Apple card culture clash

The Apple card stink: east and west coasts collide

Apple’s new credit card has come under fire when couples who file joint tax returns received different credit limits. The credit card is branded Apple but the financial management of the new card is handled by Goldman Sachs. CNBC

dis-rup-shun: This incident is a good example of why Apple doesn’t have as many partnerships as a company of its size might. Apple’s golden aura and cult-like following was built on doing things different, to remember the 1997 ad campaign. The problem is, Goldman Sachs is not a think different bank (are there any?) — it relies on the same thing most all financial institutions rely on — the big three credit agencies. Those agencies have dozens of frustrating and seemingly punitive policies, and have frequently made dumb credit decisions. The card is a strange match up of West Coast cool and East Coast traditional, and not one that Apple is likely to do again, but in this case, Apple was anxious to quickly bring a number of service products to market in 2019 to combat slowing iPhone sales. The partnership was successful in a quick launch, but has tarnished the Apple reputation a bit.

Google division amassing personal health data

Google has formed a partnership with the nation’s second largest health system, Ascension. The project, named Nightingale, enables Google to operate as an associate of Ascension, thereby gaining access to millions of personal health records well within the protections of HIPAA laws. HIPAA specifies that your data can be used to further medical research, and that is what Google is doing, but of course there is fear that Google will want to do far more. The company assures that personal health records will not be combined with other data the company collects for the purposes of advertising.¬†Wired

dis-rup-shun: AI has the potential to dramatically assist in health diagnoses, quickly analyzing symptoms to determine the cause of an illness with a very high probability. In theory, this could be done without a doctor, or a doctor could be involved only after a computer determines your ailment and directs you to the right care provider. To do this effectively, however, a computer(s) must have access to tens of thousands of health records at a minimum. With more data, the accuracy increases. Google, through its Ascension partnership, is racing to build that database so that it can become a primary provider of disease data to the healthcare industry. That will make Google’s health division a very valuable information utility, and Google thanks you, I’m sure, for contributing your data.

Amazon grocery store: not self serve

Amazon has leased over a dozen locations in Los Angeles to open a chain of grocery stores. The stores will not be autonomous as some of its Seattle stores, and will not be Whole Foods brand. The format of the new stores is unknown. CNBC

dis-rup-shun: It seems odd that Amazon would launch yet a third food store brand and format, but then again, this is Amazon. Amazon knows that almost every person in almost every country shops at a food store, and if it owns a significant number of food stores, it can directly reach most citizens. At its current pace, Amazon will be a major player and market mover in most all of its lines of business. On Sunday as I received a package from FedEx, I asked the driver how long his company had been delivering on Sunday. He said several weeks and that it was a result of the Amazon effect. What more should your business be doing to give customers something they want but antiquated industry rules say that can’t have? That’s what Amazon is studying right now.

Realme enjoys smartphone sales growth of 808%

As smartphone sales slow in Western markets, sales of the product are exploding in markets including China, India, Indonesia, Malaysia, Pakistan, Vietnam and Egypt. The upstarts, Chinese companies, are pushing out Samsung’s lead in many markets. Xiaomi has been the leader, pushing Samsung to second place, but a one and a half year old upstart called Realme is now giving Xiaomi and Samsung a run as its overall growth in the past year has been 808%, with 401% annual growth in India.¬†TechCrunch

dis-rup-shun: These phones sell for $80 to $240 in their markets. Evidently the phones have enough smart features to connect large, Internet hungry populations. What would stop them from selling decent phones into Western markets? Not much. Apple and Samsung have lower priced models of their flagship phones that are less frequently seen in the U.S. and Europe, but it won’t be long before the Chinese phones are widely available everywhere, and that is why we see Apple, Samsung and Google doubling down on ear buds, smart watches and services. The golden era of the smartphone is entering its later stages and the dreaded C-word (commodity) is on the horizon as new vendors with staggering volumes are not afraid to slash market prices for the category.

Smart surfaces are next big technology innovation

Next big thing: smart surfaces

Sentons is a company that has developed a processor and software capable of turning any surface into a user interface. The company uses ultrasound technology to make any surface respond to gestures, touch and other forces. Initial applications are for smartphones — enhancing gaming input and camera controls, but the possibilities extend to most any device. TechCrunch

dis-rup-shun: Smart speakers are transformative and we have only begun to see how they will change machine control. Amazon is just now pushing Alexa into cars. Now we know the next wave of innovation of device interaction — making any surface smart. This will lead to virtual keyboards appearing on counter tops, desk surfaces, and appliance controls no longer being physical knobs or buttons, but virtual. Imagine the convenience of typing on your airplane seat tray since there is no space to open up a laptop. The cost of many devices can be reduced as the electro-mechanical components can be eliminated.

Why Big Tech keeps building hardware 

Apple and Samsung are the dominant device makers of our age, yet Big Tech software and service companies keep introducing new devices. Google, with Pixel and Chromebooks, wants to offer a pure, undiluted Google experience to loyalists. Amazon wants to bring consumers into the Amazon shopping experience by any door, and is willing to build devices that support Alexa to help do so. Microsoft uses its Surface line of hardware to introduce and showcase new features, such as the Duo and Neo folding computer. Facebook wants to dominate AR/VR and is using its Oculus investment to try to be the market leader. CNBC

dis-rup-shun: The hardware business is, well, hard, and the margins can be thin. Apple has demonstrated that the new game is not about just making great devices, but using devices as a platform for services, be they music, news, videos, personal fitness, or mobile payments. To be a software and services provider to third-party device makers has become riskier, as device makers often want to use their own services and apps, even if they are not the best. To minimize the risk of displacement, software and service companies are having to take on the difficult, unpredictable, and high cost role of device makers. There will continue to be a few successes, but mostly failures.

Apple credit card the most successful launch ever

Goldman Sachs, the bank behind the Apple credit card, called the launch of the new card the most successful credit card launch ever. While we aren’t given specific data on the launch, consumer demand has been strong since August. CNBC

dis-rup-shun: The magic powers of the Apple brand continue, and Goldman Sachs follows companies like AT&T that have made billions off of Apple’s brand power. The success of the card also prepares the way for Apple to further extend its reach into services including gaming, videos, news and many others not yet imagined. Banks and other partners have to weigh the benefits of a partnership with the risk that Apple will someday decide to offer services without them. If Apple (or Amazon or Google, for that matter) seeks to disrupt an industry, it will, so it makes sense for partners to make as much money while they still can and possibly have a seat at the table for later.

Drone delivery is happening now in Virginia

Wing, the drone division of Google parent, Alphabet, has started delivering small items to residents in Christiansburg, Virginia. Wing’s partners include Walgreens and FedEx and the company has been authorized to deliver packages to certain zones that are beyond the line of sight of Wing traffic controllers. TheVerge

dis-rup-shun: You will enjoy the video that shows how the service works. While we can all think of dozens of complications, the main point is that Wing has beat Amazon and UPS to production. As city streets become increasingly crowded with gray Amazon Prime vans stopping at many houses seven days a week, we have to remember that for Amazon, shipping is not a profit center as it is for UPS and FedEx. One of the carriers’ biggest customers, Amazon, is going to market increasingly without them, potentially changing the economics of the logistics business. If drones will be a profitable delivery mechanism, UPS and FedEx don’t want to lose to Amazon, so FedEx’s partner’s first-to-market win in Virginia is an important development.