Puddle of burn

Welcome to a very special episode of The Vergecast, featuring our new colleagues from Re/code, Walt Mossberg and Lauren Goode. They join Nilay and Sam to take a break from the news this week, and take stock of the state of the union in tech. From Amazon and Google to Microsoft and Beyonce, the crew takes stock of where we are, and what constitutes hype. Don't miss this one. 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 The Vergecast is brought to you by Lynda.com, the online learning platform with over 3,000 on-demand video courses to help you strengthen your business, technology, and creative skills. For a free 10-day trial, visit lynda.com/vergecast. That's L-Y-N-D-A.com/vergecast. Lynda.com is for problem solvers, for the curious, for people who want to make things happen. Maybe you want to master Excel, maybe you want to learn some negotiation tactics, maybe you want to build a website, maybe you just want to boost your Photoshop skills. Go to lynda.com and feed your curious mind. You can learn about virtually anything there. You can learn how to build a note-taking app for iOS 8, you can learn how to do a data visualization, you can do better retina graphics with Photoshop and Illustrator. There is an entire course where you just learn how to get Sam Sheffer's haircut. It's kind of amazing. Lynda.com will give you

• 0:43Nilay Patel?

  unlimited access to training on hundreds of topics, all for one flat rate. So whether you're looking to just become an industry expert, you're passionate about a hobby, or you just want to learn something new, please visit lynda.com/vergecast and sign up for a free 10-day trial. That's L-Y-N-D-A.com/vergecast.

• 1:05Nilay Patel?

  I want to say it took Mossberg four seconds to start trolling me on the air for this Vergecast. Hello, everybody, and welcome to The Vergecast. What is today? Today is June 25th. It's a very special episode of The Vergecast. We are joined by our new colleagues, one, Mr. Walter Mossberg, who you're supposed to say hello.

• 1:26Speaker 01

  Oh, hello.

• 1:26Nilay Patel?

  There he is. And the delightful Miss Lauren Good.

• 1:30Speaker 02

  Hello, everybody.

• 1:31Nilay Patel?

  So Dieter, I've got, I've got just tabs playing audio everywhere. So Lauren and Walt are joining The Verge as part of Vox Media's acquisition of Recode, which is very exciting.

• 1:42Speaker 01

  Right.

• 1:43Nilay Patel?

  They're going to be around. They're in town this week to meet everyone. Literally, it's just been three days of introductions.

• 1:48Speaker 02

  It's been awesome.

• 1:48Speaker 01

  Meetings.

• 1:49Nilay Patel?

  Endless meetings.

• 1:51Speaker 01

  We had a good dinner. That was good.

• 1:52Nilay Patel?

  We had a good dinner.

• 1:53Speaker 02

  Thanks to Dieter.

• 1:54Nilay Patel?

  Yeah, our friends at Dieter hooked us up.

• 1:56Speaker 01

  Yep.

• 1:56Nilay Patel?

  And we thought we'd have them on The Vergecast this week. And then later on, I'm going to somehow swindle Walt into doing a podcast of his own, and that's going to be great. And then over, what the hell are you doing?

• 2:07Speaker 02

  He's drinking distilled water.

• 2:08Speaker 03

  No, it's not distilled. I'm just reusing.

• 2:10Nilay Patel?

  Chef is in a hype seat.

• 2:12Speaker 01

  Can I just call hype on the giant bottle of water?

• 2:15Nilay Patel?

  Yeah, so this is how, okay, you don't call hype. Here's how this works.

• 2:18Speaker 01

  Okay.

• 2:18Nilay Patel?

  It's very close to. God, what have I gotten myself into? So this is the Vergecast. Let's start, start, start. This is the Vergecast where we discuss all things Verge for the week.

• 2:29Speaker 03

  Right.

• 2:30Nilay Patel?

  We usually stick to technology. We have the, we have formats where sometimes we, you know, get deep into entertainment, we get deep into culture, we, you know, Liz will be on, we talk about science. And then sometimes we have what we call hard tech Vergecast, where we just get really nerdy about technology. But the main format here is that basically it's chaos over here and Sam sits in the hype desk over there. And as we discuss various topics, you can ask Sam to hype check those topics. So we can, Sam, hype check the iPhone.

• 3:00Speaker 03

  It peaked a while ago. It's not like it's six or seven now. Like it's ubiquitous.

• 3:04Nilay Patel?

  And the idea is for Sam to provide a number, but that, the formula-

• 3:07Speaker 03

  There's usually some flavor there.

• 3:09Nilay Patel?

  The formula that generates that number is subject to much discussion.

• 3:13Speaker 03

  Uh huh.

• 3:14Nilay Patel?

  Because I think it should change over time. I think the hype level of things-

• 3:18Speaker 01

  Of course.

• 3:18Nilay Patel?

  Changes over time.

• 3:19Speaker 01

  No, you're totally right.

• 3:19Nilay Patel?

  Yeah, so that's the first agreement I've gotten from all week. So I feel really good about that. So just for the audience, we have been in meetings and literally just like introducing people and hanging out and seeing how things work. So we've been a little off of the news cycle. And these guys haven't been on the show before. So I thought what we might do is sort of introduce them to everybody with kind of a State of the Union and just talk about the big players in tech, what they're up to, how they're doing, you know, where their, where their, where their hype levels are coming and going. You gotta stop drinking out of a two liter, or a two gallon jug of water, man.

• 3:54Speaker 03

  No, one gallon.

• 3:55Nilay Patel?

  It's a one?

• 3:56Speaker 03

  That's one gallon.

• 3:57Nilay Patel?

  Okay, well, it's still crazy what you're doing. Hype check your jug of water.

• 4:02Speaker 03

  Ten.

• 4:05Nilay Patel?

  So this, Walt and Lauren is the Vergecast.

• 4:08Speaker 03

  Peter Kafka is live watching.

• 4:10Speaker 02

  Oh yeah, he's our biggest fan and he has already told us, Walt, that we need to speak into the microphone. So thanks, Peter.

• 4:15Speaker 01

  Thanks, Peter. Because you know what? That's the first time Peter's ever told us to do something.

• 4:20Speaker 02

  I think it's the first time that Peter has watched a podcast streaming live.

• 4:24Nilay Patel?

  This is amazing. So that's our show.

• 4:26Speaker 01

  No one lets him on them. Have you noticed that?

• 4:28Nilay Patel?

  Oh.

• 4:29Speaker 01

  It's just really interesting.

• 4:30Nilay Patel?

  Peter, you're in the hype seat next week, buddy. That would be great.

• 4:34Speaker 01

  Peter lives in the hype season.

• 4:36Speaker 02

  No, he lives in deep Brooklyn.

• 4:38Speaker 03

  Deep Brooklyn. Shade throughout at Brooklyn.

• 4:41Nilay Patel?

  He wrote, he wrote, it's a long story.

• 4:45Nilay Patel?

  So the, the frame of this, we were talking just before the show started, um, is who is Eric Schmidt at Google? Was at

• 4:51Speaker 01

  Right.

• 4:51Nilay Patel?

  A conference with Walt, on stage with Walt.

• 4:53Speaker 01

  Yeah.

• 4:54Nilay Patel?

  Their conference, was it D or code?

• 4:55Speaker 01

  It was D.

• 4:56Nilay Patel?

  It was the D conference when it was

• 4:57Speaker 01

  In 2011.

• 4:58Nilay Patel?

  Uh, and he referred to it as the gang of four, which is Apple, Google, Facebook, Amazon, right?

• 5:04Speaker 01

  Correct.

• 5:05Nilay Patel?

  Notably leaving out Microsoft.

• 5:07Speaker 01

  Right. And I said, why did you leave out Microsoft? And he's, his answer was something on the order of they don't have a modern platform. And then he went on to make a point, which was, I mean, and I interpreted that as just, he's hated Microsoft since he ran Novell, which one person listening to this knows what Novell is, but it was a networking enterprise kind of company and he competed with Microsoft. But he left them out and he had a rationale, but, and, and we had Microsoft on stage the next morning and they fired back.

• 5:42Nilay Patel?

  It was Snovski.

• 5:43Speaker 01

  It was Stephen Snovski.

• 5:44Nilay Patel?

  Yeah.

• 5:45Speaker 01

  Who was an important executive there at the time and for, had been for many years. And he was actually showing for the first time ever, I think, Windows 8, which went on to, as you know, conquer the world.

• 5:58Speaker 01

  And, um,

• 5:59Nilay Patel?

  Lost birds.

• 6:00Speaker 01

  What was the hype on Windows 8?

• 6:03Speaker 03

  I mean, when it, at the time, the, the fanboys were rabid for it.

• 6:07Speaker 01

  Right.

• 6:09Speaker 03

  And yeah, it, uh, people are looking forward to Windows 10 now. Let's just leave it at that.

• 6:13Speaker 01

  Yeah, that's right. So, uh, Snovski made the point correctly because Snovski is a smart guy. He's a student of history, lived in China for a while. That the gang of four was also a term that referred to the kind of, um, clique of dictators that ran China for a while.

• 6:31Nilay Patel?

  Yeah.

• 6:31Speaker 01

  And so he was happy for Microsoft not to be in that. That was his point. But, but Eric actually, putting aside the Microsoft jealousy thing, he had an interesting point to make, which is still true today, I think, which is,

• 6:45Speaker 01

  He claimed there had never been a time in tech history where you had four companies that were platforms that were so powerful and growing so fast simultaneously and that it was just sort of an amazing time for developers and consumers of the products they developed and that was that was sort of the way his thought process was working on that.

• 7:11Nilay Patel?

  What I think is fascinating is how all encompassing those platforms have become.

• 7:14Speaker 01

  Right.

• 7:15Nilay Patel?

  Now, you can't, you, literally everything, I wrote a piece, what, last week, two weeks ago, where the entire media industry, the whole revenue of the media industry, of the music industry, is less than Apple's profit over three quarters and they're totally dependent on Apple's platform to succeed and be the gatekeeper of everything they do. And Google wants the same thing in a slightly different way and Amazon wants the same thing in a slightly different way.

• 7:39Speaker 01

  Right.

• 7:40Nilay Patel?

  And Facebook is literally just subsuming the media industry into instant articles.

• 7:43Speaker 01

  Yep.

• 7:44Nilay Patel?

  And it's amazing how big these platforms have become and Microsoft is trying to reinvent its platform of Windows 10 yet again, the 15th time.

• 7:51Speaker 01

  Right. And I think the, I think the interesting thing is that all these guys, and most of them are guys, had a, had a particular thing they were good at or that sat at the center of their, their formula. You know, Google, it was originally search, then, you know, then Android. Apple, it was and still is, I think, basically making hardware with software that kind of ties in vertically to the hardware. With Facebook, social, obviously, and with Amazon, it was selling things. But they're actually all now impinging on each other.

• 8:31Nilay Patel?

  Right.

• 8:32Speaker 01

  Like, you know, you could draw these Venn diagrams and show all the overlaps of all this stuff. So. It's it's like a giant four sided or including Microsoft, a five sided war.

• 8:45Nilay Patel?

  Yeah, I think we should include because Microsoft's on the cut.

• 8:47Speaker 02

  Yeah, it's really more.

• 8:49Nilay Patel?

  They're on the cusp of trying again, but I think if we were doing this a year ago when Windows 8 was like in full throat, I would say maybe you could leave him out like that. That didn't work.

• 8:58Speaker 01

  No, I wouldn't have even look, there's still are hundreds of millions of PCs running Windows. And that's what they do every day. So that is the legitimate platform that a lot of things, a lot of work, a lot of of browsing and other things is done on every day all around the world. Right, Lauren?

• 9:20Speaker 02

  Yeah.

• 9:20Nilay Patel?

  Yeah. So let's get into it and I'll just ask Lauren. So we're in an Apple moment right now. Let's I'm just going to go on the list. Apple, Google, Facebook, Amazon, Microsoft.

• 9:28Speaker 02

  Okay.

• 9:29Nilay Patel?

  Let's do State of the Union, all of them somewhere in there. I'm going to read, read some ads.

• 9:33Speaker 02

  And why do you think we're in an Apple moment right now? Just because they're the biggest?

• 9:36Nilay Patel?

  They're well, they're huge. They're about to roll out Apple Music, right? They showed off the next versions of all of their platforms, OS 10, iOS 9. The iPhone continues to be a monster. They got Taylor Swift to put her album on Apple, you know, like they they have the cultural weight that I don't think anybody else has. And I think when Google, you know, we look at, I look at it. When Google had I O a couple of weeks ago, there wasn't just the wall to wall saturation of Google's like we did it on our site because we cover Google, but the rest of the world wasn't like paying attention to Google. Apple is like, has one little tweet with Taylor Swift and like the world explodes.

• 10:18Speaker 02

  Right.

• 10:18Nilay Patel?

  And I think that moment is still very strong. So Tommy, what do you, what do you think is going on with Apple right now?

• 10:23Speaker 02

  Well, Apple Music specifically, I mean, there's so much Apple Watch. I mean, what?

• 10:29Nilay Patel?

  So the watch, I think is like fascinating. Please stop talking about the watch. You're not wearing one right now.

• 10:33Speaker 02

  I'm actually not.

• 10:34Nilay Patel?

  Walt's wearing one.

• 10:34Speaker 02

  Walt's wearing one and I've noticed a bunch of people at the verge actually are wearing theirs as well, but I'm testing something different right now. And yeah, we, I mean, it is definitely a moment for Apple, right? I mean, they revolutionized the way that everybody pays for consumes music over a decade ago now. They're now trying to do it again. They're sort of, you know, they've taken this wait and see approach. Everyone now knows that streaming music is a thing, right? And so I think, you know, this is going to be a really pivotal moment for them in terms of their music services and actually what happens to iTunes as it exists now. They, just like they're doing with music, they took a wait and see approach with wearables and now they've just come in with a smartwatch.

• 11:18Speaker 02

  But, you know, I think the response to Apple Watch has been a little bit mixed, actually. I mean, I think the early reviews were all sort of like polite and acknowledging it as a beautifully designed piece of hardware. Of course, like, you know, because we reviewed it right off and then Walt reviewed it, you know, early on as well. There weren't third-party apps at the time, so we couldn't really judge it, you know, totally accurately or entirely at the time. But now, like, even we've seen lots of apps come out and people are still like, yeah, you know, we're still gauging the value of this thing. So it's definitely an Apple moment, but it's like, there's still so much wait and see and we hate saying that as journalists, like, we're just, well, time will tell, but it's sort of what's going on right now.

• 12:00Speaker 01

  So I think, I think you're right, but I would remind you that if we could get in a time machine and go back to two months into the iPod, the iPhone, if you look at the reviews, the iPad got weird, bad reviews in the beginning, like, no one's going to buy this, and it became the fastest-selling piece of consumer electronics ever, even faster than the PC one.

• 12:31Nilay Patel?

  I actually think the bad iPad reviews and people getting those wrong is the best thing that could have possibly happened to Apple Watch. Because I don't, I thought everybody was wrong. Those bad reviews about the iPad were wrong, like, off the bat.

• 12:43Speaker 01

  Right.

• 12:44Nilay Patel?

  But I think the mixed reviews of the watch are dead on.

• 12:46Speaker 01

  Yes, of course they should be.

• 12:48Nilay Patel?

  But everyone's afraid to, like, really say it because they might be as wrong as they were.

• 12:51Speaker 01

  No, but, Neelai, they should be mixed because the whole package isn't out there yet.

• 12:56Nilay Patel?

  I agree.

• 12:56Speaker 01

  Because they just... Thank you. Gen one. Thank you. First of all, the hardware is gen one, but it isn't that. The hardware is fine for gen one. Yeah. It's, they just, as you know very well, they just released what you might call the first real SDK for it. Right. Where a third-party developer can write to the watch as a device. What I said in my piece, which was based on wearing it for a month, was that I had the feeling, and I did have some apps to talk about that were finished, but there were these apps that, you know, basically are little stubs of iPhone apps because they didn't, weren't allowed to write directly to the watch. And so I wrote, "It just feels like a lot of the developers don't know what to make of this yet."

• 13:41Speaker 02

  Right.

• 13:42Speaker 01

  Right. That's not going to be true in the fall, and we all... So why did they rush it out? I don't think they rushed it out. They took years to do it. The question is, why did they do it in these two stages? Yeah. Because it was probably faster to get a bunch of apps out through the iPhone. It may have been a mistake, who knows?

• 13:58Speaker 02

  Well, it's also, there's also a learning curve with these types of devices, right? Like, I was just talking to the Fitbit CEO yesterday, and we ran a story about that on Recode, and even he pointed out, and they've been around for eight years, we're still in very early stages of consumer awareness around these types of products, too. So on the flip side of that, I guess, is if Apple had rolled everything out and saying, like, "Okay, and here are a thousand apps you can run immediately on this watch," and, you know, a lot of the app load experiences have been really slow, or in some cases, you're swiping and you're like, "Well, what does this do here?" It could have been too overwhelming for a certain segment of the market.

• 14:29Speaker 01

  Apple, you've got to remember two things about Apple, and it goes through all these products, and one is, they, you guys mentioned this, but this is a truism with Apple, they always wait. They always wait to see what people are fun, pummeling around in a category, they decide it's interesting to them, and they figure out, "Can we do this better, or more holistically, or whatever?" And then they try, and that's what's going on there.

• 14:56Speaker 03

  And then they usually really succeed and dominate the market.

• 14:58Speaker 01

  They do. They have, historically. Secondly...

• 15:04Speaker 01

  Apple plays the long game.

• 15:07Nilay Patel?

  Yeah.

• 15:07Speaker 01

  And they can afford to.

• 15:08Speaker 02

  Mm-hmm.

• 15:08Speaker 01

  But to be fair, when Jobs did not have this kind of money, he still played the long game.

• 15:14Speaker 02

  Mm-hmm.

• 15:14Speaker 01

  I mean, I had lots of conversations with him over the years. I can't ever remember him talking about quarterly earnings.

• 15:21Nilay Patel?

  Yeah.

• 15:22Speaker 01

  It just couldn't have mattered less to him.

• 15:24Speaker 02

  Yeah.

• 15:24Speaker 01

  He never went on the analyst's phone calls. I think he did once.

• 15:27Nilay Patel?

  He did once to burn Android tablets to the ground.

• 15:30Speaker 01

  Right. But the point is, basically, he didn't care. So, I mean, I did see him super excited one time when the sales of one of the Pixar, the box office for one of the Pixar movies came in because he was so happy about it. But, so, they're in it for the long game. If you look at the iPhone, it was dead in the water for the first three or four months. I mean, dead in the water. And they had to cut the price.

• 15:57Nilay Patel?

  Yeah.

• 15:57Speaker 01

  He had to cut the price, and he had to cut the price again.

• 16:00Speaker 02

  Mm-hmm.

• 16:00Speaker 01

  And it did not, if you looked at the sales chart on that, it did not, there was eventually kind of a hockey stick thing, but it was like a year, it was like after they had opened an app store and all that other stuff. Same with the iPod. And so, it's way too early. The reason I have a watch is it's a platform device from the company that, as the hype desk has just declared, has eventually succeeded in all these things.

• 16:29Nilay Patel?

  How have I brought these two people together?

• 16:30Speaker 01

  It will, it will, it either is going to be a huge flop, or it's going to actually become a platform where people are going to do stuff.

• 16:39Speaker 02

  Let's talk about Apple Music. I really want to talk about Apple Music.

• 16:42Nilay Patel?

  There's so much Apple. That's what I mean by it's a moment.

• 16:44Speaker 02

  Okay.

• 16:44Nilay Patel?

  We can do the whole show on the watch. We can do the whole show on music.

• 16:46Speaker 02

  I feel like Taylor Swift's next album should be called "Apple Moments."

• 16:49Speaker 01

  Oh, my goodness.

• 16:52Speaker 02

  Tay-Tay, you heard it here.

• 16:53Nilay Patel?

  Yeah.

• 16:54Speaker 02

  So...

• 16:54Nilay Patel?

  I checked Taylor Swift.

• 16:55Speaker 03

  She's the queen of the hype.

• 16:58Speaker 02

  Yes.

• 16:58Speaker 03

  She really is?

• 16:59Nilay Patel?

  Go through music.

• 17:01Speaker 02

  Well.

• 17:01Nilay Patel?

  We talk about Apple Music on the show, I think, every single week.

• 17:04Speaker 03

  It's been like two months.

• 17:05Nilay Patel?

  It's been dominating what we talk, because it's such an important thing.

• 17:08Speaker 02

  It is.

• 17:08Speaker 03

  And then Spotify. It's music in general right now is upside down.

• 17:12Nilay Patel?

  Emily and I were having a conversation, for the past year, year and a half, all we've talked about in terms of entertainment and technology has been television. Over and over again, we talk about TV. Are they gonna get the deals? Are they gonna make a TV? What's Netflix gonna do? Amazon's making shows? And it just sort of figured itself out. And now, we're just moving on. We're like, okay, let's reinvent music again. And we're, all we talk about when we talk about technology and culture right now is music. And it's just strange. It just flipped like that. Like, we just stopped talking about television in the way that we did for the past eighteen months.

• 17:45Speaker 02

  So you're saying this is all just one big head fake?

• 17:47Nilay Patel?

  No.

• 17:50Nilay Patel?

  Maybe Apple's, they're finally gonna do a TV.

• 17:52Speaker 01

  Or you're really interested in music.

• 17:55Nilay Patel?

  No.

• 17:55Speaker 01

  That could be.

• 17:56Nilay Patel?

  I just think that the TV stuff has proven to be so hard for so long.

• 18:00Speaker 01

  Yeah. No, you're right. You're right.

• 18:02Nilay Patel?

  That it has slowly sort of sorted itself out.

• 18:05Speaker 01

  We were actually talking about this in one of our meetings this week, how there are a lot of smart TVs, but people are still hooking Roku's and Apple TVs.

• 18:13Speaker 02

  They're still using over-the-top solutions.

• 18:15Speaker 01

  Whatever. Here's one thing I find really interesting about Apple Music, which, by the way, they did an uncharacteristically terrible job of presenting, as you wrote and other people wrote.

• 18:28Speaker 02

  It was the opposite of simplicity that they stand for.

• 18:31Speaker 01

  And I personally, I mean, I think it's because they have, this is part of their effort to integrate Beats into Apple, which are different cultures. I mean.

• 18:42Nilay Patel?

  I was thinking about what you said, actually. Go through it, because it's really interesting.

• 18:45Speaker 01

  Well, Jimmy.

• 18:45Nilay Patel?

  While it has a perspective.

• 18:46Speaker 01

  So Jimmy Iovine and Dr. Dre, who, you know, created Beats and ran Beats and got $3 billion for it from Tim Cook, which for Tim Cook is couch cushion change, right? Nothing.

• 19:03Speaker 01

  He came out on stage, he had a lot to do with, I think, the design of Apple Music. And I happen to like him a lot.

• 19:11Nilay Patel?

  Yeah, I think he's great.

• 19:12Speaker 01

  He's a great guy, but he's a, he's a record industry guy. He happens to have a, it's almost a purity of vision about music. He cares, he really does care about human curation. Since that's an Apple thing also, there is a fit there. But in terms of him coming out and doing a presentation with Eddie Q, who has become his pal, it was, it just was very muddy. It was very unclear what they're doing. And it's really not unclear when you break it down, but the way they presented it was

• 19:44Speaker 02

  unclear. I remember people were leaving and saying, oh, so Beats One is now the new iTunes Radio, but it's actually Apple Music Radio and Beats One is a channel within that.

• 19:53Speaker 01

  Yeah, iTunes Radio is staying the same with a different name. It's algorithmic radio.

• 19:57Speaker 02

  Right.

• 19:58Speaker 01

  And Beats One is an old fashioned, it might as well be 1957, except that it's global. And it's a linear radio station.

• 20:06Nilay Patel?

  It's so weird.

• 20:07Speaker 01

  Which focuses on the taste of the DJs. Yeah, but I'm not so sure, I'm no expert on this, but I'm not so sure that millennials won't find that interesting. I don't know.

• 20:17Speaker 02

  Even just the idea of multiple people tuning into the same stream and hearing the same thing.

• 20:23Speaker 01

  Right, right. Or they may find it drives them crazy.

• 20:26Nilay Patel?

  Well, we have a millennial here for a reason.

• 20:28Speaker 03

  I think this is gonna be one of the most compelling things about Apple Music. I think even like my generation, we are all so connected, you know, we have WhatsApp and FaceTime. You just, it's, you press a button and you're talking to someone on the other side of the world.

• 20:44Speaker 01

  You're talking about the greatest generation, your generation.

• 20:47Speaker 03

  That's debatable, definitely debatable.

• 20:49Speaker 01

  You won World War II, right?

• 20:51Nilay Patel?

  We could do an entire show of Walton San trolling each other. Like, let's be really clear.

• 20:57Speaker 03

  I think that's gonna be, I think it's gonna be really special where, you know, you can be listening to the same music as someone that's in a different time zone or literally on the other, other side of the world.

• 21:07Speaker 02

  Yeah.

• 21:09Speaker 03

  And it's Apple and everyone knows Apple and yeah, I think it's gonna be cool.

• 21:13Speaker 01

  It's Apple and everyone knows Apple explains a lot of things. It explains a lot of things.

• 21:19Speaker 02

  But my question is also around human curation, not just, not just the idea of the linear terrestrial style radio being streamed, but do people really care about human curation when it comes to streaming music? Do you think you listen to a playlist and you're like, this was made by a human instead of a bot?

• 21:35Speaker 03

  Well, those humans are icons also, like arguably known around the world too.

• 21:39Speaker 02

  In the case of Apple Music, but I guess for streaming in general, do you think people care about curation?

• 21:45Nilay Patel?

  Well, Emily, did you see Emily tweeted a picture of like Beyonce's like festival hits playlist on title yesterday and it was just so bad. It's just like, was this Beyonce? Like, did she do this? Did a robot do this? Did like, where did this come from?

• 21:58Speaker 01

  That, nothing against Beyonce personally, but I mean, that's a gimmick. That's a gimmick. That's a celebrity. But the point is, when, when Jimmy and Dre and Ian Rogers, who most people don't know who he is, but he's been in the music business a long time, the digital music business, and he's a very smart guy. When they started Beats Music, and the DNA of Beats Music is in Apple Music, clearly. Even, even some of the UI is in there. Their idea was not to get celebrities. They did, they do have some, but that was not their idea. Their idea was to get the, the best country music magazine. I can't remember the name, but what is it? Does anybody here know?

• 22:44Nilay Patel?

  No.

• 22:45Speaker 01

  Or if it's rock, if it's rock and roll.

• 22:49Nilay Patel?

  Country music is the last music in the world to have actual guitars in it. And I keep trying to get into it because I like want to listen to guitar songs and then it's awful. And then this is like a monthly cycle with me. Anyway.

• 23:02Speaker 01

  So, so whatever that, whatever that is, they had them curate a bunch of playlists. They had Rolling Stone curate rock and roll playlists. Pitchfork do that stuff. Yeah, but they did it. They did it first and Spotify then also did it and you know, maybe it'll all work out that it's all the same.

• 23:23Nilay Patel?

  Remember when Spotify launched apps? This is like a crazy idea they had.

• 23:27Speaker 01

  Yeah, I know.

• 23:28Nilay Patel?

  Apps inside of the desktop. And the one app that was awesome and remains awesome, but nobody, it's rarely updated anymore, is the Pitchfork app.

• 23:35Speaker 01

  Okay, but Pitchfork is in, was in Beats and it's in, I haven't checked, but I'll bet it's in Apple Music.

• 23:42Nilay Patel?

  Where you can read Pitchfork and listen to music.

• 23:44Speaker 01

  No, no, no, no, you can't read it.

• 23:46Nilay Patel?

  Right, so in the Spotify desktop app, you used to be able to read Pitchfork and it would play the songs of the music.

• 23:51Speaker 01

  I really think that's sort of not compelling.

• 23:53Nilay Patel?

  But that's like, that's my Sunday afternoon with an iPad.

• 23:55Speaker 02

  I actually really like to do that when I'm listening to Spotify in the car.

• 23:58Nilay Patel?

  Right.

• 23:59Speaker 02

  I'm just kidding. You can't read what.

• 24:01Nilay Patel?

  No, but like the idea, so I used to read, you used to read music.

• 24:03Speaker 01

  Right over his head.

• 24:04Speaker 02

  He's like me too.

• 24:05Speaker 01

  I mean, you know what, coming, coming from Recode, I think we have to lower it a little bit, you know.

• 24:10Speaker 03

  Wow, do you know what is happening here?

• 24:12Nilay Patel?

  The show is over.

• 24:14Speaker 03

  We're getting burned.

• 24:15Speaker 02

  What do you guys think about the price of Apple Music?

• 24:17Speaker 03

  What, $10 a month?

• 24:18Speaker 01

  Oh, I want to bring this up.

• 24:19Nilay Patel?

  Yeah.

• 24:20Speaker 01

  Cause here is the.

• 24:21Nilay Patel?

  I've completely lost control of the show.

• 24:22Speaker 02

  But I mean, in terms of the, not just the price that you're going to pay, but the model of it, I mean, how, like Mossberg has a theory that we've talked about.

• 24:28Speaker 01

  So here's the theory. It's more than a theory.

• 24:31Nilay Patel?

  Confirmation.

• 24:32Speaker 01

  I know it's more than a theory, cause.

• 24:34Speaker 02

  You've let the insane take over the asylum.

• 24:36Nilay Patel?

  I'm really excited about it. The shows are getting boring and now it's gonna get exciting and then there's gonna be blood. It's gonna be wild.

• 24:42Speaker 01

  Cause our friend, Peter Kafka, who knows everyone in the music industry, you know, wrote for a while about this, this, and will continue to write about it. So basically what's happening, for those of you out there who just want to listen to music and didn't really care, or are confused about why is Apple finally doing this when they wouldn't do it, when Steve Jobs is alive and whatever, what's really going on is the labels, who were saved once by Apple, when they started iTunes, the labels hate Spotify because there's no money essentially, it might as well be no money, made from the ad-supported free tier of Spotify. So what they want is everything to be a subscription.

• 25:26Speaker 01

  They don't mind if trial period, but basically they want a subscription. So they went to Apple and Apple also, at the same time, iTunes sales began plummeting, so they needed to do something different. So there was a mutuality of, mutuality of interest there, but.

• 25:44Speaker 01

  I am, I know for a fact that there were discussions about, okay, if we want to get everybody to subscribe and we want to defeat the free streaming, ad-supported streaming music, which by the way, not just the sort of, you know, evil titans of the music industry, but even the artists and the songwriters all hate that because so little money is generated from it. My curious, or my question is, why didn't they let Apple charge less than Spotify?

• 26:17Nilay Patel?

  Right.

• 26:18Speaker 01

  Less than 10 bucks? And they actually had serious conversations about it. They had conversations about six bucks, seven bucks, eight bucks, you know, whatever number of-

• 26:29Speaker 02

  Just so it was, just as a differentiator from everything else?

• 26:31Nilay Patel?

  Well, just to kill Spotify.

• 26:33Speaker 01

  To kill Spotify to achieve their goals, Apple's goals, but also the industry's goals.

• 26:39Speaker 03

  How would, how would they achieve their goals if they're charging less?

• 26:42Nilay Patel?

  Because they, they would get more people-

• 26:44Speaker 01

  Because they would, because it would still be better than the ad, ad base. They would get people behind paywalls.

• 26:49Speaker 02

  Let's ask our resident millennial. Which, by the way, I'm on the cusp, so I'm with you here in terms of millennialism, sort of.

• 26:57Nilay Patel?

  Millennialism is a world philosophy.

• 26:59Speaker 02

  But, does it matter to you if you're paying $8 a month for your favorite streaming service or $10 a month?

• 27:05Speaker 03

  It's negligible.

• 27:06Speaker 02

  Right. And so what ultimately is going to be the driving-

• 27:09Speaker 03

  Whichever one's better and whoever has Tool on streaming music, because I have yet to find a streaming service that has Tool.

• 27:15Nilay Patel?

  Right, it's the one-

• 27:16Speaker 03

  I mean, like whoever has the most music.

• 27:18Speaker 01

  So if somebody, if somebody had Tool, they could charge you 15 bucks and it would be all right.

• 27:22Speaker 03

  Would I pay premium for Tool? Maybe. My point is, is that the catalog needs to go deep.

• 27:28Nilay Patel?

  Well, no, but-

• 27:29Speaker 02

  No, but the catalog is- The catalog is the same.

• 27:31Nilay Patel?

  But Apple's catalog does need to go deep because they're, and everyone's going to tweet at me about Google Music. This is what happens every time I say this. But Apple's catalog does need to go deep because you can just buy the Tool record and then you'll have it. It'll be over, right? Yeah.

• 27:45Speaker 02

  Mark Berg's checking his Apple Watch.

• 27:46Nilay Patel?

  I know.

• 27:47Speaker 01

  No, but there's a reason.

• 27:48Nilay Patel?

  Mark Berg just excitedly showed me a...

• 27:50Speaker 01

  Peter Kafka, who's listening to this.

• 27:52Nilay Patel?

  Pinging the Apple.

• 27:53Speaker 01

  For those who don't know, Peter Kafka...

• 27:54Nilay Patel?

  This is a first on the... Oh, we talk about Kafka all the time.

• 27:57Speaker 01

  So Peter just tweeted that, in fact, Apple wanted five bucks and thought at one point they'd settled at eight.

• 28:07Nilay Patel?

  Yeah.

• 28:08Speaker 01

  And he had a link because, of course, he wrote about it.

• 28:10Nilay Patel?

  Of course.

• 28:11Speaker 03

  Lauren, to answer your question, I'm going, I pay, I've been paying for Spotify since the day it came out in the US. And when, on June 30th, I'm going to sign up for an Apple Music subscription. And after a month, a month and a half, whichever one serves me better, I'm going to pick that one.

• 28:25Speaker 02

  But by serves you better, what you, that's purely based on catalog? It's not about the UI, the experience?

• 28:30Speaker 03

  It's about, it's about the UI and the experience. Like Spotify, there was one version of Spotify that I was able to tap the icon and it would be up in like two seconds now. There's like a six to eight second buffer. And if I miss that when I have service and I hop onto the subway, I like, it sucks.

• 28:44Nilay Patel?

  It's over.

• 28:45Speaker 03

  It's over, yeah.

• 28:45Nilay Patel?

  Sam and I also argue on the show every week about...

• 28:47Speaker 03

  About Spotify.

• 28:48Speaker 01

  Spotify has a bad...

• 28:49Nilay Patel?

  I think Spotify is garbage.

• 28:50Speaker 01

  A bad user interface.

• 28:51Nilay Patel?

  See, this is why Walt's here.

• 28:52Speaker 02

  I don't like that it takes...

• 28:53Nilay Patel?

  We had the whole deal just so Walt would come on the Vercast.

• 28:56Speaker 03

  I don't know if it's bad, it's usable.

• 28:57Speaker 01

  And let me just say, let me just say, I've interviewed Danielek. I like Danielek. I like music. I like the idea of streaming music. I think you could put a little more effort into making a good interface.

• 29:10Speaker 02

  I agree.

• 29:10Speaker 01

  We'll see what Apple is, Apple's interface is really like.

• 29:13Speaker 03

  Well, Vercast again in a month and we'll revisit this conversation.

• 29:16Nilay Patel?

  I mean, I think Spotify's UI is garbage. Like, it just, it's not good. I use it. It's the one I use the most.

• 29:22Speaker 02

  Do you use Google Play All Access?

• 29:24Nilay Patel?

  It's just the tweets and the tweet of the angry email, like, yeah.

• 29:28Speaker 02

  About Google Play specifically?

• 29:29Nilay Patel?

  Yeah, because we, there's, we have a lot of listeners who use it. And I have it. I pay for that one, too.

• 29:34Speaker 02

  Yep.

• 29:34Nilay Patel?

  The thing I use that one for the most is it doesn't, I don't have to watch ads on YouTube when I watch music videos on YouTube. That's great. That is an excellent reason to pay for that service. Their apps on the iPhone are garbage. Like, they're not good, and their app on Android is a little bit crashy. Like, none of these things are good. And the reason I have been, and these listeners have heard this from me so many times, I'm excited for Apple's because I think they write the best software sometimes.

• 30:00Speaker 03

  Yeah.

• 30:01Speaker 01

  Yeah.

• 30:01Nilay Patel?

  Not all the time.

• 30:02Speaker 01

  Not all the time, but they have a history of running great software, and because they compare it with their hardware.

• 30:07Nilay Patel?

  But one of the things that Walt said to me, which was like, mind-blowing, because it had never occurred to me to think about anything this way, was he said, "Well, look, you're trying to integrate Recode, this Recode group into The Verge, and you're taking it slow, and you're being respectful of everybody's feelings. That's what Apple is doing with Beats." So they're letting the Beats people do the stuff their way, because Tim Cook knows, he said, "Tim Cook knows what he doesn't know, and he's letting Jimmy and Dre, like, do the Beats thing." And I'm thinking, "That's why this sucks." Like, what I'm looking at is a product that is a series of compromises.

• 30:43Speaker 01

  But you don't actually know it sucks yet, because you haven't lived with it.

• 30:47Speaker 02

  No, it just feels like a lot.

• 30:48Nilay Patel?

  It feels, it's a mess.

• 30:49Speaker 02

  Having artists connect, having the radio, but then also a flagship channel within the radio, and then people's iTunes also being integrated directly into streaming services. It's a little...

• 30:59Nilay Patel?

  It lacks focus.

• 31:01Speaker 01

  It lacks focus.

• 31:02Speaker 02

  But it could be awesome. It could be one of those things where you say, yes, aside from maybe artists connect, like, I see where this all makes sense, once we start using it, which we haven't started doing yet.

• 31:11Nilay Patel?

  I don't mean, sorry, to be clear, I don't mean the product sucks. I mean, I mean the keynote, the messy.

• 31:16Speaker 01

  Yes, oh, that was, Neelai, we all agree on that. You wrote a nice piece saying it sucked, I get it.

• 31:23Speaker 02

  But in this integration here, if you're...

• 31:25Nilay Patel?

  I've checked Neelai right now, because it's like a zero.

• 31:27Speaker 03

  It's dropping negative, we're approaching dangerous levels, Walt is taking over.

• 31:31Nilay Patel?

  A puddle of burn here.

• 31:34Speaker 01

  It's not, it's not a puddle of burn, okay. Can we talk about what Apple's...

• 31:38Nilay Patel?

  Puddle of burn, I believe is our episode title.

• 31:41Speaker 01

  What Apple is bad at.

• 31:42Nilay Patel?

  Yeah.

• 31:43Speaker 03

  Now, don't say cloud-connected services, because that's just bullshit. Whenever, whenever someone wants to knock Apple, they're like, "They can't do cloud services." And it's like, "Yes, they can." "I wrote a VO script on my Mac on TextEdit." And I just popped it up right on my iPhone. Boom, interconnectivity, super quick.

• 31:58Speaker 02

  Okay, I'll say one thing that I'm

• 32:01Nilay Patel?

  What you guys, what the, the audio listener is not experiencing right now is just Walt just staring at Sam. Like Sam descended from the sky on like a plane marked like idiot jet.

• 32:16Speaker 03

  Sorry, we'll continue.

• 32:19Speaker 01

  Apple needs to get a lot better at cloud services. And it has to get better at that for people that can't write a V O script.

• 32:28Speaker 01

  Right? It has to, you know, the, the, the, the, whether it's iCloud. File drive, is that what they call it? Or iCloud drive?

• 32:38Speaker 01

  Whether it's the fact that they, it took them months to get my music right on Match. They still haven't finished uploading my photos to iCloud photo library.

• 32:49Speaker 02

  How many photos do you have?

• 32:50Speaker 01

  I had 30,000, but they have a lot of people with much bigger libraries than that. They, they are not as good. And that's, and I personally, I also think that's why their Maps thing. Wasn't what it should have been. Part of that is I, I like their stance on privacy and on, on device things, but it does cut them off from some tools that Google can use even while it's

• 33:15Nilay Patel?

  So that's a good, we should, we have five of these to get through. We've done a lot.

• 33:19Speaker 01

  Anyway, that's their, so we talked about their strength.

• 33:23Nilay Patel?

  And so this is an excellent transition, I think, into Google, Facebook, Amazon.

• 33:27Speaker 01

  Right.

• 33:27Nilay Patel?

  Because those are all, their platforms are all in the cloud. Right? Like Google has Android as its one hardware plat, hardware software.

• 33:35Speaker 01

  They don't make, they don't make hardware, actually. Even the Nexus stuff, they don't make, as you know.

• 33:39Nilay Patel?

  Right, but it's the one tangible expression of their software running on a local device is Android. Maybe it's somebody else's device.

• 33:45Speaker 02

  That was a beautiful way to describe that.

• 33:47Nilay Patel?

  Thank you. I'm, I'm not going to show you my poetry.

• 33:52Speaker 02

  Your Android phone.

• 33:53Speaker 03

  What?

• 33:55Nilay Patel?

  That's great. Real MFA workshop.

• 33:58Speaker 01

  I think that was Lauren's way of asking for a 10% raise.

• 34:01Nilay Patel?

  Yeah, no, that was Lauren's way of trying to build my ego up after it's been thoroughly decimated. No, okay, Lauren, we'll start with you again. Tell us about Google. What's going on? What's good? What's bad?

• 34:11Speaker 02

  What's going on with Google? Oh, God, but I honestly don't even know where to start. Pick an area and we'll go with that.

• 34:17Speaker 01

  Phones.

• 34:18Speaker 02

  Phones, okay. Well, I mean, I think, you know, Google is, Android is very much the dominant platform in a variety of markets, and that strategy has clearly worked for Google. I use an Android phone fairly regularly because I have to as part of my job, but I have to say, like, the platform I most go to is my iPhone and iOS and that sort of thing. What else? I mean, I think it's interesting what Google has done to an extent with Nexus, trying to introduce that into the market. I don't know, like, I kind of don't know, like, what to say, but I like, don't have anything really, I don't have serious insights right now about.

• 34:54Nilay Patel?

  I think my iPhone is a vessel for Google services. That's what I use it for. Right? I buy an iPhone and I load up the Gmail app and I use Google Search and Google Photos is wonderful. It's just funny, like, my, and it's, again, it's, I work at a company, we all work now at a company, that it runs in Google Services. So that is very, that connects a lot of threads, and I think maybe if you work at an Outlook shop or something, like, it's not quite as dominant. But I literally, my iPhone runs, provides me a window into Google.

• 35:24Speaker 02

  Yes.

• 35:25Nilay Patel?

  A Google life all the time.

• 35:26Speaker 02

  Gmail, yeah, Google Docs, Gmail, Search, everything, everything on Google. I think Google has done a really great job with Google Now, its virtual assistant. I think right now, like, that there's a lot of talk of virtual assistants with, Apple claiming that Siri is getting much better, and obviously, we're going to see new iterations of Cortana with Windows 10.

• 35:45Nilay Patel?

  Oh, there's Alexa news today.

• 35:46Speaker 02

  And then there's Alexa news today from Amazon, and everyone's like, this is, this is becoming a very hot area, and I think that Google has done a really great job with Google Now. But, you know, Apple will, of course, argue that the way that they're approaching things with, in terms of all the information being local to the device is much more private than maybe Google's approach.

• 36:03Nilay Patel?

  Well, let me ask, this privacy, I think it's a, it's all a hedge on Apple's part.

• 36:09Speaker 02

  Because you think they're not as good. Because they're flat-footed in software.

• 36:12Nilay Patel?

  Yeah, I think they got caught.

• 36:13Speaker 02

  I think that could be to an extent.

• 36:14Nilay Patel?

  Like looking in the wrong direction.

• 36:15Speaker 01

  I, it's partly a hedge.

• 36:17Nilay Patel?

  Yeah.

• 36:17Speaker 01

  I get what you're saying, but I honestly believe they deeply believe it.

• 36:23Nilay Patel?

  Yeah, no, I agree with you.

• 36:24Speaker 01

  And it comes from Steve and it's still there. And if Tim Cook would, Tim Cook has taken the lead in, you know, even challenging the government over encryption. This phone, this, I'm holding up for those who are not watching, I'm holding up an iPhone, which is pretty common, but it's encrypted, right? Google has said it's going to encrypt it, or maybe they have an option in the phone in the latest version of Android to encrypt it, but it's not the same thing. Apple's a hardware company, they just decided to go and encrypt the phone, you know?

• 36:55Nilay Patel?

  Right.

• 36:55Speaker 01

  And they did. I think Google is, obviously has won the war over the share of self, of smartphones. They so, are so far losing the war over the profits made by the smartphones, but they're not a handset maker.

• 37:15Nilay Patel?

  Yeah, that's not where their money is.

• 37:16Speaker 01

  But it doesn't matter to them.

• 37:17Speaker 02

  Right.

• 37:17Speaker 01

  But there is a big threat to Google. There's two, in my opinion. One is they're spread very thin, and that's why Larry Page has begun to pare back a bunch of their products that aren't generating, either generating revenue, or he doesn't think they're leading, or they're not interesting, or whatever. And secondly, and this is the bigger threat by far, is the open source, the conflict between wanting to get Google services on Android, that's how they make money, right? Android is free, but you get this big Google search bar, and you get Google Maps, and you get Gmail, and you get all these things. And they then can collect information on you, target ads, sell, you know, place ads, all that stuff.

• 38:01Speaker 01

  That, they're an advertise, the advertising company in the sense of that's how they make their money. But a rising share, over 20%, the last time I checked on this, of Android distribution in the world, has no Google services on it.

• 38:16Nilay Patel?

  Right.

• 38:16Speaker 01

  It's open source Android. I mean, the example most Americans know about is the Amazon devices. But it is extraordinarily common in China. It's extraordinarily common in other parts of Asia. They're trying to fight back with a thing called Android One, which they say allows for sub $100 devices. But Ina Fried, our colleague at Recode, just wrote a story about how they've struggled quite a lot with that. Or maybe, well, maybe it was Mark Bergen. One of them wrote.

• 38:45Speaker 02

  I think it was Mark. It was about the OnePlus in emerging markets.

• 38:48Speaker 01

  But the point is, that's a huge threat to Google, is that ironically, the growth of Android

• 38:55Nilay Patel?

  Yeah.

• 38:55Speaker 01

  without Google.

• 38:56Nilay Patel?

  Right.

• 38:57Speaker 03

  So why

• 38:58Speaker 01

  Other flavors of Android.

• 38:59Speaker 03

  Why can't Google just manufacture their own iPhone?

• 39:04Speaker 01

  Their own iPhone?

• 39:05Nilay Patel?

  Their own flagship.

• 39:06Speaker 03

  Their own flagship, right?

• 39:07Speaker 01

  Yeah, they could.

• 39:08Speaker 03

  They could.

• 39:08Speaker 01

  I think Andy Rubin, who invented Android and who, whose company got bought and who ran the Android group there for a long while before Sundar Pichai took over, Andy liked the idea of hardware. You will remember the famous incident of the thing called the Q.

• 39:28Nilay Patel?

  Oh, my God.

• 39:29Speaker 01

  Which was a home entertainment device.

• 39:31Nilay Patel?

  The doorstop. Yeah, we had one in our office.

• 39:33Speaker 03

  We literally used it as a doorstop.

• 39:34Nilay Patel?

  Yeah, it was amazing. It was very heavy. It was a super effective doorstop.

• 39:37Speaker 01

  They were very, they made it in the, they were going to make it in the US.

• 39:40Speaker 03

  Right, in Texas.

• 39:41Speaker 01

  It was made of high-quality materials, all this stuff, and they never put it on the market. You know, I think Andy had some tendencies to liking the idea of, at least the idea of hardware. But you don't have the margins in hardware that you do in software or in advertising.

• 39:58Speaker 03

  But it's not like Google's broke at all.

• 40:01Speaker 01

  Yeah. Google could do it, but I, but just like it's, just like it's not as easy as people think for Apple to do the kind of job online that Google does, it's not as easy as people think for Google to do the kind of job that Apple does with hardware. People, just like humans, companies have things they're really good at and things they're not as good at. And, you know, they could go to, they could go to Foxconn.

• 40:28Nilay Patel?

  They could buy Motorola.

• 40:30Speaker 02

  Right, they could buy Motorola.

• 40:31Speaker 01

  They could buy Motorola. Yeah, actually, they did a phone.

• 40:36Speaker 03

  They did many phones.

• 40:37Speaker 01

  No, but they did a phone that was intended to take on the iPhone and

• 40:41Speaker 03

  Which one are you referring to?

• 40:42Speaker 01

  The Moto X. That was

• 40:45Speaker 03

  But it's not, it's not, it's not the Google.

• 40:47Speaker 01

  You can shrug, but, no. Google owned that company.

• 40:51Speaker 03

  Right.

• 40:51Speaker 01

  Google helped Motorola immensely. There were Google engineers all over Motorola.

• 40:56Speaker 03

  I just don't think they were punching as high as they could be punching. Right? If they're gonna do it, just do it and do it right. This is the Google phone that you've been waiting for.

• 41:03Speaker 01

  Sam, I completely agree with you, but the point is-

• 41:06Nilay Patel?

  We've been saying that with Microsoft and laptops for 10 years too. It's like, it, I, I think it was, what Walt is saying is, it's not as, it's not that easy. And faced with the choice between, we're gonna piss off Samsung and they're gonna continue forcing Android.

• 41:20Speaker 03

  Right, yeah.

• 41:20Nilay Patel?

  And they're the hardware maker that has the better carrier relationships and the distribution channels.

• 41:24Speaker 01

  They're the only Android maker that is global and profitable, although less and less profitable.

• 41:30Nilay Patel?

  But I'm saying, when Google had that choice between, we can do this on our own, we can learn how to do it, or we can give up and let Samsung do it, and Samsung will play nicer with us, they just like offloaded Motorola.

• 41:39Speaker 03

  So then that, that begs the question, what is the next Nexus phone? Are we gonna see a Nexus phone this, you know, this year? What does the Nexus program even mean to Google right now?

• 41:48Speaker 01

  Well, there are, there have been rumors they're gonna drop it. They, I think they've denied them, so I assume they'll still do it.

• 41:53Speaker 03

  Naturally.

• 41:53Speaker 01

  But the Nexus phone is a, is a, as we all know, is sort of a reference design.

• 41:58Speaker 03

  Right, it's like an enthusiast's device.

• 41:59Speaker 01

  I, it's, it's the Android phone I choose.

• 42:02Speaker 03

  Right, and it's the Android phone most people would choose.

• 42:04Speaker 02

  The Nexus 6 is actually a pretty nice phone. I mean-

• 42:07Nilay Patel?

  It's enormous. Would you have a Nexus 6? Do you have an Android phone too, or do you swap?

• 42:11Speaker 02

  I have a Nexus, excuse me, Nexus 6, loner at home. And I have a Nexus 4, I think that was given to us in some code conference swag bag. No, I haven't bought it. But, I mean, I appreciate having unlocked phones around. It's really easy to travel with.

• 42:27Speaker 01

  I'm the proud owner of a Nexus 5, but I thought the Nexus-

• 42:29Nilay Patel?

  Nexus 5 is my favorite phone.

• 42:30Speaker 01

  Nexus 6 was a little big for me.

• 42:32Nilay Patel?

  If the Nexus 5 had a not garbage camera, I would probably use that as my main phone.

• 42:36Speaker 02

  We've talked about this a lot too, like when you did your review of the Asus, Asus Zenfone 2 last week for Recode. And this idea that there's always going to be, you know, the premium for the iPhone. iPhone, the Samsung Galaxy S6 or Samsung Galaxy Note that people like aspire to. They're sort of aspirational devices, right? But you go to other countries and you see that like not everyone can afford those types of phones. And there are a lot of handset makers now that are coming in at the low end of the market, making actually pretty decent phones. And it's really starting to put pressure on things. And I think I look at the Nexus 6 as something like that. Or I mean, I know it's not as.

• 43:08Speaker 01

  No, the Nexus 6 is expensive.

• 43:10Speaker 02

  It's not as inexpensive.

• 43:11Speaker 01

  It's roughly, it's roughly the price of an iPhone.

• 43:13Speaker 02

  Same price, right? But you look at, you know, different devices like that. And I don't, I think they're, you know, they're starting to put some pressure.

• 43:19Speaker 01

  So, so anyway, to me, the danger for Google is they might be losing control of Android. Let's just say that. They might be losing control of Android. And, and they would say, well, we never controlled Android.

• 43:32Nilay Patel?

  Yeah.

• 43:33Speaker 01

  But they do, you have, they give you a contract. And it's supposed to be about, you know, faster updates and not forking and all that's great. But it's also has in it, you have to use these Google services. You can't just pick and choose. You have to use this whole suite of Google services. This search bar has to appear on this home screen.

• 43:52Nilay Patel?

  Finally, once in my life, I can say that was my scoop instead of a recoup scoop. I was the first person to publish that pod and gadget.

• 43:58Speaker 01

  That's fantastic.

• 43:59Speaker 02

  What do you guys think of Android Wear?

• 44:01Nilay Patel?

  No, has to stand up. He's like, he's like, good scoop. You know, I've got to actually stand up now. The watch told me so.

• 44:07Speaker 01

  I'm waiting for Kafka to Kafka to text me and tell me that what, that, that they had it first. But anyway, the point is, so that to me.

• 44:16Nilay Patel?

  That's your Google.

• 44:16Speaker 01

  That's, that's the Google.

• 44:17Nilay Patel?

  What about, what about the rest of the Google suite? Cause we, we, we should go to Facebook and Amazon. Cause I think Amazon is really interesting because I think everyone thought they were going to be a big platform company. They were in that gang. And then the fire stuff, at least in my estimation has flopped. But I think Facebook is very.

• 44:38Speaker 01

  All right, but let's, let's, let's go through Amazon because we can do that pretty quickly.

• 44:41Nilay Patel?

  Yeah.

• 44:41Speaker 01

  Okay. So, Amazon is obviously enormously successful in two very important vectors. One is commerce. I mean, there's a lot of other commerce companies, some of which are doing very nicely. But Amazon is still like the gorilla there and they continue to innovate. They don't, they disrupt themselves, which is the key to everything, I think. And if you're going to be successful. But Amazon, I think in the device area, which, which to be honest, they don't even need, but they just do it.

• 45:15Speaker 01

  They have the Kindle e- Inc. readers.

• 45:18Nilay Patel?

  Yeah.

• 45:19Speaker 02

  Which Dieter, Dieter Bond just called.

• 45:20Speaker 01

  Dieter, Dieter just did a review on it.

• 45:22Speaker 02

  The Kindle paper.

• 45:23Speaker 01

  The Kindle Paper White.

• 45:24Speaker 02

  Mm-hmm.

• 45:25Speaker 01

  My wife has an iPad, but she just walks around with that, with a, with a, with a Kindle, and she loves it, and she, she's a voracious reader.

• 45:34Speaker 02

  Does she have a Surface? Just kidding.

• 45:36Speaker 01

  I have a Surface.

• 45:37Nilay Patel?

  That's how you end. That's how we were talking about.

• 45:39Speaker 01

  I have a Surface.

• 45:40Nilay Patel?

  You have a Surface?

• 45:40Speaker 01

  Yeah, we'll, we'll get there.

• 45:42Nilay Patel?

  All right.

• 45:42Speaker 01

  Um, but, but, um, so, so, but my point about Amazon is, okay, so there's the e- Inc. Kindle readers. Everything else they've tried, even though they don't ever announce sales.

• 45:55Nilay Patel?

  Yeah.

• 45:55Speaker 01

  I mean, we know the Fire was.

• 45:57Nilay Patel?

  The phone.

• 45:58Speaker 01

  The Fire Phone was a flame out, but I think the Fire Tablets.

• 46:02Speaker 02

  That was pretty good.

• 46:02Speaker 01

  Have sold. I stole that from you. I think that was in your headline.

• 46:06Nilay Patel?

  Yeah, we, we did that one.

• 46:07Speaker 01

  Uh, I think the Fire Tablets have been, if this was, um, Apple, and Apple was reporting the numbers the way Apple does, which is pretty transparent, they would be terrible numbers.

• 46:21Nilay Patel?

  Yeah.

• 46:21Speaker 01

  I don't think the Fire Tablets could be considered a big success.

• 46:25Speaker 02

  What about the Echo? While we're talking about devices.

• 46:27Speaker 01

  The Echo is a fascinating device, but it's brand new, and we just don't know.

• 46:31Nilay Patel?

  So I love the Echo. I, I bought one a couple of weeks ago.

• 46:34Speaker 01

  Yeah.

• 46:34Nilay Patel?

  I think it's great, and I think it will go, it will die as soon as Apple builds that feature into a speaker, or lets other speaker manufacturers tie it into an Apple TV, you know, like, Apple's got this HomeKit thing happening, so the idea that you could buy an Apple TV and it would sit there and be the brains of Apple.

• 46:51Speaker 01

  You wonder if it needed, actually, uh, they have a new.

• 46:54Speaker 02

  That Alexa would be the brains of an Apple?

• 46:56Nilay Patel?

  No, no, no, no, I'm saying, like, I'm saying Alexa's great.

• 46:59Speaker 01

  He said he loved it, and then the next clause, he said it's gonna be dead, but.

• 47:02Nilay Patel?

  Yeah, and I love, like, the idea is so good, right? It, and then Apple, and then Amazon's ecosystem is so limited, that you can just see how Apple can swoop in and take the idea, and.

• 47:12Speaker 02

  But that's assuming that they got the virtual assistant and artificial intelligence part right, too, because part of the appeal of the Echo is this Alexa artificial intelligence software.

• 47:22Speaker 01

  Yeah, but it actually, it actually doesn't do that much.

• 47:24Nilay Patel?

  The appeal of the Echo is just that it is there, and it is so much easier to talk to a computer for some things than type it.

• 47:31Speaker 02

  Right, but what you're saying, that part, I mean, so it's a piece of hardware. It looks kind of, it's like an elongated speaker, essentially. And anybody, anybody can do that.

• 47:39Nilay Patel?

  Yeah.

• 47:39Speaker 02

  The talking to it part that you're, you'd enjoy is the artificial intelligence.

• 47:43Nilay Patel?

  Right, but I'm saying, so like, Google could do too. It, it, the, the backend assistant part is commodity smart. It's like tables, Alexa's table stakes.

• 47:55Speaker 01

  Table stakes.

• 47:56Nilay Patel?

  Right, you can ask her the weather, you can tell her to play some music.

• 48:00Speaker 01

  But it's not really, it's not a giant leap.

• 48:02Nilay Patel?

  Google Now, right? Where Google Now is like, like, Alexa never wakes up and says, get the hell out of here, you're gonna miss your flight, the way Google Now could do. Um, but what is amazing is having a speaker that's sitting there always, you don't have to push a button on your phone. And I just say, Alexa, what's the weather, like, every morning now, by habit.

• 48:20Speaker 03

  I just want to speak to this. I think this would make a great, like, holiday gift for normals. The same way that I feel like Roku is so successful because a lot of normal, and I say normals, it's like, you guys know what normals. Um, it's like, not us, not people like us that do this for a living. Um, but like, you go to amazon.com, you see an ad for the Echo, and then you like, Google Echo and, you know, watch some videos and read some reviews. It's like, holy crap, I had no idea this thing existed.

• 48:44Nilay Patel?

  It's priced at the right number.

• 48:45Speaker 03

  What, what is it, 200?

• 48:46Nilay Patel?

  It's 179 if you have Prime.

• 48:48Speaker 01

  So.

• 48:48Nilay Patel?

  But my point is, Apple could make a Siri Echo.

• 48:51Speaker 03

  Right, I don't think they will.

• 48:53Nilay Patel?

  Or, but, or, and I think this is the move, because basically, Amazon announced this today, right? That other hardware makers can plug into their APIs. There's no reason Apple can't say to other speaker makers, you can plug into our API and get access to Siri through HomeKit.

• 49:07Speaker 01

  Lauren, am I wrong about this? But, and you were there, I actually should ask both of them, because you were sitting right behind me, you were sitting, I don't know, next to me. In the, at the Apple event, did they say something about the developers finally being able to tap into Siri in some way?

• 49:21Nilay Patel?

  On the phone.

• 49:22Speaker 01

  Oh, only on the phone.

• 49:23Speaker 02

  Oh, right.

• 49:23Speaker 01

  Okay, but that's, that's a step, at least. Look, let me get to my, back to my point about Amazon. I don't, if the Echo is a breakthrough and a big deal, and they follow through, and today's announcements show they're serious. So, that could change everything, that could be, it could be the next device. Other than the e-ink Kindle readers in which they're successful. I'm only saying that right now, as we sit here, all the devices between the e-ink Kindle and maybe the Echo have not, have not been.

• 49:56Nilay Patel?

  And the phone is a disaster.

• 49:58Speaker 01

  Yeah, and I actually remember, I saw that phone a little, a while before it hit the market, and I thought, and they, and you know, they have serious people who have been at other companies doing hardware for a while. They thought, they, they were very serious about not just selling stuff through it, but actually being a phone power. And the problem was, and it's Microsoft's problem too, I mean, it's a funny thing in that business. You start late, and it's very hard to get people to think you've got the gimmick, or the, you know, the, that, in their case it was you, you kind of flipped it.

• 50:41Nilay Patel?

  That was real dumb.

• 50:42Speaker 01

  And it demoed great in Seattle when I was there, saw it, and then I got my review unit, and like, my wrist got tired. And it worked okay going right, but not going left in my case, and you know, I, you could dig up the review, I wrote, I wrote about that, but, so, they may not need the device business, because they've got the, the other vector that I didn't even mention that we all know about, but average people who use Amazon don't necessarily know about, is they have this whole backend, you know, they, they're, they are the, they are the servers for everybody else's business.

• 51:19Nilay Patel?

  It's AWS, but what's interesting about that is, those are, those are other companies, right? They, they're a platform provider, but they don't get any, they don't get any intelligence across all those companies.

• 51:31Speaker 01

  No, they don't, but they make money.

• 51:32Nilay Patel?

  But they make money, but it's interesting that that would be, that's like...

• 51:36Speaker 01

  No, but they are, in a way, that's kind of being a platform.

• 51:40Nilay Patel?

  Right. No, it is being a platform.

• 51:41Speaker 01

  So they're a platform there, and they're a commerce platform. And those are, that's both pretty powerful.

• 51:47Nilay Patel?

  Right. Alright, so we should do, and while, I know you have a hard app, but we should do five or 10 on Microsoft, if you have time. Because I think Microsoft, if we're, if we're in an Apple moment, there is a Microsoft moment coming with Windows 10. But in my estimation, that moment is coming, sort of, it's like careening towards us. It does not feel like an orderly, and by design, right? They've done a lot of Windows 10 out in the open. There's a lot of walk back on the new start screen versus the desktop. They're kind of, it's kind of like Back to the Future with Windows 10.

• 52:22Speaker 01

  They've made, they've made, this, Tom Warren knows the exact count. I don't, but I think they've made at least three revisions of Windows 8.

• 52:32Nilay Patel?

  Yeah.

• 52:32Speaker 01

  And now with Windows 10, there's going to be another one that are basically backpedaling from the original concept of Windows 8. Here's the, here's the short, my short point of view on Windows 10, which is not about the quality of Windows 10. Windows 10 is designed much more for reviving their phone than for improving PCs, although...

• 52:56Nilay Patel?

  And that is shocking.

• 52:57Speaker 01

  I'm not saying it won't improve PCs, but PCs are not a market that's growing nearly as fast as phones, and so the phones is really crucial to them. They have a universal app format. So if you are a developer, Lauren, and you decide to make a Windows, a Windows 10 app...

• 53:16Speaker 02

  That's right. I'm a Windows developer.

• 53:20Speaker 01

  You are.

• 53:21Nilay Patel?

  Worst user story ever.

• 53:22Speaker 01

  You are.

• 53:22Speaker 02

  That's what I do on my Saturdays.

• 53:25Speaker 01

  I know.

• 53:26Nilay Patel?

  The Windows developers who listen to this...

• 53:27Speaker 01

  And your productivity is way down.

• 53:29Speaker 02

  High phones.

• 53:30Speaker 01

  Because of the cat. But anyway, so, here's their idea. Get everybody to upgrade to Windows 10 on the PC, of which there are hundreds of millions in their installed base. I don't know the exact number. Actually, I think they promised a billion devices, right?

• 53:46Nilay Patel?

  Yeah, billion.

• 53:47Speaker 01

  And, once you upgrade on the PC, then there exists a Windows 10 app that can also run on the phone.

• 53:54Speaker 02

  Right, they're universal.

• 53:55Speaker 01

  And then all of a sudden, the Windows phones have a whole bunch of...

• 53:58Speaker 02

  It's the same executable code.

• 53:59Speaker 01

  Right.

• 53:59Speaker 02

  Right.

• 53:59Speaker 01

  Have a whole bunch of apps. And that's been one of their big problems with phones.

• 54:06Speaker 01

  Here's the interesting thing. Historically, Microsoft has never cared about upgrading to new versions of Windows. It's been about 10% of their Windows business. It's been difficult because the hardware didn't support the new version of Windows. We've all tried it, we all know this. It's usually a good column for reviewers, we'll probably do it again. But this time, they've just not cared about it. Plus, their partner, Intel, and their OEM partners like Dell, they wanted an HP, they wanted you to go out and buy a new PC anyway. This time, Microsoft's interests in the phone, which is such a strategic product, requires

• 54:49Speaker 01

  them to get all these hundreds of millions of people with PCs to upgrade to Windows 10, so that developers will say, "Okay, there's a huge market for my Windows 10 app. I'm going to be really interested to see how many people are going to want to do that. Is it going to be easy?" All that stuff.

• 55:07Speaker 02

  Tell us about your Surface.

• 55:08Nilay Patel?

  Yeah, tell us about your Surface.

• 55:09Speaker 02

  I want to know about your Surface. Which one do you have?

• 55:11Speaker 01

  I have the original Surface.

• 55:14Nilay Patel?

  Such a troll, Lauren.

• 55:15Speaker 02

  Am I trolling?

• 55:16Speaker 01

  That was built on an ARM. And I bought it because it was the first computer, not counting the Xbox, I mean, the first standard computer that Microsoft had ever made. And I think they did a good job on the hardware on it.

• 55:32Nilay Patel?

  They did.

• 55:33Speaker 01

  And not the software, but they did a good job on the hardware. And I also thought it was smart to do it on ARM. I thought it was dumb to call RT, and I thought it was dumb to put a Windows desktop on it. They should have taken those Office apps and let them be fullscreen, like people are used to with a tablet. And by not having the desktop, they wouldn't have had the problem of people thinking they could just put regular Windows apps on there.

• 55:58Nilay Patel?

  I mean, I think they should have, our listeners totally know what I think, but I think they should have called it Metro, and it should have been basically their answer to the iPod, or the iPad fully.

• 56:07Speaker 01

  Yes, you and I completely 100% agree on that.

• 56:09Nilay Patel?

  First, we should just end the show. I don't know if I have a...

• 56:12Speaker 01

  It's not a first.

• 56:14Nilay Patel?

  Do you use any Microsoft products, Lauren?

• 56:17Speaker 02

  I've been using the Microsoft Surface 3, the relatively inexpensive one that they put out a short while ago that runs on an Atom processor and it's really, it's really very slow is my observation so far. So I'm not, I don't love it. It's not the kind of product that you're gonna like, you know, run heavy apps like Photoshop off of and do all of your heavy multimedia work on.

• 56:38Nilay Patel?

  I think this desktop apps thing to drive the phone is, A, when Walt said this to me yesterday, it's the most counterintuitive thing to think about Microsoft ever, that they're gonna use their desktop install base to court developers into writing phone apps is, I mean, that is like a jujitsu move.

• 56:56Speaker 01

  No, but that's absolutely true. I'm not making that up.

• 56:58Nilay Patel?

  But what is crazy to me is I don't know that mobile developers are racing to write desktop apps. I think they're gonna say, just open a browser.

• 57:06Speaker 01

  Well, yeah, but they won't be necessarily mobile developers. So in other words, they want a better, maybe I'm wrong about this example, but let's say they want a better Facebook app. So Facebook, which typically, I guess, doesn't have apps on desktop.

• 57:19Nilay Patel?

  That's what I'm saying, right? Facebook is gonna say, open your browser, like do better job of HTML5 in your browser.

• 57:24Speaker 01

  So maybe this will be a spectacular failure, but this is their strategy.

• 57:28Nilay Patel?

  But here's the thing.

• 57:28Speaker 01

  Strategies take their strength, which is the kind of moribund PC market, but still with a large install base, and use that to do this jujitsu, to leverage it over into phones.

• 57:40Nilay Patel?

  But that's, I mean.

• 57:41Speaker 01

  And we're gonna watch that drama and see what happens.

• 57:43Nilay Patel?

  And I would actually love, I mean, I, you know, it's funny, I have this like MacBook Pro sitting here. Mostly it's running web apps, right? Walt and I both use Mailplane. Mailplane is basically Safari with some stuff.

• 57:55Speaker 02

  I just started using Mailplane.

• 57:57Nilay Patel?

  Right. I've got Slack open. Slack is a web app. It's an app, but it's definitely running a web view in the background. And then it's just Chrome tabs for days. And that's what's like what's open on this computer right now. And I, it's, it's a really fancy Chromebook. It's a very, it's beautiful. Don't take it away from me.

• 58:11Speaker 01

  Okay, but.

• 58:12Speaker 02

  Do you use any, do you use any, oh, oh, can we say one more thing? Do we have to wrap up?

• 58:16Speaker 01

  Well, you do have to wrap. I know, you guys can keep going, but I'm gonna leave.

• 58:19Speaker 02

  What time is it?

• 58:20Speaker 01

  And then, and then on Twitter, it'll be walked out on. Eli.

• 58:24Nilay Patel?

  You know what? Here's the thing I know about great television and great radio. You gotta stage some stunts. You gotta get the people talking. You gotta give them something good.

• 58:33Speaker 02

  Well, we do have one thing to mention, though.

• 58:35Speaker 01

  I just have to get to a train.

• 58:36Speaker 02

  Which is that Recode has been working on its own radio show for a little while now. And so on July 8th, we are going to be launching Recode Radio, which we're very excited about. And we're also going to be launching something called Recode Decode, which is an interview show on Recode Radio.

• 58:53Speaker 01

  By the most feared and yet the most loved woman in Silicon Valley.

• 58:58Speaker 02

  The sparkly vampire.

• 58:59Speaker 01

  The sparkly vampire herself, Kara Swisher.

• 59:01Speaker 02

  It's gonna be great.

• 59:02Speaker 01

  Recode Decode, July 8th.

• 59:04Speaker 02

  We're really excited.

• 59:05Speaker 01

  Recode's first podcast.

• 59:07Speaker 02

  Yeah, I don't think it'll, I mean, I don't want to say it's not going to be as entertaining as this one, but this is pretty, this is pretty fun.

• 59:13Nilay Patel?

  This one's all over the place.

• 59:14Speaker 01

  This was really fun for us. I have no idea how it was for the listeners, but it was Kara Swisher free. And then, and Recode Decode would be Kara Swisher.

• 59:23Nilay Patel?

  Adding Kara to anything is a real, real step up. Sam, do the rest of our engagements.

• 59:27Speaker 03

  Hello. Thank you for watching and listening to this podcast.

• 59:33Speaker 03

  You laugh, but I do my thing. I gotta do the thing.

• 59:35Nilay Patel?

  Sure, man.

• 59:36Speaker 01

  Go, Sam.

• 59:37Speaker 03

  We are on Snapchat. If you've listened to the show and you've heard me say this, you know what's good. You should follow us on Snapchat. We are The Real Verge on Snapchat. I promise you, it will be worth watching our stories. You should hit us up on Periscope also. We're at Verge on Periscope. We take it to events. We take it all around the world. Something you want to see there. We're on YouTube, youtube.com/theverge. Subscribe if you haven't. We are going to hit a million this year and you're going to make it happen. And now back to you, Eli.

• 1:00:05Nilay Patel?

  All right. And then, obviously, there's Recode Decode. We'll start, we'll be promoting that across The Verge, but you can find the rest of our shows, Verge ESP and What's Tech on iTunes, at itunes.com/theverge. Sam on Twitter is SamSheffer. Lauren is LaurenGood. Walt is WaltMossberg. I am reckless, the only person without his first name on here. Thank you so much for listening. Hold on, I've got to do a thing. And I want to thank Lynda.com for sponsoring our show today.

• 1:00:34Nilay Patel?

  Lynda.com is an online learning platform with over 3,000 on-demand video courses to help you strengthen your business technology skills. Free 10-day trial, lynda.com/firstcast. That's L-Y-N-D-A.com/firstcast. Thank you so much for listening. Thank you to Walt and Mo for being here. That was firstcast.