Two admirals, a coxswain, and a guy with a steering wheel

We've been going over in time for the past few episodes, and this week is no exception. But we have an excuse. It's earnings week and there are a lot of thoughts. Nilay, Dieter, Paul, and Lauren bring the news right to your ears. 01:55 - Apple earnings 22:52 - Apple car 25:33 - The trolley problem 29:09 - Apple TV 44:45 - Paul's "Gadget Flavor" 50:31 - Google earnings 53:51 - Facebook earnings 54:53 - Twitter earnings 1:00:43 - Google hardware 1:04:52 - Amazon earnings 1:05:53 - BLU phone Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Nilay Patel?

  Hello.

• 0:00Speaker 01

  Hey.

• 0:01Nilay Patel?

  Hello.

• 0:07Nilay Patel?

  Hello, this is The Vergecast. That was not a good beginning to The Vergecast, but you know what? It's like Vergecast, what is it, like 213? It's some enormous number, 214.

• 0:17Speaker 01

  Yeah.

• 0:18Nilay Patel?

  It's Vergecast 214, our producer says.

• 0:19Speaker 01

  It's not a large round number, you don't even need to try.

• 0:21Nilay Patel?

  Yeah, but you know, we've been doing it for a while, we gotta like, gotta re- re-energize.

• 0:28Speaker 02

  You know, 100 episodes from now?

• 0:30Nilay Patel?

  Yeah.

• 0:31Speaker 02

  We're only gonna talk about pie.

• 0:32Nilay Patel?

  Yeah. Probably true. Uh, yeah. Anyway, hi, everybody. Welcome to The Vergecast, flagship podcast of theverge.com. The one, by the way, many people told me, it's the one with the Admiral on it.

• 0:46Speaker 02

  My Twitter has been nonstop people defining flagship to me.

• 0:48Nilay Patel?

  Yeah, so whichever one of us four chooses to be the Admiral, that's always the flagship.

• 0:53Speaker 01

  Admiral on it.

• 0:53Nilay Patel?

  Yeah, that's the flagship. Anyway. Uh, I'm Neelai Patel, uh, that's Lauren Good that you're hearing. Hey, Lauren.

• 1:00Speaker 03

  Hi. This is Admiral Lauren Good.

• 1:03Nilay Patel?

  We're all admirals now.

• 1:04Speaker 03

  I don't even know what that means.

• 1:05Nilay Patel?

  I don't know. You get a hat. Dieter is here.

• 1:08Speaker 02

  Yeah, I'm the, I'm the swain. I'm the cock swain.

• 1:11Nilay Patel?

  So you're just telling us to row?

• 1:13Speaker 02

  Yeah.

• 1:14Nilay Patel?

  Great. Uh, and Paul Miller's here.

• 1:18Speaker 01

  Hello.

• 1:18Nilay Patel?

  How's it going?

• 1:19Speaker 01

  I was trying to think of a different job on a ship.

• 1:23Speaker 01

  I'm steering.

• 1:26Nilay Patel?

  Yeah, that guy.

• 1:26Speaker 02

  You got the big wheel?

• 1:27Speaker 01

  Yeah, I got the big wheel.

• 1:28Nilay Patel?

  That feels good to me. Look, this boat, that's called the captain? Two admirals, a guy yelling for people to row, dude with the steering wheel. That's a really effective ship.

• 1:38Speaker 01

  Flagship.

• 1:39Nilay Patel?

  And I gotta say, one of the most threatening navies in the entire podcasting ocean. This week, uh, this is usually where I say a joke about scissor vacus, I'm just gonna say cut through the night.

• 1:50Speaker 01

  Nice.

• 1:50Nilay Patel?

  All of you understand that.

• 1:51Speaker 01

  Good.

• 1:51Nilay Patel?

  Good catchphrase. Um, this week kinda, a lot going on this week. Sort of defined. Structurally, by the fact that every big tech company has its quarterly earnings this week, and we were just talking about this when we came on the show, the nitty gritty of the numbers is not to us particularly interesting, right? It's like-

• 2:13Speaker 01

  Like, we're not playing the stocks game. That's not our job. We don't even own stock.

• 2:18Nilay Patel?

  This is where if Walt was here, he would now do two minutes about how he can't invest in anything. He doesn't own any stocks. And that's all true for us, too.

• 2:28Speaker 01

  Right.

• 2:28Nilay Patel?

  We don't, nobody's allowed to own any stocks. It doesn't matter to us. We really care about the products. But earnings is a really good time for us to just sort of see how every company's doing. Are they up? Are they down? So we gotta start, I think, just get into it with a little, little fruit company.

• 2:45Speaker 01

  Hmm.

• 2:45Nilay Patel?

  Makes a very popular cellphone.

• 2:46Speaker 01

  Don't do that. Don't, don't be the guy who calls it the fruit company.

• 2:50Nilay Patel?

  I love calling it the fruit company.

• 2:52Speaker 01

  Take a drive down one infinite loop.

• 2:54Speaker 02

  Fruit company is like, it's some like Twitter troll garbage. Like, I'm, I'm, I'm too cool to refer to Apple, so I'm gonna call it that fruit company and feel like I'm superior.

• 3:05Nilay Patel?

  You know what we never do?

• 3:06Speaker 02

  Just don't do it.

• 3:07Nilay Patel?

  We never refer to companies as the cities in which they reside. Do you remember when everyone used to refer to Microsoft as just Redmond? What will Redmond do?

• 3:15Speaker 01

  Yeah.

• 3:15Speaker 03

  I think people say, I think people say like, down in Cupertino, and everyone knows who you're talking about.

• 3:20Nilay Patel?

  Yeah, but no one's ever like, waiting for the response from Cupertino. Like, that was like a print journalist move.

• 3:26Speaker 01

  Hmm.

• 3:27Nilay Patel?

  You know, when you can't use the same, you got, you got like a crusty old editor who's like, "You got four inches, Bob."

• 3:31Speaker 01

  Mm-hmm.

• 3:32Nilay Patel?

  You gotta change up the words. "Oh, we should just do that some more." Anyway, look, there is a technology company called Apple, which is a fruit, I guess. Doesn't matter. Dieter hates me now.

• 3:45Speaker 01

  Thank you so much.

• 3:47Nilay Patel?

  So their earnings came out, they, Lauren and I were actually talking about it as we were covering them, they have been saying they're not gonna be great for some time. And the big story-

• 3:59Speaker 03

  Yeah, Apple's been like, Apple's been like that significant other that's like, "Listen, I'm gonna be a really shitty boyfriend." And then they like bring you flowers, and it's really not all that much, but you're like, "That's so nice!" Because your expectations were so low.

• 4:13Nilay Patel?

  Yeah. And instead of flowers, they brought basically flat iPhone sales.

• 4:18Speaker 03

  Right. They're like, they're like, yeah, I don't know. The analogy is not going to work.

• 4:24Nilay Patel?

  No, the analogy.

• 4:25Speaker 03

  They had said, so last quarter was the first time in 13 years that the company had reported a decline in, it was a decline in revenue, correct? No, sorry. It was iPhone sales.

• 4:38Nilay Patel?

  iPhone sales were basically flat and revenue was down for them for the first time in a long time.

• 4:44Speaker 03

  For last quarter.

• 4:45Nilay Patel?

  Last quarter.

• 4:45Speaker 03

  So they had set their guidance to be very low. And so they just sort of narrowly, you know, scooted past what analysts had expected and what their guidance had been. And so they did beat expectations. And as a result, the stock got a nice little jump. And that was sort of the same story across all of their unit sales as well. If you looked at every key product, if you looked at iPhone, if you looked at iPad, if you looked at Mac, year over year, all of their numbers were down. But because the expectations had been set so low, they sold more, they actually made more money off of iPad now because they're making more expensive iPads. They're selling more of the iPad Pro. And so investors seemed to like it.

• 5:25Nilay Patel?

  Yeah.

• 5:26Speaker 03

  So that was pretty much the story there.

• 5:28Nilay Patel?

  But we're not investors. Let's talk about the, like, I think that the thing is, we're coming up towards September, which is traditionally a time for a new iPhone. And they've also been really underselling this next iPhone, right? Like, the rumor in the world is that this, and all the leaks, quite frankly.

• 5:47Speaker 01

  They'll move the antenna lines.

• 5:49Nilay Patel?

  They'll move the antenna lines.

• 5:50Speaker 01

  Get rid of Neelai's favorite plug.

• 5:52Nilay Patel?

  Best plug. Best plug.

• 5:54Speaker 01

  I bet it'll be faster.

• 5:55Nilay Patel?

  It'll be faster.

• 5:56Speaker 01

  Might have an OLED screen.

• 5:57Speaker 02

  Before we get to the next iPhone, shouldn't we talk about the number of phones they've sold so far? Like, they hit a billion.

• 6:04Nilay Patel?

  Yeah.

• 6:04Speaker 02

  But it was like the day after or something?

• 6:06Speaker 03

  Yeah, they announced it the day after earnings. They did not.

• 6:08Speaker 02

  How frustrating is that? Like, come on, just do it the same day. Just come on, guys. Just tell them the same day. Well, we haven't hit it yet. We're at 999,999,999,000.

• 6:16Nilay Patel?

  That just shows you how honorable they are.

• 6:18Speaker 01

  They're so honorable.

• 6:19Nilay Patel?

  Down in Cupertino. In the apple orchards of Cupertino.

• 6:24Speaker 03

  No, I mean, they may have also been saving that data point to see how the stock reacted the day after the earnings report and then just kind of, who knows, maybe keeping it in their back pocket. But yeah, that's a lot of iPhones.

• 6:34Nilay Patel?

  Right.

• 6:34Speaker 03

  It's a lot.

• 6:35Nilay Patel?

  So, I just think the story is, and there was a great post by a guy named Benedict Evans, being like, "The smartphone wars are over. The platform wars are over. We know who won and lost. Apple and Google have won. And if you pull it apart, there's way more Android phones out in the world, but obviously Android has a freaking problem, so you've got to count them differently and you can't really measure everything directly. But generally, in this industry, the phone, the phone thing happened.

• 7:00Speaker 01

  Hmm.

• 7:01Nilay Patel?

  And Apple's kind of feeling that, right? Like, they're not spiking their sales, they're not growing, they're just selling as many phones. I think they sold, let's see, 40.4 million iPhones, and last year they sold 47.5 million iPhones.

• 7:15Speaker 01

  If Apple-

• 7:16Nilay Patel?

  Which is, by the way, a fucking enormous number of iPhones.

• 7:18Speaker 01

  If Apple never added another feature to the iPhone, but they just released, kept shipping the iPhone 6S.

• 7:27Nilay Patel?

  Yeah.

• 7:28Speaker 01

  For, how, I mean, how long, I feel like they could keep selling those for like, five years.

• 7:33Nilay Patel?

  I mean, if you think about the iPhone SE, it's the same phone, just a little bit faster.

• 7:38Speaker 03

  Right, with a better processor.

• 7:40Speaker 01

  And, and there's a part of me where it's like, I have to buy an iPhone every couple of years because I drop it and break it.

• 7:46Nilay Patel?

  Yep.

• 7:47Speaker 01

  Or the battery starts to die, or, you know, for whatever reason, I kind of, I'm, I'm on this treadmill.

• 7:54Nilay Patel?

  Yeah. Well, so that, here's a comparison.

• 7:57Speaker 01

  Yeah.

• 7:58Nilay Patel?

  Samsung's earnings came out selling S7's, like, crazy, biggest profit in Samsung history, led by their mobile division. So there's something going on there, but it's hard to say exactly what.

• 8:10Speaker 01

  VR.

• 8:11Nilay Patel?

  It's, it might be VR.

• 8:13Speaker 02

  My sense of Samsung is that, uh, everybody who likes Samsung phones skipped the S6 because it wasn't that good.

• 8:20Nilay Patel?

  Yeah. I mean, I think that's totally fair.

• 8:23Speaker 02

  They took all the stuff that you wanted them to do in the S6 and then they did it, right? And then they have the Edge, which is a remarkably good phone, uh, and has a huge screen and a not huge body, and is just flat-out beautiful. And you know, they are probably making a bunch of free money on selling gear VR headsets. They're a hundred bucks. It probably makes them five bucks to make them. So it's not a total shock to me. The, the big question with Samsung is like, I am not willing to say that, oh my God, they're, they're back on the upswing and they're leading a, they're bucking the trend of flat smartphone sales worldwide until later, because to me, this looks like a story of people didn't want to upgrade to the last Galaxy phone. They're

• 9:07Speaker 02

  waiting for this one. This one came around and they're like, yep, this is great. I'm buying this.

• 9:11Speaker 03

  I think it's a bigger story of Samsung finally achieving a design aesthetic, a certain design aesthetic that is neither ridiculous nor derivative.

• 9:19Speaker 02

  Well, did you see their font? The Samsung One font?

• 9:24Speaker 01

  It's, yeah.

• 9:25Speaker 02

  It's, it is literally the definition of fine. It's like they went to 50 design agencies. They're like, what is a typeface that screams fine?

• 9:34Speaker 01

  On a scale of one to 10, would you rate that font a seven?

• 9:37Speaker 02

  Yes, that font is a seven. It's, it, it is literally so inoffensive that if they hadn't told us they did it, we would have never noticed that it happened, uh, which is probably what you want in like a system font, but it's still like.

• 9:49Speaker 01

  My favorite thing about the font was all the like, you know, like when you're like trying to come up with like your corporate directive and like what words define us and you have like brainstorms and you like throw balls back and forth brainstorming, you know, you know, like.

• 10:01Speaker 02

  Have you ever been in a brainstorm?

• 10:03Speaker 01

  I have been.

• 10:03Speaker 02

  With balls?

• 10:04Speaker 01

  Corporate exercise. I don't.

• 10:07Speaker 02

  The last brainstorm I recall being in with you was the one where we named the verge and you rode your bicycle upside down in your apartment.

• 10:12Speaker 01

  That's true. See, you gotta do something physical to keep the mind. Okay. Here's what they came up with in whatever setting. Just, just use your imagination.

• 10:21Speaker 02

  Yes.

• 10:22Speaker 01

  Human, balanced, ownable, distinctive, universal, scalable, expert, durable.

• 10:31Speaker 02

  Durable. Nothing so sexy like the word durable.

• 10:33Speaker 01

  With all of those adjectives.

• 10:37Nilay Patel?

  And they did.

• 10:38Speaker 01

  Yeah.

• 10:38Nilay Patel?

  Literally all those. Anyway, so that's a context, right? But there's other, there's other stuff going on with Apple too. So iPhone sales are flat, not a big surprise. There is this idea that the, the next iPhone won't actually be the seven. I heard a terrible rumor, completely unsubstantiated, but kind of makes sense that they'll call the iPhone six SE. And then the next one will be the seven. Cause that would be the radical redesign.

• 11:06Speaker 03

  Yeah, there's also a rumor that the next MacBook Pro would be like the Mac Pro SE or something like that. Also completely unsubstantiated.

• 11:14Nilay Patel?

  I gotta, I gotta, it's just not a good idea. Just putting it out there. Like, I get that there's some history with SE and Apple and.

• 11:21Speaker 01

  Yeah, well.

• 11:21Nilay Patel?

  The SE thirty was like the best computer ever made.

• 11:24Speaker 01

  I had an SE.

• 11:25Nilay Patel?

  You have an SE or an SE thirty?

• 11:26Speaker 01

  Well, the one with the dual floppies.

• 11:28Nilay Patel?

  They both had dual floppies.

• 11:29Speaker 01

  They did?

• 11:29Nilay Patel?

  Yeah. But the SE thirty, I think, came with a hard drive a bunch of time. Anyway.

• 11:34Speaker 02

  I mean, to me, SE is, stands for, we don't know what our product roadmap looks like. And we can't fill, fill out the exact product lines of the way that we want to. So we're just gonna slap the word SE on it and make a thing, because we gotta make a thing. And it might be an incredibly good thing, but it doesn't tell you what's gonna happen in three years. The way that MacBook Pro, MacBook Air, MacBook tell you what's gonna happen in three years.

• 11:56Nilay Patel?

  Yeah. I mean, the, they, on the call, they pointed out several times that the demand for the iPhone SE like, was way bigger than they thought.

• 12:06Speaker 01

  But that was small.

• 12:07Nilay Patel?

  Yeah.

• 12:08Speaker 01

  That was about there being a small iPhone.

• 12:10Nilay Patel?

  So let me ask you this.

• 12:11Speaker 01

  Not about calling a phone SE.

• 12:12Nilay Patel?

  So let me ask you this. This is a real question I thought about a lot. The thing that has driven phone sales forever has been screen size. Form factor and screen size. Not necessarily design.

• 12:24Nilay Patel?

  Operating system, whatever, right? I mean, the, the Android manufacturers were killing. Well, not killing. They were doing well in sales when they had the big phones and Apple didn't. And then Apple made the big phone, their sales skyrocketed. And then Apple's like, what about a small phone again? And their sales went up. Is that it? Is that all that we care about?

• 12:41Speaker 01

  It's a little do-si-do.

• 12:43Nilay Patel?

  Screen size?

• 12:44Speaker 03

  No, it is going to come down to the services. I mean, I think the one sort of, um, the one bright spot of their earnings that they didn't really have to hedge at all was this idea that their services have grown, I think, I don't remember the exact numbers, um, off the top of my head, but year over year. And so they've been pushing that lately, right? And things like the App Store are becoming an increasingly important part of their revenue generation and getting just people locked into Apple's infamous walled garden. Um, and so like, I actually don't think this, I mean, the screen size is just product differentiation and it's classic form. It's like, oh, look, something new. We changed the screen size, um, or we added this hardware feature like, like 3D touch. Um, but at the end of the day, it's just all about getting people to use their apps and

• 13:29Speaker 03

  use their services.

• 13:31Speaker 01

  Right. It's like, you know, you have to buy this phone and Apple makes you, helps you feel better about it. It's like, oh, well, I'm getting this one because it's got a bigger screen. I'm getting this one because it's got a smaller screen. I'm getting this.

• 13:43Speaker 03

  Better camera.

• 13:43Speaker 01

  Right. I, I, I, there's something on the spec list that I can pretend to myself, that's the reason, but really I'm just re-upping.

• 13:52Nilay Patel?

  Yeah. Well, I mean, I.

• 13:54Speaker 02

  Can I tell you guys a story about screen size?

• 13:56Nilay Patel?

  Mm-hmm.

• 13:57Speaker 02

  I have switched from a six plus and a Nexus 6P down to a regular six S and a Nexus 5X and I couldn't be happier.

• 14:06Nilay Patel?

  Really?

• 14:06Speaker 02

  I'm done with fablets.

• 14:07Speaker 03

  That's a good love story. Really? You're done with fablets? Or when are you going to write that story?

• 14:10Speaker 02

  I don't think I need a fablet.

• 14:12Speaker 03

  P I O T S.

• 14:13Nilay Patel?

  Yeah, man. That stands for put it on the site. It's, um, normally the cock swain is the person who yells to put it on the site, but in this case, the admiral is really just.

• 14:23Speaker 03

  I'm really actually, you're the admiral. I'm like the iceberg watcher. I'm like, look out for icebergs.

• 14:30Nilay Patel?

  Lauren's the lookout.

• 14:31Speaker 01

  The lookout.

• 14:32Nilay Patel?

  Land! Finally, the ship is coming to shore. I can get off this boat.

• 14:39Nilay Patel?

  No, I mean, wait, Dieter, tell me more about this. You're over it.

• 14:43Speaker 02

  I don't need a huge phone, like even, except on certain Android phones where they manage to let you do the thing where you can like change the font size, which the S7 just added on AT&T with like a random carrier update.

• 14:59Nilay Patel?

  By the way, everything you just said is the story of Android. Like, the S7 on AT&T because of a carrier update.

• 15:07Speaker 02

  Allows you to change the font size. Well, it's not the font size, it's the zoom size, but regardless. You don't get to see that much more on a big phone than you do on a small phone, and the promise that big phones would give you better battery life turned out to be a huge lie. And so what do you get out of a big phone other than, "I'm old, I like to see things bigger"?

• 15:30Nilay Patel?

  That's shot to the heart, Dieter.

• 15:34Speaker 03

  Better battery life?

• 15:35Nilay Patel?

  No, but Dieter's right. My 6S does not get appreciably better battery life than any of my old small phones.

• 15:42Speaker 03

  Your 6S Plus, you mean?

• 15:43Nilay Patel?

  6S Plus, yes, that's true. I will say that having the phablet is the thing that has basically let me use my phone as a primary computer. When I had smaller phones, I would always be like, "Ahhh", and then like go to a laptop. But now I'm like banging away.

• 15:59Speaker 03

  Yeah, I remember when Dieter had worked on his big feature story about Sundar Pichai around last year's I/O, Neil, that's when you and I were chatting at Code Conference, and you were like, "Look at this thing we're working on", and you took out your giant phablet, and you basically went through like your whole workflow process on the phablet, and I was like, "Wow". I was just thinking in my head, I would definitely need to take out my laptop if I were going to show somebody a project of this scale and like what we're doing. Anyway, that's like a really silly anecdote, but one other thing too, which you guys are going to be like, "Oh, okay, like wearables nerd", but phablets really suck for exercising too, like carrying them on your arm or trying to put them on your body in some way, or like,

• 16:41Speaker 03

  I don't know, in a bike pack or whatever it is, like just having a phablet when you're exercising sucks.

• 16:46Speaker 02

  You need like a shoulder holster, like a James Bond.

• 16:52Speaker 02

  They make them. You can buy them.

• 16:54Nilay Patel?

  They, he, let me just say this. No holster for a phone has ever been cool.

• 17:00Speaker 01

  Are you sure?

• 17:01Nilay Patel?

  I'm a hundred percent sure.

• 17:01Speaker 02

  The original Star-Tac plastic belt holster was badass.

• 17:06Nilay Patel?

  I know what you're talking about. That thing, it was badass in the sense that it was, because it was so aggressively plastic, it felt like you were like clipping like a gun. But like every other holster has never been that cool. Also, the Star-Tac was designed, it had clips for that holster.

• 17:23Speaker 02

  Yep.

• 17:23Nilay Patel?

  The phone itself was designed around a belt holster.

• 17:26Speaker 01

  Are you talking about belt holsters?

• 17:28Nilay Patel?

  Yes.

• 17:29Speaker 01

  Well, I'm thinking of like shoulder holsters, like where cops, like detectives.

• 17:33Speaker 02

  That's what I was thinking about.

• 17:34Nilay Patel?

  You don't, you don't wear your phone around your body?

• 17:37Speaker 01

  Look at this guy. Look at this cool man on this audio podcast.

• 17:41Nilay Patel?

  It's a radio show, Paul.

• 17:42Speaker 03

  Wow, look at this. You know, the 90s are back. We should bring this back.

• 17:45Nilay Patel?

  It's, uh, can I go ahead and tell you it's a radio show? Um.

• 17:48Speaker 02

  We should talk about, um, Apple Car and Apple TV too.

• 17:52Nilay Patel?

  Oh, the Apple TV story is amazing. There's one more thing I was gonna say about phones, but it doesn't matter. Um, but Lauren is, is, I think, right. I mean, Apple's big thing was we're growing services. Oh, that's what I was gonna talk about. I was gonna ask Lauren about the watch. Almost no mention of the watch. And we're coming up to an event where it seems like they're almost certainly gonna do a new phone. The Macs are in desperate need of refreshes. And sort of all signs point to WatchOS 3 coming out for real against an updated watch. And it seems like watch sales have, you know, they've just gone down.

• 18:27Speaker 01

  Well, it's a million years old. Like, people aren't gonna buy it.

• 18:30Nilay Patel?

  It's like a year old.

• 18:32Speaker 03

  It came out in April of 2015.

• 18:34Nilay Patel?

  Yeah.

• 18:35Speaker 01

  Million years old.

• 18:41Speaker 03

  Paul's like, I don't wanna be on this treadmill, this product upgrade cycle. That thing is a million years old.

• 18:46Nilay Patel?

  Can you imagine that it was only like a year and a couple of months ago that the watch came out and we all had like the watch moment?

• 18:54Speaker 01

  That can't be that recent.

• 18:57Nilay Patel?

  Yes, it was that recent.

• 18:58Speaker 01

  Wow.

• 18:58Speaker 03

  It was.

• 18:59Speaker 01

  Okay, well, I knew it was over a year. So I was right about that.

• 19:02Nilay Patel?

  A million years.

• 19:04Speaker 01

  I guess what confused me is that we're on WatchOS 3.

• 19:07Nilay Patel?

  Yeah, cuz they put it out on, on WatchOS like oh, point nothing.

• 19:12Speaker 01

  Mm-hmm.

• 19:12Nilay Patel?

  Oh, point nothing. It's a good version.

• 19:14Speaker 01

  Same.

• 19:17Nilay Patel?

  Well, so.

• 19:18Speaker 03

  Maybe that's why, maybe it wasn't mentioned. So the reason why they put out, you know, two versions, two newer versions of software is because the app loading process was so slow on it. I mean, Neelai has written about this as well. And what was the story that you wrote about life is too slow, life is too short for slow computers?

• 19:35Nilay Patel?

  Yes.

• 19:36Speaker 03

  And it was all about your wrist computer.

• 19:37Nilay Patel?

  The quote. The quote I want on my tombstone someday.

• 19:40Speaker 01

  I, I just, obviously wrist computers aren't going to go away. They just have a long ways to go before they're really great.

• 19:48Nilay Patel?

  Right.

• 19:49Speaker 03

  Oh, yeah. But so to that point, though, the reason why they had to put out new software is because it was really slow. And so they started to move more and more of the app logic onto the wrist itself in an attempt to make that a better experience. But at the end of the day, having like, having app developers build for iOS and then build for maybe macOS and, you know, build an Apple TV app. And then, oh, by the way, I should probably optimize this and make a little micro app for Apple Watch. Like, that's just obviously not the number one platform in most cases that people are going to build for or that consumers are going to interact with. Like, there are some, like, there are some companies that are like, hey, we built a heart rate monitoring app specifically for Apple Watch. And that's, and that's great. And that's maybe like the platonic use case

• 20:32Speaker 03

  for that. But it's still like, if they are really pushing for apps and services right now, it's not like WatchOS is going to be the killer platform for that.

• 20:40Speaker 01

  But was, was, was the killer app for the phone, something that came from the desktop?

• 20:47Nilay Patel?

  No, the phone converged every other device into it. That was its move. Like, you don't need a calculator more because you have a phone. You don't need a camera anymore because you have a phone. You don't need an iPod anymore because you have a phone. And then we all cried because iPods were amazing.

• 21:00Speaker 01

  What was the first thing, though, that you felt like the phone could do that nothing else could do that you got from the App Store?

• 21:07Nilay Patel?

  Probably some game.

• 21:08Speaker 02

  No.

• 21:09Speaker 01

  Shazam?

• 21:11Nilay Patel?

  Nah.

• 21:12Speaker 03

  I mean, just.

• 21:12Speaker 02

  Oh, from the App Store? Yeah, stuff like Shazam and Gams.

• 21:16Speaker 01

  That thing where you can pretend like you're drinking a beer?

• 21:19Speaker 02

  It was Super Monkey Ball. It was Super Monkey Ball.

• 21:22Nilay Patel?

  Yeah, and then it's now it's stuff like Pokemon Go, right? Like, by the way, can we, can we just say that, uh, Tim Cook on the call was asked by Gene Munster, no less, what do you think of AR? And he first admitted that Apple's investing heavily in AR, which we, they're whispers about. But like Tim Cook said, our bets on AR, we think it's going to be huge. And then he pronounced Pokemon, it's Pokeman.

• 21:46Speaker 01

  Like a real mom.

• 21:47Speaker 04

  We're investing and the number one thing is to make sure our products work well with, uh, other developers' kind of products like Pokeman. And so that's the reason you see so many iPhones out in the wild right now chasing Pokemans.

• 22:00Speaker 03

  It's kind of adorable.

• 22:01Nilay Patel?

  It was super cute.

• 22:02Speaker 02

  Yeah, like I wrote a whole post about it and then it was like, man, there's no way I could write this without it just coming off as mean. And I don't like, I actually think it's like charming and adorable, so we just killed the post.

• 22:12Nilay Patel?

  It was really fun. And there was just that, that moment after he'd said, that's why so many people are hunting Pokemans, that there was just kind of that silence. And everyone on that phone call agreed that they weren't going to mention it. And they just moved on.

• 22:26Nilay Patel?

  The Vergecast, as you know, is supported by Citi Cards with Android Pay. How cool is it that we live in a world where you can use the same device to listen to the Vergecast and buy your morning coffee, groceries and more? Did I mention that it's a super fast way to pay? Just use your Citi card with Android Pay at the register. Get in, get it and get going. Download the Android Pay app on Google Play or visit citi.com/androidpay to get started. Android Pay is available for eligible Citi Consumer Credit and Debit Cards.

• 22:52Nilay Patel?

  Anyway, so we should move on to the next two things about Apple that, uh, Dieter or Lorne, he brought it up, uh, the, the services are growing, which is, ties into the big TV story that the Wall Street Journal published today, and then the, there was a bunch of car news today, too. So let's do cars real quick and then I, we can, there's a lot of meat on the TV bone. That is the worst phrase ever uttered on the Vergecast.

• 23:13Speaker 02

  Three days ago, we heard that Apple was bringing back Bob Mansfield to.

• 23:18Nilay Patel?

  They can't get enough of each other.

• 23:20Speaker 02

  He just can't.

• 23:21Nilay Patel?

  He keeps leaving and he keeps reeling him back in.

• 23:23Speaker 02

  Yeah. So he used to run hardware at Apple. So like, oh, great. They're actually like gonna make, gonna make this thing. But then today.

• 23:31Nilay Patel?

  Well, then he left and they brought him back to run chips and then he left again.

• 23:34Speaker 02

  Yeah.

• 23:35Nilay Patel?

  And now he's back.

• 23:36Speaker 02

  I don't know what to tell you, man.

• 23:37Nilay Patel?

  It's Bob. He's just, everyone loves Bob.

• 23:39Speaker 02

  What about him?

• 23:47Nilay Patel?

  The news, the big news is, and this is kind of interesting. They brought him back. They're obviously investing in the car stuff. Another leak, Lauren, to your theory, they put out the earnings and then a bunch of news came out today. Who knows? But the story was they're focusing more on autonomous driving software than necessarily like the car.

• 24:08Speaker 02

  Yeah, that's the story today and it's actually two parts. So one thing that's interesting is it's Mark Gurman's first big scoop over at Bloomberg. So big ups to Mark Gurman. And they hired this guy named Dodge, Dan Dodge, Dan Dodge.

• 24:19Nilay Patel?

  What a great name.

• 24:20Speaker 02

  What's interesting about him is he ran the previous only decent car software that you could trust to actually like not crash. Uh, like, like software crash, which was QNX, QNX, which BlackBerry bought. So he used to be the CEO of that. But now he's coming over to Apple under Mansfield and Gurman says that they are, like Nellie just said, not as interested in building a car as they are in creating autonomous driving software.

• 24:50Nilay Patel?

  Which who's gonna take Apple's software? To just put in their car.

• 24:54Speaker 03

  Well, maybe some of the manufacturers that are already using Apple on their dashboard.

• 24:58Nilay Patel?

  Yeah. I think my great fear with the car is always if you buy the Apple car, like Apple loves Lock-in, right? They love their wild garden and somehow that car is gonna demand that you use Apple Mail on your phone. Right? Like that's the nightmare scenario. It's like I bought a new car and now I have to use mail.

• 25:16Speaker 03

  Or Maps.

• 25:16Speaker 02

  The only calls that are allowed to go through to you while you're driving are people that you've marked as VIP in Apple Mail.

• 25:22Nilay Patel?

  Yeah, like that's the nightmare.

• 25:24Speaker 02

  And like.

• 25:25Nilay Patel?

  It's literally the worst case scenario. Is that I have to set up mail on my fucking MacBook and like use the VIP feature.

• 25:33Speaker 02

  You know, if they really are building and distributing self-driving car software, the next earnings call, I want Gene Munster to have his question be about the trolley problem.

• 25:46Nilay Patel?

  Dieter, can you explain to the listeners, and also me, what the trolley problem is? Really? You don't know the trolley problem? Alright, so it's- No, I definitely do. I just want to make sure the listeners know what it is.

• 25:54Speaker 02

  It's this old philosophy problem where it's about ethics. And so there's a train running down the tracks, and it's gonna run over four people. But you are standing ahead of those four people next to a switch. And if you throw the switch, then the train will go off the track of killing four people, but it's still gonna kill one other person. And so the trolley problem is, should you kill the four people or the one person? Well, most people would say, well, you kill the one person. But the thing is, you are actively choosing to kill a person. If you don't throw the switch, you just like, watch it happen. You might not technically be at fault, but if you do throw the switch, you're definitely at fault. And there are variations on the trolley problem that are like, get progressively more hilarious and dark. Like, you're on a bridge,

• 26:38Speaker 02

  on a footpath over the train tracks, and the train is barreling down the tracks. And if you push this rather large person down in front of the train, you'll kill that person, but stop it from killing the other people down the track, should you push a person in front of the train.

• 26:51Nilay Patel?

  You think the former CEO of QNX can get us through this problem?

• 26:55Speaker 02

  I think so.

• 26:56Nilay Patel?

  And Bob. I think Bob is there.

• 26:58Speaker 02

  And Bob.

• 26:58Speaker 03

  Who is the train barreling down the tracks right now? In this metaphor?

• 27:04Speaker 02

  Uh, self-driving cars. They're barreling down the tracks, and they have to decide which, if they want to kill four people or one person.

• 27:10Speaker 01

  Right, like, so a car sees, like, driving down the street, child runs into the road. The car's only two courses of action are run over the child, or veer onto the sidewalk and hit a bunch of pedestrians on the sidewalk.

• 27:24Speaker 02

  Or veer off a cliff and kill the driver. So, you're the person that bought the car. You expect that this car is supposed to protect you, but is it supposed to protect you above all else? Right now, when you buy something, you have a direct relationship with the person you bought it from, and you expect them to treat you and care about your needs above everybody else's. But now, you might buy a thing, and that thing is not going to care about your life as much as it cares about the life of somebody who didn't buy the thing.

• 27:50Speaker 01

  What if, what if the car just, you know, like, the setup, like, "Welcome, please pick your Wi-Fi network."

• 27:58Nilay Patel?

  Swans you through the trolley problem. Hello? The darkest user flow of all time. Like, "Here's a picture of a child."

• 28:06Speaker 01

  "Here's a picture of you. Who do you like better?"

• 28:10Speaker 01

  Who would you rather?

• 28:13Nilay Patel?

  Apple car usage did not increase this quarter because users found the setup to be really, really dark.

• 28:21Speaker 03

  Pick a password prompt. Which is your, what is your hometown? Where did you go to high school? Enter it in.

• 28:28Nilay Patel?

  Yeah. Um, but that's a central problem. I mean, that's the Tesla crash, right? I mean, like these cars are making decisions. There's a study that came out today. Uh, these walls are still cracking up. He's just losing it about the trolley problem.

• 28:41Speaker 01

  Trolley problem illustrations. If you just search for trolley problem and then click images of Google, there's this one artist who's got a lot of, done a lot of good work.

• 28:52Speaker 01

  Track is heading towards B. If you pull the lever, it'll switch to A. Nobody's on track A, but B has a loop-de-loop after the people.

• 29:07Speaker 01

  It's called the heat in this trolley problem.

• 29:09Nilay Patel?

  Okay.

• 29:10Speaker 01

  Well, anyway, sorry. I'm sorry.

• 29:12Nilay Patel?

  So that is the car.

• 29:13Speaker 01

  I should do, I should do a podcast just about pictures.

• 29:18Nilay Patel?

  Paul describes pictures. Actually, that'd be a great pod. I would listen to that podcast.

• 29:22Speaker 01

  Alright.

• 29:23Nilay Patel?

  Alright, so now we gotta talk about TV because that was the other big story that came out today. Wall Street Journal, blockbuster scoop in the Wall Street Journal.

• 29:32Speaker 02

  Just an incredibly good story.

• 29:33Nilay Patel?

  Just incredibly, like full of, full of details that are so petty. So the story is Apple's been trying to get the TV deal forever. Uh, I think the earliest date quoted in that story was 2008 or 2009. So ages they've been trying to get this TV deal. Eddie Q has been meeting with TV networks. Uh, apparently he says things like, we're Apple and just expects people to like meet his terms.

• 29:57Speaker 01

  Doesn't wear socks.

• 29:59Nilay Patel?

  This is the best petty detail of the entire thing. He came to a meeting at the Time Warner Center with the CEO of Time Warner. And like literally the amount of petty detail, like overlooking Central Park. All the Time Warner people are in suits and Q shows up 10 minutes late.

• 30:14Speaker 02

  Ten minutes late.

• 30:15Nilay Patel?

  No socks, Hawaiian shirt. Uh, and basically says like, I don't ever want to give you a rate increase, even though rate increases are how you grow your profits. And so they rejected him. And so over and over and over again, uh, they've been rejected by the TV companies, which is why they don't have this fabled $30 a month streaming service.

• 30:36Nilay Patel?

  And now, of course, for how long is Apple TV? It's a little more than a year now, or a year-ish. And their whole thing is the future of TV is apps. But we kind of knew, I think Lauren, you and I had this conversation too, because you reviewed a bunch of Roku's. The Apple TV is basically the world's best Roku. It's not a new futuristic product. It's the same feature set as every other streamer out there.

• 30:58Speaker 03

  Minus, minus Amazon Prime Video, but yeah.

• 31:01Nilay Patel?

  Right, because Jeff Bezos was basically like, I don't want to pay your stupid app store tax.

• 31:05Speaker 01

  Can I, can I just use this as an advice?

• 31:08Nilay Patel?

  Yeah.

• 31:08Speaker 01

  Technical advice podcast? Sometimes I watch TV shows on Netflix. And I was like, this seems like a cool TV show. Are they still making it? Yes. Oh, there's a new season available, but it's not on Netflix. And at that point, it's like, well, is it on any services? No, it's on, it's like, it's in that network specific thing. You gotta do the thing with the cable where you tell them that you have cable.

• 31:33Nilay Patel?

  Yeah, but it's really your parents.

• 31:35Speaker 03

  The authentication. Yeah.

• 31:37Nilay Patel?

  Your streaming box calls your mom.

• 31:39Speaker 01

  Wouldn't that be a great, if someone came out with a product that was like, here's where you go to see first run TV always. I mean, I guess that's the dream.

• 31:51Speaker 02

  One of the like eight things that Apple tried to pull off, one of the things they wanted, it was like, they were, they wanted on-demand, commercial skippable first run TV shows as part of the package. And that's like another thing that got rejected because they're like, well, what are you going to give us for that, this hugely important valuable thing? And they're like, eh, we're Apple.

• 32:13Nilay Patel?

  Yeah, I mean, the, the.

• 32:14Speaker 03

  They want, like, they wanted, they wanted only specific channels.

• 32:19Nilay Patel?

  Yeah.

• 32:19Speaker 03

  And basically the cable companies were like, no, because they're finding, actually, there was a report out earlier this week in Business Insider about skinny bundles and how for people like Dish, like the skinny bundle isn't actually working out as well as maybe they thought it might, because you either have these cable loyalists who are paying like $90 a month or whatever, or more for the full package. Or you have people who are going totally à la carte with OTT services and like the in-between stuff isn't really shaken out so far.

• 32:46Nilay Patel?

  Well, so a big theme in the Wall Street Journal piece and the Business Insider piece was good too. The big theme is. The consumers aren't seeing the value of the bundles, even though the bundles represent a good value. Right? Like, consumers don't care, they just care about shows, mostly. They don't care about getting AMC, they, right, they care about Mad Men.

• 33:06Speaker 01

  Right.

• 33:06Nilay Patel?

  They don't care about USA, they care about Mr. Robot.

• 33:10Speaker 01

  And what I'm worried is that the 2008 is an old mindset, like a pre Netflix being your primary way of watching entertainment. And now, right now, the only time I think about networks is when I can't find something.

• 33:24Nilay Patel?

  So, I'm asking you this, if you, if, let's, you're like a primary Netflix consumer.

• 33:28Speaker 01

  And then I also have HBO, the HBO Now.

• 33:31Nilay Patel?

  So, you've got the two ones. But let's say there's a show that you wanted to watch that you couldn't, I'm trying to think of something that's not Netflix. We'll use Mr. Robot as example, right? Mr. Robot's on, actually, really hard to stream Mr. Robot for a show about digital culture, that, like, literally, on the after show last night, we pointed out that it has screenshots of torrent folders in it.

• 33:48Speaker 01

  I feel like, Mr. Robot, you're like morally obligated to torrent.

• 33:51Nilay Patel?

  Anyway.

• 33:52Speaker 01

  The show I'm really thinking of is Zoo, which is on CBS, and the first season was on Netflix. I watched it, been really excited about season two, and now it's.

• 34:02Nilay Patel?

  Here's my question, so if Netflix was like, "We don't have Zoo, give us a dollar and you can watch Zoo," would you pay that extra dollar?

• 34:10Speaker 01

  Totally.

• 34:11Nilay Patel?

  So, that's, so that, what that gets me to is, what you've bought is like an interface to entertainment. Netflix is an interface to entertainment, it has all the things you want, and if it doesn't have things you want, you're actually willing to pay this incremental price, but you're not willing to pay another eight dollars a month to some other interface.

• 34:27Speaker 01

  No.

• 34:28Nilay Patel?

  Which is, I think, the problem Apple's trying to solve, and you can see how on the Apple TV they're getting there, the Roku's there, because they just have the universal voice search. So then you're like, Zoo, and it like brings up all these options, and ideally, now they're doing it with the new Apple TV, they have like single sign-on, so you can just like sign into all the cable providers and just like go get everything you want.

• 34:47Speaker 01

  But I still have to, and the reason I don't do cable provider, because it's like a gamble. On like Netflix is a $10 a month gamble that they're going to keep on coming out with things like Stranger Things and I'm gonna and old shows that I want to watch like the cable situation is like a 60 to $100 a month gamble that I'm going to want to watch some first like a couple first run shows.

• 35:11Speaker 02

  But also the other problem with the cable app model is paying, you know, the extra bit to go use the cable app. There's they're all inconsistent about what they actually offer. Like some of them have got full on demand libraries. Some of them don't. Some of them are like hard to figure out and they suck as apps. Some of them are pretty decent. And so like the leap from this thing that I know and trust to the siren that's going on behind me, the leap from the thing I know and trust.

• 35:34Nilay Patel?

  That's Eddie Q. He's super pissed at you.

• 35:36Speaker 02

  Thing I have no idea if it's going to be any good is like not worth it to me.

• 35:41Speaker 01

  Right. Yeah. If I had a very confident, limited cost solution to watching Zoo right now, then I probably would go for it.

• 35:51Nilay Patel?

  So here's the thing that came up in the Wall Street Journal piece today, which I thought was really interesting and kind of borne out by this conversation. You can go get Zoo. You can go pirate Zoo. Any, any minimally competent listener of this show can probably figure out how to go to Kick Ass Torrance, which is back and like get what they want. But the TV industry is saying, we're not as threatened by piracy. So when Apple went to the music industry and Steve Jobs went to the music industry is like, we're just doing iTunes. And then later when Spotify just was like, we're doing this.

• 36:21Speaker 01

  Yeah, it sounds like what you're saying is we need to pirate more so TV feels more threatened.

• 36:27Nilay Patel?

  I just, I think the threat is there. It's not quite recognized, right? Like the cable bundles are doing well, but the skinny bundles kind of aren't. And Apple's version of the deals are not as lucrative potentially. I mean, obviously what Apple's saying is give us this really sweetheart deal, but then you'll see the market will explode. And the TV industry is kind of saying like, we're in the golden age of TV. Why would we? Why would we devalue our products just because you think you're going to do a better interface? Oh, another great story from this, you have to read it. I understand the Wall Street Journal is behind a paywall, but this is why you would pay because of these like random anecdotes in this piece.

• 37:08Nilay Patel?

  At one point, Brian Roberts, the CEO of Comcast, asked to see the new interface. He was like, yes, well, you can do a cable box, we'll put it out on Comcast. We'll give you everything. What does the interface look like? And they refused to show it to him. He was like, can you just draw it on the back of a napkin? And all Apple responded with was, it will be the best interface you've ever seen.

• 37:29Speaker 02

  It'll be huge.

• 37:31Nilay Patel?

  It'll be huge. It was like basically the Donald Trump, like unbelievably great interface. You won't even be able to believe it.

• 37:37Speaker 03

  Make interfaces great again.

• 37:39Nilay Patel?

  But what I've been told for ages, like the interface problem is actually solved. Like everybody, every major TV vendor, every set-top box vendor is like, if we just had all the stuff, the interface problem is easy. Apple has said it to me, basically. Roku has said it to me. Vizio, Samsung, they've all said, if we just had all the stuff, if we had all the deals, the interface problem is relatively easy to solve. We just show you the stuff you like, we show you some, some stuff that's on live, and we give you some recommendations.

• 38:09Speaker 03

  Podcasts has even figured out the interface.

• 38:12Nilay Patel?

  So I don't think the problem is the interface, I think the problem is the content. So it's just funny, Apple's been at this for eight years, nine years, and the TV industry to this day is like, no, like we're too powerful and we're not going to cede that power. And then on the flip side, Comcast, Netflix earnings came out, they're doing fine, but they're, you know, one of their big things is their Comcast is finally putting Netflix on their X1 cable box, which is kind of a big deal. They've refused to do it forever.

• 38:42Speaker 02

  Are they putting it on the X1 cable box or are they building it into the X1 operating system?

• 38:47Nilay Patel?

  You mean the X1 iPad app that they think is an operating system? Man, that joke never gets old for me. Uh, but Comcast's line about it was Netflix has already done to the entertainment industry everything that it will do. So like, we might as well just put it on now. Like, we, we understand the dynamics of this industry. And if, if that's where the cable industry is, then like, how does Apple disrupt it?

• 39:09Speaker 03

  There are a lot of recurring themes between these past two stories, which, I mean, it's a little bit of a stretch, but hear me out. If they're both true, right? Which, which is like a bit like, if Apple really is shifting its focus from making a car to making self-driving software, and if Apple is still facing these headwinds and actually getting into quote-unquote "real TV," it shows that they're having trouble, for lack of a better word, disrupting these legacy industries that maybe in a previous era, they would have been able to execute on.

• 39:40Nilay Patel?

  Right. And, hate to say it, but there was a guy who used to be able to charmingly convince media industries to do what Apple wanted.

• 39:50Speaker 03

  With no shoes on.

• 39:52Nilay Patel?

  With no, literally no shoes. Just, literally, long hair, crazy.

• 39:57Speaker 01

  Well, the, the, Apple working on original programming, they're gonna do one about apps, and they just got the carpool, car-

• 40:05Nilay Patel?

  Can we?

• 40:05Speaker 01

  Karaoke.

• 40:06Nilay Patel?

  Yeah, they signed the deal to put carpool karaoke.

• 40:08Speaker 01

  Like, that's them taking the X, the Xbox, Netflix-style.

• 40:14Nilay Patel?

  Yeah.

• 40:14Speaker 01

  It's like, okay, this is what we have to do, but that's just following, that's just-

• 40:19Nilay Patel?

  Well, you, you get some leverage in this world.

• 40:20Speaker 01

  I guess so.

• 40:22Nilay Patel?

  Can we just talk about how bad of a name Planet of the Apps is?

• 40:25Speaker 01

  It's pretty bad.

• 40:27Nilay Patel?

  It's, I mean-

• 40:28Speaker 01

  Literally the worst name.

• 40:29Nilay Patel?

  It's, that's the fir-, that's the joke name that, like, the screenwriter wrote-

• 40:33Speaker 01

  Yeah.

• 40:33Nilay Patel?

  On the screenplay. Like, Planet of the Apps, and like, underneath it in parentheses, it says "temporary name." And they're like, "Oh, that is funny." But Apple has, like, a corny sense of humor. That's, that's their-

• 40:43Speaker 01

  It's tough for me. I mean, like, Pixar is like, one of the most important companies ever to me. CEO, Steve Jobs.

• 40:51Nilay Patel?

  Yeah.

• 40:51Speaker 01

  Like, it's not impossible for nerdy people to invest in good entertainment. But Apple doesn't seem to know how to do it right now.

• 41:03Nilay Patel?

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• 41:47Nilay Patel?

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• 42:30Nilay Patel?

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• 43:13Nilay Patel?

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• 43:17Speaker 01

  Wow. So like, literally right now, if someone just heard that and they think they downloaded the episode early.

• 43:23Nilay Patel?

  Yeah.

• 43:23Speaker 01

  They should go to that URL.

• 43:24Nilay Patel?

  You should do it right now. This is the best offer code in the history of podcasts.

• 43:28Speaker 01

  Please pull to the side. No, you're not even supposed to pull to the side of the road. Please find the nearest exit and park at the Walmart.

• 43:34Nilay Patel?

  Yeah. Instead of going into Walmart.

• 43:36Speaker 02

  Switch on your trolley. Let it kill that one person while it's going that direction.

• 43:40Nilay Patel?

  Sad got dark. Anyway, stop what you're doing right now, unless you're driving, in which case, as Paul said, pull into a Walmart, just to refute commercialism, and then go to this website, iDevicesinc.com/verge. If you use promo code VERGE, and you're one of the first 500, you get a switch for free. If you're just buying other stuff, you get 30% off whatever you're buying. So, there's only 500 available. Go to iDevicesinc.com/verge. If you're one of the first 500, you get one for free, an iDevices switch for free. Otherwise, you get 30% off with offer code VERGE. Cut through the night. iDevicesinc.com/verge.

• 44:18Nilay Patel?

  Finally, a use for HomeKit. No, HomeKit's about to get like all fancy in iOS 10, right?

• 44:23Speaker 01

  I'm excited to try.

• 44:25Nilay Patel?

  I'm doing it.

• 44:26Speaker 01

  I want some home automation.

• 44:28Nilay Patel?

  Yeah.

• 44:29Speaker 01

  So I can like complain about it.

• 44:30Nilay Patel?

  Paul, you can't be one of the first 500. You know this, right?

• 44:33Speaker 01

  No, I'm not. I said I'm excited to enter the contest. I'm excited to like, see if HomeKit could ever actually be a real thing, and not just a figment of keynotes.

• 44:44Nilay Patel?

  Yeah. I think this is time, Paul, for a little thing that you do. What's it called?

• 44:50Speaker 01

  Gadget flavor.

• 44:52Speaker 02

  What is the flavor of gadgets?

• 44:55Speaker 01

  Gadget flavor is like, it's like, you know, like how someone has like, Flav?

• 45:03Nilay Patel?

  You know, when gadgets are on fleek, they got a hot flave.

• 45:06Speaker 01

  Right, right.

• 45:07Nilay Patel?

  No, don't do what you're doing. I want you to stop. This is worse than that time I called it the Fruit Company.

• 45:14Speaker 01

  This week's gadget flavor is the Kawa Robot R1 First Robotics Suitcase.

• 45:22Nilay Patel?

  By the way, when I was putting you up to rundown, completely knew that this is what you would pick. Can we talk about the number of robot suitcases that we've seen in the past two weeks?

• 45:31Speaker 01

  So there's two very important suitcases.

• 45:32Nilay Patel?

  Hottest trend in tech.

• 45:33Speaker 03

  I like the one that you attach to your butt.

• 45:35Speaker 01

  Oh, I guess there are three, there are three.

• 45:37Nilay Patel?

  There are two important ones, and there's one that attaches to your butt.

• 45:41Speaker 01

  Yeah, well, we'll start with the butt one. You put a hook on the back of your pants.

• 45:48Nilay Patel?

  This is the worst idea.

• 45:49Speaker 01

  And then...

• 45:50Speaker 02

  Wait, are they selling the hook, or is it like a special suitcase that goes with it?

• 45:54Speaker 01

  Well, probably needs a special handle, the hook onto the hook, or it would just fall right off.

• 45:58Nilay Patel?

  It's just the worst idea.

• 46:01Speaker 03

  And then you get locked at the airport and use your phone and your hands free.

• 46:06Speaker 01

  You're holding Starbucks in one hand, phone in the other.

• 46:10Nilay Patel?

  What's worse than a cellphone holster? What about a butt holster for your bag? Anyway, go on.

• 46:16Speaker 01

  All right.

• 46:18Nilay Patel?

  I'm just saying, this is, this is one of those ideas that like college students have when they're hammered. And then they woke up and they went to Home Depot.

• 46:25Speaker 01

  This is called my hitch.

• 46:28Speaker 01

  No. Yeah. No, it's not.

• 46:31Nilay Patel?

  Yes, it is.

• 46:31Speaker 03

  And the women's version is my lovely lady hitch.

• 46:34Nilay Patel?

  Oh, my God.

• 46:35Speaker 01

  Oh.

• 46:36Nilay Patel?

  I quit. All right, look, iDevicesinc.com/theverge, that's the end of the show.

• 46:41Speaker 01

  Okay, and then there's a suitcase that you can ride. It's like a Segway, but you sit down on it, it's like a little scooter. And what's amazing is this commercial has people, it looks like footage from like the pod racing, episode one. Like, they are zooming through this airport, and they are definitely gonna get tackled by security.

• 47:04Nilay Patel?

  Does it fit in the overhead bin?

• 47:05Speaker 01

  I don't know, probably. Yeah, it looks like it.

• 47:08Speaker 02

  I mean, if you're gonna ride around an airport, it has to.

• 47:10Speaker 01

  Yeah, yeah, yeah, but it's amazing. It's amazing. Just, and everybody's having so much fun. That's on Indiegogo. It's called

• 47:18Nilay Patel?

  Is it funded up?

• 47:19Speaker 01

  Modo Bag.

• 47:20Nilay Patel?

  No, that's fine.

• 47:21Speaker 01

  If it's not funded, then I'm quitting. I'm quitting the internet again. Come on, people, we have one job.

• 47:27Nilay Patel?

  It's funded.

• 47:28Speaker 01

  Totally funded.

• 47:29Nilay Patel?

  Okay.

• 47:30Speaker 01

  Yeah.

• 47:30Nilay Patel?

  And then there's the third one.

• 47:32Speaker 01

  Which is my gadget flavor pick of the week. Cow Robot R1. It's a regular suitcase on four wheels and you're rolling around and then you're like, you know what? Tired of dragging this. Let go. It's got little wheels in the bottom that like down onto the ground and it starts rolling itself and it follows you around.

• 47:51Nilay Patel?

  This is what I want.

• 47:52Speaker 01

  Also, also you can like beckon it. You can say, hey, come, come to me suitcase. Also it's got like GPS.

• 47:58Speaker 02

  How does it know where you are?

• 47:59Speaker 01

  Um, it has

• 48:00Speaker 02

  Does it like follow your phone?

• 48:00Speaker 01

  So you know how the, the handle stays extended? The sensors are in there. It watches you from the handle.

• 48:07Nilay Patel?

  Let me ask you what the future is.

• 48:08Speaker 03

  How does it not start following someone else?

• 48:10Speaker 01

  Well, I have no idea, to be honest.

• 48:13Speaker 02

  Never go to the airport with your identical twin.

• 48:15Nilay Patel?

  Yeah, I mean, this is basically like, what if instead of a small child who got lost at the airport, it was all of your belongings?

• 48:20Speaker 01

  Also, if it like, if it goes, you know, like it's got a geo fence. So like if it goes for a certain distance away from you, like you leave in a car, it'll like notify you and show you on the map where it's at. It also has a huge battery to power the robotic stuff, but you can use that to charge.

• 48:35Nilay Patel?

  This is the dream.

• 48:36Speaker 01

  Devices.

• 48:37Speaker 03

  Can you carry this on?

• 48:38Speaker 01

  Also funded on Indiegogo.

• 48:40Nilay Patel?

  I gotta say

• 48:41Speaker 01

  Yeah, and you can take out the battery to put it through security.

• 48:44Nilay Patel?

  I gotta say, if, given the choice between a hitch for your butt.

• 48:50Speaker 01

  Uh huh, my hitch?

• 48:52Nilay Patel?

  Or a lady hitch? And a robot dog suitcase? Come with a robot dog.

• 48:59Speaker 01

  But what about a car suitcase? Or like a, like a Segway suitcase?

• 49:02Nilay Patel?

  Let me ask you this. If the robot suitcase has to choose between killing a child.

• 49:09Speaker 01

  Hmm.

• 49:11Nilay Patel?

  Which one?

• 49:12Speaker 01

  The right choice.

• 49:15Speaker 01

  That's the kind of morals that you can afford when you raise $114,000 on Indiegogo.

• 49:20Nilay Patel?

  That's how much, that's all they need?

• 49:23Speaker 01

  Well, Indiegogo, you know, they do it like flexible goal. I mean, Indiegogo, a lot of Indiegogo's are just to like, show interest to investors.

• 49:30Nilay Patel?

  Right.

• 49:31Speaker 01

  Most, and a lot of Kickstarter's like that too. Hardly any of these for like something this complicated. And I'm sure MyHitch can be funded like $15.

• 49:41Nilay Patel?

  But MyHitch people, I can make that product. But I don't want to.

• 49:46Speaker 01

  Right.

• 49:47Speaker 03

  I want one of those Boston Dynamic robots to carry my luggage.

• 49:51Nilay Patel?

  Lauren's got a big dog. It's like banging through the airport.

• 49:55Speaker 03

  That thing is terrifying. Everyone would move out of the way. You would never be late for a flight. You would just be like, the seas would part at the airport.

• 50:03Nilay Patel?

  Why didn't Lauren make her flight? Well, she brought a weaponized dog suitcase to the airport.

• 50:08Speaker 01

  Oh, not the dog. I'm thinking of the human. What if the humanoid was just carrying me?

• 50:15Speaker 01

  Right?

• 50:16Nilay Patel?

  Oh, my God. Yes. Well, I gotta say, the fact that robotic suitcases were a major Circuit Breaker theme for the past 12 days or so, that's why Circuit Breaker exists.

• 50:27Speaker 01

  Exactly.

• 50:28Nilay Patel?

  So that we can catch these trends in the upswing.

• 50:30Speaker 01

  The heart of the matter.

• 50:31Nilay Patel?

  Um, let's move on. We only have a few minutes left. We spent all that time on Apple, so it's only fair.

• 50:36Speaker 01

  I verge, am I right?

• 50:37Nilay Patel?

  It's all true. Um, we, we end, we gotta talk about, Google had some earnings, Amazon had some earnings, Facebook, Twitter, the rest of them had some earnings. Here's what I'll say, just to, Google earnings literally were breaking as we, as we started recording here. Um, Google did extraordinarily well. I think people forget, Google's like a massive company that reorganized itself into this thing called Alphabet. So inside of Google, Google made like $21 billion in revenue. They made a five-ish and five-ish billion in profit. And then all the other stuff.

• 51:08Speaker 01

  This is Google, not Alphabet.

• 51:09Nilay Patel?

  Google, not Alphabet.

• 51:10Speaker 01

  Right.

• 51:10Nilay Patel?

  Literally everything else in Alphabet is categorized as Other Bets, which has got to just make them feel great.

• 51:15Speaker 01

  Right.

• 51:16Nilay Patel?

  And everyone's super excited because Other Bets.

• 51:21Nilay Patel?

  Lost money, but lost money slower than they made a little money. Which they still lost like 800 billion, 800 million dollars. But a little bit, they lost a little bit slower.

• 51:34Speaker 01

  That's like, it's like being a middle child, an other bet.

• 51:37Nilay Patel?

  Yeah, you're the other bet. I hope you're good at something because your brother is great and that one's the baby.

• 51:42Speaker 01

  Right. We know you're old, but we've got smart on luck. You're another bet. Law school, I think he can handle it. Why don't you try something else?

• 51:54Nilay Patel?

  That's terrible. Yeah, and we're gonna, the little one, we're just gonna care for her the whole time. I'm not a middle child. I'm the baby. So that's how, that's how my parents feel about me. My sister is like the smart one. I'm the one who, I'm the one who tells jokes about butt luggage for an hour a week.

• 52:12Speaker 01

  You know what, you know what, you're the, um, Niantic.

• 52:18Nilay Patel?

  What's that?

• 52:19Speaker 01

  They Google.

• 52:20Nilay Patel?

  Oh, yeah. They spun me off.

• 52:22Speaker 01

  They spun you off.

• 52:22Nilay Patel?

  They're like, we're mostly doctors here. So if you want to do that Pokemon thing, you just go off. You just get it done.

• 52:28Speaker 03

  You are being too modest. You're also a lawyer. I mean.

• 52:33Nilay Patel?

  Oh, but I was such a bad lawyer. Let's like not discuss that. Um, here's what I'll say about other bets. Uh, Nest is inside of other bets. Nest had, the drama, you know, it continues. Um, they put out their outdoor camera. We're all very happy for them. It took them four years, but they waterproofed the camera. The Nest service went down this week in the middle of a heat wave. The thermostat still worked, but all the apps were like not functional.

• 53:03Speaker 03

  Ah, but they put out an Apple Watch app.

• 53:05Nilay Patel?

  Oh, they put out an Apple Watch app.

• 53:07Speaker 03

  Woo, you can now control that broken thermostat from your wrist.

• 53:10Speaker 01

  The thermostat kept, because before they've had outages where the thermostat does not do anything.

• 53:17Nilay Patel?

  Yes, but that was early days. They haven't had one of those.

• 53:20Speaker 01

  Okay.

• 53:20Nilay Patel?

  But this time the Nest service.

• 53:22Speaker 01

  There was, there was like a pet, like an automatic pet feeder. It had a things thing that went down and was literally not dispensing food to pets. It's just terrifying. Yeah. Think about it.

• 53:34Nilay Patel?

  Internet of Things. Put a chip in it, see what happens.

• 53:37Speaker 03

  I know. Sorry your cat died. #InternetOfThings.

• 53:40Nilay Patel?

  So there's Google. There was not a lot of like other Google News inside of these earnings. They did much better than, you know, people thought they were gonna do. They continued print money. You compare that to Facebook, which also did outstanding. And also, I think the big quote there from Zuckerberg was, "We see video as a primary part of every platform we have." And if you're looking at Facebook lately, you see they're putting video everywhere. Video is where the advertising money is going. It's like, that's where it all is. It's where the audience is going. Google owns YouTube. I just think about this always in terms of icons on the home screen. So, Google tends to control distribution through your browser icon, right?

• 54:21Nilay Patel?

  You open up a browser on your phone, you tend to search. It's the primary thing you do there.

• 54:27Speaker 02

  And then you click on a YouTube link, and then half the time it launches the YouTube app, and then half the time it plays.

• 54:33Nilay Patel?

  Here's this thing in the web. And you're not logged into your YouTube Red accounts, you gotta watch the ad. It's a whole mess. But Google owns, obviously, I think they own distribution through the browser icon. They obviously own YouTube, and most people have the YouTube icon. Facebook obviously has Facebook icon, the Instagram icon, the Messenger icon. They're all doing extraordinarily well. And then there's Twitter, which, just doing real bad.

• 54:58Speaker 02

  Yeah.

• 54:59Nilay Patel?

  And it's been quarter after quarter, even with Dorsey back at the helm, just doing real bad.

• 55:03Speaker 02

  They added just a paltry number of users.

• 55:06Nilay Patel?

  Yeah. And they put out an ad campaign that's like, here's what Twitter is. I think Ashley wrote a story that's like, Twitter's 10 years old and still trying to tell people what it is.

• 55:17Speaker 02

  Like, Nick Stat's headline was, "Twitter is adding users." But like, that's literally a headline that they are managing to continue to add and not lose users at this point. They added 3 million users on top of 310. Like-

• 55:31Speaker 03

  Are those real people?

• 55:32Speaker 02

  They're just done growing. And like, they're just, I have no idea what they're gonna do. They have to pivot into something else. They have to make video happen. They have to make these like, you know, live stream partnerships a real part of the product and not a random thing you might be lucky to see in your feed. Because like, what they're doing right now- Is not sustainable.

• 55:55Nilay Patel?

  But Twitter is still incredibly vital. Like, that's, yeah, except for the, you know.

• 56:00Speaker 01

  Right, it dominates the whole news cycle.

• 56:02Nilay Patel?

  Yeah, I can't, I'm assuming all of us and most of our listeners have been watching the conventions for the past two weeks. I can't imagine watching these things without Twitter up on my phone.

• 56:11Speaker 02

  Dude, I had to watch, uh, last night's DNC President Obama speech on the plane and I didn't buy the wifi. So I didn't have Twitter during the speech and I did not know what to do.

• 56:23Nilay Patel?

  I was just like, I had, I was literally just holding the phone in my hand off. Because I, like, that's how you watch TV now.

• 56:31Speaker 01

  Are we just in a, are we just media elite bubble New Yorkers, San Franciscans?

• 56:38Speaker 03

  I don't know, I don't think so. I don't think, I don't, I think during events like these, like the DNC and the RNC, if you actually follow the hashtags and you kind of, you know, you're not just paying attention to your own echo chamber of media wonks. You see that there are a lot of people, a lot of people that are using it for those specific events, like those moments in time. But it is this weird feeling of like, like you're sitting watching it and you're like, this, you know, this is ridiculous, right? This is, this is ridiculous. It's like, you used to look around and like, look at your friends sitting around your living room and sort of, you know, right, right? And then, and now it's like, that's what Twitter is. And if you don't have that, you're like, I'm pretty sure this is ridiculous. You're like, I'm pretty sure this is the most monumental speech ever. And you just have no way to kind of like, I don't know, reaffirm your own interpretation of the live media that is happening.

• 57:23Speaker 01

  Ridiculous for everyone or just me?

• 57:25Nilay Patel?

  Well, so this is what Twitter is, um, yeah, that's.

• 57:28Speaker 01

  But why, if that is the case, because I agree that that is exactly what Twitter's great at. Why, shouldn't they have a huge upswing right now during the heat of an election season?

• 57:38Nilay Patel?

  No, because their signup is hard. I mean, this is why they're doing this brand campaign. People, they, they put out this research for this new ad, like this blog post, and they're like, people think in order use Twitter, you constantly have to tweet or you have to tweet once a day or something. But now their ads are like, you just get to see what's happening. And so that's why they're investing in, right, they're streaming the conventions and they're, have you guys looked at the, how they're doing convention streaming? It's actually really slick, right? You push the button.

• 58:07Speaker 03

  I tried using it, but it was a little bit annoying.

• 58:09Nilay Patel?

  Well, it's because it's not your feed. It's like the hashtag.

• 58:11Speaker 03

  That's exactly why.

• 58:12Nilay Patel?

  So you push the button, like you open the Twitter app on your phone and it says, watch the NC or whatever. You push it, the live stream opens and then a stream of tweets happens underneath it. So they're combining that sort of first screen, second screen experience. They are going to stream a bunch of football games, they're talking to every other sports league. They've got rights to a bunch of other stuff. They know that live events are where they belong. And I think what they're going to do is just say like, you don't have to tweet. Like there's no write a tweet mode in that live stream view.

• 58:45Speaker 02

  Can I just say, I know that I link to this story like once every six months and people are tired of me talking about it. But in January of 2012, I went to the Dive Into Media conference and then CEO Dick Costolo was on stage. And I said that what Twitter needs to do is become a broadcasting social network and stop trying to be a social network. And they're still trying to figure it out. Like they had the idea four years ago that think of us as a new kind of broadcasting network that happens to be a little bit social. And they still haven't figured it out.

• 59:23Nilay Patel?

  Yeah, but they're getting there.

• 59:25Speaker 01

  So this seems like the, this will be the first year with like, well, some more sports with the election. I don't like that. I want to tweet.

• 59:35Nilay Patel?

  Yeah, it's weird, but their problem is.

• 59:37Speaker 01

  Think about Twitch chat, YouTube chat, like these are services that are designed for watching video while you also see other people chatting.

• 59:45Nilay Patel?

  But those are like small communities, like Twitter's, their problem is they're a big community. It's, it's just interesting.

• 59:50Speaker 03

  There is a whole language to Twitter. I mean, we take it so much for granted, but for someone who's just signing up for Twitter and you're explaining to them hashtags and ad signs and putting the period before the ad signs that your mutual friends can see it. And then, you know, you're, there's going to be a wall you're away and then, but then there are moments and all this. Stuff and like and then it's coupled coupled with the harassment problems they're having. Um, which, you know, people may sort of know about peripherally if they're not on Twitter as much as we are. And it's like, people are probably thinking like, what's the, what's the value? Like, why should I spend some, why should I invest so much time in getting?

• 1:00:22Nilay Patel?

  Especially when every news organization is super committed to aggregating the best of Twitter and showing it to you all the time.

• 1:00:28Speaker 01

  That is true. Oh, that's why you, oh, that makes sense. Yeah. Like, why would you bother?

• 1:00:33Speaker 02

  Sign up to see more tweets because you see the tweets right there.

• 1:00:36Nilay Patel?

  Yeah, here's like Donald Trump like blows his nose and everyone's like, guess what he tweeted?

• 1:00:40Speaker 01

  Hmm.

• 1:00:41Nilay Patel?

  And it's, he's like sad.

• 1:00:43Speaker 02

  Oh, hey, look what just happened in the Alphabet earning call. Google sold 30 million Chromecast.

• 1:00:48Nilay Patel?

  Whoa.

• 1:00:50Speaker 02

  Um, it was 25 million in May, so these new Chromecast are flying off the shelf.

• 1:00:54Nilay Patel?

  Um, did, good job.

• 1:00:56Speaker 03

  And that's just, is that Chromecast audio too included in that or just?

• 1:00:59Speaker 02

  Uh, just Chromecast devices. It's probably everything all combined.

• 1:01:02Nilay Patel?

  Um, Cadillac and the new CT6, which is an extraordinarily expensive car, but the new CT6.

• 1:01:08Nilay Patel?

  All the, every super fancy luxury car has like a backseat experience now because they assume that someone else will drive it for you. Um, so it's got monitors in the backseat and it's got an HDMI jack and they're putting Chromecast in there. And as part of the sales process, the salespeople teach you how to use the Chromecast in the car.

• 1:01:26Speaker 03

  Oh.

• 1:01:27Nilay Patel?

  Which like they're training their dealers on like what a Chromecast can do because it's such a thing.

• 1:01:31Speaker 01

  I thought backseat screens were for kids.

• 1:01:34Nilay Patel?

  They are, but if you're buying a Cadillac CT6, they might be for you.

• 1:01:37Speaker 01

  Ah.

• 1:01:38Nilay Patel?

  Because, you know.

• 1:01:39Speaker 01

  Something to aspire to.

• 1:01:40Nilay Patel?

  Cause Leroy, your chauffeur.

• 1:01:42Speaker 01

  I've always wanted to have a driver.

• 1:01:43Nilay Patel?

  He's driving the car.

• 1:01:44Speaker 01

  Leroy.

• 1:01:45Nilay Patel?

  Yeah, it just came up with a name.

• 1:01:46Speaker 01

  Cool.

• 1:01:46Nilay Patel?

  Feel like a good name, you know? But we should talk about Google's sort of hardware game right now because Chromebooks are doing extraordinarily well. The Chromecast are doing extraordinarily well.

• 1:01:56Speaker 01

  Hmm.

• 1:01:56Nilay Patel?

  The S7 is doing extraordinarily well. It's an Android phone.

• 1:01:59Speaker 01

  Hmm.

• 1:01:59Nilay Patel?

  At some point, Google's gonna have to pull this all together and actually make, make that real for them, don't you think? Or are they just gonna keep giving the operating system away for free all the time?

• 1:02:09Speaker 01

  Like, make what real?

• 1:02:11Nilay Patel?

  I, you, like, you don't think they're gonna do? A version of like the Chromebook Pixel that is actually accessible. You don't think they're gonna make their own phone, which they've been rumored to do forever outside of sort of the Oh, yeah.

• 1:02:23Speaker 01

  I feel like we've talked about that, right?

• 1:02:25Nilay Patel?

  Yeah, it's just they're in a moment.

• 1:02:26Speaker 02

  So they are doing a phone in Project Ara, but that's really experimental. I think they're not gonna make a Pixel for affordable Pixel because that would piss off the vendors who would just say, screw that, I'm going to Windows if you're gonna compete with me. But the latest rumor is they're gonna be making their own smartwatches.

• 1:02:46Nilay Patel?

  Oh, yeah. Wait, why? I actually don't know why why any of these vendors would go to Windows if what they're selling are Chromebooks, right? The value of the Chromebook is that it's simpler, schools are buying tons of them. The schools don't wanna support and maintain Windows.

• 1:03:00Speaker 02

  But why would they, like, why would they compete with Google on the low end if they could not compete with Microsoft on the low end? Like, they can make a good computer cheaper with Chrome OS, but if they have to compete directly with Google at that low-margin, low end, then they'll be like, well, we should just go with Windows because then we don't have to compete with Microsoft. Like, I don't know. It seems to me like that is, we always, everybody always worried when Microsoft started making the Surface that all their OEMs would run away and they'd be pissed about it. And that didn't happen, and I think that's partially because the Surface is a relatively expensive device. I think that calculus is way different when you get under $500.

• 1:03:39Nilay Patel?

  Yeah, that makes sense. I just think as they move Android on to Chrome OS, which is, I know, Dieter, you have a Pixel that can do it, right?

• 1:03:48Speaker 02

  I have, I have a Pixel, an R11, and a Flip, so come at me.

• 1:03:52Nilay Patel?

  I hate you. Can I have one? Can I have one of those things, please?

• 1:03:57Nilay Patel?

  I think as that happens, I, I just think the Google as a platform vendor will kind of like come into more focus. And that's like, I, I think that's tremendously exciting. I think Windows, Windows as a platform has like found where it belongs. I think the Surface is very popular. But it's not gonna be, because it doesn't have a mobile component, it's just kind of fixed in time where it is. Obviously, Apple's got its platform strategy the way it is, but having another sort of unified desktop to mobile experience is really interesting to me. And I don't think, I don't think Google can get there unless they start making some of their own products.

• 1:04:34Speaker 01

  I would love more Google products, I guess.

• 1:04:38Nilay Patel?

  Cool.

• 1:04:39Speaker 01

  I just think it's interesting.

• 1:04:41Nilay Patel?

  All right, let's talk about Amazon. We've clearly squeezed everything out of this weekend.

• 1:04:45Speaker 01

  Oops, we're Apple.

• 1:04:46Nilay Patel?

  Yeah.

• 1:04:47Speaker 03

  Yeah.

• 1:04:48Nilay Patel?

  But it would be cool. And I think more competition in the market's good, anyway. Lauren, do you know what's going on with Amazon? Or are you gonna read this article that just went up the same way I am? Amazon just hit, by the way, for the listeners.

• 1:04:59Speaker 03

  I'm just gonna read it. They posted a profit of $857 million, right?

• 1:05:04Nilay Patel?

  That never happens.

• 1:05:05Speaker 03

  That was a year, year over year, that was an 832% jump. And their sales were up 31% from the previous quarter. So this is, so it used to be like for a while, you know, it was like, Amazon doesn't make money, except for Amazon Web Services, AWS, right? Like, they make a lot of money and that's great, whatever. But now it's actually like, and that's still highly profitable, but now it's like, Amazon is actually making real money.

• 1:05:33Nilay Patel?

  And they don't want to. That's, usually they take every, they could always make money. Like, the story is, they could flip the switch and make money, but Bezos in particular is like, we're plowing all that money back in R and D, or new products. But I guess they're like, well, the phone didn't work. This drone thing's a lark.

• 1:05:48Speaker 01

  Hmm.

• 1:05:48Speaker 03

  Yeah.

• 1:05:49Speaker 01

  They built a big office.

• 1:05:50Speaker 03

  Amazon.

• 1:05:51Nilay Patel?

  They built a big office. I will say, we reviewed their Blue phone. And Dan actually kinda liked it.

• 1:05:58Speaker 01

  I reviewed it.

• 1:05:58Speaker 03

  It was Paul.

• 1:05:59Nilay Patel?

  It was Paul.

• 1:06:00Speaker 03

  Yeah.

• 1:06:00Speaker 01

  And it's not, Blue's been making phones apparently for a while.

• 1:06:03Nilay Patel?

  Yeah.

• 1:06:04Speaker 01

  Amazon puts ads on it and gives you a $50 discount.

• 1:06:10Speaker 01

  And it's just as great and bad as that sounds. Like, you literally, every time you unlock the screen, there's a new ad on it, basically. And it's either like a swipe to dismiss that, or a literally full screen. So like, it's like you picked up somebody else's phone, and that person liked looking at an ad of, I get a lot of like, fitness stuff, there's like this protein powder that want me to buy, or like a lady who runs around in headphones, like, I don't want headphones that I can run in, for sure. So I don't know who they think I am. They're not very targeted, but um yeah, it's a great product and $50 cheaper. It's kind of crazy that you can get a phone that good for $60.

• 1:06:52Nilay Patel?

  Yeah. Sorry that I didn't know you reviewed it.

• 1:06:54Speaker 01

  It's okay. It's rare, but I, but Dan helped a lot also.

• 1:06:59Nilay Patel?

  I probably looked at just the photos.

• 1:07:01Speaker 03

  Paul, tell me a lie about your lead in the book that you've been reading and what that says about entrepreneurship.

• 1:07:05Speaker 01

  Oh, yeah. Kevin Kelly wrote a new book. I think it's called The Inevitable.

• 1:07:12Speaker 01

  And it's like 12 trends that he sees that will like keep on progressing. And one of the trends he talks about is that like you, you kind of go away from ownership of things towards like renting or just gain you like pay for or somehow obtain access temporarily to things. And so I thought this was kind of that phone.

• 1:07:35Speaker 01

  But like in the future, you can imagine like you kind of just like wake up and you just decide you want a certain set of gadgets and tools for the day and content, right? And that comes into your life through like, I don't know, a tube.

• 1:07:49Nilay Patel?

  Yeah.

• 1:07:49Speaker 01

  And then you use that and then you dump it into the other tube at the end of the day. And I feel like this phone having ads on it and being really good for how cheap it is is like, I just felt like I was a little bit living that future.

• 1:08:04Nilay Patel?

  At some point, someone's got, what are the ads for? The ads to make you buy something? Or rent something for another financial time.

• 1:08:11Speaker 01

  Right. But see, think about Amazon. Amazon's really well positioned there because they have so many people signed up for Prime. And for, well, the cloud services obviously makes a lot of money. These are like recurring services, but I would love like Amazon Instant where it's like, or what's it called? Amazon Now? Man, so many services. Where if they brought me something and then I used it and then they took it back.

• 1:08:32Nilay Patel?

  Yeah.

• 1:08:33Speaker 01

  What would that look like?

• 1:08:33Speaker 03

  Oh. Oh.

• 1:08:36Nilay Patel?

  I don't know. That's weird.

• 1:08:37Speaker 03

  Like what though? Cause a lot of what they're pushing these days with some, well, I shouldn't say a lot, but they're, they push a lot of consumable goods, right? So you like get the dish though.

• 1:08:46Nilay Patel?

  Right. You push the button and.

• 1:08:47Speaker 01

  Well, like, let's say you wanted to rent a camera, like it's a special occasion. So you want to have a decent camera. So you rent. So they bring you a camera.

• 1:08:56Nilay Patel?

  Yeah.

• 1:08:56Speaker 01

  You send it back. With all the battery and everything's all ready to go, you use it.

• 1:09:00Nilay Patel?

  That's interesting.

• 1:09:01Speaker 01

  You send it back.

• 1:09:01Nilay Patel?

  I will say, here's my, we gotta wrap up, but here's my counter. Yesterday, we were at the end of, we were taping the Mr. Robot after show, which I will hype in a minute. But Cora Donna, who's one of the writers and the technology producer on the show, was talking about how, within that show, there was like a VCR moment where they watched an old tape. And he's like, that effect, we actually got it by putting it on a tape, pulling the tape out and crinkling it, and he's like showing it to us, the physical tape. And we were all just holding a VHS cassette and being like, oh, these were awesome. Because they were like real and like, there's all this physical experience around the media. And then we had a whole conversation about like vinyl and this, but there's something to it. There's like, there's that world, but there's also the, I have stuff world.

• 1:09:42Speaker 01

  He talks about stuff like that in the book as well, that you have a certain type of collector that goes after certain, a kind of feeling of scarcity.

• 1:09:53Nilay Patel?

  Yeah.

• 1:09:54Speaker 03

  I still, actually, I still collect actual books and I, like anecdotally, my chances of finishing a book on Kindle versus finishing the hardcover book, it's much higher with physical book. I finish physical books and I like put them on the shelf and I'm like, I finished that book. I read that. And then like, I download a bunch of stuff to Kindle and I'm like, I'm totally gonna read this book. I just, I just don't finish. It's weird.

• 1:10:16Nilay Patel?

  Yeah.

• 1:10:16Speaker 03

  Anyway.

• 1:10:17Nilay Patel?

  What is the nature of reality? That on the next Vergecast, next week.

• 1:10:21Speaker 01

  Nice.

• 1:10:22Speaker 03

  Stay tuned.

• 1:10:23Nilay Patel?

  At some time on Friday.

• 1:10:24Speaker 01

  I should clear, but he's not calling these trends good or bad or right or wrong. He's just saying, this is where things are going towards.

• 1:10:31Nilay Patel?

  Here's what I'll, as a counterpoint to that, Emily interviewed Werner Herzog. It's up on The Verge today. And he just discussed for a while Pokemon Go and whether it should require physical violence.

• 1:10:44Speaker 03

  It's fantastic.

• 1:10:45Nilay Patel?

  It is the craziest interview we've done in a long time and beautiful photos. So look at that. That is the Vergecast for the week. If you have not got enough of these people talking, you can listen to us talk in various other ways. Lauren has a great podcast that she unceremoniously booted me from this week. But we didn't talk about Yahoo.

• 1:11:05Speaker 03

  Oh, I'm really sorry.

• 1:11:07Nilay Patel?

  But who gives a shit about Yahoo, except for the people who want to listen to Kara talk about it? Because she's the only person in the world who's interesting about Yahoo. So, listen to Too Embarrassed to Ask with Lauren and Kara. You guys got deep into Yahoo this week, I imagine.

• 1:11:19Speaker 03

  We, so Kara basically has been hiding out in Yahoo's air vents for the past 20 years. And so I had to take this opportunity to interview her and ask her every question you could possibly ask about Yahoo, and it was great. It comes out this Friday. But I did end up booting Neelai off the show, and we need to reschedule because I really, like, I really want you to come on, but I want you to talk about the stuff that, like, gets the people going. But, and by the people, I mean Neelai. I want you to talk about the stuff that gets Neelai going.

• 1:11:46Nilay Patel?

  We'll figure it out.

• 1:11:47Speaker 03

  It's gonna be awesome. It's gonna be so fun.

• 1:11:48Nilay Patel?

  Um, I've been trying to have a thought about Yahoo for so long, and I think I'm close to one. But it's just, it's not really a thought yet. Um, anyway, listen to Lauren's podcast, Too Embarrassed to Ask, it's wonderful. Uh, also on the Recode side, Kara has a podcast, Recode Decode. Peter Kafka has a podcast, Recode Media, which is wonderful. On, on the Verge side of the radio house, the house of radio that we've built at here at Vox Media.

• 1:12:13Speaker 01

  On the ship.

• 1:12:13Nilay Patel?

  On our ship.

• 1:12:17Nilay Patel?

  Two admirals, a coxswain, and a guy with a steering wheel. Uh, Chris.

• 1:12:22Speaker 03

  Look out, look out.

• 1:12:22Nilay Patel?

  I forgot all the podcasts now. Uh, Chris Plant does, uh, What's Tech, which is wonderful. Um, I think he did What Is Podcast this week, which is like, very meta, very cool.

• 1:12:30Speaker 01

  With Alex Golden from Reply All.

• 1:12:32Nilay Patel?

  Yep, so that's a great one.

• 1:12:33Speaker 01

  Sorry, I just had to get that in there.

• 1:12:34Nilay Patel?

  Emily and, Emily and Liz, uh, have Verge ESP, Entertainment Side Podcast. And sadly, Control Elite was off this week because Walt's on vacation, but we'll be back.

• 1:12:43Speaker 01

  And I'm starting a new podcast called A Thousand Words, where I describe pictures.

• 1:12:51Nilay Patel?

  That's gonna be our most popular podcast in like, a week. It's just Paul describing various Google image searches. All right, that's it. Uh, leave us, you know, the right number of stars. And iTunes, you can tweet at us, I'm at Reckless, Paul's at FuturePaul, Lauren's at Lauren Good, Dieter's at Backlon. I want to know your answer to the trolley problem, or send your illustrations of the trolley problem to Paul.

• 1:13:15Speaker 01

  Yeah.

• 1:13:16Nilay Patel?

  Thanks, Ty Devices, unofficial, official, official, unofficial sponsor of Scissor Vodka. Uh, and you can get, if you're one of the first 500, you can get. A free switch. iDevicesinc.com/verge. Thanks, everybody. Rock and roll. Cut through the night. Paul. Paul. Paul. Catchphrases.