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Episode 20: Android

Episode 20: Android

Fri, 16 Sep 2016 13:10

Ben & David examine Google’s 2005 purchase of Android for a rumored $50M, undeniably one of the best technology acquisitions of all time. But will it top the list of these tough graders? Tune in to find out.
Topics covered include:
  • Welcome new listeners! We quickly review the show format for newbies.
  • Community spotlight: Patagonia on a Budget from community member Matt Morgante (@mattm on Slack)
  • Andy Rubin’s career trajectory and what made him “born to start Android"
  • The undeniable “cool factor” of the Danger Sidekick in the early/mid-2000’s, including fans such as Larry Page, Sergey Brin and… Turtle from Entourage
  • Android’s original ambition to build an operating system for… digital cameras
  • WebTV founder Steve Perlman is pretty much the best friend ever
  • Google’s own perspective on Android as their “best deal ever"
  • The Android team’s reaction to Steve Jobs unveiling the iPhone in January 2007, and redesigning the initial launch hardware
  • Announcing Android and—equally importantly—the Open Handset Alliance (“OHA”)
  • The much-talked-about "mobile holy wars", between Android’s “open” platform and Apple’s “closed” platform
  • The less-talked-about US carrier wars with the iPhone + AT&T in one camp, and everyone else in the Google / OHA camp (including “Droid Does”)
  • A quirk of history: HTC at one point acquires a majority share in Beats, resulting a short-lived period of Beats-branded Android phones (still available on Amazon!)
  • The real battleground for Google in the mobile platform wars: the economics of “default search” (briefly known thanks to the Oracle/Java lawsuit against Google)
  • Google’s detour into smartphone hardware with the acquisition (and subsequent divestiture) of Motorola
  • The “fork-ability” of Android via the Android Open Source Project (versus “Google Android”), and the rise of Xiaomi, Cyanogen, Kindle Fire and other platforms
  • The ecosystem economics of the Android business for Google
  • “Defensive” versus “offensive” acquisitions, and protecting Google’s core search business
  • Could (or would) Google have built an Android-like platform without acquiring Android the company (or having Andy Rubin)?
  • Framing the technology world’s shift to mobile within (surprise) Ben Thompson’s Aggregation Theory
  • The current “moving up the stack” of the competitive playing field as the mobile landscape matures
  • Grading: Android versus Instagram?
Hot Takes:
  • The iPhone 7 (and AirPods) announcement
The Carve Out:

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You should like a fighter jet fly by if you guys heard that at all the sea ox game starting. Oh nice That is a cool plane not a concord though. No Who got the truth? Is it you is it you is it you who got the truth now? Is it you is it you is it you sitting down? Say it straight another story on the way The truth welcome back to episode 20 of acquired the podcast about technology acquisitions. I'm Ben Gilbert David Rosenthal and we are your hosts Today's episode is one that's been coming for a long long time. It's a cornerstone of all of computing today Google's 2005 acquisition of Android. I'm speechless Yeah, it's interesting. I mean 2005 When you think about the numbers doesn't feel that long ago But when you think about you know the first time you saw an Android phone and heard about who Google is working on it It seems like the iPhone hadn't come out yet, right? Yeah This was pre I before iPhone was just a glimmer and Steve Jobs. I yeah Our presenting sponsor for this episode is not a sponsor but another Podcast that we love and want to recommend called the founders podcast We have seen dozens of tweets that say something like my favorite podcast is acquired and founder So we knew there's a natural fit. We know the host of founders well David Senra. Hi David. Hey, Ben Hey, David. Thank you for joining us. Thank you for having me I like how they group us together and then they say it's like the best curriculum for founders and executives It really is we use your show for research a lot I listen to your episode of the story of akyo marita before we did our Sony episodes this incredible primer You know, he's actually a good example of why people listen to founders until acquired because all of history's greatest entrepreneurs investors They had deep historical knowledge about the work that came before them. So like the founder of Sony Who did he influence Steve Jobs talked about him over and over again if you do the research to him But I think this is one of the reasons why people love both of our shows and there's such good Complements is on acquired we focus on company histories You tell the histories of the individual people you're the people version of acquired and where the company version of founders Listeners the other fun thing to note is David will hit a topic from a bunch of different angles So I just listened to an episode on Edwin land from a biography that David did David It was the third fourth time you've done Polaroid. I've read five Biographies of Edwin land and I think I've made eight episodes of them because in my opinion the greatest such a printer to ever do it My favorite entrepreneur personally is Steve Jobs and if you go back and listen to like a 20 year old Steve Jobs He's talking about Edwin lands my hero So the reason I did that is because I want to find out like I have my heroes who were their heroes and the beauty of this is The people may die, but the ideas never do and so Edwin land had passed away way before the apex of Apple But Steve was still able to use those ideas and now he's gone and we can use those ideas And so I think what acquired is doing what a founder trying to do as well is find the best ideas in history and push them down to generations Make sure they're not lost history. I love that Well listeners go check out the founders podcast after this episode you can search for it in any podcast player Lots of companies that David covers that we have yet to dive into here on acquired so for more indulgence on companies and founders go check it out So to all of our new listeners Welcome we were featured on new and noteworthy and an iTunes over the past looks like Weaker 2 and about doubled our our subscriber base So thanks so much for everyone trying us out and giving us a shot I think what I want to do is is go over the format of the show since a lot of you are new and And talk about what we'll cover today in in kind of reviewing and grading Google's Android acquisition So the first thing is something sort of a new wish that we're trying called community showcase and We felt it was important since we have so many listeners who are working on projects and building things a lot of entrepreneurs and And we like to on each episode talk about something that one of those people is working on so that we'll do our our community showcase Then we go into acquisition history and facts where David takes us through What actually happened? Yeah, yeah, what happened in win? Yeah, and then then we get into the acquisition category where we decide if it's a people acquisition technology product business line We recently added asset to our categories or the ever so famous other Yes, then we talk about what would have happened otherwise? What tech themes this illustrates for us? We then formally give the grade of our acquisition from the episode then we have some some follow-ups and a A section called the carve out. This is where we're David and I Grab something from our lives that we've seen it with a book or a piece of software or anything in the media that we think is Either related or completely unrelated to the topic at hand and To something fun that strikes our fancy the other thing that we sometimes do now is hot takes Something big in the M&A world or otherwise happened in the past week or two. We'll do a quick discussion We will so that's the show indeed all right. So our community showcase this week listener Matt I might butcher this morgante Released a book called Patagonia on a budget. It's on product hunt right now If you search on Amazon for Patagonia on a budget, you can you can find it and it's how to have your adventure in Patagonia on $30 a day and there's a ton of cool photographs in there. I I should I should go pick up a copy because it looks looks super cool Patagonia is awesome that brings us to Also for our new listeners our slack community. So we have a community Channel on slack and if you'd like to join it, there's lots of great discussion going on there Just go to our website and there's a sign up form there and then you can hang out with the community Throughout the week. Yeah, and if you if you want us to show off what you're working on Drop a link in and we'll check it out So onto this week's topic David you want to hit it with the acquisition history and facts as always been So Android has been mentioned this one has been a while coming we've had a lot of requests for this We've been saving it and we felt was time to finally dive in here. There is so much done back here So we'll get into it October 2003 Android is a startup company just founded in Palo Alto by Andy Rubin Rich minor Nick Sears and Chris White and Andy Rubin the CEO was basically born to start this company. So Andy's career started at Carl's ice the The camera lens camera technology and camera lens manufacturing company Then he moved to Apple at Apple he met a bunch of folks. This was during the John Scully era Wow, I did not know he said Apple. He was at Apple. Yep there for a couple years and he and a bunch of other people spun off from Apple and started a company called General Magic Which not a lot of people remember But this was a spin off from Apple actually went public itself and the whole they never launched a product But what they were doing was they were building essentially a tablet Like a personal communicator, you know, sort of the a palm competitor and a lot of that tech I believe ended up in the Newton They went public it was a public company. Yep. Then it ended up going bankrupt. Wow It was super ambitious at the time. I believe also some of the technology that they developed there became the standard for USB Huh a lot of really cool stuff happened there. So He went from Apple to General Magic and then a bunch of General Magic Alums went and started a company called Web TV Which probably do remember and Web TV was part of This was in the kind of mid-delay 90s Vision that a lot of people in technology had at the time that the internet was not going to happen on computers in a big way It was going to happen on your TV. That's right. So this was a set top box like your cable box This is in the era that Microsoft's making the bet that they should do MSNBC like a technology enabled television channel joint ventures This is the AOL time Warner days like it's all new media old media eyeballs like it's the eyeball economy So web TV ends up getting acquired by Microsoft and and and and Andy and the team Go up to Seattle where you're working Microsoft. I don't know if they actually ever came up to Seattle But they build Microsoft TV which as we know now is an object failure But shortly thereafter Andy leaves and he starts a new company called danger So danger was founded in the in the late 90s. I believe after Andy left Microsoft and They made a little device called the sidekick and this was sort of Rim already existed. So there were blackberries out there, but this was the first consumer focused Smartphone really. Yeah, and it had like Celebrities where it had a cool factor because they would show their danger and print, you know, photo shoots and like this This was a thing you wanted to have one of these. I remember the first time that I started hearing about About the sidekick in danger was watching entourage Oh, man, and it was like everybody on entourage had a sidekick I think there's actually a episode where this is a plot point that turtle like gets a sidekick and like it's You know, super cool. I get it. Remember exactly It is so recognizable too with the way that it spun out. I mean the the Industrial design was crazy unique and super cool. Yep, see I mean there was very little on the market like this Like I said there were smartphones they existed, but this was like the windows mobile days. There was blackberry Business people it was for business people. Yeah and And then the sidekick comes out and it's the first time like oh we can bring this technology to consumers as well So Andy was the CEO of danger and then he ends up leaving uh Relatively early on in the life of the company Oh, by the way supposedly Larry Page and Sergey Brynn were huge sidekick users as well and So he ends up leaving and starting a new company that he calls Android and the vision for Android is This is post acquisition. No, no, this is pre acquisition of danger danger doesn't end up getting acquired by Microsoft until 2008 Oh, wow much later but in 2003 Andy leaves and starts the Android and Whereas danger was a sort of full stack company. They were making the hardware they were making the software that went on these sidekicks They were dealing with carriers everything Android is is an operating system company and they want to take Linux and essentially make it into a It operating system capable of running on mobile devices and the first sort of We now know Android runs on so many devices today The first target market that they're gonna go after is digital cameras. That's right. That's right I remember reading that and I think what they assessed that it's not a big enough market Yeah, which is interesting because like it was a huge market at the time. I mean this was 2003 everybody had the You know point shoots and it would be interesting to know like what the all process they went through and deciding that that wasn't big enough But fortunately they made the right call yep and quickly pivot into focusing the device on mobile phones Yeah, I wonder it didn't you know the hindsight's 2020 but I don't think it was a parent in 2003 that Point and shoots would go away and become part of phones like could you is there a world where you see that maybe the other way around That you're like we should build a really great camera because at some point cellular technology will become you know Lightweight enough that we can put it into the camera. Yeah, yeah It would certainly been hard to imagine Cameras on phones to the extent they even existed then getting good enough that you could right actually take real pictures on it Yeah, I don't think I had a camera phone until 2005 or six yep later than this time here Oh, they were awful Awful I mean even the first iPhone in 2007 like the camera was part of it But it wasn't like that was a big selling point and contrast that now with I literally huge the camera is on the iPhone I literally just pre-ordered a form factor that I don't want because the camera is better like I the plus is too big for me and I just I Had this weird realization that wow. I use this thing more as a camera that a phone Maybe Andy and team were like more right than they thought at the time Anyway getting back on track so as far as we know They never raised any venture capital that Android but Steve Pearlman who had been the CEO of web TV And who had been a general magic with Andy and Andy had worked for him at both places at one point there's in the lore of of pre-Google Android Apparently Andy was running low on cash and Steve shows up at the office At Android with an envelope with $10,000 in cash in it and he just gives it to Andy and he refuses To take a share in the company Andy tries to give him shares for it and he says no, no, this is just for you. He's just giving him the cash What a good friend. I know. That's awesome. I know Steve. Will you be our friend? So So that happens they're working away on this operating system and As we mentioned a minute ago, Larry and Sergey had been big sidekick fans they had actually met Andy back in back in the day when he was working on danger and July 2005 comes along and Google ends up just acquiring Android before they've shipped anything their long way away from shipping anything Deal terms not announced. This was a small team and raised any venture in Palo Alto rumored to be about 50 million dollars and what's interesting is that many years later David Lowy who was At one point head of Google's corporate development in 2010. He's being interviewed and he calls this Google's quote best deal ever So they've acquired this company. It's Andy and team. They're working on this operating system Immediately, you know, Google had just gone public a year before Lots of rumors start circling about what Google is up to here. You know, are they working on the G phone? You know, this is kind of like the G drive that we talked about right with Google docs the Google the rightly acquisition For years people are speculating what is going on here? What is going on here? And there's no G phone Andy and team are working away for years And and so pretty much nothing happens until 2007 and Then in January 2007 the world changes. Yep Steve Jobs Announces the iPhone the the breakthrough internet communications device where nobody really understands what he's talking about and a phone It's an iPod. It's a breakthrough internet communications device One of the best one of the best, you know, product launches and speeches and presentations of all time. Yep So that happens in January 2007 meanwhile Andy and team within Google had been working on the operating system and they'd been working with hardware partners about what the phones that they would ultimately bring to market would look like and they were working with HTC and And they had a prototype and it looked a lot like the Palm trio if you remember that it was not a touch-screeing and it had you know Blackberry like keys on it, right? I'm not sure if it had a stylus it may and and so then they watch the iPhone announcement which you know at the time it was It was amazing like I I lined up for the first iPhone like I couldn't wait to get it But like I lined up for the first iPhone and didn't buy one I was I was young and did not have any money and it was like I couldn't pay for the data plan But I wanted to be part of it. That's amazing So I was lucky I had just graduated from college when it all when it came out that summer literally and this was the first Cell phone I bought like I went off my parents plan got my own plan just so I could get an iPhone That's right cuz I launched special iPhone plans that didn't include family plans because it was we'll get back to this It was an exclusive with AT&T and Which becomes quite important later So so this happened and you know consumers were dying to get this thing I think people were calling it the god phone But this is also the time Steve bombers saying like you know literally laughing about it like a lot of Corporate tech and big companies, you know are really discounting The transformative power that the iPhones about to have here and meanwhile the the there's a great story about a bunch of Rim employees that were sitting around that watch the keynote and said it was fake They were like they there is literally no way to do this that we've tried, you know that this is not you can't get scroll Performance like that you can't make it you can't make a screen like that and and It's like it's amazing how you know you can get Steve bomber dismissing it while simultaneously the Blackberry guys don't even believe it's possible to do that stuff It's interesting to look at the spectrum of reactions here. You've got Steve bomber who just dismisses it the blackberry guys are in denial And the Google reaction says an engineer later a interview later with Google engineer Chris to Salvo who was working on Android at the time And and he said he says quote what we had suddenly looked just so 90s it's one of those things that are it's one of those things that is so obvious when you see it and And and they realize that they had to go back to the drawing board immediately that this was game changing wow So this was this was January 2007 and they had these prototypes that were pretty far along with HTC and had they started the open handset alliance That comes in a minute But they scrap everything they realize hey the world has changed. We now need to compete with the iPhone so later that year in November Google and it's interesting the timing here We don't know when they were originally planning to do this, but they ended up doing it in November so After the the iPhone had launched they have a big event and they announced and the Android operating system and They also announced equally importantly the open handset alliance And so the open handset alliance they have HTC Sony Samsung sprint T-Mobile and Qualcomm so like the whole It's like the phone ecosystem the whole stack manufacturer. They're the operating system. They've the carriers Yep, and this is this is for all of these these players in the ecosystem You know if they don't realize already this comes to be this is the only way they're gonna stand up to Apple Is they all need to work together and there needs to be this open operating system tying it all together which becomes Android? So they announced both at the same time and what's super interesting is As part of the announcement they also have the $10 million Android challenge so they make it super clear Google does that Android is an open operating system and that means two things one it's open source So anybody can use it and later on this leads to forks of Android like Siannogen Like the Kindle fire. Xiaomi. Yes Become super important later But that's it's completely free anybody can take the Android software and do whatever they want with it The other part of open that Google really focuses on is developers can develop for the platform So this was before the iPhone iOS was not yet open to developers Wwdc in jl or in June of 2008 is when Apple gonna walked back there You can make web apps and announce the app store. Yeah, and Steve jobs would initially was you know his posturing was We didn't we don't want developers. We want to control everything of the software stack and Hard to imagine what the iPhone would be like today if there were not third party developers not successful Well, it's interesting. I mean Google kind of pushes them towards this with when they make Android open right and developers start to realize The massive reach with you know There are however many computers there are PCs There are in the world of web browsers, but there's a lot more phones. Yeah, and they can reach this huge consumer base So this really is sort of like Google's kind of putting a flag in the ground and saying hey, we're open. That means two things We're open to the entire hardware and supply chain ecosystem, but much more importantly in the long term we're open to developers So that was that was November 2007, but remember they realized like they couldn't compete with the iPhone So they end up not shipping the first Android phone until almost a year later in October 2008 and that's when the the HTC dream Slash in the US the T-Mobile G1. That's right is the first Android phone the the much-vonted Anticipated Google phone and that still it comes out that's still at a keyboard right still at a keyboard So it was a touch screen And it had a it had a scroll wheel on it. That's right and physical hardware buttons, which were part of Android for a long time And then it had a slide out full-cordy keyboard Much like much like the sidekick that slid out horizontally from the device Super interesting, so it doesn't really look anything like the iPhone. It's kind of its own thing But this is this is the first the first Android phone that finally comes to market so with T-Mobile made by HTC And it comes out sort of just in time for the holidays of 2008 It doesn't really make much of a splash you know at this point the iPhone You know the growth in iPhone shipments by today's standards or slow but at the time it was like Completely taking off clear that this was ahead and I remember Steve Jobs on stage saying that their goal for the I think was their goal for the first year of the iPhone was to Capture one percent of phones. I don't think he said smart phones. He intentionally I think he and I believe it was intentionally because they didn't want to acknowledge that smart phones were a category much like they never acknowledge netbooks or right and I I think like it's amazing looking back like they're their hope was to get one percent And I think that's that's kind of what they tracked actually that that first year But then the explosion after that never could have predicted and then and then the market just completely exploded so So it wasn't actually then until around the holiday season of 2009 The Google you know Who knows how much Google drove this but essentially the rest of the Wireless phone industry ecosystem except for Apple realize they have a big problem A big big problem because the iPhone is on its way you know at this point 3g has been launched so That was one of the big things with the original iPhone. Oh like it's great, but like it's slow and 3g was out but Apple It was one of those things where Apple had been working on the iPhone for so long that the only thing they could get to market by July of 2007 was an edge. Yeah, and then what oh wait was 3g 2.5g That's right. You remember Ben that's right um and And by 2009 Apple then opened up iOS to developers so that wasn't even an advantage anymore um and and the amount of so remember iPhone was still exclusive to AT&T at this point in the US and AT&T is just raking in subscribers at this point becoming it was already I believe it was already the largest Phone network before the iPhone and at this point, you know Verizon sprint T-Mobile Have huge huge issues. Yeah, that's got to be one of the best Partnership or exclusivity agreements in the history of the American corporation is AT&T strapping itself to the iPhone as a rocket. Yep. I mean it The the thing that paint said in my mind for how like how big a deal that was is how big a deal the opposite was Like how widely anticipated the Verizon iPhone was and when the Verizon iPhone came out how crazy All my friends went that were non AT&T with all this incredible pent up demand for it. Yeah, which um Which is uh Interesting that by holiday 2009 there's finally been enough time in the product cycle that Verizon Google everybody else all the hands at makers Realized they got to do something and so Verizon launches the droid In 2009 and they paid Lucasfilm every single time that word droid was mentioned. It's not amazing The bottom of every magazine ad it's it's so awesome that they were like yeah screw it. It's worth it It's told it's worth and and I mean this was in a lot of ways. This was a phone ahead of its time Yeah, but the whole positioning was against the iPhone here. It was the the campaign was called droid does and This was like the you know the old Mac and PC campaigns been in reverse It was like well your iPhone doesn't do X but droid does that's right and that this is like the full swing of the The smartphone wars heating up where now we sort of settled into this place where you know Android's got about 80% of the people iPhones got about 20% of the people but iPhone people pay you know for apps And yeah much more so than Android people and it's interesting how it's reached this almost like like not a piece treaty But like it's it's like we thought there was gonna be one winner in this smartphone wars And it was gonna be a crazy five-year thing and one person we thought it was gonna be Microsoft and Apple all over again Right, right and it's interesting how we've reached this equilibrium where like the the world exists in a multi-platform way Kind of sustainably for at least this this set of years this moment in time. Yep, and and then the in that an initial droid does thing they They intentionally like it was confusing to people that You could get an Android, but it wasn't from Google and it wasn't called an Android And so I think it was like an intentional move to say you know what We're just gonna like just like lean into that the phones gonna be called a droid It's the main one we're gonna market. We're not gonna have Android be a consumer brand. Yep, and it was amazing how how many important remember to Who made the the droid it was Motorola which we'll get to when I say oh yeah, yeah, but as it I guess my point is like it's amazing How it was in most people's likes a con to ask you even iPhone or a droid yeah, it wasn't Android. It was a droid. Yeah So yeah everything you you're saying Ben. I mean this was like These were the holy wars of mobile that that got kicked off with the droid and and so basically from 2010 to kind of 2012-ish There's just this race where Everybody who's not Apple in the ecosystem is racing to copy Apple and then try and surpass if they can but even just get to parity And that's you know towards the end of that time. That's when you see Samsung really emerging I mean they were the most shameless just literally ripped wholesale Everything from the iPhone but it worked and so fast like two months after Apple would announce something like Some team at at Samsung will get to it work all night and then they'd brush it to market and then they'd announce that it exists and then like You know there'd be Maybe you could get them from supply chain Maybe you couldn't but like they put a stake in the ground that like yes Samsung has this too And you see it all the way through like touch ID like they had slide unlock like there was a big fight about that Yep, yep And and and to the bitterness involved here so you know Steve jobs is towards the end of his life at this point and And the Walter Isaacson you know biography that comes out which is this incredible book. He has this quote in there He says I will spend my last dying breath if I need to and I will spend every penny of Apple's 40 billion in the bank Funny that at the time Apple only have 40 billion in the bank like that's cute right Um to write this wrong. I'm going to destroy Android because it's a stolen product. I'm willing to go thermonuclear war on this This is incredible You know, but this was this was the height, you know and and so you know that comes out and and then um and then Vic and good to our guy incredible. Um it's amazing like how much the world has changed though from his Vision, you know when he was alive Um and how different things are now, you know like the famous quote like if you see that Steve said if you see a stylus we blew it Did you hear the interview with Tim Cook a couple weeks ago that they asked they um I forget who did it But in Apple's recent little PR rush they asked him cook about that exact thing and they're trying to push him on the point That like are you guys blowing it and uh and Tim starts with well first of all it's a pencil not a stylus I love Apple's marketing What would Steve have said But Tim is in Steve which is the point and Apple is not Tim did recently, you know the last couple of years referred to the android ecosystem as a toxic hell stew Or I think he pointed out it was like a quote from a writer that they put up on the stage of Apple So uh you know google doesn't just like take this lying down. They you know they strike back and um and so Vic Gandotra uh who is a longtime exec uh at at google and I believe Founder of or in charge of google plus at one point so that was that was a low mark on on his uh his time there but um at Good at IO uh google's big conference in 2010 Vicks you know asked about this and uh steves you know quote and apples feelings about it and he says if google did act This is a quote if google did act we faced a draconian future a future where one man one company one device one carrier would be our only choice That's a future we don't want yeah, it's a very like noble way to approach it's like the you know the famous apple 1984 commercial. It's like apple is now the you know the man talking on the screen and yeah You know google and android is throwing the hammer at it Yeah, if you can find a way to position yourself as an underdog even if you have a monopoly and search and are worth One of the largest technology companies in the world by god you should do it absolutely I mean they're literally outappling apple yeah at apple zone game here um and uh and and so you know it it was a war uh and at the time you know so many everybody in the press Everybody in the tech world was you know is it android? It gonna win is ios gonna win what's gonna happen? What should i then start up? See now at the time we our portfolio companies and as we we were talking to new investments Like well, what are you gonna develop for like it was a big question then because it was really hard to develop for both Right, I guess it's probably a time to say for new listeners David's a VC here at a madrona venture group where we're recording out of their offices this weekend And um I'm over at pioneer square labs just down the street where we're a startup studio So that's probably helpful to have some some context on like Who are we doing this yeah um and uh A couple other side notes that uh One that is more a quirk of history, but it's just too fun not to talk about here in august of 2010 HTC acquires a majority stake in beats Beats audio and as a result of that from kind of you know 2011 to 2012 2013ish um You can still go buy these things on amazon, which is amazing. We will link to this in the show notes There are beats branded android phones out there on the market HTC phones I kind of want to buy one and like bring it to my next meeting at apple like pretending it's like my phone See what happens. That would be amazing Total like quirk of history. I mean there were HTC was was bundling beats headphones with their android phones for a while when they were selling them I'm hard to imagine that in today's world of you know beats being part of apple. I know Um also makes me realize just like just how small the technology world is I feel like we talk about this a lot on the show But like whether it's you know marklory, you know had worked at amazon and amazon had acquired his last company And then he's vowing to destroy them or you know all the companies that came out of paypal or Photoshop and Pixar they came out of Lucasfilm like it's really a It's a small world in this In this corner of the economy here. It is and the other It's funny. These are like not I guess they're sort of tech themes like themes of the show it it's funny how Long things seem in our mind and how short they were in number of years like when apple launched the iPhone in 2007 Android had not been announced yet and they were not at war they were so friendly that like Erich Schmidt Came on stage in at the launch of the iPhone and talked about how google It was going to be an integral part of the iPhone and it was I mean google maps was a huge like that was a tent pole feature of Not to mention google search which we will get into in a minute indeed But it's incredible how fast these companies Became at each other's throats and completely separated I mean if you the the way that companies are direct competitors like if you go back 20 years apple and Microsoft are direct competitors and hate each other and Google's like Like this benevolent, you know hands-off we serve all group and in a very in very short order from 2007 to 2009 It became apple and google at each other's throats and fast forward to today where like Microsoft services are all over all these platforms and like apples partnering with Microsoft not a lot of things and And another crazy example like apple launching this big enterprise partnership with IBM Like how fast the world changes? And you were in the middle of this I mean you were one of the original folks on office for iPad was I was yeah that was a heck of a project So we'll get more into this in a minute, but I think it was I mean this is a A little flash forward to tech themes for me, but um, I think the reason this was happening was like All these big tech companies realized all of a sudden that this was the opening of a new frontier and of new market the mobile market that was gonna be Literally the biggest market that technology and maybe the world had ever seen Yeah, I mean because apple becomes the world's most valuable company during this time period So all these companies are realizing that you're gonna have you know first a couple hundred million people in the United States And then a billion people around the world and and then and then multiple billions of people and ultimately Every person in the world When we get to the end state, you know still a couple years hence from now is gonna be coming online buying a smartphone having access to technology for the first time and you know as friendly as apple and google were before this All of a sudden it's a race to go capture this market, but I think the mistake that they made is Or at least that I don't know there was a mistake But the fight that they were fighting at first wasn't the right fight They were fighting for the like hardware layer right and well was the question is was google doing that at first like why Why did google so this is this is sort of as we Transition from the the history and facts into more of like our analysis portion where we are today It's very clear that the reason that android needs to exist is to prevent Apple from being the front door for users to use google services But google can't afford to give up that control number one in case you know people are going to use other services instead of google services Namely google search where all their money comes from or all the revenue comes from yep and secondarily There is an agreement that gets signed with people who are sending traffic to google and Amazing, we'll just come out and start with this number right now 34% of google search revenue from their their ad sense, right? Uh, well that's upwards so What Ben's referring to one of the for our new listeners one of the things that we love on this show is lawsuits Not not targeted at us, but between the the companies that we covered because also it's a really interesting things come out in lawsuits and and Over the last few years oracle has been Waging a lawsuit against google for google's and android's use of Java in creating um and java's api's and creating android and um one of the things that came out in that lawsuit is How much money google pays apple for for having google search as the default search on the iPhone and it's pretty incredible Yeah, the the amazing thing is david hour um Like looking pouring over the lawsuit and thinking about this. It's not a flat fee like apple gets 34% of of all the search revenue that comes from their platform Yeah, so somewhere in the neighborhood of 34% it was at one time around that it's a lot of this part of the lawsuit Google freaked out about and had sealed but for a moment it was public How how this worked so in 2015? Estimates from Goldman Sachs are that google did about 15 billion dollars of revenue from their their mobile search And so apple has about 18% of the global market share So if you kind of figure out what that comes to it's about 918 million by that calculation or as released in the these documents about a billion dollars that That google paid to apple for apple to be using Or directing people to google search. So then you start thinking about okay the strategy for android as it is today is very clearly To basically get free Customers basically it people that are already google's customers to directly interface with google and and search and that way Google doesn't have to pay that that revenue split to anybody else for access to those There's something I didn't really realize until we started doing the research for this episode But is kind of mind blowing if you think about it like a Apple is getting a percentage of ad word google ad words revenue that happens on the iPhone like that's crazy One But to like it all makes sense for google now like to the extent that people use android phones Or use the chrome browser on the iPhone instead of safari Or any one of a number of ways that people are searching on Platforms that are owned by google versus or at least controlled by google versus Other platforms where they have to pay out you know revenue shares like It's just a it's a no-brainer. Yeah, the case for like basically google is a company that makes money when people search and then click on ads Like that is that is they do all these other things search on properties that are not google even indirectly like they're searching on google But they're doing it in the safari browser. Yep google has to pay Attacks every time that happens. Yeah, and so there Google basically is is the entire reason That android exists is so that google doesn't need to Pay for access to their own existing customers and what mobile did was it inserted this new Wedge into you know google already had this relationship where everybody You know opened up their computer and google was their their home page and they would search or it was built into browsers Through all these agreements they had cut mobile opens this opportunity for All the sudden there's this whole new platform with with all these people that have switched over to it and all these people They're coming online for the first time. Yeah, and Not only does google have to make sure that those places don't use their competitors small as smaller as they may be But they actually have to pay To get the you know pay a cut of their revenue for the the privilege of being the the default search there So it would you kind of take a step back like the the strategy for android the strategy for the the reason chrome exists Like these things are all the same and it's to make sure that no one else is inserted between The revenue generated by clicking on ads from search and their customers and it's interesting right like Wall Street and plenty of other You know They're looking at google they always throw stones at google and they say like oh come on like this company can't succeed at anything except adwords like none of their products make any money Android doesn't make any money YouTube doesn't make any money as we talked about which I still feel good about our grade on youtube But chrome doesn't make any money, but they're a c for the record. Yep But but the reality is things like android things like chrome are Huge economic value to to google. Yeah Yeah, it's I mean it's a It's providing defensibility to google's business Yep, and so I to to carry out that calculation a little a little bit So then if you run the flip side of that since google has 80% market share So you look at the 80% of people that are searching on phones and generating that that 15 billion dollars of google search revenue a year right now If you take that 34% that they don't have to pay out to other people Android is effectively saving them for billion dollars a year just on that because google doesn't have to pay for that traffic Which is pretty incredible. Yeah All right two things real quick to wrap up history and facts and then we'll move on to um Jack was it in category One I mentioned motorola earlier so google makes This move that is in some ways completely brilliant and in other ways completely boneheaded Where they buy motorola in august of 2011 for 12 and a half billion dollars And they say at the time that you know the primary driver of this was motorola is patent portfolio And then this is the brilliant part of it, you know Apple Oracle as we've already talked about microsoft many others the phone companies There starts to be a lot of litigation happening in this space and people are enforcing patents and defending patents and Google being a much younger company than these other these other firms Didn't have the kind of patent bench strength that they did So google buys motorola very old company Gets all of their patent portfolio and that helps defend google in things like the oracle case um And uh, but the second part of the deal was oh well now we're gonna have a unified, you know stack within google from You know operating system up through the hardware. We're gonna make these incredible phones Didn't happen didn't go so well. Yeah happens. So they end up selling the assets of motorola till Lenovo For 2.9 billion dollars a lot less than 12 and a half But to the extent they save themselves from multiple billion dollar judgments against them um, may have been successful The other interesting thing that's gonna become very relevant as we do the analysis here um in 2010 a company in china is founded called shamei Which um, I presume a lot of our listeners are familiar with but for those who aren't Yeah, this is you know people refer to this as the quote-unquote apple of china and if you've seen that written that's x i a O M i Yep, and and so at this point uh sitting here in september 2016 Um uber I believe is the most val highly valued private company technology company in the world um shamei I believe is the second uh value did Somewhere I believe between 40 and 50 billion dollars in their last financing um and shamei is interesting like they much like samsung and others, you know uh Been accused of just copying the iphone um, but what shamei did Has done samsung was completely reliant on google You know they just made the hardware and then they had some software, you know, skins quote-unquote that they would put on top of android But it's running google android shamei as we talked about Completely forked android Have taken over have their own branch of android that they fully control Um, there's a startup called siannogen that has also done the same thing that only distributes the operating system And shamei can't afford does the same kind of fire amazon does this with kindal fire Um and shamei basically leveraged open source android to uh compete with apple and so they make beautiful uh relatively low cost devices seldom in china they're wildly popular Um, and they run a version of android that shamei is completely locked down in controls and this is a good time to um to Draw the line between what is the android open source project and what is android as licensed from google so You can get Android absolutely for free from google And it comes with all the services that that google does google maps gmail uh, most google now access to the play store and all the apps in there or you can go get the source code yourself And you can fork it and you can uh, you can just use android source code But the the major disadvantage there is you don't have access on your platform to the play store And you don't have access to all these services so you really have to not only go and build that yourself the all those You know, a mail or plug in other partners right right, but you actually have to build an entire new developer ecosystem Like amazon has to go around and convince everyone to submit to the amazon app store Yep, and the google play store and then you know requires a little bit of work from from each developer Generally worth it, but you kind of have this new cold start problem And so what what google sort of has an advantage here is for people who care about For manufacturers that care about having access to all the apps in the play store and all those services They're just going to roll with stock android and then google gets to make sure that you don't change any of the searchers services away from them Yep, um, all right Sorry, that was a long one. There is so much to cover here with android Yeah, David do you think that uh, so we've kind of talked about like what the point of android is right now Do you think that was the strategy when they acquired it and when they started getting into the mobile game like why was mobile going to be important to google in 2005? I don't I don't know, but I don't think there was any way Anyone could have foretold what was going to happen, you know in this market. I think this was a Great buy by google of a really talented team working on some really cool technology that had a lot of potential but I mean Well google probably knew about the iPhone because Eric Schmidt was on Steve Jobs's board at Apple But I don't think anybody really could have figured out exactly how this was going to play out but but major You know google has done an amazing job with android in terms of Shepherding it through this wildly complex You know jirations in the market that by the way completely killed blackberry So like a company that was Many multi-billion dollar company that was the leader in smartphones just decimated gone. Yeah You know and and Microsoft in a lot of ways too, you know obviously Microsoft is having a resurgence now and didn't wasn't destroyed But they were the like one of the leading mobile operating system providers and now that's gone Google really has done a great job shepherding this Yeah It's a great point. All right. You want to move on to acquisition category? Absolutely Awesome. I am going to go with technology here Uh, other choices people product business line asset or other. I don't think my initial inclination was product But this was so early That what they were acquiring was not a complete product and not something they could go to market with and something that didn't have its own Independent fully fleshed out strategy. Yep, and what they were really buying was kind of this core core technology that um has actually No one else really went out and tried to build that like it clearly is a difficult piece of technology to build because Surprising though too because it like clearly it's difficult, but it was it itself was based on Linux somebody else could have also taken Linux and You know the android team was a super small team when hadn't raised any VC when Google bought it Yeah, and now there's no incentive to go out and build anything else because like if you were going to build anything else You'd have the cold start problem on all those services and well everybody's already on iOS and Android So right, but it is interesting how you know Google has this core technology and access to services that it licenses out and the The I guess there's a free license, but at the very At core of that is this technology that they acquired Yep I basically gave my answer to this earlier uh, which which I won't repeat all of it, but I completely agree This was a technology acquisition when they bought it Uh, and then Google has done just this incredible job of shepherding it through you know I actually wrote down that it was a technology acquisition with a little bit of some great talent when they bought it But over time this has gone from a technology to a product to a business line and now an asset at Google And it's really been under the under the story ship of the whole company and it's amazing how it's an asset of defensibility I mean really the the core thing they get from from Android and My opinion is making sure they don't lose access to all of those people searching And for as many of these interesting moonshots as Google is working on and self-driving cars truly could be um a very different business for them and a very Big and profitable one that actually rivals search like google makes money from having a marketplace of ads when you search And you know sometimes on other websites and I think that when you boil it down They they bought defensibility and and more importantly like it was a cheap buy what they did was invest 10 years into building a entire You know arm of their business to provide defensibility um Totally green should we move on to what would have happened otherwise? Yeah, yeah, so I was thinking about this one earlier and my core Question is I guess it's two could and would Google have built themselves into the position that they're in today if they had not made the Android acquisition Ah interesting we usually think about what would have happened otherwise from the startups perspective Where's that company going to land which here? I think is an interest is a easy question answer because there's no way uh the Playing field was so massive here as this market evolved there's no way a small independent company could have had this scale of impact So I don't think Android It probably would have been bought by somebody else or failed on its own But but yeah for google could they have done this without buying android like did they in in um Let's say hypothetically they had the foresight to know that the world would be the way it is today Which again they knew what apple was up to yep And and they they knew they would need a competitive mobile operating system or maybe even actual phones To make sure that they own that customer relationship to funnel people to search Then you have a builder buy decision and 50 million is a is like You know Let's say they were going to staff a team to go and build basically android and house I it feels like it's close yeah, it feels like this was not an outlandish Um well, and especially back then I mean google was the darling of Silicon Valley like everybody wanted to work there. They'd just gone public yeah um Certainly they could have done it the question I think is would they have you know they they bought android um At least part of it was you know larian surgae were sidekick fans right Uh, and they knew andy um and Google's m&a strategy has always been about acquiring really talented teams and having those people come into google and see what they do um and in this case they hit it out of the park would Would anyone at google have been enough of a champion and visionary about what was gonna happen to do this otherwise did you need an Andy Rubin to kind of be at the hell yeah, and let you know like we said in the beginning. I mean andy was Born to start this company. I mean his whole career to this point You know, I even know as Steve jobs says you know you can only connect the docs dots looking backwards not forwards But looking backwards. I mean it's hard to imagine anyone more qualified or who had been Thinking about this problem about how do you create a really compelling mobile Computer and operating you know system and experience uh denandy Yeah, you're right and the thing that keeps tugging at me is you could see a very classic Microsoft way to go about this where where um google says okay, we got to have uh phones. We're not gonna make the phones We're gonna make the operating system we're to charge for the operating system But android already had this whole open source thing going on and they said you know we're gonna be completely open source We uh they hadn't figured out the like you know license package with google services On Linux, but like what was that yeah built on Linux was that a forcing function To make google go into this business strategy of give it away for free or would google have arrived at this give it away for free Business strategy on their own if they hadn't acquired android and one thing that just popped in my head is you could make the case that Well compared to the insane business that searches They shouldn't be in the business of selling individual software licenses, right? But they're doing it with google apps like if you're account. It's like tiny portion of their revenue But they they haven't like totally shied away from the traditional business model of of like a Yeah, and it's interesting I mean if you think about the grade that we gave google docs, which is a big part of google apps Um, I can't remember exactly what it was, but it was it was not an a yeah um We haven't created android yet more to discuss, but I'm pretty confident. I'm gonna be higher than I was on google docs Yeah Yeah, I guess that my the question in my mind That I don't think we can really answer is um Yeah, would would google have done this very unique open source approach to to grow insanely quickly and get on everyone's Uh or get on you know 80% of the world smartphones Um without acquiring android. Yeah. Well listeners uh if any of you were at google at this time. Yeah, let us know We'd love to we'd love to know um okay tech themes um We can't go an episode without bringing up Ben Thompson um and then Stratekry, but you have to own the front door to the customer in this day and age And and the reason Ben and I were talking about this before show too. I mean I think the reason why that's important in The current you know internet information economy that we live in is what the internet has done is it has made distribution free And in the old world this is you know not taking credit for this as is bentomsons insight here um You know in the old industrial world distribution was really hard And so you had to aggregate distribution and if you control distribution the customer was your your surf basically in your kingdom Um, but now distributions free and anybody can build anything like we were saying anybody could have built something on top of Linux uh mobile operating system um So in that world you need to win the customer and you need to have the best customer experience. Yep. Yep. That is one of mine too um and I think the um The spin that I had on that was um If you think about what microsoft was trying to do at that point in time with windows mobile um You know the the microsoft way of thinking Uh, which is is evolving now, but but certainly still at that point in time was like we control Everything you need to distribute a computing experience to a customer. You know, we have a deep relationship with intel um We have all the software developers that can make our own proprietary operating system. We don't use open source um And we have relationships with all the carriers Uh, the phone carriers and we can push this stuff out into market and that's great and people will use it You know, especially corporate customers because they need it, but like windows mobile especially in that day and age sucked Um, I believe I had one of those devices at one point in time and it was very frustrating um and and They didn't approach it from this way that you know, Ben you're talking about uh that we're talking about now of like Oh, hey like we can just take Linux and build this, you know, and let's build some awesome on top of it Um, so that's one the other one that I wanted to talk about that I referenced earlier was um Thinking about how the mobile market has played out. It's interesting to see like You kind of see this in technology that like the area of competition and like what's interesting kind of moves up the stack so In um, you know in the old PC world it was like the hardware, you know, um Was it you're gonna buy a Mac or you're gonna buy a PC right and then in the beginning of the phone world As we talked about it wasn't really so much about the hardware whether you're gonna buy because Google wasn't an android Wasn't competing in hardware, but it was the services, you know, are you gonna buy An android phone that has Google services baked into it or you're gonna buy an apple phone that has apple services And that Google can still participate in that but they're paying the apple tax What's interesting is I think now that the you know the great mobile holy wars are Pretty much over as far as we think I mean who knows what will happen in the future The level of competition has kind of further elevated up the stack to the application layer You know and like now it's like and and well Services some services right but like not core level services not like operating system level stuff You know, it's like are you gonna use uber or lift? Are you going to spend your attention In snapchat or in facebook or in instagram? You know these are The these are where money is being made today and this is where the the playing field exists You know, it's not at the level of the operating system anymore And it's actually you know people talk I think this is kind of a red herring at least in not in china um But people talked about like moving even further up into being on top of the messenger ecosystem And maybe we'll see that happen, you know people are talking about bots and slack bots and we're not early Early stage of the hype cycle on those early stage of the hype cycle But it is definitely a theme that you see in technology that like this level of play keeps getting further pushed up the stack. Yep Um Okay, totally agreed Well, I think it's time to grade the acquisition before I throw out my grade I did a couple of There's my here's my reasoning and logic So android makes money for google in two ways one is advertisements supplied by google and shown on on android phones And the other is revenue google takes from its mobile app store google play and We haven't talked much about that yet. That's a that's a non trivial amount of money. Yep if Since we're going off of the the data that oracle opened up in this lawsuit It's reported that they had 31 billion dollars of Of revenue per year from android and so we we've seen the estimate that 15% of that or 15 billion dollars of that is from mobile search revenue Between ios and android largely on uh, I guess So it'd be about 12 12 billion dollars of that because it's all from android and then you have like The rest of that is you know, there's some amount from the the actual phones that they're selling because google Obsels the the nexus phones, but then a lot of that that top line You know 10 to 15 billion dollars of it is is from the the google play store and google keeps 30% of that so let's say three to four billion dollars a year is Uh is made from from the actual play store so that in itself much like how the app store for apple It's a great business. You know compared to their their other businesses. It's it's not um You know, it's not not insane, but um That in itself would you know on a 50 50 million dollar acquisition would be great But the the thing that I think it android really did is um Ensure that google was safe for the next decade or two as the world changed out from under them and They were at great risk of uh, losing access to their customers and they um they engineered a strategy here where they Not only you know went and got a lot of those customers Uh kind of back and made sure that as they transitioned to mobile they um they stayed with direct access direct access to google But and actually even tighter since then everyone the operating system on desktop But really were the the primary place to go for the developing world as people came online for the first time And so I think uh google's core asset marches on and is well protected and uh, this is an a plus Yeah, um I for me the question about grading this is um question whether this is an a or an a plus No doubt this was you know 50 million dollars for Something that is achieved even even though it didn't start this way But over time achieved everything that we've talked about in this episode for google Absolutely fantastic You know as as David Lowy said, you know perhaps Uh, you google's best deal ever yeah, the Goldman numbers has 22 billion dollars of profit last year from the android division Yeah, incredible um the thing that i'm wrestling with a little bit is um But in in trying to determine whether to give the plus or not is This was in many ways again. I don't think they saw it this way at the time But this was a defensive acquisition. This was not an offensive acquisition Yep, and i'm comparing it with instagram, which is kind of our gold standard here Instagram is so much simpler than android. I would still say defensive though Well, it's interesting right like defensive yes Existentially as i guess android was in some ways too, but not really because People are still going to keep using google services whether it was on a google property or not Like this was just like preventing them from paying the thirty whatever percent tax Mm-hmm and and lots of other things too, but instagram was much more about like oh We're gonna up level the playing field now Like i was talking about in tech themes like we're gonna move up the stack I don't know i'm struggling with that like part of me feels like i want to Uh, just the you know the like bold part of me wants to like reward offensive acquisitions and forward thinking acquisitions Not that android wasn't you know more than defensive um, I would still say that that instagram was was not a uh Uh a bold offensive forward thinking like ultimately That they sell attention to advertisers and they were at risk of losing yep, which is the same thing that advertise that facebook sells Yeah, facebook and instagram and google all do the same thing they also attention to advertisers. Yep, and I think they they It was interesting like facebook's move was defensive in that they wanted to make sure that they captured instagram's attention and could sell that to advertisers too Google knew that they were gonna keep getting the attention, but basically wanted to save their margin a new a new yep And platform on which to do it Yeah, I'm struggling. I think it's an a plus He says in a very defeated. I'm defeated. I'm I'm limping into the a plus here then But which makes me think I don't want to be limping into the a plus. I want to be charging into the a plus You know, okay, what acquisition ever is an a plus Instagram. I mean Android has already made a lot more money for google and instagram has for facebook But I think I think this is what I'm having a hard time with and maybe it's just semantics but like Android has saved google a lot of money instagram has made facebook a lot of money Yeah, I'll buy him. Yeah, yeah, yeah Yeah, android is effectively a margin saver. Yep Hmm. Whereas instagram is like This is a new revenue engine for For facebook. Yeah, presuming that google would have gotten the queries from all the new people that were lighting up and basically like new people coming online for the first time All right, here's what I'm gonna say Android is my new gold standard for defensive acquisitions and is an a plus in that regard. All right I still like to play offense more than defense. Yep. All right It's interesting because at the time we just keep going back to this I don't think it was defensive when they bought it But what it ends up turning out to be is the most one of the most incredible defensive plays of all time All right on that note on that note Let's move quickly into follow-ups. Yeah, yeah, so sticking with google Couple episodes we covered ways This is one of those quirks of history on our show that I think we I think we spoke too soon here We we are gonna have to do a full follow-up episode on on this maybe maybe on Automotive technology generally at some point um, but within the last couple weeks Google and ways announced that they are now doing ride sharing within ways competing the product is slightly different but competing with uber um and lift too but competing with uber um interestingly of which google is a major shareholder in uber um And david drummond Google's head of corp dev and chief legal officer was on uber's board and resigned after this happened What do you think? Yeah, I mean it shows that uh I mean we are assertion with the ways episode was that mostly they were using ways data But not like doing massive reinvestments in that product to make google maps better and potentially um provide data for their self-driving car stuff and what they're showing now is that they're actually Using they're playing offense not just defense here to introduce new products and try new things and um You know, not only is it a new thing that that is interesting It's it's probably the most interesting new thing that they're doing that they're rolling out through and they've chosen ways And they've chosen ways. Yeah, super interesting. Not google maps. Yeah, the question is like so when they So that they're going to do their car sharing through ways right now their self-driving cars are much more of an independent thing Does that mean that they do a self-driving car service rolled out through ways instead of Well, I wonder here too how much the fact that google is a huge shareholder in uber and david drummond was on uber's board played into the decision to do this through ways here Like, oh, you know, this is this company that you know is still standalone they're based in israel and and ways had had rolled out Right sharing in israel long ago The news was that they brought it to san francisco, right? You know, so this is sort of like our independent division doing this, you know, not related to google corporate, you know It's sort of like a head fake here Had if google were not an investor in uber would they have rolled this out through google maps Huh, I don't know I and really the question is is it actually that much different than what already existed in in their uh israeli product and then they just decided like yeah, I will try to your two because it is actually as big a deal as the press and we are now making it out to be Well uber thinks it's a big deal for sure. Yeah, yeah, that's true Yeah, it's it to continue our our mentioned from earlier about how fast things change like Friends become enemies very quickly when things like this happen as we saw with apple and google yep, yep So who does new markets Read a lot of competition in five years who is uber using as their maps provider on android 100% uber Yeah, I mean they actually a lot of uber driver rides that I take now The drivers are using the native uber navigation and not switching over the way as a google maps But isn't it still like you still need the core maps product underneath even if they're navigators. Yeah, but uber bought Oh, I'm blanking on who they bought but they bought some assets from Nokia I believe I believe they brought your map to your part of that conglomerate. Yeah, huh all right Quick hot take not an acquisition, but we thought it'd be fun to talk about especially given the content of this episode apples big event launching the iphone 7 and And air pods or no air but air pods. Yeah, yeah, I mean, we're just seeing like the full maturation of mobile like it's interesting to see The phones are aware laptops were 10 years ago and um You know it starts to open the question for what's next like I got excited. I bought one That of course that was going to happen It's it's going to be an incredible product all the changes that are made are largely incremental except for their continued breakthrough advancements with the the cameras which I'm super excited about I heard another interesting point that this could be apples software and to vr capture That because of the dual camera system on the plus. Yeah. Yeah, that that's something that's kind of going Unset a little bit is uh You know apple just launched a phone that'll be in you know hundreds of millions of people's hands that has two cameras And they they can kind of do some interesting things with software with that later um who knows but uh Wait, so here's what's really interesting to me about the apple event um last week and i'm really surprised that people aren't talking about this or maybe just not people I'm following are talking about this You know apple is super secretive about their roadmap what they do they don't talk about anything But they do drop these hints, you know, and if you look if you listen closely to what they're saying It's usually not a surprise what they end up doing and I was really struck when they were talking about air pods Um and talking about the removal of the headphone jack and everybody's focusing on you know the courage right and like Yeah, that was probably a poor choice of words um but uh But here's what I think they're saying I think they're saying like We are moving in with our maybe it's the next iPhone Maybe it's two down the road or maybe this happens incrementally. We're moving to a world where there are no wires um, you know, there's there's no So cord to your earphones Uh, there's no power cord Um, there's nothing tethering you and that means that the device is actually kind of secondary And if you look at the air pods, you know double tap to activate Siri like we're moving to a world where computing is just On you part of you around you all the time people have been talking about this, you know, this is part of what Amazon is doing with Alexa um, but that to me was a really strong message from apple that coming soon Uh Siri which we've done our episode on Siri And we are then an I very skeptical of apple on this like Siri is going to Control your computing experience. It may or may not be through a screen Yeah, expect more chips and air pods to and air pods three and then air pods seven get excited because you won't need a phone Yep, and we'll go from there. We'll go from there. All right. That's our hot take carve out Yeah, mine's quick reading a really cool book right now Uh, it's called business adventures by john Brooks. Oh, it's so good. It's uh short vignettes maybe like 20 to 30 pages each that are stories of incredible things that happened in business over the last 100 years um, the first couple are awesome the 1962 stock market crash talking about the impact of the the fact that trades were happening at a higher velocity than could be printed out So no one knew what price they were buying things for when they put in a A bi-order in a sell order on on some of these crazy crash days and The second chapter that I'm on right now is the the colossal failure of the Ford Edsel and That's a good one and the kind of history and and how that came to be and just super great and really nice if you're Doing a lot of short flights or something like that where you can go knock out 30 pages But then you won't pick it up again for you know a month or something and don't want to forget their very kind of bites Yes, this is a great book recommended to me a while back by my buddy mad nirlinger who said uh at AVP which is a Growth VC firm in in San Francisco This I believe is Want to bill gates favorite books and I think his favorite business book. Yeah, he's endorsed it on the cover Killer hard to beat that Mine is also quick It is the ESPN OJ documentary It is so good have you seen this pen? No, but you were telling me that You got all everybody's got to watch this it is um five part documentary series Jenny my wife and I are in the midst of watching it now where we're through the first three parts So good. I'd say it's like it's like 30 to 40% about OJ and The rest the majority of about like what was going on in America? You know from the civil rights movement in the 60s up through the 90s and you know and then specifically like in LA Race relations in LA the police in LA, you know, I mean this is where NWA was you know I had there's so much deep history here. That's not um People know about but like this is just such a fantastic job covering it Also, I didn't realize like for people kind of been in my age OJ just like it's the trial right like that's all we think about him But he was an incredible football player like Like wait like head and shoulders above everybody else. So really great to watch Highly recommend to everybody. All right. That's what we got for you if uh if you aren't subscribed And you want to hear more you can get the subscribe from your favorite podcast client And if you feel so inclined we would love or review on iTunes Um, and if you want to share this episode tweet about it put it on Facebook tell your co-workers Um, yeah, really appreciate his listener. Thanks so much. Thanks to everybody. We'll see you next time. See you next time