Jack Dorsey’s Square, Inc. buys Tidal / Microsoft Mesh and the future of Microsoft Teams / Apple not switching to USB-C iPhones

Nilay Patel and Dieter Bohn talk to Billboard's Micah Singleton about Jack Dorsey’s Square, Inc. buying a majority stake in Jay-Z’s streaming service Tidal. Verge senior editor Tom Warren joins the show to discuss the announcement of Microsoft's Mesh mixed reality platform and the various updates to Microsoft Teams, Outlook, and more. Further reading: Johnson & Johnson COVID-19 vaccine backed by independent FDA committee Long COVID patients say they feel better after getting vaccinated Vaccine centers embrace stickers and selfie stations Countries are polluting like it’s 2019 again: Global CO2 emissions came roaring back as pandemic-induced restrictions loosened Jack Dorsey’s Square, Inc. is buying a majority stake in Jay-Z’s streaming service Tidal Square Is Acquiring a Majority Stake in Tidal for $297M NFTs, explained Microsoft Mesh feels like the virtual future of Microsoft Teams meetings Microsoft Teams will soon let you pretend to be a news reporter during meetings Microsoft’s new Intelligent Speakers deliver its promised meeting room of the future Microsoft Teams is getting end-to-end encryption support Microsoft’s new Outlook calendar board view looks a lot like Trello Microsoft Edge gets a speedy startup feature and vertical tabs Microsoft’s Windows 10 UI overhaul continues with new system icons Google Workspace picks up new features designed for remote work Microsoft Surface Pro 7 Plus review: built for business A folding iPhone could be coming in 2023 Apple not switching to USB-C iPhones in the near future, according to Ming-Chi Kuo iPhone 13 might finally bring a smaller notch and faster screens Arizona advances bill forcing Apple and Google to allow Fortnite-style alternative payment options Epic Games is buying Fall Guys creator Mediatonic OpenHaystack is a new open-source tool that lets you create DIY AirTags on Apple’s Find My network Exclusive: this is the Sonos Roam, coming in April for $169 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 week on the Vergecast, Micah Singleton from Billboard joins to talk about Square buying title. Tom Warren talks to us with all the Microsoft news this week, and we get into some Apple rumors and what is going on with the App Store in Arizona. That's coming up on the Vergecast now.

• 0:15Speaker 01

  This episode is brought to you by On Investing, an original podcast from Charles Schwab. Each week, hosts Lizanne Saunders, Schwab's chief investment strategist, and Colin Martin, head of fixed income research and strategy for the Schwab Center for Financial Research, bring you fresh insights on what's happening in the markets and why, and what the implications might be for your portfolio. Join Colin and Lizanne as they explore questions like, how do you evaluate corporate bonds that look interesting? And what sectors are on the move right now? Download the latest episode and subscribe at schwab.com/oninvesting, or wherever you get your podcasts.

• 1:00Speaker 01

  This episode is brought to you by On Investing, an original podcast from Charles Schwab. Each week, hosts Lizanne Saunders, Schwab's chief investment strategist, and Colin Martin, head of fixed income research and strategy for the Schwab Center for Financial Research, bring you fresh insights on what's happening in the markets and why, and what the implications might be for your portfolio. Join Colin and Lizanne as they explore questions like, how do you evaluate corporate bonds that look interesting? And what sectors are on the move right now? Download the latest episode and subscribe at schwab.com/oninvesting, or wherever you get your podcasts.

• 1:49Nilay Patel?

  Hello and welcome to the Vergecast. The flagship podcast of high end streaming services. Great. I'm excited. I'm your friend, Eli. Dieter Bohn is here. I'm your non fungible friend. Oh, it's true. You're irreplaceable. We have a fun show. Tom Warren is here. Hello there. We have a lot of Microsoft news to talk about. And for our first segment, notable Verge expat, Michael Singleton is here. Billboard reporter, Micah Singleton. Hey, Micah, how you doing? I'm good, man. How you doing? I am doing all right. I'm excited to have Mike on for the first segment because I'm just gonna say it. Square bot title, which is just a nonsense phrase. And Mike is gonna explain what's going on. But first, as always, I want to start with COVID and vaccine news. The most important story in the world.

• 2:34Nilay Patel?

  Our science team continues to do a great job of it. As you probably know, I hope you know, the FDA has authorized the one dose Johnson and Johnson COVID-19 vaccine. It can be stored at room temperature. That's a big deal. The FDA authorized it. An independent FDA committee authorized it. We've got that story on the side. If you're interested in knowing more about that vaccine, I encourage everyone to go get vaccinated. That vaccine is a big deal. It can narrow some of the gaps in vaccines that we've seen. We have a long story about that and how that might play out. COVID long haulers, people who've had COVID for a long time, there's a surprising number of them. They're starting to say they feel better after getting vaccinated. We have a story about that. I always talk about second order effects of the pandemic.

• 3:16Nilay Patel?

  One of them that I think is just really interesting and sort of clever is vaccine centers are starting to embrace stickers and selfie stations and make getting vaccinated a cultural moment. That's a big change. We got a story about that. As the pandemic comes to a close, people are getting vaccinated. CO2 emissions are coming back to 2019 levels. That's something to keep an eye on. And lastly, on the platform front, Twitter is gonna start labeling COVID-19 vaccine misinformation and forcing a strike system against that. That might get you kicked off Twitter if you're a repeat offender. And Facebook has a bunch of COVID-19 misinformation policies. The Oversight Board, they're like Supreme Court of Facebook, said you should loosen them. Facebook said it will not, which I think is probably the right choice.

• 4:01Nilay Patel?

  Okay, science team doing a great job covering COVID. Still the biggest story in the world. Hopefully, as people get vaccinated, coming to a close, I'm hopeful. All right, Michael, let's talk about Square and Tidal. And I'm just going to force you to talk about NFTs as well, because it is, it all seems together. So this morning, I think you were among the first reporters to break this news. Jack Dorsey, who owns Square and Jay-Z, who owns Tidal, announced a beautiful partnership. What on earth is going on here?

• 4:32Speaker 02

  So this has been in the works for some time, since last summer. And Jack and Jay-Z have been gallivanting around the world on vacations together for a little bit. You know, getting this deal together. Square is acquiring Tidal, not really for the streaming service. They're really doing it to get access to musicians and build financial components around that. So there's a lot of synergies here for Cash App. There's been a big sort of push in the music industry recently to support indie artists and get direct to consumer. Recently, SoundCloud changed their payment structure to go to user centric. So what effectively that means is who you listen to gets paid by that. Currently, that's not the structure in the music industry. Right now, it's based on market share. Your money goes to Taylor Swift, whether you listen to Taylor Swift or not, because she pulls in the most streams.

• 5:16Speaker 02

  That structure is slowly and quietly changing on the independent side. The endpoint of that is you going on Tidal and saying, I want to listen to this artist. And they say, well, give us $10 to Cash App and they'll all go directly to the artist. That's, that's the endpoint. That's the end goal here for this. So that's, that's what they're trying to build here is sort of the next phase of streaming. The next phase of independent artists getting paid for their content, getting paid for merchandise. And that's where Square can really sort of leverage Tidal's, you know, streaming service or lack thereof, to build a better ecosystem.

• 5:49Nilay Patel?

  Wait, walk me through that really quick. So you would, right now, I paid, I don't know how much money, I pay $15 a month to Spotify.

• 5:56Speaker 02

  Yeah, so your $15 right now is going to Drake, is going to BTS, is going to Taylor Swift. It really doesn't matter who you listen to, because it's based on market share. So BTS, you know, whenever they put out a new single, everyone, all their fans on Twitter get together and do a streaming push. They all stream the song a million times. That takes up market share and your money is going to them, right? You could be listening to an indie band, but they're only getting a percentage of that market share. What SoundCloud has done with their independent artists has changed that structure. So if you're listening to, you know, Beyonce and Kings of Leon, they'll get five bucks and five bucks. Right? They'll get your money. That's not the current structure everywhere. And that will slowly change over time as the industry's been pushing for this for a long time.

• 6:36Speaker 02

  And so the next evolution of that is just paying artists directly for music like we once did. Cutting out the middleman. Square gets paid off their fees. You can just cash out people for money for songs, for merchandise, for things that can sell through title. Uh, and then Square can build an ecosystem around that that will far exceed what they could do with the streaming service. And so, you know, the long-term strategy here is to build an ecosystem, a financial ecosystem around musicians that, you know, will pull in more revenue than what they're currently getting through streaming service.

• 7:09Speaker 03

  Right. So thi- this is like the longstanding criticism of how music works now, that songs are worth nothing.

• 7:15Speaker 02

  Right.

• 7:15Speaker 03

  Right. The best thing you can do is before the pandemic, if you're an artist, you're making a lot of singles in your hotel room before the tour. You're always on tour because the tour is where the money is. The streaming services are making you nothing. This is a way to flip that around.

• 7:29Speaker 02

  Right. If you can change that and if you can make it so that if you go on title, you can pay, you know, your favorite artist 10 bucks for a song or for an album, they can get that money directly today through Cash App. They don't have to wait six months to get their royalties back. They can sell you merchandise directly and get paid for that today. That sort of upends what we're currently dealing with in the music industry, which is, if you have Olivia Rodrigo, she put out her huge single Driver's License, which has been number one on Billboard for a while. She's not going to get paid for that until the end of the year.

• 7:56Speaker 03

  That's a good plug for Billboard, Micah.

• 7:58Speaker 02

  Thank you. I've been working on it.

• 8:00Speaker 03

  So, okay, this is a stupid question and I think I know the answer, but I'm going to ask it anyway because that's my job here. Why did Square have to buy title to do this? Couldn't they have just ma- if they just made the, the like music licensing pay the artist service and just offered it to everybody? Nobody would use it. So they had to buy title to like make it happen to force everybody else to follow along? Or like, it seems weird that they need title to do this.

• 8:27Speaker 02

  They don't need title to do it, but when you buy title, you get the relationships. Title has been late on payments for multiple years. And we, I just reported today that they're late on payments once again. We reported that at The Verge in 2018. The only reason that stands is because the labels can't do anything to Jay-Z. He has too many connections. You don't want to piss off the guy who's married to Beyonce. That doesn't really work out for your business. So when you have those relationships, that speeds up the process. You don't have to deal with, you know, getting along with the music industry and figuring all that out. When you can bring him in-house and you have Roc Nation coming with him in relationships. And you can build off that and get big artists to jump on the platform and build that up quickly.

• 9:09Speaker 02

  It speeds up the process and you know, for a square $300 million is a rounding error.

• 9:13Nilay Patel?

  So let me make a comparison to another streaming service purchase that was a rounding error. There's this company called Apple and they bought a streaming service called Beats Music, which was run by Jimmy Iovine and Dr. Dre and Trent Reznor. And none of those people got titles at Apple. They were just Jimmy and Dre, which was the best part of that whole announcement. And the idea was Jimmy Iovine would come in with relationships and they would build Apple Music and they would get exclusives and they would do something. Instead, what you have is Apple Music is like a rounding error for Apple that they like music. It's great. The Beats headphone business is, from what I can tell, just a group of perpetually unhappy people who get nothing. And Jimmy and Dre and Trent, like are gone from Apple.

• 9:58Nilay Patel?

  Like that's a direct comparison to this same idea, right? You're going to buy a famous musician who's successful in the industry as a business person as well as an artist. They're going to bring you the connections you need to grow a new kind of music industry. Why, why will this be different?

• 10:13Speaker 02

  Well, depends how you're looking at Apple Music. If you're looking at it as, you know, it's not the biggest streaming service in the world, sure. If you're looking at it as a key component of Apple One, a subscription service that Apple is focused on growing, then it's working, right? They're the second biggest streaming service out right now. If you're focused on just subscriptions and it doesn't matter where those subscriptions come from and you're building an ecosystem based off purely subscriptions and you're building a bundle effectively that you're trying to grow rapidly, it's working for them. Apple Music is making money. They signed Drake, which really helped grow that platform. They're the number one streaming service for hip hop. You know, but The Verge reported multiple times how Apple Music. Consistently outstream Spotify when it came to hip hop releases on first weeks.

• 10:56Speaker 02

  Every single time despite hip, you know, despite Spotify being two or three times bigger than them at the time. So they built an ecosystem around that. They're the most love service buy artists. They get to maintain that. And so from that aspect is working. Do they want to be the biggest service? Probably. Is it there? No. But is it a key component of Apple one? And the reason people are subscribing to it and a reason why I just paid Verizon more money to give me free Apple? Yeah.

• 11:21Nilay Patel?

  So, but let me, so it brings us back to title, title Jay-Z, another, a host of owners, largely representative of the hip hop community that make this deal with Square. Is the goal to grow title to compete for that second or first spot in streaming? Or is it to say there's a new, there's a different, better way for artists to make money. It's more direct connections to fans. Square is a financial services provider. We'll be the financial services provider on any platform. Or is it about title?

• 11:49Speaker 02

  So I asked Jesse Dorgusker, who is going to be the interim head of title this question. And he said, they want to make title much bigger, but he said, it's not just about streaming. It's about the artist. And that tells me they're going after touring revenue, right? If you can pull in artist merchandise through touring and everyone's going through Cash App and everyone's going through Square. And you can pull in that market, which they don't have right now, right? They don't control the marketing and, and, you know, touring merchandise market. They can grab that using title. They can grab that using Jay-Z's relationships. They can grab that using Jay-Z who Rock Nation is through Live Nation. There's a lot of connections there for them to really go in and say, hey, we're going to build this product.

• 12:30Speaker 02

  We're going to build a streaming service that's paying you the most per stream compared to any other streaming service. We're going to give you better rates than you're getting currently. And we're going to take that market and make a lot of money from it because touring is going to come back over the next couple of years. And it's going to blow up again. And that is going to be a big market for them. So they're looking at ancillary, you know, opportunities here. Streaming service, yeah, they want to grow it, but is growing it in service of building better financial products around the music industry.

• 12:55Nilay Patel?

  Okay.

• 12:57Speaker 03

  I get some of that, like that actually makes sense. And the touring thing is really interesting about it is then artists could just have one, one company providing a bunch of their money, the stuff they sell online and the stuff they sell at their tours. Okay. I'm trying to think of it from like Jack Dorsey's perspective because, you know, Twitter owns a little bit of SoundCloud. Twitter just announced a way to pay people directly with Super Tweets. They bought Review. And so there's like a whole like pay creators directly thing happening on Twitter. And Twitter is also involved in SoundCloud. And then over on the other side, he has Square by Tidal. Like, what is going on in his galaxy brain?

• 13:30Speaker 02

  Well, when you talk about Twitter, I mean, Twitter is not, they don't have a good relationship with the music industry right now.

• 13:36Speaker 03

  Yeah.

• 13:36Speaker 02

  A reporter a couple of months ago that, that the music industry is very mad at Twitter. They don't have a content ID system. They take very long times to remove copyrighted content. And so they've been in a back and forth for a while. This will not smooth that relationship over because the music industry is not that fond of Tidal either. So there's going to be some issues there going forward. But what Jack is trying to accomplish is unclear. I, you know, it seems that this is going to be a good move for the, you know, Tidal's space and growing that space around the touring industry and around the merchandise industry. But overall, his music strategy has been scattered, at least. I mean, SoundCloud has done decent recently. It's sort of improving now. They have a new CEO over there who's

• 14:19Speaker 02

  sort of helping turn things around. But, you know, they've not been great. Twitter's obviously have their issues. And Square is sort of jumping in this with lead, you know, the, the Jesse Dorgusky who's going to lead Tidal. He was the guy that led development on the Lightning Connector at Apple. So he's, his background is not anything close to music. So it's going to be really interesting to see how this develops. And, you know, that will help him on the high fidelity side, which Tidal's been good at. They have more high-end speakers support Tidal than any other streaming service in terms of high fidelity audio. So they'll work out for them in that aspect. But there are questions around how the core streaming service will be led moving forward. That, that's sort of the biggest question. I think. What, you know, people in the industry see as a positive is the ancillary products that can be grown around this.

• 15:04Speaker 02

  But no one is expecting Tidal to blow up over the next few years and, you know, pick up 20 million subscribers.

• 15:10Nilay Patel?

  Really? No one's expecting Tidal to blow up?

• 15:12Speaker 02

  No, no, I haven't heard that. I've talked to a lot of people today. Uh, no one's, no one's really expecting that.

• 15:17Nilay Patel?

  They're not expecting it to blow up. They're expecting to it to do the opposite thing, to implode, right?

• 15:21Speaker 02

  I mean, implode to where?

• 15:22Nilay Patel?

  Yeah, they, it's harder for them to further implode. Mike, you've done like an excellent job of presenting this as a rational deal that makes sense. What's the opposite case? Right? It's just Jay-Z conjured Jack Dorsey into buying his failed streaming service. Like, that's the opposite case, right?

• 15:39Speaker 02

  I'm sure. Yeah, that's, that's the opposite case. I mean, he, you know, Square bought this at a lower valuation than Tidal had a couple of years ago when they took the investment from Sprint. Uh, Sprint invested 200 million for a third of the company, valuing it at 600 million. This was a $297 million deal for a majority stake, which means it's worth less than that. So, you know, they took a hit. Um, but Jay put $56 million into this company when he bought it in 2015 from, uh, Aspiro. So he's gonna make a profit. The artists are still involved. But the question, you know, around the mainstream services, it's not, they said it's growing, but growing is relative. Spotify is growing by leaps and bounds. Apple is still growing. They're approaching 100 million subscribers.

• 16:20Speaker 02

  Amazon is growing rapidly. Spotify and Amazon have both introduced high fidelity tiers, which is the sort of the direct competition from Tidal and sort of where they got the idea from. And Tidal, I was talking to one music executive today and they said Tidal is the reason that Amazon made that play. They saw the market was viable. They took it and ran with it and they did it better than that. And now you're seeing the fruits of that. So, you know, the distinctions of Tidal have sort of fallen away. The only thing they really have right now is artists are still involved and they pay the most per stream, but that doesn't matter to the majority of people. So there's gonna be remaining questions around, how do they sort of develop and elevate the core streaming service? I think the ancillary products will be good, but that mainstream service is falling behind and they're gonna have to do a lot of innovation

• 17:03Speaker 02

  to, to get that up to par, if that's their goal.

• 17:06Nilay Patel?

  So let me ask you one last question, because I know you got to run. Next to all of this, there's just been a flurry of chatter about NFTs, non-fungible tokens, things that you can buy on the internet that are less copyable than other things. We're going to do a whole episode next week because Liz Lopato is writing along along NFT story. So we'll do, we'll do all of that next week. But a lot of people this week have been saying, NFTs, basically selling digital items on the blockchain is the future for artists. Kings of Leon actually just put out an album as an NFT this week. I know Jack is deep into Bitcoin, Square is deep into Bitcoin. Is there a connection here? Or is that just, I'm taking the two big news topics and mashing them together?

• 17:49Speaker 02

  I would be surprised if they don't do something with NFTs. That would be more surprising to me. I would definitely see something there. Jack and Jay, I think they just invested $50 million in Bitcoin in Africa as it developed, sort of music companies there. They're into Bitcoin, they're into cryptocurrencies. It would shock me if they don't do something with NFTs. The labels are sort of scrambling to figure out what to do with this. I'm hearing some stuff around labels not understanding how this works yet. So there's going to be a lot of scrambling from music companies over the next couple of months. A DJ named Blau just made 11 and a half million dollars selling his album through NFTs. So that market is rapidly developing and it would shock me if Tidal and Square did not get involved in it.

• 18:32Nilay Patel?

  Yes, this is just all the keywords I love. Like ultimately, I feel like what happened here is Jay-Z acquired Jack Dorsey. Right? Like, I'm just like proud of Jay for just like pulling this off. What happens next year? Is there, is there something people should be looking for?

• 18:45Speaker 02

  The question is, how fast can Square spin this up, right? Live Nation is expecting the streaming, the touring industry to sort of rebound this fall, late winter. And so it's going to be really interesting to see if Tidal can get something going by then. They're also having to repair relationships, you know? Those relationships have been strained and no one has liked Tidal for a long time. And Square is going to have to repay that. Now, the great thing about Square is they're a payment company, so they should be able to pay their bills on time, like Tidal, but. Those relationships are going to take some work to repair and for labels to get back in good graces with title. And so those are the two things I'm looking for to see if they can really rebuild those relationships around the industry and see how fast they can spin this up when touring comes back because touring is going to come back soon. And when it comes back,

• 19:30Speaker 02

  it's going to come back fast. Every major artist is in line to get dates at arenas right now because it's going to be a backlog. So expect next summer to be very busy in the touring industry.

• 19:41Nilay Patel?

  And I would just point out Jay-Z has a has a pretty big stake in Live Nation. Like from his perspective, he's just bringing it all together.

• 19:47Speaker 02

  Yeah, Live Nation is a co-owner of Roc Nation. So there's the tie-ins everywhere here.

• 19:52Nilay Patel?

  Nothing like the music industry to be simple, direct, and not based on crony capitalism. All right, Micah, I miss you, man. It was great talking to you. We'll have to have you back soon. Thank you so much.

• 20:02Speaker 02

  Good talking to you too, buddy. Talk soon.

• 20:04Nilay Patel?

  All right, we're going to take a break. We'll be back. We got to talk about all this Microsoft news. There's so much of it.

• 20:13Speaker 04

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• 20:44Speaker 05

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• 21:15Nilay Patel?

  All right, we're back. Tom.

• 21:17Speaker 06

  Hello.

• 21:18Nilay Patel?

  Microsoft just went crazy this week.

• 21:20Speaker 06

  They did. They kept me busy.

• 21:21Nilay Patel?

  We're all gonna be working in VR. We're gonna be floating around as avatars. What happened?

• 21:28Speaker 06

  So I guess the big thing, the VR floating around and avatar stuff, Microsoft Mesh, that was their big announcement. They held basically Microsoft Ignite this week, which is kind of their IT admin enterprise-y sort of conference. And Mesh was the big thing. So I'd like to say it's the future of AR, the future of VR, whatever they want to call it. But really, I think it's like a rebranding of some of the stuff they've already been doing and a meshing together, shall we say, of like the VR and AR stuff that they want to do. So essentially, it's kind of like a platform that underpins a lot of the work. Like, when they first introduced Hololens, one of the things they really wanted to do

• 22:11Speaker 06

  was the idea of holoportation. So you could basically teleport yourself into a virtual world and have a meeting with someone else and see them and you'd see each other in real time, you know, sci-fi sort of stuff. And now it feels like it's closer to becoming that reality, but it's not quite there. So they're using avatars instead at the moment. So it's like, we're nearly there. We've got this mesh thing, but we still need to do avatars. And that's basically the basic gist of it. It's a lot more complicated than that. There's APIs, there's platform stuff involved. But they basically want this experience to span across a bunch of devices. So Hololens has obviously been the one where you get the most, you know, AR sort of experience. And then you get your VR headsets, Oculus,

• 22:56Speaker 06

  you know, all of the sort of leading ones that will be supported there. And then the 2D experience on the Mac and on Windows PCs and iOS and Androids. So it sort of spans every sort of device out there. And I guess they're really kind of putting it out there as a platform for developers to build on top of pretty much what they do with Hololens and some of their Windows Mixed Reality headsets. The real question around it is, you know, people don't own these headsets really in a mass volume. We're not quite there yet. And it's whether they lead us there to wherever there is AR and VR, whether the future of that sort of... But it feels like that's going to be some sort of future. But it's whether they lead us there or if Apple comes in and, you know, shakes things up.

• 23:39Nilay Patel?

  So I want to start with just a very, the thing you're talking about the headset. Just to attend this meeting, you had to do a lot of work. So just describe what it took to attend Microsoft's announcement.

• 23:52Speaker 06

  Yeah. So Microsoft, despite I have a gaming PC that's capable of VR and everything else, Microsoft still wanted to send me a laptop that was capable of VR, a VR headset and a HoloLens headset, all to do an hour meeting.

• 24:09Speaker 06

  Like this is, this is how we do meetings in the future, apparently. So this giant Pelican arrived in my, in my house like last week sometime. And it came with like all these instructions and how to set it all up. And like it took, I guess it kind of highlighted like the experience of VR and AR at the moment. Like AR, yeah, the, the HoloLens headset, you sort of switch it on, you click an app and it's there, you know, like it's a lot more. They've done a lot of out of box experience stuff that's, that's pretty good there. But like the VR experience is, is a lot of like, you know, plugging all these sort of crazy cables in because there's no single cable.

• 24:45Speaker 06

  So I basically set the HoloLens up, did a meeting with Alex Kipman, who if you don't know who Alex Kipman is, he's the inventor essentially of Kinect and of the HoloLens. And he basically appeared as like an avatar form in my living room.

• 25:02Nilay Patel?

  Like his body or an avatar, like a cartoon version of his body?

• 25:05Speaker 06

  A cartoon version, yeah. So, and then he like started handing me jellyfish as you do in meetings.

• 25:11Nilay Patel?

  Were they non-pungible jellyfish or could you? Yeah. Did you buy and sell jellyfish? So wait, let me, this is one of the things about AR, particularly in the war context that I, I'm just trying to puzzle out. So I think most people think about AR and the immediate thing I think of is I'm going to put on some glasses. I'm going to go outside and like, I'll get walking directions overlaid on the real world. Or I'll walk into a party or a conference and people's names will appear above their faces, which is, I will buy that headset the second it comes out. Surveillance state that is required to build that functionality be damned. If you can just help me be better at names and faces, I will buy that headset tomorrow. That's what most people think about when they think about AR. That's just my, my guess.

• 25:56Nilay Patel?

  Right. You're, you're going to be out and about doing stuff. Microsoft's vision of AR or MR, or whatever they want to call it, with HoloLens, like very focused on work. Right. So you, you've done the demo. I've done the demo. I think Dieter may have done the demo before where they're like, you're going to change a spark plug on a motorcycle. And the motorcycle is in front of you and there's like arrows and instructions and it's a cool demo. And what has always struck me about that is it is premised on the physical space around you being controlled.

• 26:24Speaker 06

  Yes. Yeah.

• 26:25Nilay Patel?

  And I just like, if Alex Hipman was in my living room right now, like, it would be so weird because he wouldn't know what my living room looks like. So what's he like, what's he do, what's the value of him there?

• 26:34Speaker 06

  Yeah, he'd have no way of seeing that even unless you like enabled the camera sensors on the headset so that you could see it. But then it's kind of defeating the, the point of the whole thing anyway. Yeah, like I, I think the way that it swayed for them with, with HoloLens is like they, they had this grand vision of like connecting people in meeting spaces and just this shared collaboration sort of stuff. And it kind of swayed very enterprise heavy just because, you know, those are the sort of customers that could afford it. Right. And those are the sort of customers that were finding value in it. Like no one's really wants to walk around with this headset on the outside at the moment for these walking directions. And, you know, to get someone's Facebook profile, know their name when you're walking down the street or something like that. Like that is very far, far in the future, uh, once these things shrink down.

• 27:18Speaker 06

  But for now, it's like, it's very enterprise focused because it, it kind of has to be, right? That, that's their market right now. Um, that's the only people that are willing to invest and to, to spend the money right now. Apart from like, I'd say there's a large sort of growing learning, um, and education sort of market, I think. Um, maybe not for AR, but definitely for VR that they're sort of like trying to tap into. But yeah, like it's, it's the enterprise stuff is, is the key. And, and this kind of spawns from that, right? Like it's, it's all to, to do with getting, you know, architects and designers in a virtual space together to collaborate, um, which obviously during the pandemic is particularly relevant.

• 27:57Speaker 03

  But so the the thing that's interesting about the way Microsoft thinks about AR, but especially like these virtual spaces, disclosure, my wife works at Oculus, vision of Facebook, et cetera, is they're not trying to build like the metaverse, right? They're not doing what Epic done or what actually what Facebook is trying to do and like create a single space. They've talked about like they want to, they want to have like AR location stuff all around the world and they like, they've talked about that. But for this like this Microsoft team stuff and mesh specifically, they really want to like, they want to make the platform and then have every single, I don't know, company on the planet create their, figure out how they want to use it for their own virtual spaces.

• 28:34Speaker 06

  Yeah, they're basically trying to create the plumbing, right? That they want developers to feed into their apps to base, meshify their apps essentially and make them collaborative in AR. That's their vision, right? Because then they own that platform, essentially.

• 28:51Speaker 03

  The vision is world domination. It's a very subtle vision. Do you have a sense of how, how seriously Microsoft takes this? I'm just thinking of the, the Kitchen of the Future CES demos that Bill Gates did for 10 years, right? That we never really knew how much that they were showing off or if they're like, no, this is real, we're doing this. This seems like on the scale, like it's as real they're doing this.

• 29:11Speaker 06

  Yeah, I think, I think it's, it definitely is, like, I think they haven't talked a lot about hololens over the last, last year or two. And this feels like a reinvestment, but I think Satya Nadella sort of put it in the, in the Nike keynote, he compared it to Xbox Live, which I thought was kind of interesting. So he said like how that changed, you know, cooperative play and the ability to have single multiplayer gaming and sorts over the internet. And he thinks that is, you know, going to unlock the potential for AR with, with mesh in the same sort of thing. So I don't know if I fully agree that it's that, you know, it's that significant, but I feel like that's the way that they're viewing it, right? Like that's, they, they feel like they're putting a big investment into, into this

• 29:54Speaker 06

  and they are, they're doing a lot of research and they're doing a lot of stuff that, you know, competitors aren't quite there yet. So they are definitely ahead. But like I said earlier, they're going to have some really strong competition once this stuff matures and the headsets get to that point where

• 30:09Speaker 03

  Yeah.

• 30:09Speaker 06

  You know, the, the price comes down a little and they're less clunky.

• 30:13Speaker 03

  Well, that's, that to me is the thing, right? So there's a bunch of other teams and Microsoft at work news that we should talk about, like.

• 30:19Nilay Patel?

  In the pandemic, everybody like lots of people are working from home. Microsoft is in a prime position to capitalize on that. Other companies like Slack and Google have tried to capitalize on that stuff, too. But right now, like the biggest competition for HoloLens and Mesh is just Teams exists. And you don't have to put a thing on your head and like monkey with and you just like push the button and you're in the video call. And then when it's over, you close it and then you just like go back to work. And that like, you know, it's some of it works better than others. And, you know, it's a very competitive market. I say, we only figured out that out like this year to like have a video call to be click a link. But for this year, it was still like.

• 30:56Speaker 06

  It was still clunky.

• 30:58Nilay Patel?

  Yeah.

• 30:58Speaker 06

  Yeah. Zoom kind of really made that a lot easier for sure.

• 31:02Nilay Patel?

  Through a series of security problems.

• 31:06Nilay Patel?

  But like, but that's the competition, right? Is.

• 31:08Speaker 06

  Yeah.

• 31:09Nilay Patel?

  We're just talking right now. None of us had to put on headsets and like, figure out why your avatar is like misaligned in my room that you can't see. And if you're gonna pay that cost, right? That's a cost you gotta wear the headset, you gotta set it up, it's gotta work. You're gonna have some weirdness in the early going. There needs to be some corresponding value. Where you have to get something out of that that you couldn't get otherwise. What is Microsoft's perspective on what you would get out of that?

• 31:38Speaker 06

  I think, I think it is like, so when I did the keynote, I don't play around with a bunch of VR stuff a lot of the time. So for, for me, like the value like of going into that keynote is that I almost felt like I was at a Microsoft event. Cause it was kind of like they, they literally had people like, like, you know, when you take a meeting, you have like PR handlers and they kind of like just float.

• 31:57Nilay Patel?

  But that was in VR, right?

• 31:59Speaker 06

  Yes. Yes. This was in VR. And you know, you know how you have like, they have PR handlers that kind of just float around. They're not really doing anything. They're just kind of, you know.

• 32:08Nilay Patel?

  They're just happy. They're just around.

• 32:09Speaker 06

  Yeah. Taking notes, they had those people in VR. Like there was PR people in VR doing that. So it like all felt like very strangely real in in that sense. And I think that's that's the thing like if they can pull this off in a collaborative space where it makes sense and like they they obviously acquired all space VR, which is powering like a lot of the avatar work here. And they acquired them like, I think it's like three, three years ago as well. If they can pull that off and like meshify this collaborative space across all the apps and make it that is like plug and play and that you you do feel more immersed when you're doing these meetings and stuff. I think that's the the payoff, right? If they it's because they talked about bringing this into Microsoft Teams. So it's not, it's not like they are

• 32:52Speaker 06

  competing with teams because eventually it will be part of teams somehow. And I think that's the payoff if it it will feel all feels a bit more immersive, I guess, because they've done some, some pretty neat work with teams where like they, they will cut your silhouette out and put you side by side with your colleagues and stuff. And it looks a bit like gimmicky and stuff, but it actually does kind of make you feel a bit more like interested in the meeting, a bit more like you're not just looking at a grid of people. So it's a lot of that, like, a lot of that work that I feel like would be a payoff to make these meetings a little bit more bearable, especially when you're, when you're doing like, you know, 10 of these a day.

• 33:30Nilay Patel?

  I guess my question comes down to is that a VR payoff or an AR payoff?

• 33:34Speaker 06

  That's the big question, right? Because we are at the point where like Microsoft's calling it mixed reality. They don't care. It's like they they don't care whether it's VR or AR. They're they're just they're targeting both, right? They've obviously really invested in AR. And I think pretty much if you ask most people in the industry, they can probably see AR winning out once the technology is there because it just, it makes sense in a broader spectrum of applications, right? But at the moment, VR is way more immersive and works a lot better than a Hololens, so. So it's like, it's that interim period, right? But I think I think it's gonna be both.

• 34:07Nilay Patel?

  Yeah.

• 34:07Speaker 06

  Like, I I don't, I don't think there's particularly one's gonna win out like straight away. But if they if they can get like a common sort of app across the, across the two, then.

• 34:16Nilay Patel?

  I just the conventional wisdom for the longest time. And I think we, we kind of heard this around like Apple rumors, right?

• 34:22Speaker 06

  Yeah.

• 34:22Nilay Patel?

  VR is great, but it's kind of niche. The real thing is AR. We're gonna put all of our effort into that. And it's like,

• 34:29Speaker 06

  Yeah.

• 34:30Nilay Patel?

  Well, now I've just spent a year in this goddamn house. Like, I don't need you to augment this reality. Like, please take me to a different virtual reality. That would be great.

• 34:38Speaker 06

  Yeah, you almost want to just teleport somewhere.

• 34:41Nilay Patel?

  Nothing about this reality is important to me, actually.

• 34:45Speaker 06

  Yeah.

• 34:45Nilay Patel?

  And I, you know, I think we're even seeing some of that with the Apple rumors lately, which is their, their first product will be a very expensive, high-end VR headset.

• 34:53Speaker 06

  Yeah.

• 34:53Nilay Patel?

  Because you are able to control, like literally you're able to control that entire like space.

• 34:59Speaker 06

  Yeah.

• 34:59Nilay Patel?

  Virtually and do things with that that are interesting. Whereas unless you're out and about adding information to reality, like might not be that helpful or useful or even doable.

• 35:09Speaker 06

  Could be distracting. Yeah, it is like this huge task and they've overcome quite a few of like the very basic like gestures and stuff like even, even when when when Hololens first came out, like just grabbing objects was was really clunky. Like there just wasn't a really easy way of doing it. You had to like air tap, which was like your finger in the air and tap down, silly things like that. But now you can actually grab objects as if they were there. The hand and eye tracking stuff that they're working on has obviously come on over the last few years, few years and progressed. But there's still such massive hurdles of understanding the world around you for a computer, just getting basic computer vision and AI.

• 35:48Speaker 06

  And that stuff just, you know, Google, Microsoft, a bunch of other companies are working on that. And it's not, it's not solved yet. So I think, yeah, like Apple, they'll do their VR headset. It'll be, you know, expensive, but it'll be like a single cable. It'll probably be 120 plus hertz, you know, displays, really fluid. And it will teach the VR market a big lesson, but it'll also open it up to like the, these people who are sending the $200, $300 headsets. It just creates that interest in the market, like broader interest if Apple, if Apple comes in. So.

• 36:23Nilay Patel?

  Yeah.

• 36:24Speaker 06

  If they do it right. So.

• 36:25Nilay Patel?

  We'll see. It'll be a single cable. Would it be like a proprietary?

• 36:28Speaker 06

  Oh, yeah, for sure.

• 36:29Nilay Patel?

  Thunderbolt seven to lightning. Yeah, amazing. Uh, there's, uh, let's talk about all this other Microsoft. They announced a bunch of other team stuff. Let's go through it.

• 36:37Speaker 06

  Yeah, so speaking of meetings, they did the new intelligent speakers, which the Dela sort of came on stage in, I think it was Build 2018, something like that. And they did like this meeting room of the future where it basically identify anyone who's in the meeting, transcribe what they're saying, even translate it. So pretty, pretty good if you're a remote worker and you're sort of dialed into a meeting and you don't really know who's talking and all that sort of stuff. They've actually made that a reality now with these, with these sort of like small puck-like devices essentially. But I mean, we're at the time when people aren't in meeting rooms now, so it's like awkward timing, but at least they delivered on what they said they were gonna. So at least that wasn't like some weird prototype research project.

• 37:20Speaker 03

  Yeah, I was in the room that they like set up on their campus two years ago to show off like the first iteration of this.

• 37:26Speaker 06

  Oh yeah, you did the back, the behind the scenes.

• 37:28Speaker 03

  Yeah, it was very, very cool and I was really impressed with all that, especially the auto translation stuff, like this is great for accessibility, cool, cool, cool. When, when, when are you gonna ship it? And, you know, I'm glad they actually did it.

• 37:39Speaker 06

  Yeah, we just have to see how good it is now, but I don't know when we're gonna be able to test that, because, yeah. So that was that. And in Teams is getting end-to-end encryption support. It's only like one-on-one and it's very, it's very limited for enterprise customers, but pretty good that they're getting that. And then Outlook actually got a new calendar view, which doesn't sound that exciting, but kind of is because like if you've used Outlook or any calendars, they're pretty difficult to manage, like a combination of tasks and goals and lists and all this sort of stuff. So they're kind of, they're making basically a Trello board in your calendar where you can just drag and drop stuff, files, whatever. It's, it looks kind of neat.

• 38:19Speaker 03

  I mean, my big takeaway from all this, and then like a bunch of stuff they announced like in the interim is, I'm not saying Microsoft wasn't doing stuff before, but it really feels like, especially with Teams, they've got some real momentum and some like actually really interesting things happening. In a way that they didn't before. When they first launched like the version of Teams that was like, oh, you made a Slack clone. Okay. Ha ha. But it really feels like they've got their head wrapped around their like strategy for it's not the office video, but for like productivity and collaboration software. And they're, they're actually doing interesting stuff. And there's, there's just more sort of, I don't know, juice. There's more momentum there than I've seen from them in a long time.

• 39:02Speaker 06

  Yeah. I mean, they, they basically trying to create, trying to basically put Teams as their hub for everything, right? Like for everything, especially for everything office. Like you could basically think of like the office brand as Teams now, really. That's, that's the way I kind of look at it. And like they're, they're doing like the, it's for me, it's been really unusual to see them, the pace that they're working at. Cause it's really unusual to see Microsoft just push out stuff on a monthly basis. They, they always promised that with Windows, but like the reality is, is like, you know, buggy patches. So. But, but this is like new features. Like I can't keep up half the time. Like they'll, they'll be like, here's a beta feature. Like this week they announced, uh, you can like float above your slide deck when you're presenting.

• 39:47Speaker 06

  Or you can pretend to be like a reporter, like kind of like the side.

• 39:51Speaker 03

  Yeah. They, they kind of took that from, mm hmm though, didn't they?

• 39:54Speaker 06

  Yeah. Yeah. I mean, a lot of people do it, but um, I think the, the together mode.

• 40:00Speaker 03

  Oh, where everyone's like in a stadium or whatever.

• 40:02Speaker 06

  That was really cool and like kind of unique.

• 40:04Speaker 03

  Yeah.

• 40:04Speaker 06

  And I think they're, they're probably working on a bunch of stuff like that. They, they showed like some sort of future, you know, you remember they used to do these like future of office videos every couple of years. They kind of did a similar one during, during a night and it was like, the future is like your apartment and every screen on it is Teams. It's like your TV is suddenly Teams. You go to, I don't know, the screen on your fridge and it's like your coworkers. Like that's, that's the way they see the, the, the future now because everyone's obviously stuck at home.

• 40:36Speaker 03

  Yeah.

• 40:36Speaker 06

  But like, it's interesting to see how they're extending Teams everywhere and, and just all the stuff that they're bringing into it.

• 40:43Speaker 03

  What's fascinating to me is we have seen big companies make big efforts. Like, all right, this is the, this is our thing now and everything has to integrate with it. Right? There was a little bit of that move, maybe like Office 365. Uh, we definitely saw Google try to do it with like Google Plus.

• 40:57Nilay Patel?

  Yeah. And so this is another one of those efforts like, all right, this is a central thing. Everything needs to like be part of the strategy now. Everything needs to connect to it and vice versa. And normally that's a recipe for just an utter disaster. But it seems like Microsoft is not screwing it up right now. Like it's they're holding it together.

• 41:15Speaker 06

  I'd say that the app still needs some work for performance and stuff like that. It's still a little clunky, but like the service overall and all up is is pretty decent. And I think they benefit and the reason they have like over 100 million people using this thing every day is because it's free as part of your office subscription, right? So if you were already in that ecosystem, and particularly particularly going into the pandemic, we've seen schools like flick up flip over to Teams, whereas they probably didn't really use it before because everyone's in the classroom, right? So it's just a natural way because it's so essentially like bundled in to the rest of their office suite that they've kind of sort of led people straight into it at the perfect timing. Like

• 41:58Speaker 06

  it couldn't have been more perfect timing for them to have made this big Teams investment for then the pandemic to hit. Because it just it just accelerated. The user growth has been pretty crazy for for a service like this.

• 42:11Nilay Patel?

  All this focus on new features and building teams. And yep, it was bundled with Office and that is why Salesforce owns Slack now, right? Like they just

• 42:18Speaker 06

  Oh, yeah, for sure.

• 42:19Nilay Patel?

  It just happened that way. I was just looking this up. There's this week, actually, a company called Around took a $10 million Series A investment from Venture and also the Slack fund. And their their big trick is that everybody in the meeting room opens Around their video conferencing app, but then it syncs all the microphones on the laptops.

• 42:43Speaker 06

  Right.

• 42:43Nilay Patel?

  Right? So you get like a full spread of conference microphones from everybody's laptops.

• 42:49Speaker 06

  Oh, interesting.

• 42:49Nilay Patel?

  Which is just like a feature level improvement to video conferencing, right? Anybody in the room can talk and the people who are remote can hear it well in a way that like, I mean, wouldn't When we were in our office, like we had Polycom microphones and it was just always a disaster and like.

• 43:06Speaker 06

  Yeah.

• 43:06Nilay Patel?

  And actually, when those microphones would fail, we would make a talking stick. We would make everybody in the room lock, log out, turn off their mics. And then one person would, would join the meeting from their phone, turn off the video and then the phone would be the microphone and then we'd pass it around the room.

• 43:20Speaker 06

  And if, if, if it wasn't that, it'd be like, can, can you please move closer to the mic?

• 43:24Nilay Patel?

  Yeah.

• 43:24Speaker 06

  That was the usual thing.

• 43:25Nilay Patel?

  But like, you know, like the amount of competition in the space is such that there's a startup here that's focused on. Let's, let's go real deep on the basics, right? And like, there's a lot of microphones in this room because everybody has a phone and a laptop. What if we just use all those microphones to make video conferencing better? And you can see exactly why Slack now with the sales pressure money behind them is like investing in this.

• 43:47Speaker 06

  Yeah.

• 43:47Nilay Patel?

  Because definitely this press release mentions one click Slack integration.

• 43:50Speaker 06

  Yeah.

• 43:51Nilay Patel?

  But like Mike, is Microsoft doing that stuff too? Like this Holland stuff and like a Trello view and the calendar like. Yeah, they're just like, they're attacking with features, which is the Microsoft way. So it's like very hard to leave.

• 44:04Speaker 06

  So, so they've been doing a bunch of like, they do like a bunch of basic stuff like noise suppression. But like nothing like linking up everyone's microphones in the room. Like if you want that sort of thing, like they're, they're offering now is the intelligent speakers. So that thing has like multi array mics and, and there's a speaker in itself and it should pick up, you know, a di- di- direction of people speaking and stuff. But as in terms of like how that integrates into teams on a software level, like I don't think they're quite there yet on, on some of that stuff. So yeah, there's always like room for these, these startups with like really great ideas. The, the only problem with those startups is that, yeah, like typically they're, they're going to get acquired by someone who wants them or they just get copied.

• 44:46Speaker 06

  Like that's, that's the, that's the big problem because they don't have the platform, like the breadth, right? And I think that that was a problem with Slack is that Slack didn't have video and audio calling. So they kind of like.

• 44:56Nilay Patel?

  I mean, they, they technically did.

• 44:58Speaker 06

  Yeah, they did, but like it was, it was.

• 45:00Nilay Patel?

  I was on a Slack call today and it was like, why are we on this cycle? I don't.

• 45:04Speaker 06

  Yeah.

• 45:04Nilay Patel?

  Why do we pick this? But that's like a very pandemic experience. Like.

• 45:09Speaker 06

  Yeah.

• 45:09Nilay Patel?

  I'm, let's, let's try Skype today. Like we're all bored. Let's spice it up. Actually, at the beginning of the pandemic, Stuart Butterfield was on the Verge chat. So you can go back and listen to that episode and he was like, our focus is on text.

• 45:21Speaker 06

  Like, yeah.

• 45:22Nilay Patel?

  Video and audio is like, not where we need to be. Our focus is on this thing. And it's like, it turns out, actually, uh, video calling is a big deal.

• 45:30Speaker 06

  Yeah. Yeah. And they promised like this Slack promised this almost Discord like, um, open audio room. Like they haven't rolled any of that out yet, but they did promise it last year. Like, I feel like that's one thing where Teams and Slack really fall back on like Discord. I use Discord a lot, um, for like more personally, like just to chat with friends and, and connect. We all just jump on a call. We don't say, you know, are you free at 8:00 PM? Or like, let's jump on a call at nine or you just see someone who's in the call and you just jump in. Like it's, it's so seamless. There's no like, it's not a meeting, you know? It's, it's just you're hanging out, chatting to friends or whoever's around. And like, I think Teams and Slack really missed that, um, that, that ad hoc meeting. Cause you do that at your desk.

• 46:14Speaker 06

  You go over and start talking to someone. You, you can't really do that in these, in these tools, cause they're, they're very rigid and structured for meetings that happen at a certain time of the day. So I think that's, that's one thing that I think we'll see a lot of experimentation of like ad hoc meetings and just pinging people at the desk and stuff like that. That's, that's the next thing that's coming.

• 46:33Nilay Patel?

  From this point on, we're running the Virgin Clubhouse and that's the way it's gonna be.

• 46:36Speaker 06

  Oh, no.

• 46:37Nilay Patel?

  Last thing, we reviewed the Surface Pro 7 Plus. That is a name.

• 46:41Speaker 06

  It is, yeah. It's basically the Surface Pro 7, but with LTE and removable SSDs. Okay. That's, that's just pretty much the, the quickest way I can describe it. Um, it's good, like it's faster, you know, it's got the latest Intel chips, the better graphics as well. The XE, um, graphics from Intel. But yeah, it's still, I still want to see a redesign. I feel like the Surface Pro is at the stage that the MacBook Air was, was, you know, like it's, it kept that design for so many years. Cause it worked and fair enough, it does work. The Surface Pro, it doesn't really have a, a big. It's the best two in one, I guess, really, out there. But I still want them to do something that pushes it closer to the Pro X. So, because that hardware is so nice.

• 47:23Speaker 03

  It's gonna be years. I mean, they might, they might push it close to the Pro X. But I have to believe that Microsoft, in particular, is as angry at Intel now as Apple was like three, four years ago, right?

• 47:36Speaker 06

  Yeah.

• 47:36Speaker 03

  Like Qualcomm is not getting it done for them. Windows and ARM and, you know, that whole, that whole fiasco. I love the Surface Pro X. I deeply love it as a Chromebook, not as an actual laptop.

• 47:48Speaker 03

  No, I think it's great. But, you know, if Microsoft has lots of interesting ideas for what to do with PC hardware, like they do, we saw with Surface, they got the little Surface Go. They could just be cranking out all sorts of really interesting, cool form factors and stuff. But right now, they're just like, they're waiting for slightly better iterations than what Intel can do. Until Intel can figure it out and Intel's roadmap for figuring it out is a while.

• 48:14Speaker 06

  Yeah, yeah. I mean, they are literally, and like Qualcomm isn't really stepping up to, to offer something that's, that's competitive with Intel, let alone the M1, right?

• 48:24Speaker 03

  Yeah.

• 48:24Speaker 06

  Like, who knows how it's gonna, how long it's gonna take for them to catch up as well. So it's like they're, they're kind of battling with both of their partners. And now they're kind of getting a little bit deeper with AMD, which is interesting. So the, the next Surface Laptop that's coming in the next few months, it's gonna be AMD as well, which, you know, the last one was as well. But it's interesting to see them sort of spread that Surface hardware through the different chipmakers. So, but like, I think they're big, the big question hanging over all the Surface stuff and, and all of that is how they compete with the M1. So, especially when Apple starts cranking on the next chips. And is there gonna be like a five year gap here or what? Like, what's, you know, what's gonna happen?

• 49:04Speaker 03

  I mean, there's that rumor of the next MacBook Pro that has an SD card slot, no touch bar and a Magisk, and it's like, and that will not have an M1, right? That will have a more powerful MacBook Pro class processor. And it's like, that thing is just gonna blow, it's gonna blow up. Like, the pent up demand of people who just want, like, a useful MacBook Pro. Like, it was already there at the previous 16-ish one, which like fixed the keyboard and does all this stuff. But like,

• 49:29Nilay Patel?

  That moment, I think, is going to be an inflection point in the laptop industry because it will show.

• 49:34Speaker 03

  Yeah.

• 49:34Nilay Patel?

  Here's a, here's a pro laptop with a close to all day battery life. I'm dying for this laptop. Apple, can you just announce, can you just call me and tell me? Uh, that'd be great. Speaking of Intel, by the way, if anybody, if anybody's listening, we're trying to get Intel CEO Pat Gelsinger on Decoder, so.

• 49:49Speaker 03

  Yeah.

• 49:49Nilay Patel?

  Cause he's the new guy. It's, it's on him to figure this out and potentially outsource production to TSMC and other, other fabs that can get to the, the node sizes they need to be competitive.

• 49:59Speaker 03

  That is, that was, is what I want. What I really want, though, is for him to come on, for him, so we can just ask him to, to give us one piece of advice. For the next couple of years, when we're talking about a laptop and we say, yeah, but the M1 or the M2 is like way faster and it's going to just be driving everybody crazy, what, what can we say to like, not have that just turn into like an exhausting, yeah, but Apple's, Apple's chip is faster?

• 50:21Nilay Patel?

  Yeah, great. We've now guaranteed that Intel CEO Pat Gelsinger will not come on Decoder. Amazing. If you, if you work at Intel and you were listening, just delete that from your mind, get the CEO on the show.

• 50:32Speaker 06

  He's already smacked all Apple there, hasn't he? Like before he even, even started?

• 50:36Nilay Patel?

  A little bit. It was pretty gentle.

• 50:39Speaker 03

  Yeah, I love that, actually. That was great.

• 50:41Nilay Patel?

  Well, so what he said was, we have to do better than this in the lifestyle company in, in, in Southern, in Northern California. And it's like, he's the new guy. Like, of course, he's telling his chip making team that they have to do better at making chips than the iPhone company, but I think he was excited that I got blown out of proportion. If I was him, I'd be excited about that.

• 51:00Speaker 06

  It would be great to have him on. So I feel like he's, he's well respected, I think, at Intel as well. So it's like, yeah, he'd be an interesting person to speak to about how, how he's going to clean it all up.

• 51:11Nilay Patel?

  Well, Pat, if you're listening, ignore what I said.

• 51:16Nilay Patel?

  And then come on and we'll definitely ask you that question. All right, we're going to take a break. Speaking of Apple, there's some Apple rumors to talk about and some, some crazy App Store stuff going on, so we'll be right back.

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• 52:52Speaker 03

  All right, we're back. Dieter, you want to run through these rumors? So Ming Chi Kuo has come out with another slate of analyst predictions. So the rumor that Apple is considering a folding iPhone persists. There's like now a year on it, 2023. It seems like they're aiming for a thing that folds out into a tablet instead of a flip phone style thing. So that exists. There's the rumor that the iPhone 13, not the 12, what are we even on now? We're on 12.

• 53:24Nilay Patel?

  12.

• 53:25Speaker 03

  Is going to have a smaller notch and faster screens. They're finally going to have a higher refresh rate. They're going to do something to get the notch smaller. And then...

• 53:33Nilay Patel?

  My favorite analyst note of this group is writes, "We believe that USB C is detrimental to the MFI's business profitability and waterproof specification is lower than Lightning and MagSafe." So, no, no plans for USB C to come to the iPhone. It's much more likely it'll jump to a portless iPhone someday, or maybe a PogoPen, I don't know.

• 53:58Speaker 03

  Wait, can I just stop? Can you just live in that for a second?

• 54:01Nilay Patel?

  Yeah.

• 54:01Speaker 03

  Uh oh.

• 54:02Nilay Patel?

  The MFI program, it might be very profitable for Apple. I'm sure it is. They sell a lot of cables with a sticker on them. Great. Overall, as a consumer, it is just a failure. And we've talked about this so many times, like, the state of accessories for any Apple product is like, ugh.

• 54:20Speaker 03

  Yeah.

• 54:21Nilay Patel?

  Right? Like, where are the iPad keyboards? That connector is open. Where, four months in, is it four? I think it's four months.

• 54:29Speaker 03

  Mm-hmm.

• 54:30Nilay Patel?

  Where are the MagSafe chargers for my car? Like, the easiest product, I would spend $50 today. Just tell me where to give you the money. I'll cash shop it to you on title.

• 54:40Speaker 03

  Just put it, put an ad on Instagram and Neil, I will definitely see it and just spend the money.

• 54:45Nilay Patel?

  All of Facebook's AI is waiting to target the MagSafe charger to me on Instagram. Where is it?

• 54:50Speaker 06

  It's almost as if proprietary stuff is, is bad for consumers.

• 54:54Nilay Patel?

  It's just like, I, I understand, but also just like, the, the stuff you can buy around your phone, around the iPad, to, to even a pretty huge extent around the Mac, although that has nothing to do with MFI. It's just a bad, there's just bad ecosystems. Like, it's hard, it's hard to see MFI as a success. It might be making a lot of money, but it hasn't built great ecosystems.

• 55:18Speaker 03

  You know what you can do with the Mac now? Uh, thanks to some security researchers came out today? You can make your own AirTag with a little BBC Micro, uh, whatever it's called. They hacked, they didn't hack, they like figured out how the public-private key system and Find My works. And so you can create your own. Open source, you can create your own air tag and then Apple will think it's an iPhone and then Apple's Find My Network will track it for you.

• 55:41Speaker 06

  Wow.

• 55:42Nilay Patel?

  This is like, Apple's gonna arrest these people.

• 55:45Speaker 06

  When are they doing these, these air tags? Like, this, this thing's been like a persistent rumor. It's like a VR headset.

• 55:51Speaker 03

  It's ridiculous how, but, but like, it's in the OS. We've seen like, you know, little icons for it.

• 55:58Speaker 06

  Yeah, it's all there.

• 55:59Speaker 03

  Why are they just not releasing it? Are they, are they that afraid of like Tile yelling at Congress? It's very confusing.

• 56:05Speaker 06

  It's very, yeah, the timing's strange.

• 56:07Speaker 03

  Yeah.

• 56:08Speaker 06

  I will say though, in defense of the lightning port on the iPhone, is that don't forget where that came from. Like, that arrived when USB was a bit of a mess.

• 56:16Speaker 03

  Yeah, that was, I think, Micro, Micro USB was just happening, right?

• 56:19Speaker 06

  Like, it was, it was so good when it first came.

• 56:21Speaker 03

  Yeah, there was a bunch of mini USB out in the time.

• 56:24Speaker 06

  It was reversible and, yeah. But yeah, they have kept, they have kept hold of it a bit. It's outstayed its welcome.

• 56:30Speaker 03

  Yeah.

• 56:30Nilay Patel?

  I mean, I will say even my, um, the MacBook Pro I have, the 16 inch MacBook Pro, often it draws a lot of power over USB. So I needed a special USPC cable and a special USPC charger. And both the SMC, the System Management Controller on the, that does all the charging on the, the Mac, and the charger will crash. Which is like the most.

• 56:54Speaker 06

  I don't believe it. USPC is perfect.

• 56:57Nilay Patel?

  It is, I'm like, why isn't my computer charging? It's like, I'm, I have to reset both, I have to unplug and plug back in the charger and reset the SMC on the MacBook Pro. Like, I think this is related to the fact that I'm making that charger also run my video conferencing cameras. Like, this is definitely my fault.

• 57:13Speaker 03

  Yeah.

• 57:13Nilay Patel?

  Like, I should just have multiple chargers. But it is not the promise of USPC in any way, shape or form.

• 57:19Speaker 03

  On the folding phone, I've been thinking about this a little bit too, because do you just want an iPhone that folds up, opens up to an iPad UI? Or do you want something in between? And it just also, the iPhone 12 Pro Max has, is just, it's such a big screen and they do nothing to help you like do more interesting things with the big screen. Um, I get that it's awkward to use a S21 Ultra, you know, big, big screen or, you know, folding phone or whatever and like some of that UI needs work. But yeah, Apple needs to be way more flexible, no pun intended, in its thinking on what, how, how software can work on these larger portable screens than it has, I think.

• 57:59Nilay Patel?

  I just, I don't know that I want an iPad mini, just like an iPad that turns into an iPad mini. I think I want, I want more interesting ways to like manage Windows and that kind of thing.

• 58:07Speaker 06

  Yeah, and that's the biggest problem with the foldable phones in general at the moment, right? It's, it's, it's literally the software and the UI. It's just, it's just not quite there. It's, it's very clunky, especially like on the Surface Duo. It's, it's, it's really clunky. But yeah, I, I still feel like I'd rather it scale up to an iPad interface, but be clever about it.

• 58:25Nilay Patel?

  Hmm. I mean, it's the be clever part I'm worried about.

• 58:27Speaker 06

  Yeah. Yeah.

• 58:29Nilay Patel?

  Last big sort of Apple thing to talk about. We talked a few weeks ago about the bill in North Dakota that might have forced Apple to allow multiple payment services on the iPhone. Failed in North Dakota. Advanced through the Arizona House, needs to go to the Arizona Senate and then signed by the governor of Arizona. But I will tell you this, here's a really interesting realignment politically of this. Bill advanced in Arizona, mostly by Republicans, opposed by Democrats.

• 58:58Speaker 06

  Ooh.

• 58:59Nilay Patel?

  The Democrats are saying, hey, there's already all this antitrust action going on, hold off. Also, this might be unconstitutional because of the Commerce Clause. There's a lot to unpack there. Republicans, I think, are saying, hey, we have been mad at big tech for about a year and a half. Here's some bills we can pass that will actually address some big tech problems. Lots of small businesses and startups kind of interested in this. David Hanna Meyer Hansen, who, uh, CTO of Basecamp, is saying if this passes in Arizona, he will relocate Basecamp to Arizona so that, because then it'll be an Arizona company.

• 59:32Speaker 06

  Yeah.

• 59:33Nilay Patel?

  And then the law will apply to them. And Apple to do business, Apple to do business to them would have to allow these multiple payment services. The bill also, specific carve out after a long argument in the Arizona House, specifically exempts video game consoles and other specialized computers that connect to the internet, which has long been Apple's argument.

• 59:55Speaker 06

  Yeah.

• 59:55Nilay Patel?

  We will see. It's, it's still got a ways to go. But this bill or similar bills are in lots of states. Apple is like deploying lobbyists. There's a great article in Protocol.

• 1:00:07Speaker 03

  The open app, whatever, whatever the lobbying system is from the, the companies that are anti App Store has been.

• 1:00:12Nilay Patel?

  You mean Spotify wearing an eye patch and a hat?

• 1:00:14Speaker 03

  Yeah. Well, they were the one, when I asked who's behind the North Dakota stuff, a bunch of people reached out and said, oh yeah, it's that lobbying firm, like explicitly. So they have, they have gone from zero to 60 like that.

• 1:00:27Nilay Patel?

  Yeah, but it's definitely like Spotify and a handful of other companies and Epic in disguise.

• 1:00:31Speaker 03

  Yeah.

• 1:00:32Nilay Patel?

  Feeling like the coalition for app fairness.

• 1:00:34Speaker 03

  The, the language, by the way, is other special purpose devices that are connected to the internet.

• 1:00:38Nilay Patel?

  Yeah.

• 1:00:39Speaker 03

  So.

• 1:00:39Nilay Patel?

  Which is like, if you're gonna parse it, right? There's like computers and not computers.

• 1:00:46Nilay Patel?

  Another hour of the bird chats coming up after this, folks.

• 1:00:49Speaker 03

  Yeah.

• 1:00:50Nilay Patel?

  But this is happening, right? Like interoperability, multiple payment systems, all the stuff, like actually, Apple announced a tool this week that lets you transfer your iCloud photo library to Google Photos, which is a, just a data portability thing that the EU, US regulators, they've all wanted for a long time. And I think we've, we've talked about this so many times, a little bit of heat, a little bit of regulatory attention, these companies all just start doing the right thing. So I'm very curious to see how these state level bills, like the conversation about whether or not they are constitutional because they touch on interstate commerce. I'm, I know the people who are gonna tweet at me about this. I welcome your tweets. I'm still learning. I'm excited to learn from you. That's a big conversation. And the real answer

• 1:01:35Nilay Patel?

  will be like, probably hashtag in court once one of these bills passes. But these bills are passing, there's heat on them, and it is not the political alignment that you would expect, right? All of the antitrust action happened in the House Antitrust Subcommittee, chaired by David Cicilline, like that was all Democrats. He was on the show. He's a Democrat. All of this action's happening with Republicans. So there's not a lot of bipartisanship in America right now, but let's be angry at tech companies. Very bipartisan. Totally, still totally polarized, but very bipartisan.

• 1:02:06Speaker 03

  Actually, speaking of just hating app stores, what do we think of Epic buying Fall Guys? Or the, you know, the creator, Mediatonic?

• 1:02:14Speaker 06

  I thought that was, that was kind of interesting time because Fall Guys is kind of. Had its little moment of growth.

• 1:02:21Nilay Patel?

  Yeah.

• 1:02:21Speaker 06

  But I I think that the broader way to look at it is that they're buying, I feel like Epic's buying up the Fall Guys developer and obviously they've got Rocket League. So I I feel like they're they're building towards a time where they can have exclusive content in their store that they own, right?

• 1:02:37Nilay Patel?

  Right.

• 1:02:38Speaker 06

  They they obviously have Fortnite and all that sort of stuff, but they need more like they they've been trying to push that store on the PC for for quite some quite some time now. Um, with free games and sorts, but for some reason gamers just hate Epic games and they just hate the the Epic store, like they want everything in Steam. So I feel like they're they're trying to build towards like some exclusive content at some point.

• 1:03:02Nilay Patel?

  I look at it the other way, right? Like Fortnite is the phenomenon it is, it is big enough to allow Epic to fight Apple head up in court because it has this internal marketplace where you're like, you're buying scenes, you're buying all this stuff, you're buying dances. Fall Guys has that potential, right? People spend a lot of time in Fall Guys, it's fun, it has a sort of, if you squint, it has that like a Fortnite kind of experience, like you drop in, it's a bunch of people, you all do something, you start over like, and then you can like customize your character. Rocket League is some of the same way, like Taylor Lyles and I have been talking a lot about the F150 that you can buy in Rocket League right now. Which is very funny. I think they're buying marketplace, they're buying these like metaverse game experiences

• 1:03:45Nilay Patel?

  where you can do a lot of transactions for digital goods inside inside the app.

• 1:03:49Speaker 06

  But I feel like they're built, they're they're buying the talent, right? Because Rocket League is still huge, like Fall Guys, I don't think is particularly huge, but but the talent behind Fall Guys and their vision for it and and like just the the culture that company has.

• 1:04:02Nilay Patel?

  They're buying their creativity to to have come up with new ways to sort of spin that basic metaverse model. Uh, I think that, you know, they want to, they want to have multiple cracks at that idea.

• 1:04:15Speaker 06

  Yeah, they they they're gonna have a bunch of talent that will create the next Fortnite. Like they'll be, they'll be in the best position to. To, you know, kill Fortnite themselves.

• 1:04:24Nilay Patel?

  Yeah, that's where you want to be. All right, last little thing. Chris Welch had a great scoop today, actually. Sonos, moving into the portable speaker category, something called the Sonos Rome. It'll be $169 coming April, direct competitor to like the ultimate years boom, all that stuff.

• 1:04:42Speaker 03

  Yeah.

• 1:04:42Nilay Patel?

  I'm into it.

• 1:04:43Speaker 03

  It's got Wi-Fi, so it'll work with the Sonos system. I guess maybe you can make surrounds out of it. That would be hilarious.

• 1:04:48Nilay Patel?

  That'd be amazing.

• 1:04:48Speaker 03

  Yeah, I have no idea how it sounds. Obviously, it's pretty small. You got, I think it's like a $50 dock, wireless dock, which hopefully it's just pogo pins. Who knows? $50 is way too much for a dock. It's basically just a USB C pass through, but whatever. I don't have a good Bluetooth speaker. I've been waiting for it and, you know, I was gonna buy a Uwe Boom. It's like been in my like Amazon buy it later cart for a very long time, but then it turned out I didn't need to leave the house and didn't need a Bluetooth speaker. But that time is coming. Like using them in parks is nice. I think this is probably gonna be the thing I buy.

• 1:05:23Nilay Patel?

  Yeah.

• 1:05:23Speaker 03

  And it's not just because I'm not a Sonos super fan. We've got Sonos in the house. I like it, but it just, I don't know. I prefer this to like an AirPlay 2 speaker. I definitely prefer it to Bluetooth. It just gives you, you can do all that stuff, but it gives you like one nicer, more convenient way to start your music. I had one of those.

• 1:05:44Speaker 03

  It wasn't, it wasn't an Echo, but it was like the Amazon Bluetooth speaker. I forget what they called it.

• 1:05:50Nilay Patel?

  The Echo Tap.

• 1:05:51Speaker 03

  The Tap. Yeah, yeah. Except I think it was just the Amazon Tap. It might not have been the Echo Tap.

• 1:05:54Nilay Patel?

  You're right. It was just.

• 1:05:55Speaker 03

  I don't know why.

• 1:05:58Speaker 03

  It sounded like hot garbage. It was the worst.

• 1:06:01Nilay Patel?

  It was, I had one too. And mine died, which no Bluetooth speaker I've ever had has just been like, you know what? Fuck it.

• 1:06:08Speaker 03

  Yep, I give up. But it had a little dock you could set it on and like, most importantly, you know, if you took it to an Airbnb or something, you hook it up to the Wi-Fi and then you've got Alexa in your Airbnb or in your wherever you are, and then you can talk to the speaker to get stuff or get music. And it's way more convenient than like walking into the hotel room, but the phone, but. So that's why I'm interested in this thing. If it sounds good. For $170, who knows?

• 1:06:34Speaker 06

  I'm interested in it because the name makes sense.

• 1:06:38Nilay Patel?

  It's good. It's a good name.

• 1:06:39Speaker 06

  It's like Sonos has like a speaker that's called Five. And a speaker that's called Arc and a speaker that's called Beam. The only other one that really makes sense is Sub.

• 1:06:48Speaker 03

  Yeah, well, there's the move, which is hard to move.

• 1:06:50Speaker 06

  Yeah.

• 1:06:51Nilay Patel?

  I like our move a lot. I didn't even consider the possibility of dramatically producing my battery powered surround speakers in various rooms of the house. And if that is possible, I'm I'm in.

• 1:07:04Speaker 03

  Yeah.

• 1:07:04Nilay Patel?

  Like, hang on, it's movie time. Let me go collect my surround speaker.

• 1:07:08Speaker 03

  Wait, what if what if they made it easier to dynamically move them from room to room? So that you would you want to watch? You got the Sonos and the little arc, you know, in your bedroom. You'd like carry speakers in and set them behind the bed. And then when you want to go watch them in the living room, you carry speakers down there and they know where they are.

• 1:07:24Speaker 06

  What was if you could get a couple of the Rome rooms and just tack them to your ceiling and then have Atmos?

• 1:07:30Nilay Patel?

  Yeah, yeah, this is great. We all need to get the hell out the house is like what we are clearly demonstrating.

• 1:07:35Speaker 03

  Oh, wait, they're kind of cylindrical. You could you could build one of those like male vacuum tube systems like they used to have at the banks, you know? And then you could like shoot them around the house.

• 1:07:45Nilay Patel?

  We need to we need to leave our homes. That's what I got.

• 1:07:47Speaker 06

  It'd be called Sonos Swish.

• 1:07:49Nilay Patel?

  Amazing. That's actually a good name. All right, that's it. I want to call out on Monday in the feed, we got a special episode. We had an event this week with Senator Amy Klobuchar and a bunch of panelists talking about the future of tech regulation in section 230. We'll have a highlight episode coming for you on Monday with Russell and Addy. That's very exciting. Twitter had a product, Cave on Bakpor on Decoder next Tuesday. That's gonna be a good one, I think. We'll see. I've got I've got some ideas for that one, too. So that's coming on Tuesday. We'll be back next Friday with more of our chest. Thank you to Micah. You can tweet at him. He's at Michael Singleton. Tom is at Tom Warren. Dieter is at Backalon. I'm at Reckless. We love hearing from you. That's it. Rock and roll.

• 1:08:30Speaker 03

  Wear a mask.

• 1:08:31Speaker 06

  Europe.

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