and Amazon are required to maintain the same level of service in the UK and are prevented from making changes in big contracts or senior management without express approval of the regulator. Obviously this seems like a bigger deal for Amazon not being able to do any contractual changes or senior management, at least broghting their business in the UK. But surprising to see, one, surprising to see government regulation coming this quick down the pike, you know, something in May already getting ruled on in July seems very fast for a government regulator, Keith. Yeah, and I'm glad that they're paying attention. I have mixed feelings about Amazon's delivery network. As a customer, I love one-day delivery. I love two-day delivery. I love the service that I'm getting from Amazon. But it's kind of like the whole zero-rate wireless thing where, you know, if you watch YouTube on your T-Mobile phone, you don't get charged data. It stifles competition. I have friends that have Amazon delivery network businesses and they do well for themselves now. But I really worry about the future of where Amazon is going with that. I just, there's something about Amazon. I just don't trust the company. Well, I do think it's interesting, though, that, you know, delivery was a local start-up that had existed and then got this, you know, this round of investment from Amazon and then they took a stake in it. I do wonder, though, if by coming down to a very strong regular, and this isn't the first thing we've seen the CMA just this week, we saw them coming out saying they're investigating Facebook and Google regarding data practices and data privacy and how that's being used and doing a broader study on that too. So the CMA is definitely not afraid to take on these large technology companies, which I think is interesting in and of itself. But, you know, Keith, we all know some companies are started because they want to get bought, right? Theoretically, does this, you know, change the market for doing a delivery start-up? If you know that Amazon's off the table as a buyer? Yeah, I don't think that will slow down. There's trillions of dollars on the sidelines. Investors need somewhere to put that money and they'll continue to go in these types of companies. Money will go to money, as it were. Remember, if you want to get all the tech headlines each in about five minutes, subscribe to Daily Tech Headlines at DailyTechHeadlines.com and hey, you can hear me on there sometimes as well. All right, getting into our main discussion today, you know, kind of going back to what we were talking about with Amazon just a second ago. There was an interesting report by RECode looking at the efforts that Walmart's doing to really expand their e-commerce operations and some of the struggles that they're having. Since buying Jet.com in 2016, I think the narrative around Walmart's e-commerce efforts have been, I'd say, overall pretty positive. I think that was seen as particularly forward-facing step, bringing in not only a technology platform, but also the people that kind of understand e-commerce with it as well. The company recently started offering one-day shipping with orders over $35, I believe it is, in the US and has made major brand acquisitions to kind of expand beyond the traditional Walmart customer base as well. Walmart's e-commerce market share increased 80% in the last three years and online sales were up 40% year over year this last quarter. With all that said, though, sources are telling RECode that Walmart's e-commerce division projects a $1 billion loss for 2019 on revenue between $21 and $22 billion. So it's generating a lot of revenue. It's just not profitable. It's really operating like startup at this point. The division led by Jet.com founder and CEO Mark Lohr is reportedly under pressure to cut losses with plans to sell the online clothing labels, ModCloth, which was acquired for $50 million in 2017. Walmart's e-commerce market share has increased to 4.7% this year and it makes up 5% of Walmart's overall US business. Of course, the gorilla in the room here, Keith, as you alluded to just a moment ago, is Amazon. They're the obvious threat here and the same RECode piece pointed out, they have a 38% market share and in that same period where Walmart increased by 80% to almost 5% of all e-commerce, they increased from 32 to 38%. So certainly not growing percentage-wise as fast, but just a huge, huge, the obvious dominant e-commerce player there. The other kind of points here that the article made that I thought were really interesting was that, if you're looking at fulfillment centers, Amazon has about 110 fulfillment centers in the US and Walmart is estimated to have around 20. They also use their existing retail locations as points of presence, but the footprint there, the ability to stock things that you would stock at a fulfillment center at a warehouse, they just can't match that when it comes to these retail footprints. So there's a limited utility. That helps first shipping them, kind of the mainline items, your staples of grocery and that kind of stuff, but for some of these long-tail items, which is where you can really jack up your margins and really charge a nice price, Amazon can deliver those all day. Walmart has a much harder problem with less fulfillment centers, kind of keeping those in stock and being able to deliver those in a timely fashion. So Keith, I know you had a chance to look at the piece. Doesn't paint the best picture for Walmart. Where do they go going forward if they want to stay competitive with Amazon without being locked into years and years of losing money? Yeah, you know what? This is one of those things that I'm scratching my head with Amazon, I mean, sorry, with Walmart. Walmart's revenue, you mentioned that this is making up 5% of their US business. Their overall revenue is $500 billion, over $500 billion. So a $1 billion loss, if you look at it from like the Jeff Bezos philosophy of pouring money into a point all profit back into the business and expanding the business, you wonder why Walmart just doesn't follow this roadmap that obviously worked. Walmart has advantages that Amazon doesn't. Obviously the store footprint while Amazon doesn't have, I mean, sorry, while Walmart doesn't have the fulfillment centers, Amazon envies the store footprint. That's why they bought Whole Foods and you now have some Amazon fresh stores that you can go in and buy goods from. So there's obviously some synergies that Walmart can gain, but from an investment perspective, they don't look like they want to sacrifice some of those profits. $1 billion in loss is kind of nothing for Amazon. Yeah. For Amazon or for Walmart. Well, and that's what Mark Lorre kind of the piece at least made it sound like he's been arguing with management is that we do have to run this as a startup. In fact, I was doing a little research just kind of doing some homework to see what his history with the company is. And literally the first YouTube video if you search for Mark Lorre, Walmart is we need to run this as a startup. And Amazon for years was, a lot of these startups when you're building this kind of infrastructure, again, you just have to pour that money and he's argued that they need more distribution centers. Again, those do cost billions of dollars, theoretically Walmart can afford it. But if you look at how they got to be so successful, I think if you take the other side of the argument, the reason Walmart has been successful is because they do things that make money, not necessarily those kind of long term investments. And going back, they had been making some key moves here seemingly to want to really embed themselves with e-commerce they had acquired Bonobos, Modcloth as I said in 2017 and another fashion startup, Eloquie in 2018, all of those right now were remaining unprofitable. But again, like especially like Bonobos, I mean, I remember they made a huge marketing blitz a couple of years on a bunch of podcasts and it's, it's very hip and, you know, not it's not the customer base that would necessarily shop at Walmart. So the idea being that they wanted to expand beyond maybe the traditional customer base there. And there was always this rumor going out there for about a year that was going out there or Walmart wanted to build their own streaming service, right? They already owned Voodoo, which is kind of like a, you know, a place to buy movies, but a streaming service to compete with Netflix or Amazon Prime and that kind of stuff really to build out a suite of services that would be compliment, you know, that could be a direct analog to what Amazon is trying to do. And there was a part earlier this year that they abandoned those efforts because guess what they didn't want to do, Keith? Invest money in original content and take a bath on that while they built up an audience and did that too. So it seems like, you know, that this long-term, you know, high capital and long-term losses just are against the Walmart DNA, or yeah, the Walmart DNA. The one thing I would say though is looking at what some of their retail competitors are doing, they're taking a very different approach instead of trying to build their own version of Amazon Prime. We see partnerships with companies like Instacart. We see target operating ship. They acquired shipped, which is basically a subscription shipping service that works with a bunch of other stores besides Target. You know, maybe if Walmart's not willing to commit to a level of investment to be a technology platform, they partner with one of those companies down the road and then they're still able to offer delivery, just not owning kind of the whole e-commerce stack there. Yeah, if you look at the flip side of the argument, Walmart is serving their core customer, you know, I think the digital effort is a good way to take a look at that. Earlier today, my wife went with my father-in-law to cancel the internet service on his Comcast bill, because he's 70-something years old and he doesn't use the internet, as well as, you know, he drops his phone and doing a fishing trip. And I went to go add his phone numbers back to his phone. It was a flip phone. So, you know, you look at a Walmart, typical Walmart and digital piece, if I wanted to go rent a movie, I or you would probably, one, we'd probably go on Plex first. Then after we checked on Plex, we take a look on, you know, one of the many rental services. If my father-in-law wanted to rent a movie, he'd drive up to Walmart and he'd go to this thing called Rentbox and rent a physical disc for $2 or $3 a day, whatever the rate is. So I think Amazon has shown the way how to grab that one segment of the market. And Walmart, I think, is kind of laser-focused. And then this in-between, stay trying to figure out this, how they serve their market in a digital world. You know, Keith, this kind of digital transformation can be tough for a lot of companies. As we all well know. It'll be interesting to see if how their e-commerce plans and their ambitions change, you know, if this reporting is to be believed, if Mark Lorre is either on the way out or having a role changed or what kind of scale they wanna operate at. So that'll be interesting to see. Thanks for all those who participate though in our subreddit. It's invaluable when we're putting together this show. Remember, you can submit stories and vote on them at dailytechnewshow.reddit.com and check out facebook.com slash groups slash dailytechnewshow, lots of good conversation there as well. Let's check out our mail bed. We had several people write in about using Uber Eats in their particular situation. So thank you for your feedback. We had Kimberly, the Texas teacher, who said the idea of us ordering in the morning and pre-paying, and I think that also maybe reserve a table, would make things so much easier. I see this working at fancier restaurants, not on a spur of the moment, the way we think of Uber Eats now. Instead, a couple of days before you go, or you're going to a theater or something like that, you make your reservation at your high-end restaurant. You place your order and give them your, oh, and give them your out-the-door time when you have your tickets, let's say like at an 8.15 performance. They work backwards and then pad that time a little extra and give you your reservation time. The restaurant can prepare ahead of time and know exactly what they're going to serve. I think an old-fashioned pre-arranged set dinner before going to theater, but everyone gets to order what they want. I think that's a really cool idea. Again, I don't know if Uber Eats is the company to do that, but yeah, kind of reversing a lot of the order of operation, I guess, for a traditional restaurant experience. I think it was kind of a cool idea. All right, well, Keith, thank you so much for being on the show. If people are interested in checking out your great stuff, where can they find you? Yeah, create a ton of content at CTOvisor on Twitter, and then the CTOvisor.com is the website. Excellent. And if you're interested in, like I said, you can check out and checking out more of my stuff, Daily Tech headlines. You can find there several days a week, and you can also follow me on Twitter, at Mr. Anthropology. Wanted to give a big shout out to our patrons. Remember, our goal each month is to get one more patron, then the last. You could be that person that puts us over the top, become a DTNS member, and get an ad-free RSS feed, special episodes from Tom, the editor's desk came out on the 4th of July. Happy 4th of July there. And so much more special episodes looking back on tech news of the past, and more, remember to sign up at patreon.com slash dns. Our email address is feedback at dailytechnewshow.com. We are live every Monday through Friday at 4.30 p.m. Eastern time, 20, 30 UTC. Find out more at dailytechnewshow.com slash live. Tom and Sarah, back on Monday, along with Blair Vizadrich from This Week in Science. Have a happy weekend, everybody. And a super sparkly day. This show is part of the Frog Pants Network. Get more at frogpants.com. Timing Club hopes you have enjoyed this brover.