Facebook’s F8, Oculus Go, and Apple earnings

This week on The Vergecast, Nilay returns to the show after welcoming a child! Dieter is out this week, so Nilay and Paul bring on Adi Robertson and Casey Newton to discuss what happened at Facebook’s F8 developer conference, the Oculus Go, and some earnings talk. There are also a lot of new Instagram features. Is it slowly just becoming Facebook? There’s a lot more in between that — like Paul’s weekly segment “Safety first!’ they said” — so if you listen through this whole episode, you’ll be all caught up on the tech news this week. 05:51 - All of the news from Facebook’s F8 developer conference 22:51 - Oculus Go review 36:47 - Video calls are coming to Instagram 42:21 - Over 400 Startups Are Trying to Become the Next Warby Parker. Inside the Wild Race to Overthrow Every Consumer Category — Inc. 46:14 - Paul’s weekly segment “Safety first!’ they said” 47:45 - Koss Porta Pro Wireless 49:13 - Sprint and T-Mobile have announced that they will merge 59:56 - Verizon is putting Oath bloatware like Go90 on its Galaxy S9 phones 1:04:18 - Apple reports solid iPhone revenue but stays quiet on HomePod sales 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?

  This episode of Vergecast is brought to you by HBO's Silicon Valley, which is as timely as ever as Pied Piper founder Richard Hendricks pivots to build a new decentralized internet free of ads and data tracking. But as the saying goes, new internet, new problems. Not 100% sure that's a saying, but the show is great. Watch new episodes of Silicon Valley Sundays at 10:00 PM on HBO.

• 0:17Speaker 01

  Hello, Vergecast listeners. I am Grant Gordon.

• 0:19Speaker 02

  And I'm Ravi Gurumurthy, and we're your co-hosts of a new podcast called Displaced from the Vox Media Podcast Network and the International Rescue Committee where Grant and I work.

• 0:28Speaker 01

  Right now, the world is witnessing the largest displacement crisis since World War II. That is the largest number of people who've been displaced because of conflict. If you want to understand why that is and what can be done about it, listen to Displaced.

• 0:39Speaker 02

  You can subscribe on Apple Podcasts or wherever you get your podcasts. Now back to Vergecast.

• 0:49Nilay Patel?

  Hello and welcome to Vergecast, the flagship podcast of Vox Media, The Verge, the media industry at large. You know, it's upfront season. We're not doing an upfront for The Verge. So if you're an advertiser and you're listening to this, consider this next hour of your life, our presentation. Buy some ads. Anyway, I'm Neelai. I've been gone for three weeks, and I know Dieter has been hosting the show for those three weeks, and I've removed him. He's, he's just not here this week, but Paul is here. Hey, Paul.

• 1:17Speaker 03

  Hello.

• 1:18Nilay Patel?

  How are you?

• 1:19Speaker 03

  I'm good. Please don't also hurt me.

• 1:21Nilay Patel?

  Addie is here. Addie Robertson's here. Hey, Addie. Hey. And Casey Newton is here. Well, Casey's in San Francisco. Welcome back, Neelai. Yeah. So if, I don't know, did you guys talk about this while I was gone? My wife and I had a baby.

• 1:34Speaker 03

  We've just been telling people that nobody knows where Neelai is.

• 1:37Nilay Patel?

  Well, I don't either. I called the police. I'm going to apologize to all of you and to the listeners because I have, in the past three weeks, not actually gotten eight hours of uninterrupted sleep. The most I've gotten in the past three weeks is four. So I'm a little loopy. I'm a little out of it, but I think, I think we can do this show. So what's been going on, guys?

• 1:57Speaker 03

  Well, most of all, I want to know what fatherhood's like.

• 2:00Nilay Patel?

  If you want to feel the jail doors of ecosystem lock-in just crash down around you, I encourage you to produce a child. Uh, every single decision is an ecosystem, like literally everyone. Like what? Well, so, you know, we have grandparents. I have a sister, Becky has a brother. Everyone wants to see photos of this child. So we have, we immediately had to pick a photo sharing system and you can't change it. Right? Like usually I try something. I'm like, I hate, I love this phone. I hate this phone. It's gone. You can't do that with baby foot. Like no, no one's screwing around when it comes to like, I need 10 photos of this baby every day.

• 2:40Nilay Patel?

  So you just land inside of iCloud photo sharing because everybody has an iPhone. And you can't ask your, like, I can't be like, mom and dad, please download Google Photos. It's just not going to fly. So like just slid into that faster than anything.

• 2:56Speaker 03

  It sounds like what you're saying is that becoming a father has changed you in no ways.

• 3:03Nilay Patel?

  Well, no, it's like, um, I wanted to buy a real camera, so I bought a DSLR. Um, and just immediately, like everything to do with photos has become 5,000 times more complicated. Because usually I take photos, like no one gives a shit about my dumb photos. Now everyone cares. So like deciding that the public place for the baby will be Instagram as opposed to my Facebook account was like a big deal. And we're actually going to talk about Facebook a lot because it was F8. Casey and Addie, you covered all of F8. And I thought, to me, the funniest shift in the entire Facebook presentation this week was, we're really sorry about the elections and the fake news. Oh, by the way, we've added a bunch of AR filters to Instagram because they're still trying to preserve Instagram as the happier version of Facebook.

• 3:49Nilay Patel?

  Yeah, like literally like the, the, the food, like the bottles that we buy to feed her are an ecosystem. And once you buy some of them, you have to buy all of the rest of the same kind. Um, we have a snu, which is a hilarious. It's a review unit. It's a hilarious $1,200 smart crib that like rocks her to sleep at night. It works 50% of the time. It's very scary. It's fucking terrifying, but it has special clothes that have to clip into it appropriate. Like literally everything is in ecosystem or an app. Uh, we were very careful to only use, we have to track everything she eats and poops when she's new. So that's how you know she's like healthy and growing.

• 4:31Nilay Patel?

  Um, all of those apps are ecosystems of related apps that like, she'll be 25 and I'll still be like, honey, did you poop today? And like the app will grow with her. So we're, uh, it's, it's actually remarkable how, how much everything in the world, as soon as you have a kid, you start to make these decisions and you realize they're going to compound on a time scale that usually is just a random person who likes tech. You're like, whatever, I'll throw it away. Like I'll start over. Now there's like another literally human life in the mix that I have to care for. It's a little bit harder. That's fine. Max is great. She's great.

• 5:03Speaker 04

  Just imagining all of this is gonna, somebody is gonna say that speech verbatim in like an Amazon keynote at some point. You have so many decisions, ecosystem decisions for your baby. We're going to take care of all of it for you.

• 5:16Nilay Patel?

  Yeah, no, it's, it, I mean, even that one, like there's a, we put a Google assistant in her room, like a, a, a home speaker. So we can just like play music. And I was like, wait, this sucks. Like I hate, I hate saying Google to my baby every day. Like I don't, so like we're gonna, we put a, a echo dot in there. Now I'm saying Alexa around the baby every day. And is that worse? Is that better? Who knows? I haven't gotten enough sleep to really decide. Like it's just a lot harder. Anyway, uh, that's enough about my child. She's great. She's going to grow up in the woods, far from all technologies, as, as, as near as I can manage it. But there was a lot of tech news this week and I want to start with F8 because Facebook just had an impossible task this week as, as far as I can tell. Casey, you wrote a lead up to it. You were there. Tell us about it.

• 6:01Speaker 05

  Yeah, so they did have this difficult needle to thread, which was, on one hand, they could not appear to be ignorant of the past 18 months of events, particularly the last two months of events in which they've been battered by this data privacy scandal. So they had to acknowledge it. They had to acknowledge that they were shutting down large swathes of the developer platform. And then they had to tell that same room full of 5,000 developers that it was a very exciting time to be a Facebook developer. So like, as keynote writing challenges go, I would give this one maybe nine and a half out of 10. But if I'm being honest, I think they mostly pulled it off. I think they were

• 6:44Speaker 05

  able to confront the Cambridge Analytica stuff really directly. It was surreal to see the words Cambridge Analytica in the video that opened up the entire keynote. They splashed headlines in front of all of the developers that said things like, "What did Facebook do to American democracy?" Right? Like, they really put it out there. So no one could accuse them of avoiding the question. And then Zuckerberg came out and he said, essentially, that Facebook is a very important idea, and if Facebook went away, then we would all be miserable. And so here are the things that you can now build on Facebook. And from there, they went on and announced a bunch of changes, the most immediately buzzy of which was Facebook Dating. But there was a bunch of other stuff, too. And now

• 7:27Speaker 05

  we sort of have to see whether Facebook is able to get a sort of fresh start with all of the people who have felt betrayed by it over the past months and maybe a year and a half, or whether they're about to stick their foot into something else that we haven't anticipated.

• 7:42Nilay Patel?

  Casey, can I ask you a really dumb question? Just super dumb?

• 7:44Speaker 05

  Yes.

• 7:45Nilay Patel?

  Who develops on Facebook? Like, why does Facebook have a developer conference? Like, obviously, people make gamers for Oculus, and we're going to talk about Oculus in a minute, but Facebook apps is a concept to me, seemed to have been gone for a long time. What do these developers do?

• 8:01Speaker 05

  This is a question that I had, too, right? Because you don't hear about people really getting rich on Facebook the way you might hear about people getting rich by making iOS. Apps, let's say. But the truth is that people do make money on Facebook. Publishers are among that group. Facebook paid out something like $300 million to publishers in recent months for developing article formats for Facebook. There is also a games platform on Facebook that you access through Facebook Messenger. And I know what you're thinking, I don't access it on Facebook Messenger, but someone is, right? And there's optimism that that will will happen more in the future. And then there are just those developers who want to try to build the next thing, who are very interested in augmented reality, virtual reality.

• 8:45Speaker 05

  So, you know, I've talked to a lot of developers who don't see Facebook as kind of their main money-making potential. But it does offer them access to some tools. It offers them some access to some marketing. And if they can kind of build a product there, like say, using this new Facebook camera platform that is open on Facebook proper and is now opening on Instagram, maybe they can get some kind of viral promotion that will draw attention to them. So, you know, it's basically the same story as it always is with Facebook, which is that 2 billion people use it. And so if you can get your thing in front of those people, like there's, there could be money somewhere in there for you.

• 9:20Nilay Patel?

  But that's just, I don't know, a year ago, it was like, or two years ago, it was all about bots. And everyone's gonna build bots on Facebook, and that went nowhere. We can build stickers inside of one of its messaging app. Like, where, is it the money in just like hidden little pockets? Is it in adverti- like, I just don't understand what developers are doing on this platform. And that, when you say it's like really hard to thread the needle, it's, I just, I don't, at a very basic level, everything that was bad is so in the public consciousness. And everything that is good is so opaque, I guess is the word. And I'm trying to like make it less opaque to me.

• 9:56Speaker 05

  So there's one thing that is not opaque about Facebook to me, which is Facebook is a really incredible machine for finding customers, right? That's why its advertising platform is one of the, the two biggest in the world. And so there are a lot of people who come to Facebook just to learn about, how do I use this, I'm sorry, who come to F8 to learn about, how do I market better to these customers? How do I use these tools? How do I integrate these tools into things that I'm already doing? To find customers. And so you wind up meeting a lot of people there who are just essentially marketers. And and so Facebook becomes this really incredible way to generate leads for those people. Right. And even the publishing industry is now starting to see Facebook this way as no longer. This is our our main channel of distribution, but this is one of our very best ways of finding customers

• 10:41Speaker 05

  and then converting them into paying subscribers, right? Like all of Facebook publishing, it seems like right now is about selling subscriptions. So I think you're continuing to see Facebook just embrace its status as a really good advertiser. And the people who are coming to F8 are essentially trying to use it to find some customers and monetize them in ways that may have very little to do with Facebook.

• 11:03Nilay Patel?

  That's I mean, so you were there, right? This sounds like a like a hell world to me, just like a million, a million marketing, online marketing experts desperately trying to sell a subscription to some product. But there's a bunch of privacy news there, too, on the on the flip side, right? They announced the clear history tool. They're gonna audit conservative by the conservative bias thing to me is it sounds like nonsense, but I'm interested in sort of your take on Facebook trying to clean up this public mess.

• 11:31Speaker 05

  Well, it, you know, it drives me crazy, and I would actually like to hear from all of you about it. I've written about it pretty dismissively in my daily newsletter that I write about Facebook and democracy. But got some emails back from conservatives who said, hey, you need to take this more seriously. Like, this is a real concern that we have. And the basic idea is that there have been a handful of incidents where conservatives who have big Facebook presences have felt like or maybe received some sort of information that they're seeing less reach than they believe that they should. And so that has led to a congressional hearing last week where Diamond and Silk, these two pro-Trump vloggers, went before Congress to talk about their experience of seeing reduced Facebook reach.

• 12:16Speaker 05

  They also got a really weird email from from Facebook Customer Service. And so there are sort of these swirling questions. The reason that I find it very frustrating is that if you look at the empirical data that we have about how conservative content performs on Facebook, it performs very well. If you look at like Log posts from companies like NewsWip which monitor kind of the virality of posts across various publishers. Conservative publishers often rank very near or at the top. In November, Fox News was the most engaged publisher on Facebook. And if you want to create a Facebook experience that is all conservative news all the time, I think it's very simple to do that. So I find these questions sort of maddening, but now there's going to be an audit to determine sort of once and for all whether there is any sort of systemic bias.

• 13:01Speaker 05

  And I think the real question, though, is even if the audit finds that there is no bias, will any conservative people believe it? Or will we just continue to have this bad faith debate forever?

• 13:12Nilay Patel?

  Yeah, it feels like to me that the outrage cycle is such a key piece of that ecosystem. Like, if you're not beset, you're not, if you're not feeling aggrieved, you're doing something wrong inside of that particular media ecosystem. But I only see it from the outside. I think on the inside of it, there's a sincerity to that aggrievedness. And honestly, being aggrieved at Facebook is the easiest thing in the world to do. It's not like hard.

• 13:40Speaker 03

  I've seen this way, so I do follow a lot of different conservative-type people. I've seen a lot more on YouTube of getting demonetized. That was kind of a big problem. There's a lot of people who talk on Twitter that they think they are or can prove that they are being shadow banned. But a podcast I listened to that was the Dan Bongino Show. He just had an episode where he was like, "I've tried to post something on Facebook. I don't post very often, but I just tried to post something and Facebook marked it as spam. And now Facebook thinks I'm spam and I can't get any word from Facebook. They won't talk to me. And I'm assuming like in a couple of weeks, they'll like say, 'Oops, that was a mistake.'" But like, this is, you know, and then...

• 14:25Speaker 03

  He kind of extends it to like this is an epidemic, like this is something that happens all the time. And so it's really hard to tell if it is an epidemic, or if it's just like, you know, he accidentally got marked as spam by an algorithm that wasn't performing correctly. And, and he viewed it as an attack on, on his conservatism. So it's, I mean, it is hard to tell because when it happens to you, this is, it feels like your voice specifically is being shut down. And if your voice, you identify mostly as a conservative, you're like, well, they're shutting down my conservative voice. So they're probably shutting down conservative voices. But I, it's really, is really hard to tell if it is. I, I'm looking forward to this audit. I think they'll be interesting.

• 15:08Speaker 04

  I think the thing that seems bad faith to me is that there is never a control group is that I've only ever heard the vaguest of, well, this only happens on one side, rather than, you know, what we do know, Facebook moderation is bad. YouTube moderation is bad. All moderation is bad. Like, it's very easy to say, yes, I had this thing happen to me that is unfair. But that means nothing if you're not also able to say, and people on this other political spectrum don't see that.

• 15:33Speaker 05

  Yeah. There's like, there's two totally different conversations happening in the culture. You have like, sort of the liberal world, which sees Facebook problems and says, the advertising model is bad. And the only way to save Facebook is to implement like a paid subscription. And then there's conservatives, which says, like, there is an active conspiracy to prevent my voice from ever being shared. And, and no one is talking to each other.

• 15:54Nilay Patel?

  Well, I, you know, it's even if you talk to our engagement folks inside the verge across Fox media, we run a large professional media company. And they're like, Facebook is censoring us. Like, we don't know what the hell they're doing. Like, we pushed this button and something went wrong. Like, one of the things that, that stuck out to me from the past week, from F8 was Zuckerberg at one of his, in many interviews that he did around the conference, he said, well, I went to Congress and I answered all these questions and I realized I don't know enough about our product. And so I came back and I I studied up real hard to to learn how it works. And now I now I kind of know. There's just an element to to this whole thing where no one knows how Facebook works.

• 16:38Nilay Patel?

  Just period. No one knows how it works. And it'd be great, Addie, if there was a control group. I'm not even sure that they're structured to be able to create one. Yeah. Right. There's no Don't think they could. Ideal Facebook timeline that you can see. And so I my I just I I keep looking at this company and it just seems like what they need more than anything is a very public value system for people to react to rather than trying to mirror everyone's values because no one will ever be happy in that in that situation.

• 17:09Speaker 03

  Well, some something I learned from watching some of of the the talks, I don't even know if this was one of the keynotes. Maybe it's day two keynote. You know, we've kind of made fun of Facebook for just like slapping an AI band, you know. Oh, oh, that's that is a problem. We agree. Well, thank goodness for AI. We'll solve this for us. But the way Facebook, it seems that they want to use AI because one of their big fears, you know, like think think of things that have happened where, you know, like a violent incident is streamed live on Facebook, you know. You know, what they have a problem with terrorist terrorist propaganda on Facebook and they obviously don't want that.

• 17:48Speaker 03

  So they're building a machine learning, you know, algorithms that can catch this stuff and never allow it to be published. Like, it's very, I think it's very important to Facebook that they can catch actually truly terrible content and it never is seen by anybody. So it it's it's different than a typical moderation model where you wait for something bad to happen and you get rid of it. Or you have like a everything, you know, obviously, everything can't be manually approved before it goes up on Facebook. But they want everything to be approved by these AI algorithms before it goes up on Facebook.

• 18:25Nilay Patel?

  I mean, the world's through AI at it. I don't know. Okay, so I'm curious what the vibe is there like. I also think that's ridiculous because the AI does it can't work and also. Like it can't work because it's not good enough yet. And also, no one knows how to train it against the waves of attackers that have already gained the system like 10,000 times. So like, do you, did you sense optimism from Facebook while you were there talking about how they're going to solve these problems? Or they just, you know, they have a hammer and this looks like a nail?

• 18:56Speaker 05

  Well, they definitely invoke AI as a magic talisman that will solve all future problems. And we have attempted to call them on that a couple of times, but they are sticking with it and they are pointing to some results in fairness. Like they now say that 99% of all terrorism content on Facebook that gets taken down is identified by their automated systems. So before anyone flags it, they find it. So if you're looking for reasons to be optimistic, there's one. You know, I think if you drill down with them, they'll be the first to admit that there are still a really long way away from, from where they want to be. But what gives me the willies about saying that AI is going to solve all of your content

• 19:40Speaker 05

  moderation problems is that AI gave us the news feed that we have been freaking out about over the past 18 months. Right? It's like AI is the reason that Russians were able to use the platform incredibly effectively to sow dissent in the United States. So you're sure there are reasons to be excited about AI, but I think as Facebook and other companies talk about it, we have to constantly have in the back of our mind that AI is used for ill every day, often very effectively.

• 20:12Nilay Patel?

  Yeah. And whatever AI Facebook develops, someone will point another AI at it to break it. Right? I mean, I hate to just hate on Facebook. Like it's funny how much I use Instagram every day now because of the kid and like how delightful that is. Um, but Casey, there's a reason you write a daily newsletter about Facebook and democracy. Like, I don't think they're ready to solve these problems. Like, I don't know that Mark Zuckerberg has a clear conception of what he should do yet. I think he is putting on a very good faith showing of, hey, I need to figure this out. But that is not necessarily a reassuring display.

• 20:51Speaker 05

  Right. You know, and Neela, like your Instagram is a great example because I love your Instagram. I had a chance to meet your baby. She is wonderful, but I don't live in New York. So it's probably going to be a long time before the next time I see her. But in the meantime, every time you post a picture, I get to like, remember how fun it was to meet her. And like, in doing that, I'm having the exact experience that Facebook wants, right? They want everyone in the world to feel closer to the people who are important to them and stay updated, you know, on the important things in their life, even when they are far away. And I will be the first to admit, I have totally lost sight of the benefits of that, like, or at least it's something that I totally take for granted, right? I no longer think that that is an amazing thing, that I can just sort of like peer into your apartment, you know, once a day and look at your adorable baby.

• 21:36Nilay Patel?

  And then you click the next slide and you get a Kickstarter for an iPhone 10 battery case. And maybe you buy-

• 21:40Speaker 05

  Right, right, right. You know, so-

• 21:44Nilay Patel?

  That appears to be the business model.

• 21:47Speaker 05

  And it works. Like, I actually, I bought clothes this weekend based on an Instagram ad that I had seen. And by the way, to my knowledge, that's actually never happened before. But like, they finally found the right set of shirts. And I was like, you know what? We're doing this thing. And I did it. And they actually arrived today.

• 22:01Nilay Patel?

  Inside Instagram app. That's the one that that's like, when you, when you start typing your credit card information in the Instagram in-app browser, you're like, oh, I lost. Oh, I like, I've just been horribly defeated by this. Like, I'm not even thinking this through. All right, I'm going to read one ad. And Addy, I want to talk to you all about Oculus. Because there's a ton of Oculus news. So let me read one more ad for Silicon Valley.

• 22:25Nilay Patel?

  As you know, this episode of Verchess brought to you by HBO Silicon Valley. New internet, new problems. HBO Silicon Valley takes its too-real satire of tech culture to the next level this season. As the comedy's Richard Hendrix pivots to startups to develop a decentralized internet. It turns out, the road to an autonomous peer-to-peer network is paved with misguided car purchases, stealth acquisitions of pizza apps, and a lot of public puking. And I see how. No one said launching a startup was easy. Get new episodes of Silicon Valley Sundays at 10 p.m. on HBO. All right, Addie.

• 22:52Speaker 04

  Yes.

• 22:53Nilay Patel?

  You wore a headset. How many photos have we taken of you in a VR headset in the past three years?

• 22:57Speaker 04

  Not counting duplicates of different system, or of like the same system with different photos. I was trying to count it up, and I honestly don't remember. Because there's the Vive PlayStation VR Rift, Vive Pre, Oculus Go, Gear VR, Daydream, maybe Second Daydream, and then there's probably some weird prototypes that was at something for.

• 23:19Nilay Patel?

  I'm gonna come back and build a wall. This is all I'm doing when I come back from my leave. I'm building a wall of Addie in headset photos. So Oculus Go, is this, from what I can tell, this is just an old Galaxy cellphone in a case. Right? Like internally? But they released it, you tried it. Is it more than that?

• 23:35Speaker 04

  Oh, it's moderately new Galaxy cellphone. It's like a reasonably well-functioning device. The thing that's important about it is that, A, I just can't express how much I loathe the Gear VR. It's the worst disc card ever. Whenever I touch it, I start swearing, and now I never have to touch it again. And that's good. That's actually a really good thing.

• 23:55Nilay Patel?

  What are the actual advantages of this?

• 23:58Speaker 04

  So the really primary one is that if I'm using a phone, I don't have to be like, I know that I'm not gonna use my phone for the next half hour to an hour, so I can lock it into a thing. And then I also have to kind of hope that the app launches, because the idea is that you're supposed to close it in, and this app automatically launches. But if you have the screen off, then it doesn't launch, so you have to take it out again. I've done this, I have to do this like three times every time I plug something in. The hardware is just hideous, the controller feels miserable. If you have a phone, you're gonna use up a bunch of its battery. So this just has all those things, and it takes them away. So you can use all of the sort of Gear VR app stuff, but it's just a thing, and you hit a button, and it turns on.

• 24:37Nilay Patel?

  And it's $199, which, to me, every year around the holidays, I go into a Best Buy, and I see every mobile VR headset shell thing is like gone. They fly off the shelves. It's, I don't know why, I don't know who's buying them. But they're not, my local Best Buy is always sold out of them. This seems at $199. It's just like a default, "Hey, I've got like a nerdy niece. I'm gonna just buy her this tech gift." And at $199, it kind of like hits that iPod spot. Do you think it's gonna cause an uptake? Am I being too optimistic there?

• 25:12Speaker 04

  I don't know. Because, yeah, the thing that is interesting is that I think people think the Gear VR is a lot cheaper than it is because they've given so many of them away free. It costs $130, which is not that much less than this thing. So I think that it's a thing that, yeah, you can give it as a gift with sort of no strings attached. You don't have to make sure that they own some other piece of hardware. I don't think that this is like the iPhone of VR or anything like that. It is still extremely limited and the games and apps are kind of whatever. But I think that, yeah, it's a thing that gets people in that doesn't have really big entry costs besides the price.

• 25:46Speaker 05

  So Addy, my question for you is, so we have like a unit that is on its way to our San Francisco office that we're gonna get to play around with. And like, if I get one of these things, what is the most fun I can have with it? Like, what can I do that I'm actually going to enjoy?

• 26:01Speaker 04

  It depends on what you like doing.

• 26:03Speaker 05

  You know me very well.

• 26:05Speaker 04

  I can't tell because everything Oculus says is gonna be fun is not actually the stuff that I really enjoy. Like, I've turned out to enjoy VR adventure games. I think they're neat. I think that Oculus and every other VR company talks a ton about 360-degree video and VR destination stuff and VR social, and that just barely appeals to me. But it might be really interesting. Oculus has its whole sort of social system now. You can go hang out in rooms with people. You can customize your avatars. You have this whole game room where you can like play Monopoly with each other in a VR environment. So it's all theoretically sort of interesting.

• 26:44Nilay Patel?

  The idea that this hardware is a... I mean, $199 is not cheap. Like, I don't mean to sound flippant about it, but it's definitely in that sort of... It's definitely in the price range of things that are accessible, if that makes any sense. It's not cheap. It's not expensive. It's just sort of in that kind of accessible middle zone. And it's not tied to a phone or another ecosystem or another set of purchases. It's it seems relatively portable. What's the battery life like?

• 27:10Speaker 04

  It says up to three hours. I've gotten like around two hours, maybe a bit more for doing gaming.

• 27:16Nilay Patel?

  That seems like as much time as I want to spend in any headset. So.

• 27:19Speaker 04

  Yeah, that's accurate.

• 27:20Nilay Patel?

  It definitely just seems like a thing you can buy to get a much better VR experience than almost anything else at that price point thus far.

• 27:28Speaker 04

  Yes, and Oculus's catalog is also for a VR catalog, not bad. Like, it has a lot of apps that are interesting, a lot of things that seem worth trying once.

• 27:38Nilay Patel?

  If someone was buying this and they said, what's the first thing I should try? What would you say?

• 27:42Speaker 04

  I mean, again, this is just really hard because I think the first things most people try kind of are supposed to be not very good. Like, you should just try a bunch of shooters and be like, this is really like, really interesting. I can point and actually feel like I'm kind of moving a gun. Or I think there are sculpting apps that are also pretty neat. I think that.

• 28:01Speaker 03

  For the Oculus Go?

• 28:03Speaker 04

  Yeah, I need to look this up because I get them sort of confused with the Rift apps, but.

• 28:08Speaker 03

  I've done the the social experience with the regular Oculus, Facebook's social experience, but that works on the Go now?

• 28:15Speaker 04

  No, so there are two completely different sides. There's Facebook's VR and that, I believe, is still just on stuff with fully tracked hands, which means the Rift. But there's Oculus Rooms.

• 28:27Speaker 03

  Okay.

• 28:27Speaker 04

  Or it's their equivalent of Spaces. And that you can go in and like, watch TV with people and hang out and it's not quite like VR Chat or Big Screen. I think Big Screen's also on it. Like, I think that if you want to go hang out with people in VR, that's a thing that's kind of neat to do. I don't know if it's a thing for me, but it's like VR Chat is maybe the most popular VR app out there. And I feel like that has to transfer a little.

• 28:54Nilay Patel?

  Yeah. I mean, there's a part of me that deeply loves the idea of Facebook coming totally full circle, investing all of this money into VR and what they've built. Is the best way into VR chat, which is basically AOL chat rooms from the 90s, but with three dimensional avatars. Right, like, it's amazing. Like, they've just come all the way back around and now they're just doing chat rooms again. And I think that's, that's just nice.

• 29:17Speaker 03

  Well, they really, I mean, from what they've been saying on stage, it sounds like they, it's very important to Facebook that ultimately they can make you feel like you are basically with another person.

• 29:28Speaker 04

  Yes, but people's definition of with another person seems just regrettably pathetically low in the VR world.

• 29:38Nilay Patel?

  So, Adair, is this a buy or no buy? What do you think?

• 29:40Speaker 04

  I bought one. I think it's, it kind of depends on what you think is worth spending money on. If you were like, went out and bought a Nintendo Switch on the very first day when it had like two games, um, then yeah, this is probably the kind of thing that maybe you would have fun with. Um, if you take, like, if you didn't buy a console for years and years because you wanted to make sure it was the best console and it was great, no, this is like, not the thing you should buy.

• 30:04Nilay Patel?

  Uh, I'm really taken with this idea that they're gonna start doing these immersive live performances in VR. It seems insane. It also seems like the most natural idea for VR, that you're gonna go into a Sleep No More type of experience in your headset anytime you want and these things are gonna play out. Do you think, I mean, there's a lot of immersive entertainment stuff happening in this world. It's an ever-growing phenomenon. Do you think Oculus can actually pull that sort of thing off?

• 30:30Speaker 04

  I can't tell, because again, I can't tell if I'm like most people, because I know a lot of people who are really excited about it, but one of the things that's interesting about immersive installations to me is that you are physically there. And like, that you can pick things up, that they're, you're in a space that's unfamiliar, that they're just scent and there's touch and all of these things that VR just doesn't do. Like, you know how in Westworld, the whole point of Westworld is that it's better than VR and that's its selling point? Because it's real. But that's kind of how I feel about Sleep No More stuff, even though I think that this interactive, like, AI sort of storytelling, I think that's really neat. And I think this whole interactive thing is really fascinating, but I don't know if that has to be in VR, or if it could turn out that you go, like, on your desktop and

• 31:16Speaker 04

  play like, what seems like a first-person game that happens to have sort of live mocapped actors.

• 31:21Nilay Patel?

  Yeah. I will say Westworld, uh, makes even less sense when you haven't slept in two weeks. Like, I definitely watched this episode and that's like, I don't, what are these people doing? Why are they so mean?

• 31:33Speaker 05

  There is no show where I'm more on the fence between like, this is really engaging and this is incredibly stupid. Like, I just veer wildly back and forth during every episode.

• 31:43Speaker 04

  I want to write a dissertation about every episode. I have, I want to write like a really detailed analysis of the economics and class implications and like, who uses Westworld? Because it all makes just little enough sense that I can think of all of these really interesting explanations. Where do they get the startup money?

• 32:02Speaker 04

  I don't know, having seen people buy into VR stuff, like...

• 32:05Speaker 03

  So, I was, I was wondering about, do you have any thoughts on kind of the next genera- like, so, like Oculus Go is making VR headset technology that like, you could have gotten a year ago, but cheaper and more portable or more, I don't know, more convenient. But, there's also like new, like, next-gen VR headset stuff happening too, right? Like, the next Oculus, maybe you can like, focus, like, have different focal distances or wider field of view. Is that stuff real? Is it really happening? Or, or has like desktop VR just kind of stalled?

• 32:42Speaker 04

  No, so Oculus keeps saying that it's really committed to desktop VR and I believe it just because desktop VR is sort of in a way so cheap? Because you don't ever have to worry about minimizing components and doing all of the stuff that's really hard in computing. It makes sense for them to keep doing it. I think that there are kind of two generations of VR ahead. There's one generation that is sort of like Oculus Santa Cruz, which they've been showing off for a little while. It's self-contained like Oculus Go, but it has full sort of, you can walk around a room tracking and it has full hand tracking. It does all the stuff the Rift does. But it has the benefits of the Go where it's like self-contained and cheaper than like buying a Rift and a PC together.

• 33:23Speaker 04

  And I think that's sort of where you get into, they showed off some prototypes at F8. One of them had a really wide, like 140-degree field of view. They showed, I think it had eye tracking. You, they showed off this system where they had sort of photorealistic renderings of your face and they would use sensors to analyze where it was and like, where, and read facial expressions. It's all this stuff that's... One part like improved experience and one part bells and whistles. And I think those two things could come together and that's probably going to be the next generation. The problem is neither of those actually solve like the problems that VR has, which is that the resolution's

• 34:02Speaker 04

  still, I don't know when it will be high enough, that it's really heavy, that we still, like, there are really interesting things to do in it, but it's still, we haven't really cracked, like, here's how to make it feel normal to people.

• 34:16Speaker 03

  Yeah.

• 34:16Speaker 04

  And I'm not sure if that's just a, we have to wait longer, or if there is actually a generation of things that we have to, that we just don't know yet and we haven't seen yet.

• 34:25Speaker 03

  I feel like the, the actually make it, especially if I'm correct that Facebook's ultimate goal is to make it feel like I'm hanging out with somebody. Like, the ideal is that I just wear a pair of, like, regular eyeglasses and it looks like my buddy is in the chair across from me. And I'm not wearing a fully immersive headset. It seems like, like, that, that the Magic Leap AR future is closer to what Facebook wants to accomplish than fully immersive VR.

• 34:52Speaker 04

  Yeah, I think a lot of, I was talking to Walt Mossberg about this on Twitter, but yeah, that Facebook VR and VR in general has sort of felt technically ready earlier, because when AR is bad, it's just really, really bad. But that AR, it's much easier to imagine a future of people using it in the near term, and imagine what people are going to do with it, and imagine a way that it could kind of feel natural.

• 35:16Speaker 03

  Hmm.

• 35:17Nilay Patel?

  But of course, Magic Leap is closer to what you want, because it doesn't exist.

• 35:20Speaker 03

  Yeah.

• 35:21Nilay Patel?

  Right?

• 35:21Speaker 03

  That's always helpful.

• 35:21Nilay Patel?

  It's just a dream.

• 35:23Speaker 04

  No, I think that-

• 35:24Nilay Patel?

  Obviously, vaporware is what you want.

• 35:26Speaker 04

  No, no, this is the, the distinction, is that the technology of Magic Leap is, I mean, I don't know if it's vaporware, it's probably vaporware, but the concept of like what you could do with it, it is much easier for me to imagine, oh yeah, here's this system, and I would actually use this system, versus VR, like, I don't know what would make me feel like I was physically in a separate magical place with a person, and really, really believe that.

• 35:51Nilay Patel?

  Is that just like Facebook, it's biased towards everything needs to be a community project, right? Like, Facebook knows that all of its money is in the network effect, right? That's why Instagram is good. Like, all your friends are there, all your friends are on Facebook. The majority of your friends, if you don't live in the United States, are on WhatsApp. Is that just Facebook trying to glue on something to VR that doesn't need to be there, shouldn't need to be there? Or is it what everyone in the industry thinks?

• 36:16Speaker 04

  I think it's what a lot of people in the industry think. It's also kind of a way to get around basically creating your own PlayStation and like your own whole giant catalog of games and content. Like if people can provide the entertainment for each other and you just have to create situations where they can hang out with each other and do things. That's really good for you.

• 36:37Nilay Patel?

  It's like truly the Westworld model, like go, just play here. You'll be, you'll be fine on your own. Um, okay, we, I want to move on. There's so much other stuff. There's T-Mobile and Sprint. There's Apple. But real quick, Casey, uh, we brought up Instagram earlier, but I'm just looking at this list of headlines. Video calls are coming to Instagram. Instagram stories have GoPro and Spotify integration. They're allowing third parties to create. It seems like they're just throwing everything at Instagram in a way that kind of scares me.

• 37:05Speaker 05

  I think the shorter version is Facebook is coming to Instagram. Like, if you want to get a good look at the Instagram roadmap, get a load of Facebook. And the reason is because their youngest, most desirable demographics are moving to Instagram. And so they're going to try to give those people all of the features that they abandoned on Facebook. And I kind of don't know how this is going to play out.

• 37:30Nilay Patel?

  I, I have had this. It seems like they should start another Instagram-like thing and then just chase their users around.

• 37:38Speaker 05

  Yeah.

• 37:39Nilay Patel?

  Yeah.

• 37:39Speaker 03

  Like try to make a whole circle?

• 37:41Nilay Patel?

  Yeah, they cut all the features out of Facebook.

• 37:43Speaker 03

  Right.

• 37:44Nilay Patel?

  And then everyone goes back to Facebook.

• 37:45Speaker 03

  Hmm.

• 37:46Speaker 05

  I, I've had this conversation with the Instagram team, actually, where, um, and, and I had it in the context of them launching, um, direct, which is going to be a standalone messaging app that is probably going to roll out broadly this year. And if you want to send messages on Instagram, you're going to have to download a standalone app. And we're going to get a repeat of the, uh, angst that we all felt when Facebook spun out Messenger. And I said to the team, like, take a lesson from Messenger, because Messenger was a, it used to be a really lightweight, fun app that everyone. Loved and then they just larded it with features until all of us ran screaming to other messaging apps, including Instagram, which is very limited in what it can do. So, you know, I think all software is always caught in this place of, you know, hearing requests from users, please

• 38:28Speaker 05

  build this, please do that. And it would be nice if some companies showed a little bit more resistance to doing things that ultimately undermine the app.

• 38:37Speaker 03

  Would Facebook ever let, I mean, because, you know, I give, I give Google a lot of, a lot of heat on this podcast for having too many messaging apps. But Facebook's getting up there now. Like, would Facebook ever consider like letting WhatsApp talk to Instagram, talk to Messenger? And it's like, you choose your interface? Or, or does that, does that reveal the, the big lie?

• 39:03Speaker 03

  That all of these are owned by one company?

• 39:05Speaker 05

  I think that probably reveals it. I mean, there is a very real sense.

• 39:10Speaker 04

  Standards too, right?

• 39:10Speaker 05

  Yeah. Only WhatsApp is end to end encrypted. And from the way Zuckerberg was talking this week, it doesn't sound like they have plans to bring end to end encryption to their other apps, save for the secret conversation mode in Facebook Messenger, which requires a guided tour of the app in order to find. But, you know, it is interesting how Facebook has this family of apps and they really are just different user interfaces for the same thing. I mean, arguably all social software is just the same, like five functions endlessly remixed. But, you know, some people really do have strong preferences around them. And I think a lot of us on this podcast and probably a lot of people out there would probably express a strong preference for Instagram. But man, like WhatsApp has a ton of fans all around

• 39:55Speaker 05

  the world, right? And, and Facebook itself still has a lot of partisan. So, so Facebook is making plenty of money just by giving us different interfaces for the same five features.

• 40:03Nilay Patel?

  Yeah, I just, that Instagram direct thing to me, the idea that you're going to start, you're going to spin off this app, you're going to start video calling Instagram, and you're going to start live streaming your GoPro to it. All of the sudden, this thing is like some unholy mix of Skype and YouTube. And I just don't need that thing like Instagram messages for me are like, I send my friends a bunch of emojis when they post a fun story and that that is all that needs to happen there. Look, I I rare, but the most conversation I've ever had in Instagram message is what is your email address? I would like to move this to a traditional message. Well, what is her fax number?

• 40:43Speaker 03

  It is true that like Instagram is kind of where you in some sense kind of meet people online a little bit like you see somebody doing a cool thing or you see somebody comment on your friend's post or something like that and I don't know.

• 40:56Speaker 05

  I I have this whole thing about how Tinder is just a messaging infrastructure for Instagram. Like that's all that it is. It pulls your photos from Instagram, pulls more photos from Instagram and you send messages to people with Instagram accounts and that's what Tinder is.

• 41:09Speaker 03

  That's true.

• 41:10Nilay Patel?

  Is that why Facebook is doing this crazy ass dating thing?

• 41:13Speaker 05

  A hundred percent, a hundred percent. The match group is worth $13 billion. Like there are people at Facebook just sit around all day saying, where could we make an easy billion dollars? Like dating looks very easy because it was the original idea that the company started to do.

• 41:30Nilay Patel?

  Oh, man. Every sorry, I you know, it's like I have a little distance now, like I've just been completely unplugged for weeks on end and it's Facebook's, you know, they'll figure it out, but just hearing you talk about it that way, and I'm sure that's actually how it goes down. It's like, why would you be a developer on Facebook's platform? If you're any kind of successful, they're just gonna eat you, right? Which is what they're gonna do to master.

• 41:52Speaker 05

  That is 100% true. I don't actually know how Facebook responds to that because it seems to be so transparently true. You know, I mean, look, again, like there are ways to make money on Facebook. It is a great engine for finding customers. So, you know, you can use Facebook to do that. But yeah, if you have like an idea for, you know, some sort of like group chat thing that is going to use the Facebook login API to help bootstrap your first 10 million users, like Facebook probably is not going to let that happen or if they do, they're not going to make it easy on you.

• 42:21Speaker 03

  Facebook really wants your small, local business to succeed. It wants you to sell more cupcakes than have ever been sold by a small, local business.

• 42:33Nilay Patel?

  Well, that's why Facebook boycotts don't work, right? Because the big advertisers aren't actually there. I think it was, hopefully somebody remembers, but it was like the, the CMO of like Procter and Gamble or something was like, we can't even take our money off of Facebook. We don't spend any there. All of it is Kickstarter, small business, all this customer acquisition stuff. There's a really great article, I think it was in Inc. about like the razor companies like Harry's and then Hims and there's a, all the direct to consumer, consumer goods companies that are all dumping money into Facebook and Instagram to acquire their customer base and become the next Dollar Shave Club. And they're quickly learning that there's a, like, there's just a law of diminishing returns that destroys them.

• 43:15Nilay Patel?

  It's actually cheaper for them to open a store in like Soho, because then they can get people off the street.

• 43:20Speaker 05

  That's wild. What, say more about that. Why is that? Like, what is the, what is the bump that they hit that, that makes it stop being cost effective?

• 43:26Nilay Patel?

  So this article is great. I'll, I'll, we'll put it in the show notes or something. Um, it was, it's all about Wharton, the business school at Penn. Is, it's where all of these direct to consumer good companies have started. So like, there's this flywheel of entrepreneurship there that everybody wants in on this action. Warby Parker was started there. And so Warby Parker was great because all, almost all eyeglasses in America and the world are, are made by Luxottica, which means there's not a lot of competition. Prices go high. They came in, they underpriced the market. They changed consumer behavior on glasses. People buy them much more often now. They buy them as fashion accessories as opposed to like utilities. And so that flywheel is great. But if you were trying to sell something like bed sheets or couches or razor blades, and there's already like

• 44:11Nilay Patel?

  low margin razor blade companies, you need to like elevate your brand messaging. You can't win on cutting costs alone. And so having a store is a really good way for people to like see and interact with your product and for you to, you know, say our thread count is higher, these sheets feel better, or this thing is built better than some other thing. And so their cost of customer acquisition is skyrocketing. And Facebook is also charging them tons and tons and tons of money because there's so much influx of these companies trying to use the platform to acquire customers. It's just like a wild cycle. And so like my joke about every other Instagram story ad I see is some Kickstarter. It really is. Like, it's all small businesses trying to pitch people like me on their like startup ideas.

• 44:55Speaker 05

  I just love the idea that like Facebook, like messing up this thing is like leading us back to brick and mortar retail, like. Just one more crazy, unexpected consequence of the news feed. Um, it's like the, there's a reason I write about Facebook all day, every day. It's like the weirdest dang thing in the world.

• 45:14Nilay Patel?

  It is truly strange. Oh, yeah. I'll, I'll, okay, I'll send it to you, but then I'll stick it in the show. Yeah. People, it was, um, I saw it floating around earlier this week and I, I was, as I was reading it, I was just laughing and laughing because all these entrepreneurs think they've started like tech companies or like Warby Parker companies. And they realize they've started Crate and Barrel and they're like, oh shit. Like that wasn't, that was not our intention going into this. All right. I'm gonna read this ad, then we gotta talk. I, I wanna talk briefly about Apple earnings. I want to, I want to talk a little bit about T-Mobile and Sprint.

• 45:50Nilay Patel?

  This episode of the Vergecast is brought to you by IBM. We live in a world that's creating AI-enabled everything, a world with more IoT devices than people. Today, technology has never been smarter, but smart only matters when you put it to work where it matters. When we put smart to work, we can help save species, increase crop yields and make progress, not just for a few of us, but for all of us. So let's get to it. Let's put smart to work. Find out how at ibm.com/smart.

• 46:14Nilay Patel?

  Okay, we're back. Paul.

• 46:15Speaker 03

  Mm-hmm.

• 46:15Nilay Patel?

  Every week, buddy. I mean, I, I don't know. I'm assuming you've done this for the past three weeks.

• 46:20Speaker 03

  Yeah, no, I've been very consistent.

• 46:22Nilay Patel?

  Okay. It's, I got the same name.

• 46:25Speaker 03

  Always the same name. I do a segment that's called Safety First, They Said. And it's a, it's this Lumos helmet, which I don't know. I missed this the first time around. It's a helmet with very bright lights on it that can, uh, give you like have turn signals and brake signals that you wear like while riding your bike. And then there's a little controller on your handlebars, but that's annoying. So now they set it up so that you can use your Apple Watch and use gestures, because everybody remembers. The hand signals for riding a bike, right? Hmm. Yeah, yeah. So I'm guessing that they probably use something like that. But yeah.

• 47:04Nilay Patel?

  So just you you wear a helmet and you you like

• 47:07Speaker 03

  You just

• 47:07Nilay Patel?

  Put your arm out in an L and then your helmet starts blinking?

• 47:10Speaker 03

  Your helmet starts blinking and then the watch will vibrate to let you know that it's still blinking and you shake your watch and then it will stop blinking.

• 47:18Nilay Patel?

  It seems like an excellent way to get into a bike accident.

• 47:20Speaker 03

  Yeah. And also you just look like a total dork and like I I really support safety. Uh, and I think people should wear helmets. Uh, but I'll be honest with you. I don't wear helmets because I don't want to look like a dork and Lumos isn't helping.

• 47:38Speaker 05

  I love that you don't want to look at a dork, but I'm looking at your headphones right now and oh, boy.

• 47:42Speaker 03

  Yeah. Yeah.

• 47:45Nilay Patel?

  Are you? Have you got AirPods yet, Paul? Have you given up?

• 47:47Speaker 03

  No. Oh, you maybe you missed it. The one true answer is arrive.

• 47:52Nilay Patel?

  What is?

• 47:53Speaker 03

  The the the dongle life hell is has resulted in the greatest gift to mankind, which is wireless PortaPros.

• 48:00Nilay Patel?

  Oh, I saw Vladev read them.

• 48:02Speaker 03

  Yeah, Cas has made wireless headphones. They have horrible Bluetooth connectivity, but they sound amazing. And they make you look like a real dork.

• 48:12Nilay Patel?

  It's all happened.

• 48:13Speaker 03

  But, uh, I see. Here's what I do is I all the dork points that I don't spend on helmets. I use to wear Cas.

• 48:22Nilay Patel?

  I really hope those PortaPros, uh, protect your skull. That's that's what I want. Casey, are you still? Are you still on AirPods full time?

• 48:30Speaker 05

  I I am, um, but the microphone stopped working and I'm very sad about it. It apparently makes some sort of very crunchy noise whenever anyone talks to me. And so they're like just out of warranty. I should probably go into the genius bar to see if they can do anything, but it's kind of turned into a hassle. Uh, but like all the things that I've always loved about the AirPods, I definitely still love.

• 48:51Nilay Patel?

  Wasn't David Pierce tweeting that his had broken too? Is this a thing?

• 48:54Speaker 05

  Yeah. And I actually would ask if anybody else has had any microphone issues with their AirPods, like, please tweet at me because I I want to hear all of them. Like, I I want to know if I am more than just a one off here.

• 49:04Nilay Patel?

  I can't have AirPods in my house right now because the baby will just put them in her mouth.

• 49:10Nilay Patel?

  We're back to huge. nutritious though. Yeah. Okay, let's talk about T-Mobile and Sprint. So this is a big deal. There are, I don't know, four or five ways to to cut into it. So T-Mobile and Sprint have been trying to merge for 500 years, something like that. There's an ancient prophecy.

• 49:33Nilay Patel?

  I so I'm gonna I'm gonna start. Man, I wish Dieter was here. Because this would just drive. This is going to drive him crazy. Right. I'm gonna start in like 2007 with WiMax. So I the entire story here is ages ago, Sprint tried to get way out ahead of 4G by betting on the wrong technology. Big bet. Which was which was WiMax, a technology that literally no one else in the world thought was good, except for, I believe, one carrier in South Korea. And they only used it for, I believe, fixed deployments to office buildings. And Sprint was like, what if we take that technology and put it in your pocket? That did not work out. Ever since then, Sprint has been basically failing

• 50:18Nilay Patel?

  along, as near as I can tell. AT&T, two, three years ago, four years ago, 2014, AT&T tried to buy T-Mobile. The Obama FCC said, no, you can't. We need four competitive. That was 2011. 2011. My God, time. Time disappears for me. But having a baby also is like one endless day. Like, I don't know when days begin and end. Because you you just you don't ever like sleep in a way that indicates a day is over. Anyways, 2011, Obama FCC says, no, AT&T can't buy T-Mobile. We need to have four competitive wireless carriers. T-Mobile immediately became a force, right? They became they became T-Mobile in a very serious way. They started doing all

• 51:01Nilay Patel?

  their own carrier stuff. They become a very competitive threat to AT&T and Verizon. Obviously, John Ledger, their CEO, is like a well-known public figure. He loves to talk trash. In the background of that, SoftBank, the huge Japanese conglomerate, invested a ton of money into Sprint. And literally since then, there has been talk of T-Mobile and Sprint coming together in some way. So T-Mobile can expand even into more of a threat to AT&T and Verizon. From what I can tell, there was a lot of back and forth about who would be in charge of this. And that finally got resolved. And Sprint CEO is going to be out. He'll end up on the board of the new T-Mobile. T-Mobile CEO John Ledger will be the CEO.

• 51:46Nilay Patel?

  T-Mobile COO Mike Seaver will be the new COO. And SoftBank's CEO, Masayoshi Son, will be on the board as well. So like, if you just start with all of that, what you have is, almost a decade ago, Sprint made the wrong bet and has never managed to recover in a serious way. T-Mobile was prevented from failing into AT&T and they became competitive instead because we want four national carriers. And now, T-Mobile saying, well, Sprint's gonna fail, we should buy them. And I can't quite wrap my head around if that's good or bad. Like, there's only three carriers or Sprint goes bankrupt, right? So what are you gonna do? You might as well let T-Mobile become more competitive.

• 52:30Nilay Patel?

  But at the same time, the entire rationale for not letting AT&T buy T-Mobile was that you wanted four national competitive carriers.

• 52:36Speaker 03

  But there is a fact that it doesn't feel to me that Sprint's very competitive right now. So you, you make T-Mobile more competitive versus Verizon and AT&T. So you have three more competitive than you, instead of having two really, really strong contenders. And the up and coming, up and comer of T-Mobile and then the, the floundering Sprint.

• 52:59Nilay Patel?

  Yeah, that is the argument, right? That T-Mobile would, the new T-Mobile would get something like a hundred-ish million subscribers. That puts it firmly into the same size as AT&T and Verizon. They would obviously have access to way more spectrum. T-Mobile and Sprint are claiming this is all about 5G. Literally, the website is called allfor5g.com.

• 53:18Speaker 03

  Hmm, you know what? I'm all for 5G.

• 53:20Nilay Patel?

  It is the worst Michael Bolton song.

• 53:24Speaker 03

  Well, 5G is very much about putting a bunch of spectrum all together all at once, right?

• 53:29Nilay Patel?

  Yeah, and they're saying they can they can get their way faster. Um, I just don't, the one comp that people have used is Canada where they did go from four to three. And prices everywhere shot up dramatically. Because if you don't have that desperate challenger trying to undercut everybody, there's no reason for anybody to go lower. Right? And so if you have three companies around the same size and they're just trying to manage churn, they're never going to be desperate or desperate enough to do something crazy. Of course, it's John Leisure. So like, who really knows? Like, is he going to settle down? He's going to like trade in his other jacket and cut his hair like, I don't know. But is to me, this is a huge deal.

• 54:11Nilay Patel?

  Um, and one thing that I've been thinking about as I've just been reading about it is Trump hates the idea of AT&T buying Time Warner. Like, he doesn't want AT&T to do that. And AT&T doesn't want this. Like, he might just instruct his DOJ to block it because AT&T to let it go through because AT&T doesn't want it to happen. Right? It was just totally backwards of what he's saying about AT&T and Time Warner. So we'll we'll see. It's like, it's such a big deal that we've already written, I think, six posts about it. Um, you should go read all of them because it has implications all the way out. But to me, this all starts with Sprint made such a bad bet a decade ago that it has never managed to fully recover. Like, they still don't support voiceover LTE on their phones.

• 54:56Nilay Patel?

  Like, they're that behind technologically. They're still they're still running a bunch of CDMA on their phones because they have to. And everyone else has moved on and they just they're so behind technologically that it's it's better to just let their spectrum go to T-Mobile and try to compete better. But like, wouldn't you be happier if, I don't know, US Cellular was like, fuck it, we're a national carrier now? And they became a real competitor.

• 55:18Speaker 03

  I wish.

• 55:20Speaker 03

  Google had taken Project File more seriously, or if there were, I don't know.

• 55:25Nilay Patel?

  Well, I hate to bring this back to Facebook. It's funny, because Facebook is a huge ISP all around the world.

• 55:29Speaker 03

  Right.

• 55:30Nilay Patel?

  Right? And Google tried to be an ISP in the United States, and it's, they just like ran against the wall of monopoly incumbent power, and they just gave up. They gave up with fiber and they've got a-

• 55:41Speaker 04

  They were doing something different, though. Like, they were like, you have this good service, we're going to offer incredible great service at an incredibly low price, whereas Facebook goes into places that basically don't have the internet, and it's like, here's internet.

• 55:53Nilay Patel?

  It's literally coming at you from balloons. Yeah, that's true, but, you know, Google has its own crazy ideas about getting access in places where where it never has been before. It's just, it was easier for Facebook to go into somewhere, you know, some developing country and say, here's free basics that it was for Google to go into Kansas City. And I, you can say that, like, what they were delivering was much lower quality in a sense, but it should be pretty easy to build an access business somewhere in America, and it just isn't. And so, like, to have one of those competitors go away, to me, what I'm scared about is maybe another competitor will never emerge. Because already the big companies have tried and failed.

• 56:32Speaker 03

  My worry, I, it just, it feels like we've been doing this wrong, basically, ever, ever since, like, if, if almost everywhere you go, at all times, if you open up your phone and browse for Wi-Fi, there's some Wi-Fi out there, right? Like, you're almost always very close to a lot of Wi-Fi hotspots. Uh, but like, there's just lots of problems with Wi-Fi. Obviously, the big one is, that is somebody's wireless router, and, uh, they don't want to give you the password, and they don't want you streaming Netflix on them, you know, when they're trying to stream Netflix. You know, there, there's lots of problems with trying to share that kind of infrastructure, but it's also silly to me that, like, how often

• 57:11Speaker 03

  I'm hitting cellphone towers when I really should be hitting, like, closer, more effective, like, small cell, uh, not necessarily Wi-Fi, but like, you know, just like, so, so much of the infrastructure is centered around these relatively large big tower, old-timey radio broadcast things, when we have so much, you know, we are sponsored by HBO and they're distributing it.

• 57:36Speaker 03

  Right now, like, I just feel like there's, there's gotta be a

• 57:39Nilay Patel?

  Wait, did you just refer to Silicon Valley as HBO's distributed internet thing?

• 57:45Speaker 03

  I just

• 57:46Nilay Patel?

  That's a TV show.

• 57:47Speaker 03

  I really, I have to imagine, like, you know, Elon Musk gets us some space internet, right? The space internet's beamed down from the sky into each building that has a little receiver, transceiver on the roof, and then that goes to wifi. And then it's like, yeah, I use my cellphone when I'm like on road trips. But other than that, I, you know, I don't need, I don't need all this. There's so much redundant infrastructure. I feel like there's gotta be a better way to make wireless internet.

• 58:17Nilay Patel?

  Well, it's basically Comcast is doing.

• 58:18Speaker 04

  Yeah, people have been trying to do that forever, though. Like, there have been so many little sort of MVNO style things that are like, we're gonna lease data from Sprint, but you're mostly gonna use wifi.

• 58:27Speaker 03

  Right.

• 58:27Speaker 04

  And I guess maybe some of them are still around.

• 58:30Speaker 03

  Yeah, what was it, Republic Wireless?

• 58:32Speaker 04

  Yes, that's what I'm thinking of.

• 58:34Nilay Patel?

  And Xfinity Mobile is basically, you're gonna roam around on Comcast.

• 58:37Speaker 03

  Oh, yeah, I forgot about that.

• 58:39Nilay Patel?

  And then, don't, if you don't have it, you'll jump to Verizon, which is incredible. But it's funny, because, you know, T-Mobile lists that as a competitor to them. They're like, we have eight competitors. One of them is Comcast Xfinity Mobile, which has no subscribers, effectively. And then another competitor they listed was Charter, which literally is just not in the business at all. Like, just doesn't have a wireless service to compete. So it's, it's a lot of that going on. Okay, I'm gonna read one more ad, then I do wanna talk about Apple earnings, and we're gonna wrap this thing up.

• 59:12Nilay Patel?

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• 59:56Nilay Patel?

  Okay, you know, I said we're going to talk about Apple earnings, but I really just want to talk about Verizon putting Go90 on all Galaxy S9 phones, which is the worst news I've ever heard in my entire life. Do you see, it's so funny, when you're completely disconnected, what comes across to you is just totally different than usual. Matthew Panzerino, the editor of TechCrunch, posted a photo of like knockoff Chuck Taylors that Oath had made with a TechCrunch logo on them, which are just like, he's a huge sneakerhead, and he just seems so sad about it. And I was like, Matt, you know, when we ran Engadget, we were at CES one year, and AOL decided that they would take a bunch of Escalades and wrap the Engadget logo all over them and not tell me about them. And he's like, "They will always ruin the things you love mercilessly."

• 1:00:38Nilay Patel?

  I don't know. Casey, okay, we spent all this time talking about Facebook.

• 1:00:43Speaker 05

  Yeah.

• 1:00:43Nilay Patel?

  I think that we don't spend enough time talking about Oath. For this one particular reason, their entire business is the same as Facebook's in exactly the same ways that people are mad at Facebook. Right? They are on the phone network, they run a bunch of media sites, they track you mercilessly across those sites, they deliver programmatic ads that will follow you across not only, you know, the apps and services you use on Yahoo, but all the media that you might read on Yahoo News or Engadget or whatever. And I, you know, I don't mean to denigrate the people who work there. This is a corporate decision that's being made about, you know, I was on Engadget the other day and they're like, "Please accept the new oath terms of service." Like, the people who work in Engadget have no, no control over that.

• 1:01:28Nilay Patel?

  And then Verizon owns them and they're doing device level tracking on the phone. Like, is there a reason that no one has pointed the same sort of lens at Verizon and Oath? And what's happening there that they do at Facebook? Is it just not sexy at all?

• 1:01:41Speaker 05

  Well, first of all, you're gonna love my new Vergecast spinoff podcast, Oathcast, which will investigate these issues in great detail.

• 1:01:49Nilay Patel?

  Well, it's just funny. I mean, it's just another huge business that's out there, but it attracts none of this negative attention.

• 1:01:54Speaker 05

  It's true, and I think you could extend that question to data brokers more broadly, right? And ultimately, I think it comes down to visibility. We're very aware of what Facebook is doing because we're on Facebook all day, every day. Most of us are not on oath properties all day, every day, and even if we are, we might not know that they're oath properties. So they benefit from sort of not exactly being in the shadows because they're a media company, but these decisions about how they collect our data and what data they collect, it's much harder to keep track of. And frankly, I think, you know, your personal data is now so hard to keep track of that some people have embraced a certain nihilism, right? And just sort of throwing their hands up. I mean, as we've been talking today, Twitter

• 1:02:37Speaker 05

  told all of their users to change their passwords because they accidentally, apparently stored maybe everyone's Twitter password in plain text. No way.

• 1:02:48Speaker 05

  An internal log. No, it's in an internal log. So this wasn't just like, you know, uploaded at twitter.com for anyone to check out. You know, you would have presumably had to have been inside Twitter. But at the end of the day, you know, it's a terrible mistake. And, you know, whether you're talking about oath, whether you're talking about Twitter, whether you're talking about Facebook, you know, it's hard to even know how you would get control of your data if you wanted to, how you would actually exist on the internet while maintaining any modicum of privacy or control.

• 1:03:21Nilay Patel?

  I just think the future here that we are looking at is Verizon bought a bunch of media companies, and now the phones and Verizon's network are going to have media company apps preloaded on them. AT&T wants to buy Time Warner. It's very obvious that, you know, HBO Now is going to end up preloaded on the AT&T Galaxy S9, even when that deal goes through. And all of, everything they're doing is, they want you to spend more time inside of their media ecosystem so they can develop as much, as much of a sophisticated profile as Facebook has, so they can, they can compete in that business as well as the other business. And I feel like- All of the attention we paid to Facebook, we could pay that same attention to Google.

• 1:04:03Nilay Patel?

  I know there are lots of activists out there who would love us to pay that same attention to Google. But the phone networks are, they're all trying to do the same thing. I think it's super interesting. None of this, however, is about Apple earnings, uh, which I have been teasing that we're going to talk about for an hour now. Uh, and I've utterly failed to. Here's why I wanted to bring this up. So Apple did great. They always do great. They sold a bunch of phones, uh, sixty one point one billion in revenue. They met their own numbers. Growth is back up in China, which is a big deal for them. And here's the, the thing. So, leading up to this, there was a lot of question about whether the iPhone X was a success or not. This was mostly measured against analyst expectations. And I think there's a lot of ball moving that's happening right now. So analysts were expecting the iPhone X, which was a, a new phone design, which has not happened for a long time in the Apple world.

• 1:04:48Nilay Patel?

  A new phone design usually kicks off, um, a massive upgrade cycle. That did not appear to be happening. There were reports from like Samsung's OLED division that their sales were not meeting their own projections because they were not selling as much, as many flexible OLED screens. So then iPhone X as a failure became the narrative. Then Apple released its results. iPhone X is doing fine. They, phone sales are basically flat, but they haven't gone down. And everyone's, but average sale price and revenue is way up because iPhone X costs a thousand dollars. So you look at all that and everyone's like, Apple did great.

• 1:05:23Nilay Patel?

  They blew away all these projections when really they, we just moved the ball from a new iPhone design generally drives this huge upgrade cycle to things stayed relatively fine. Does that seem like what happened here? That's just me again. I've been out, I'm like out of the new cycle, but it seems like the iPhone X was supposed to do better than it did. And then it did fine and now we're all celebrating.

• 1:05:47Speaker 03

  And that sounds, I'm just so bad at bit. As soon as you get to earnings, I just, I feel like my brain turns off. But, uh, I mean, that sounds reasonable to me. I mean, how much growth? Apple had to make this move because there wasn't much more to grow as far as more people buying iPhones. So they needed to make more expensive iPhones if they wanted to continue growing.

• 1:06:10Nilay Patel?

  Yeah. There's also this quote about the HomePod from Tim Cook. HomePod is widely recognized for having the best sound quality for its size and class. We look forward to adding new features to.

• 1:06:19Speaker 03

  What?

• 1:06:20Nilay Patel?

  Which is such a brutal.

• 1:06:23Speaker 05

  I'm so depressed about HomePod. I I'm so depressed because it I think it's it's gonna be enough of a hit that it that all of its flaws aren't gonna matter and that Apple has just achieved this sort of gravity where it doesn't even have to make good products to make a billion dollars. And I just I don't like living in that world because, man, like, when Apple was fighting from underneath, it was such a much more fun company to watch.

• 1:06:48Speaker 03

  It made a good product in terms of sound, but it hasn't solved the the customer user experience of the HomePod. Or the or the table ruining problem.

• 1:07:01Nilay Patel?

  No, Casey, I agree with you, which is why I think like the, you know, the big narrative is around Apple and services right now, where their services business is growing, their content business is growing. And I look at most of those services and they are worse than their competitors. But because they have the iPhone is there is just where they live. Like, you get an iPhone and it's really easy to sign up for Apple Music. It's really easy to start using Apple News. It's really easy to run out of storage and buy some iCloud storage. Of course, their services business is huge. It does not mean that those services are better than any of their competition by a long shot. You know, the the the key example, I think, is Apple Maps, which is fine. It's just fine.

• 1:07:42Nilay Patel?

  But it's not better than Google Maps. And yet it instantly had a dominant share because they're just on the phone.

• 1:07:48Speaker 05

  And I don't know what Apple. I got lost on Apple Maps in this calendar year. So I know we all like to say that it got better, but I was trying to get to a wedding in Phoenix and guess who ended up in a cul-de-sac that wasn't supposed to be there?

• 1:08:03Nilay Patel?

  I don't think no, no Apple employees have ever been to Phoenix. That's the problem.

• 1:08:08Speaker 05

  Nor should they. I mean, I don't hold that part against them. I'm just kidding. Phoenix, I love you. I used to live there for six years. Come on now.

• 1:08:16Nilay Patel?

  Uh, yeah, I just, I, I think that to me is a, again, I, I'm saying you have a kid, the ecosystem jail door is just like slam shut. You're like, okay, I'm just gonna use all Apple stuff. It's easy. Everybody has it like, I need to distribute photos of this child. Um, and I care deeply about security, right? I don't, I don't want them to like leak or be unencrypted. And you're like, okay, I'm just gonna use these products. They're not better than others, but they're simpler and available. And that to me is, it's such a big piece of the Apple story right now.

• 1:08:44Speaker 03

  What do you think about Apple's like relatively low R and D budget? That's like really worrisome to me.

• 1:08:51Nilay Patel?

  Isn't that, that's like a Steve Jobs thing. Like he, he came in and slashed that whole budget and said, we're only gonna work in products that shit.

• 1:08:58Speaker 03

  But there was also a time I remember where it was like some man, now I wish I remembered. Take it. There was a time when Apple was like, hey, the industry's slow right now. Here's our time. We need to invest really hard in R and D.

• 1:09:13Nilay Patel?

  So there was a recession.

• 1:09:14Speaker 03

  When we're out of this slump, then we'll be doing good.

• 1:09:17Nilay Patel?

  Yeah, that was like oh eight ish. And he said, we're gonna, Steve Jobs said, we're gonna innovate our way through the downturn.

• 1:09:22Speaker 03

  Okay. So, so the idea is that you have, you have an inverse. You, your R and D is the inverse of how well you're doing. So Apple's doing so well right now that it doesn't need to do any research.

• 1:09:35Nilay Patel?

  I mean, I don't, I don't, I, my only point, you know, I don't think you can compare the Steve Jobs Apple to the Tim Cook Apple, right? They're, they're obviously different companies. Um, my point is that like Casey's saying, Apple has so much gravity that they can't accident into success. Not necessarily on merits, right? Not necessarily competitive merit, like merits in a sense that the products are good. But like the Apple Watch is a dominant, is the dominant device in the wearables category. Mostly because it can send messages, right? If any other watch could send an iMessage, we would not always just recommend the Apple Watch. But no other watch has a capability because only Apple controls that capability. Like that, that to me is like an important piece of this puzzle.

• 1:10:20Nilay Patel?

  I'm not saying Apple Watch isn't better than the competition, but they have all of these accrued advantages. Where once you're in the ecosystem, it's better to just stay in than even for one second, look outside of it. Okay, that was dark. Apple's doing great, making a lot of money. I encourage you to have a child and live wholly within your ecosystem. You will feel very cared for.

• 1:10:39Speaker 03

  What about this rumor that Apple's gonna make a VR AR headset? Like, is that just like, just like the Apple's gonna make a TV rumor? That we just hear?

• 1:10:48Nilay Patel?

  Addy, do these, do these specs seem completely insane to you when you read them? It's like two 8K displays on your head with like a battery?

• 1:10:55Speaker 04

  I would totally believe that they're working on them because the thing is that the specs seem like unambitious for 2020. Like, yeah, an 8K display is big, but that still doesn't seem like it's gonna be, I don't know if retina is technically the right word, but I'm not sure that's still gonna be good enough that you aren't gonna be able to see, look, I'm looking at a screen. And I'm not really like, pass through video is not good. It's never good. Like, it's not good AR. Um, I heard somebody say that it could be sort of an enterprise thing, that it's like their version of like a pro product. I would believe that because you don't kinda care as much about the experience being flawless. You just want a powerful thing that can like, let you model stuff.

• 1:11:36Speaker 04

  Um, but I don't know. I would believe that they're working on it and I would kinda hope that they would iterate past it.

• 1:11:41Nilay Patel?

  The idea of Apple making a pro product is like, super funny to me. And like, they have to deliver a tower PC first. If you're really like, revolutionize, like, Pro CAD with AR displays. I like that idea, though. I mean, it's very clear that they've been working on AR, but, um, I really hope they just put out a TV, too. Like, they should just make a TV. It's like, so obvious that they should just make a TV. Anyway. I am just excited to talk to adults. Right now, I only have one friend. She's very small, does not have a lot to say. Um, she's great. Love her to pieces, but it was nice spending time with all of you. That is it for the Vergecast. Uh, there are other great podcasts to listen to. Why'd You Push That Button is going strong. I will say this. I, I am in charge of feeding Max overnight.

• 1:12:25Nilay Patel?

  So every morning, I listen at 4 a.m., I listen to about 10 minutes of Why'd You Push That Button? While Max, uh, has her meal, and that's great. I'm almost through this episode, which is about unfollowing people. Um, our managing editor, TC Sodik, is on it. Our senior features editor, Michael Lenko, is on that episode. They're both very funny. Listen to Why'd You Push That Button with Ashley and Caitlin. It's great. Uh, and then you should also check out another great Fox Media Podcast Network show, Polygon's Quality Control. It's Polygon's review podcast, uh, which is a conversation between Dave Tack and comics editor Suzanne Apolo, talking about Infinity War this week. Which I have not seen, please do not say a word to me about it because I will not probably see it for the next year. So just no spoilers the next year. That's what I got for you. Uh,

• 1:13:10Nilay Patel?

  where can everybody find you people? Addy, what's your Twitter?

• 1:13:12Speaker 04

  I'm the dextrarchy on Twitter.

• 1:13:14Nilay Patel?

  Casey?

• 1:13:15Speaker 05

  I'm Casey Newton on Twitter.

• 1:13:17Nilay Patel?

  Would you like to plug your newsletter and podcast, my friend?

• 1:13:19Speaker 05

  I would. In fact, if you go to my Twitter bio, you will see a link to my daily newsletter about social media and democracy. I encourage you to check that out. And we have a release date for Converge and it is this month. I don't think we want to spoil the actual release date, but it is this month. We've recorded a bunch of episodes. I'm setting up a bunch more. So the thing that y'all have so kindly been tweeting at me about is actually happening. And I'm just really excited to share it with everyone.

• 1:13:48Nilay Patel?

  One of the few things besides the show that broke through my leave was I looked at some podcast art today, my friend. It's looking pretty good.

• 1:13:56Speaker 05

  Yeah. And there's even newer art that I think I like even more than I'm going to show you as soon as we get off the podcast.

• 1:14:03Speaker 03

  Aren't you guys a couple of teasers?

• 1:14:06Nilay Patel?

  Come in. You gotta build the hype. Paul, where can I find you?

• 1:14:09Speaker 03

  Future Paul. And if you look at my Twitter bio, I've got an oath newsletter that I do every day.

• 1:14:18Nilay Patel?

  When I come back from leave, I am dedicating my time to making people upset about oath.

• 1:14:26Nilay Patel?

  That's all I'm gonna do. It's just like if I get, if I went through the day and not one more person was upset about oath, I will be thankful. That is it for the Verchassé. We're going a little bit long, but thank you so much for listening. I promise I will try to sleep a little bit more next week. Dieter will be back next week. He's not actually dead. He's just off doing something. It was fine though. If he was on the show this time, he would have had to just constantly disclose that his wife works Rockill.

• 1:14:52Nilay Patel?

  It all just worked out. Uh, we'll be back next week. We'll see you all next week. Thank you so much for listening. By the way, I'm reckless on Twitter. The Verge is at verge on Twitter, on Instagram. By the way, Instagram Stories game is incredible. Oh, and I totally forgot. It was the first thing on the list. I forgot to mention it. Verge Science launched on YouTube this week. Go check it out. Their first video is our deputy science editor, Al Sander Patenza, looking at slime molds and she uh eats some. That's true. That's just a fact that happens in the video. Uh, but it's incredible. Verge Science on YouTube. Go check it out. It's wonderful. That is it. We'll see you next week. Rock and roll. Paul.

• 1:15:41Nilay Patel?

  This episode of Vergecast was brought to you by IBM. Technology today has never been smarter, but smart only matters when you put it to good use. Together, we can build a smarter future for all of us. Let's put smart to work. Find out how at ibm.com/smart.