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Episode 45: HTC, Google and the Future of Mobile

Episode 45: HTC, Google and the Future of Mobile

Thu, 21 Sep 2017 14:23

Acquired is back and live on the scene! After months of speculation, Google announces today their acquisition (err, "Cooperation Agreement”) of a large portion of HTC’s hardware division. What does this mean for the future of mobile? Can Google transform itself into a vertically integrated device company and compete directly with Apple? Most importantly, when will we see more Beats Android handsets??? (We hope never)
Topics Covered Include:
  • The origins of HTC as a Taiwanese OEM, dating back to the Compaq iPAQ and Palm Treo 650!
  • HTC’s long history with Google, starting as the manufacturer of the first Android phone, the HTC Dream / T-Mobile G1
  • HTC’s ownership of Beats, for a hot minute
  • Google’s own winding history in hardware, with its Motorola acquisition in 2011 and divestiture in 2014
  • Google & HTC’s joint work on the Pixel smartphones in 2016
  • And much analysis and speculation on what this means for Google, Apple, Samsung, vertical vs horizontal business models and more!
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Well, this is nuts. It's like leaking out as we speak. Yeah, coming at you live Welcome back to episode 45 of acquired the podcast about technology acquisitions and IPOs. I'm Ben Gilbert I'm David Rosenthal and we are your hosts Today we are live covering the leaks as they come out Well, Google is is apparently about to acquire HTC or at least a part of HTC and David and I are hitting refresh on our browsers while recording this on the evening of Wednesday, September 20th around 8 p.m. Pacific time and Even since we decided a few hours ago to shift course and dive into this episode instead of one that we will do next week That is less time sensitive We there's been new information. Yeah We're coming at you live here on acquired So we decided that there's the way we want to structurally do this is we'll sort of state our assumptions about what we know because Dave and I were talking about it and we're pretty sure that we know the majority of the information that will be announced tomorrow And so we'll sort of state we know and then You know if we need to pop in and revise at the beginning of the episode or something which you will have already heard if you're listening to this Then then we will so everything Everything that you'll hear is based off of some some assumptions that will introduce. Yeah, there's like there's some serious time travel going on in this episode You guys will be listening to this in the future. Obviously. We're here in the evening Pacific time on September 20th It's already morning in Asia And so the official news is is starting to come out over in Taiwan And of course the leaks were coming out yesterday in Taiwan, which is still today Here in here in Pacific time. Yeah, and the most the most obvious one that's that's not a leak That's a public announcement is that HTC will not be trading tomorrow because of a large announcement that is likely to significantly impact The shareholders so 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 founders 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 listened 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 and 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 puner 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 their 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 Now David before diving into these acquisition history and facts of of HTC Let's let's throw out for the audience what we know and then what we believe now right so tomorrow September 21st it's looking like it will be announced that Google is going to acquire a Large portion of the engineering team at HTC so they are not acquiring the whole company is the best information we have thus far But they're paying just over a billion dollars to acquire about half of the employees and specifically the group of hardware employees And I believe that's also along with the manufacturing plants and supply chain assets That worked on the Google Pixel phones that they released last fall that HTC made for them So that is that is current state of play they're acquiring about half of the people in the company But the HTC has a company itself and all of its brands And its own operations are still remaining independent Fascinating and other products right so the you know the vibe Yes, yeah, not just the vibe of other products, but HTC's own non-Google smartphone efforts so very confusing They are going to continue to be a smartphone hands-et manufacturer on their own But sort of the A team that was working directly with Google on the Pixel phones and other devices is now coming over to be Directly part of Google. Yeah, and we say the A team, you know, there can be furious debate about HTC and who's prioritizing what and who they put on which projects but one thing that you cannot deny is there was it was very very widely publicized and and covered that you know the the Google Pixel was the best Android phone ever made and set the new standard and it's that team that that You know worked on an amazing product and obviously Google did lots and lots of the design there but We are getting ahead of ourselves so David so let's tell us a little about HTC. Yeah, let's dive into history and facts and rewind the clock and HTC is is Not you know, it's a it's a household name in the US, but But only recently however has been involved in many products over the years that that our listeners will probably recognize So the company was founded in 1997 in Taiwan. It's a Taiwanese company and And they began life and for most of their initial life were just an OEM so an original equipment manufacturer they were essentially contract manufacturer for other tech companies They didn't have their own brand and then over time they built their own brand, but obviously just like the Google Pixel and other devices they continued to build products for other brands and and when they first started in 1997 they Right out of the gate worked on on laptop computers But then pretty quickly transitioned to Cell phones and this was before you know smartphones as we know them today but back then smartphones and smart mobile devices were pda's personal digital assistance so HTC actually This is a blast from the past was the manufacturer and I believe also involved in in elements of the design for the HP and compact iPAC Windows You know personal assistant and remember that one and then also a pretty popular device the palm trio 650 which I think if I'm remembering right was one of the first Palm you know slash hands-bring trio devices that was also a cell phone Huh, huh, yeah, that's crazy I didn't thinking about this you know, I always think about there are the the few manufacturers that actually made their own stuff And palm always occupied that space in my head You know as did Nokia and you know Apparently Palm didn't make all their own stuff and I don't know I'm not actually sure if did they manufacture other products? Do you know? Yeah, I don't know and Palm itself that'll be an episode of an episode someday It was you know a darling kind of start-up Tech company and in the valley in the 90s and then ended up getting acquired by three calm, right? Is that right? Palm which it's yeah, it wasn't palm part of three calm at one point Well eventually they ended up going to HP And getting bought by HP after the part of pre Which was what that was a shame like web OS was a absolute pioneering product and the palm pre was was a Controversially yet well-designed device and I think you know to absolutely languish at HP Yes, that's that's for another day. Let's let's definitely do an episode another day Okay, okay, I just looked it up quickly. Yeah, Palm was acquired by US Robotics Corp in 1995 and then US Robotics was acquired by three calm. So it was Out of like spin out yeah, so then the founders left Three calm because they were you know unhappy and and started handspring and that's why handspring and Palm It was always that confusion Anyway back to the topic at hand So HTC is in the middle of all of this I mean they they're like the OG players in the smartphone game here and And even going back to the founding of the modern smartphone game Obviously they weren't involved with Apple and the iPhone although they did own beats at one point in time Which we'll get into we also covered this in our Android episode episode 20 Which is very relevant here? This should really be like the the Coda to that episode But HTC was one of the founding members of the open handset alliance Which if you might recall from that episode was Google's initial smartphone efforts That turned into Android and so HTC when it and what became Android The artist that would become Android finally launched in 2008 the very first and only for a long time Quote and quote Google Google phone was the HTC dream which in the US was the T-Mobile G1 And that was made by that was made by HTC and that was the very first and again only Android phone for quite a long time Yeah, man, I were playing with prototype hardware of that I mean like 2007-ish and I think that's right and that was that all right Maybe it was just very early hardware, but that was like It was hard to believe that that was the future. I mean, I know everyone was all excited about it And it's in a lot of ways the same way now that people are are showing off like an extremely crummy experience in IoT and being like IoT is the future And you're just like, yeah, okay You know, I don't think I've ever actually used one in person. I've certainly seen them But this thing we'll try and link to it remember to link to it in the show notes But so it had like a track ball on it, right? It had a track ball and then it also had a slide up physical keyboard. This was like you know the sort of unholy marriage of like a Blackberry an iPhone and like one of those super old school 80s track ball, you know mouse mice for a computer Well, yeah, I mean this was like when When Android was still basically kind of an open source Copy or perhaps inspired by Blackberry before they spent The better part of a decade do it, you know becoming that that of iOS and it was you know at that point in time Like it seemed like that that Blackberry physical keyboard You know have a little Cursor on screen seemed like that was a form factor, right? Like that if you're gonna that's what a smartphone looks like if you're gonna go make a smartphone Yep, yep, and of course there was danger and the sidekick At the time too that was also inspiring all this and I think back on the entry to episode we give a shout out to that That entourage episode where turtle gets a gets a sidekick and All this is like so dated now Always fun So HTC again like right in the middle of all this the very first Google phone very first Android phone And then they they really stay at the cutting edge for for quite a while in the early sort of modern smartphone period They built and launched one of if not the first 4G phone that was available in the US I think It was on sprint and I'm forgetting right now what it was called, but it was it was like they marketed the hell out of this thing I think it had probably like an you know like hour and a half long battery life but it was the first the first mobile phone and and Network in the US that that you could really like use it and it felt like broadband I mean before that there was 3G of course, but like it was sort of not that much faster than the old dial-up days So they were they really were you know pioneers of a lot of first they were and and you know still You know, but you could argue that the the vibe is really Valves innovation and in a lot of ways it is and a lot of the control rests with with valve We can talk about just like Android was you know Google and well Andy and Android and Andy Rubin's innovation Yeah, yeah, but the factor mains like absolutely a pioneering device and HTC you know largely responsible yep, yep So that was kind of the high point and I think that was right around Trying to remember like 2010-ish I think when when that phone came out And in 2010 2011 like HTC was really on the rise and people thought You know that they were gonna be a really credible competitor to Samsung and a dominant device maker in the in the smartphone era unfortunately Since 2011 at its high point That has not happened over the last five to six years and the stock is down 90% since then so HTC now well as of yesterday before they halted trading had a market cap of just under two billion dollars in US dollars which is down significantly from from where they were at that peak I think they were I think they were around Somewhere between 20 and 30 billion dollars at their peak Yeah, and I'll I'll embarrass myself a little bit here I was texting David earlier and I looked up their market cap just on on Google Finance and I was like whoa David I mean if this is gonna be a really splash billion dollar market cap and then like a few hours later as you're doing your research you texted me back You're like that market cap is in Taiwan. He's dollars and it's only it's only about 1.9 billion in US dollars And like thinking about you know what what HTC was and in my head they still occupied a brand yeah a large brand You're like oh yeah HTC's a 60 billion dollar company for sure No, unfortunately for the AOL was a 150 billion dollar company. Yeah, and again, you know we like I I mentioned this earlier a minute ago and and we talked about it back on the on the Android episode but Just like you can't make this stuff up. So in 2011 right at its peak HTC acquired I believe a 51% stake in beats So this was back when beats was was just the headphones was dr. Dre and Jimmy I vine and and and they were gonna buy this brand and this great audio technology Integrated into their design and manufacturing and supply chain expertise And basically what happened was for about a year to 18 months Every HTC product across their whole line, which wasn't just smartphones But but mostly smartphones had beats branding plastered all over it So you can still go on Amazon and eBay and get HTC beats Android phones. I mean they're HTC by Totally so You know What did Steve Jobs think at the time? Well, I mean if this co-branding stuff like Apple is not immune from this if you remember the the first Um the original iPod has a motor roll come out it was HP oh I'm sorry So they had the motor rocker also, but there was an iPod that came out that was an iPod HP edition Yeah, it had like an HT brand on the back above the Apple brand. It was the weirdest thing. Oh Man Apple you know For all that they really we're gonna talk much more about Apple in this episode, but As we have always on this show Um for all that they really are so often at the top of their game Sometimes they just do things that you look back on them and you're like what were you thinking? Um So so HTC in 2013 Divided their stake in beats sold it back to the company. I believe I want to say Carlisle came in and did a big Uh private equity infusion into beats and they bought back the stake and then of course it was uh Just about a year year and a half later. I think that that Apple acquired the company um So that was that's our that's our sidebar HTC of course also as we've talked about in 2016 in partnership with valve created the Vive um which still I think is uh is probably arguably the best virtual reality experience out there um better than better than Oculus still I believe uh i think so uh we can certainly fanboys will argue that you can argue in the comments Or in the slack, but um uh again really you know they It's really interesting the approach that HTC has taken to innovation they've sort of been at the forefront of Every tech wave that's come over the last you know 15 years 15 to 20 years really But they don't do it themselves. They always do it in partnership with with other companies um Yeah, and they can't seem to strategically position themselves to hold on to the most valuable asset as it grows. I mean that that Yeah Over and over and over failing as a company to do that Yeah, so Speaking of Let's bring Google into the story here Uh and we'll pick back up again Right around 2011 when HTC is sort of at its height uh and Google at that point um Samsung was was really you Google sort of had a problem that Samsung had taken Android they were by far the most successful powerful OEM out there and they did that basically by taking Android As an operating system, but then in every other aspect from hardware design and all the skins and modifications that they made to The Android operating system and software they just copied the iPhone and so Samsung phones were if either you didn't you were on a carrier that didn't have the iPhone Which was still a thing at that time Um or for whatever reason you weren't part of the Apple ecosystem But you wanted something that felt like an iPhone you went with Samsung And Google of course uh was threatened by this for for many reasons They decided to acquire motorola Now this was for two reasons the the primary reason and what they said at the time and um in retrospect Probably continued to justify was for patent reasons There was a lot of litigation happening in the smartphone world Um and in particular in the smartphone operating system world at this point Um and and Android of course was open source So they needed patent protection motorola had a large patent portfolio So but they did actually acquire all of their smartphone manufacturing business as well And they spent a lot of money for it Um they operated motorola for about two and a half years And and they released you know one number of Uh devices smartphones kind of at all ranges from low end to high end Uh want particularly successful um and then they sold it to The Chinese company Lenovo in 2014 for about three billion So they paid 12 and a half billion for it They kept the patents They also sold another piece of motorola's business which makes uh the cable boxes for your house So for a comcast or time-warner or whatever Um they sold that off for I believe about two and a half billion right after they did the transaction So let's say they paid 10 billion uh net for motorola Uh and then two and a half years later they sell it for three billion under three billion So so not a good uh not an auspicious beginning to Google's efforts in the smartphone No no so I mean if you're a shareholder right now like you need a little bit of an explanation Like and I mean I mean today like if you at first glance Just here and I know that details that are a little bit different than this but like Google's buying HTC or Google's buying the arm that manufactures the phones of HTC or even go You know whatever it is like uh Okay, like we've tried this once so how is it going to be different this time? yep well and and We'll see how it's different. We've been and I will speculate on how it's different But there's one thing that is The same history repeating itself and that's that there was an executive within Google motorola uh named Rick Osterley uh Osterlo and he ended up by the end of of Google's ownership stewardship if you will of motorola Becoming the head of that unit and then when they sold it to Lenovo he continued running that unit under Lenovo Last year in 2016 he left and came back to Google and so he is now running Google's quote-unquote hardware business uh reporting to Sundar and And um and so he that division is responsible for Everything that they launched last year the Google home the Google Pixel which we've referenced and we'll talk more about um the daydream their their VR Headset adapter for smartphones all of that so it's It's really they are In many ways with the same people executing the playbook all over again Yeah, but uh, you know we'll get to this but times are different now, you know and they are and I want to pause real quick So times are well a few things times are different now the mechanics of this deal are completely different um and on top of it um You know, it's probably worth talking about the patent portfolio uh motorola had and um you know There's there's a lot of speculation and you can read plenty of think pieces about this um about the real value of that acquisition Being the IP and Google retained a lot of that IP I believe when they sold um sold motorola off and so then it's you know highly protective for Android so that There's more to this than meets the eye um And you know it's just worth calling out it how big of a player um or how big of a deal IP was as part of that Motorola transaction it absolutely was but what's super interesting is like Again, that was the story and then when they sold motorola um That was that was the real emphasis that they said on the story. Hey, this was really a you know an IP thing and We dabbled in hardware. We decided it didn't make sense. We were you know I'm sure in tech themes we will get into the you know vertical versus horizontal approach to to a company Uh, didn't make sense Uh as a horizontal provider of Android to also be a vertical provider and compete with our partners Um, but now they're doing the same thing all over again. Yeah. Yeah. Yeah, and it's worth pausing here for a second So uh listeners um, I think this came out right before we started recording Google has confirmed the news Google signs agreement with HTC continuing our big bet on hardware and Written by none other than Rick Ostrilo who David just uh just mentioned and the key uh sentence in this blog post is um Let's see here with this agreement a team of HTC talent will join Google as a part of the hardware organization These fellow Googlers are amazing folks. We've already been working with closely on the pixel smartphone line And we're excited to see what we can do together as one team the deal also includes a non-exclusive license for HTC intellectual property And they're calling this an agreement. So it's it's not you know no one's saying acquisition no one's saying Um purchases. It's it's an agreement and of course it's four one point one billion dollars of cash that that goes over to um to HTC But okay, so we have definitive news that that it's basically you know exactly as as all the speculation was uh about that specifically that hardware engineering team um and the the other interesting thing here is they have a non-exclusive license to HTC HTC's IP So does that mean like all of HTC's patents are you know Available for Google right now and obviously HTC can do other things with them and license them as well But um that's kind of interesting too. I mean that definitely bolsters the value of the deal Yeah, and it's interesting. I mean like we were talking about earlier how much of The innovation that was happening in these products, you know even going back to the g1 and uh the HTC dream the first android phone Like how much of that IP was HTC's how much was Google's um Impossible to know right now I'll be curious if this comes out in the filings when they when they happen Yeah Yeah, me too and I think um Eh it I can't you know, I'll say this now when I talk about later Google uh you can definitely sense the um We've been burned once and now we're going to be very methodical about this approach here like it's A smaller price tag 1.1 billion. It's just the The engine your team, you know, it's it's yeah, yeah, and I mean if you look at it um It's really only exactly what they needed and they spent you know years first engaging with this team doing a try before you buy Yeah, I mean that this is a highly calculated highly risk mitigated um, transaction by by Google Yep And yet at the same time well we'll get here and tech themes But they're still again deciding to uh be both a horizontal and a vertical player in this space so David just plug yours in la la la la la la yeah right right right All right, let's go there. Okay acquisition category. Yeah, yeah Well uh go ahead. It's it's quite literally a people like a talent acquisition. I mean it's a team. It's the It's it's let's not call it an acquisition Ben. It's a it's an agreement. It's an agreement It's an agreement. Yeah um An agreement to make 2000 of HTC's 4000 people Google employees Yes Um, I'm actually quite curious how the mechanics of this work like I hope there's kind of filings about this and David You might actually have have good insight but uh like Do those people all go into a sub entity temporarily along with uh the license to the IP and then Google buys that sub entity for 1.1 billion or can they actually just yeah, I don't know give a give a bunch of cash and then say all right You know these employees all work for us now Oh yeah, well, I mean I got to assume that Most if not all of that cash is going to HTC because HTC it had huge losses as we've as we've talked about yeah for the last few years and You know their market cap before today was was Less than less than twice that 1.1 billion dollar figure so Um that amount of cash is is in the bank is going to be was desperately needed by the HTC folks Yeah, totally and uh this is actually great segue so instead of um Um, what would have happened otherwise this time we're going to do what will happen now That hasn't happened before or what will what will happen in the future that isn't happening now um because of this transaction and We'll talk a lot about the Google side, but it's an interesting thing on the HTC side like they've had mounting losses um, this gives them At 1.1 billion dollars of a capital infusion to do something with their business. They're still making handsets They're they're the hardware partner for manufacturing the Vive like if you're HTC and you're trying to sort of like steer the ship and trim down and I mean I guess maybe you look at it like well whatever revenues we were making from Google Isn't going to be the long-term strategy. So let's just jettison this team get all the cash flows from that up front now And do something else with it, but what is that something else? Yeah, what is that I mean that is the the $64,000 question here right like or a lot more a lot more money than that Given their history of as we've talked about thus far on this episode how they operate The type of innovation they do. I mean they really are like they are a at their best when they're a contract shop um And again, that's what they were doing with with Google in the pixel and and that worked well right like Google ended up buying that whole team um You know they they did that for a long time and then they tried to build a brand on their own on top of that They had some success, but it wasn't sustainable Um, I'm part of that I think was was probably because they you know, they were they were still writing on you know Google's platform um, I think it's very hard as an android manufacturer to build a real brand um even samsung is is very vulnerable as we've seen in the last couple of years um But so now what are they going to do right like they did they go back to Square one and say you know, there really is an opportunity Be it in smartphones or or other emerging devices and categories to be a great Contract manufacturer do they use the resources to go back and do that and build up that team again? Do they Create their own real IP? I don't know. It'll be very interesting to see what happens So maybe This is one place where I'm a little out of my element But if you're a contract manufacturer How much different is that then being foxcon or is that the same thing as being foxcon like could ht HTC pivot purely into a b2b company shed their brand and and just start um Yeah, you know making doing manufacturing to spec and Like the when you think about it like is that effectively what the team Was doing that was doing the the pixel manufacturing or as a raxual like you know Engineers there on the htc side doing design work Uh, I don't know. I'm not totally clear on on how much different Um the htc contract sort of manufacturing was then what foxcon does for apple Yeah, I don't uh, I don't know the delineation either Um, but certainly foxcon, you know has built a very very large business Um on on just that strategy of we are a b2b company Yeah, and what I was gonna suggest is like maybe maybe go for it Well, I was gonna say you know too uh in other uh adjacent industries in particular the semiconductor industry Like this is also a very sound strategy. You know if you're TSMC which is Taiwan semiconductor company um Uh, it's interesting that these businesses of course tend to be um Particularly thrive in Taiwan and in Hong Kong where where foxcon is Because of the proximity to China and the ability to do business there um um You know you can you can build a great business and being uh being a foundry for uh for semiconductors where you don't do the design Uh, there are lots of of fabulous semiconductor companies that are either independent companies doing their design or You know folks like apple which again we'll get into later in this show um It can be a very sound strategy Yeah, and and I was I was gonna work myself into a corner a little and say well, maybe what HTC should do is you know start Shedding their consumer brands and really just be this contract manufacturing shop But if they do that then companies like Google will come along and just buy them so they don't have to Pay a contract them But clearly that's a model that works apple hasn't tried to buy foxcon or bring any of that in house Um the fabless semiconductor companies I mean granted maybe if they took a huge hunk of capital then it would actually make sense to to fab them themselves But sort of being a horizontal manufacturer seems to work Um an HTC could sort of move into that Yeah, and I wonder if I think the key is we just don't Know enough uh right now and haven't been able to do the research in a few hours Since this announcement happened or since the rumors swirled um um to know for for HTC like where where did they play in that value chain like it was the quite this is the question you asked like how much were they The country just the manufacturer? How much were they involved in the design? How did that change over time and um And it's interesting that like sort of counterintuitively. I think in the world we're in right now in tech when you're competing against uh app you know apple and in really every category But also you know companies like like same song and and increasingly google themselves um design It is really not valued. It's it's sort of you know back to bentobson smiling curve You know either you're at one end of the spectrum where you're just the contract manufacturer. You are the semiconductor foundry Uh or you are You know really controlling the user experience Um like apple does and like google is clearly trying to do now with with android and with this acquisition um But if you're in the middle there like that's a bad place to be Mm-hmm. Yeah, I completely agree Hmm Well switching over to the google side Um, what does this allow google to do that they're not currently doing it's So there's a there's a couple that let's presume they were just gonna um go forward with the pixel line no matter why and really start doubling down on that and in tech themes we can talk about why um So this presumably Makes it so the teams can work more efficiently together Being under one roof so you don't have sort of that weird contractor arms length thing that has to happen not to mention sort of uh Um if you're an engineer over there who's collaborating with google you sort of have two bosses You're you're the business interests of of HTC and then um shipping the best product you can with google um So that gets eliminated a little bit uh For google, you know, they're they can there's those inefficiencies where they can move faster um But what is it by them? You know, I'm sure I'm sure they had some kind of agreement where they had access to HTC's IP before and they were gonna keep working with this team anyway And they were basically just gonna defer the payments to some kind of like, you know Contract that that was that paid HTC over time like what else do you think this buys google? Well, I think one thing uh if If trying to imagine myself in in google executive shoes and in richustra those shoes um You know, I think it's a little easy from the outside looking into dismiss supply chain as like Oh, yeah, Fox Connell take care of that or whatever but like I think this buys them a meaningful amount of supply chain expertise and and assets. I mean, I think about I think about apple and how much They have invested, you know, both monetarily, you know billions and billions and billions of dollars, but also human capital wise and and expertise and know how in their supply chains and part of that is internally at apple And their people but part of it also is their relationships with fox con and other manufacturers um, I mean Right like this is Tim Cook or a like Tim Cook is the CEO of apple and this was his job like this is so important at apple And has been for the last you know decade plus that that's why Tim Cook is the CEO, you know, not Johnny I've um and That's the DNA that the google really had zero of you know They maybe thought they were getting it with Motorola, but but Motorola was headquartered in Chicago You know, you can't make you can't make iPhones or pixel phones in Chicago for for a lot of reasons Yeah, but you can in Taiwan and you can in China Great great point. I remember even when you know A few years before Tim transitioned into the CEO people sort of realizing that Um, one of apple's major competitive advantages is and this is before they were making our own silicon too They had bought up like a year or two of the entire world's supply of many of the components in iPhones Because they knew they could justify the demand for it And so no one else could get that generation of whatever the thing was even you know, even processors to some extent for like many months after apple ship something Yeah, it's a huge competitive advantage Um Yeah, I mean, I'm thinking about was it uh Right after the apple event last week where they announced the iPhone 10 not X The iPhone 10 wait will there ever be an iPhone 9? I mean that is the question right like I don't understand like let me take a quick aside here. So I think apple blew it uh like to me It's it's like you should have this iPhone X or whatever iPhone it's an iPhone 10 But like have it be this thing that's like not part of your numerical line That's like a sidestep to a new thing So when you want to start building your generations like how it went Adobe decided that they were gonna go from like Photoshop 7 to Photoshop CS and now you're in like this creative sweet world Like they the opportunity to sidestep and start a new thing now and like they didn't Um, but they have did right because it's like an X not a 10 so Okay, so all that's weird because with iPad they they to my mind like they did what made sense with the iPad They went just Got ditched the numbers and like there's iPad there's iPad pro, you know Why isn't there just like iPhone iPhone pro and if it's gonna be a 10 and it's gonna continue just could do a 10 like It's really yeah So confusing and here's the funniest thing is so you're I was listening to everyone should go listen to dairy fireball if you're like an apple And I'm sorry the talk show Yeah, okay, so this is what I was gonna reference so we'll bring it back to topic in a minute. But go ahead So John bumps into Phil Schiller at a at you know after the event because they get these press briefings and stuff and Phil the first thing Phil looks at him and he just says Hi, John we spent a lot of time on the name Sorry about that sorry about the 10 thing which is crazy the sorry about the 10 thing was crazy because like Gruber wrote this piece like two hours before Phil Schiller step on stage to announce it So like he knew he had read Gruber's piece or been alerted to it and and Gruber called that it was gonna be an iPhone X And of course it was an iPhone 10 Which you know he ate some crow on but like Like I don't understand why though I will I believe you that everyone's been a bunch of time on this I just like I'd killed another rationale because it doesn't make sense to me. Yeah, it does not make sense Like why would you release an eight and a 10 at the same point Anyway, we've gotten way off topic But Gruber also of course had Craig Federighi on a special episode of the talk show And I remember if I'm if I'm remembering this right Craig was saying you know John was asking about face ID and like everything that went into creating that and I remember Craig saying in response Like oh, you know, it was it was of course the engineering team and hardware team software team working together But it was more than that. It's more than that apple Who's the security team working with them and I remember him saying it was also the ops team and our supply Chicken was a big part of that like you can't make The iPhone and you can't have all the stuff that apple can do with the iPhone by integrating everything That leads to features like like face ID You did ops and supply chain is a critical part of that yeah Totally true and man after after seeing that episode I'm sorry after seeing that Um that apple keynote like to think that's such a great lens to think about doing this episode because The amount of things that were launched that only work as well as they do because of the integration of like Not only hardware software in the way that we used to think of it like cool You like assemble all your own components into a PC and you own the and you build the hardware I'm sorry and you build the operating system like the notion that they Control to the finest grain all of the power management and core switching in the CPU and how that works with the secure Enclave to do the security stuff and how like they can do the swipe up Um from the bottom of the iPhone While the face ID thing is still reading your face and then get the signal at the last second to unlock the like All the timing and all the user experience stuff It it's really starting to become so much more than just being the component integrator and the software maker It's really like the component mate like that you have to create the components in order to get the some of these Really incredible sort of Micro optimizations that in aggregate create a whole new class of product as possible today. Yep, and that is you know Supply chain is critical to that and and you know before um before this Partnership that Agreement that Google just reached with HTC Um, they were really hugely behind. I mean, they're still hugely behind Uh on that on that dimension Um, but I think it it you're absolutely right and I think as um as the Smartphone slash whatever the smartphone evolves into be it you know AR glasses or or wearables and watches I think it'll be probably all of these things as that technology platform matures the table stakes for that level of Supply chain and ops integration to be able to do these things just gets higher and higher and higher um, you know, and I think like Is the apple keynote again is the perfect lens to see that through Where of course there was face ID and and all the things happening there between the sensors The software and security working together and then of course ops to have all of that sourced and available in you know billions of hundreds of millions of units but uh, but also in um in in the processor again through you know Throwing back to our our p.a. semi uh and an authentic uh episode That was not one of our more popular episodes, but I think is a really critical one to also understanding this like Yeah, the a 11 chip, you know bionic quote-unquote It's crazy. Yeah, I mean apples new. I don't know what's going on with the people who name stuff at apple right now like Keep it simple. It's like you can readably throw biotic on something they threw bionic on something else too There was like some some part of um I forget if there was something else later in the keynote. There was also arbitrarily bionic I think you had to do a face ID I know it's part of the iPhone 10 announced when I'm like what is bionic and what is not what is biotic seriously seriously? um But like that chip is a beast right like it is like it's benchmarking at the same level or higher as Chips that are in MacBook pros not like old MacBook pros like MacBook pros that you go and you spend two thousand dollars in an apple store today for Yeah, and and that's in a phone on your pocket that is not connected to power that's running on a battery like That is what when you make these types of investments and that's controlling the whole stack from the chip design You know through the p.a. semi acquisition You know all the way down through the supply chain and the software coupled with that like that enables you to do this kind of stuff And so I got to imagine like your Google and your your your your Sundar and and looking at this and you're like Okay, we've got the software like Google is our core competency is software That's what we do is like android has gotten great and creation and great services. Yep And we were your software and services but like hardware Supply chain like we have none of that um and and I think as as the world moves more towards all of these Things that really really are about making the devices themselves to disappear into the background If you don't have that that expertise like you're you're just you're gonna lose Yeah, the best way I can summarize this is uh Of course As with many other episodes What we're talking about is one of apple's competitors We drift into talking about apple and then just like laughing about how far ahead they are but it really is like Like apples playing a very different game Then everybody else and so you know in in making their own silicon and and having done this for years now um and controlling the operations and supply chain in this way that no one else is doing because because nobody else is um Yeah, well that's what's really interesting about it though They people say apple makes their own silicon that that's not true. They design their own. That's right TSMC and then they can and they control all of the supply chain But TSMC and and Samsung and and others, you know, they're the ones who actually fab the silicon it's a great point That's a really great point And so then at what point did you have to go deeper and integrate that? I mean is that the next step like did is there some optimization that happens between design and manufacturing where it's beneficial to actually start owning the manufacturing? Yeah, well, it's interesting. I don't know. I mean they haven't you know with Foxconn They haven't with TSMC and Samsung when on the foundries. I wonder if it's just like you know those Services are pure commodities. They're very very capital intensive commodities And Apple certainly could make those investments if they wanted to but But there's not a lot of differentiation within them. Yeah Yeah, that's a great point Okay, so we'll be okay You know we'd be kidding ourselves to say we're not already in tech themes But it is interesting to think about like you know the the features that are now expected in phones Um and a our kit is a really great example of of you know You know new new new stuff that's going to be available on iOS 11 that takes advantage of a arcade Especially on all the new Apple hardware that's kind of purpose built for AR kit um It's all of these new phone experiences Require a new level of design and integration with the hardware that that really wasn't necessary before and so The way that I am viewing this acquisition is Like a acquisition agreement uh is Google is still a horizontal company and they need to you know they make money 80 plus percent of their money from or may as even 90 plus percent of their money from ads and specifically from search ads and so you know that Going back to our android episode the reason that create they create android is to Reduce the amount of licensing fees that they need to pay iOS or need to pay Apple to make Uh, Google the default search in iOS like that's as when it really comes down to it You know, I think what did we determine that number was like a billion dollars a year that it saves them Bill is a year yeah a billion dollars a year. Well a billion dollars a year that they're paying to Apple Uh, even that's right. That's right. Well, but it's interesting and when they started android that was the strategy But you know you replace Apple with Microsoft. They thought Microsoft was gonna down in a mobile operating systems like they did on desktop They didn't want to be beholden. It turned out they were right Strategically, but they just had the wrong competitor. Yeah, interesting. Yeah So yeah, so for listeners who didn't listen the android episode um, you know the the core play with android is uh uh, own the front door to the the user so control the browser that they're on control the operating system at that they're on so that they don't have to pay uh, uh, basically affiliate fees for every search that's conducted and every ad that's clicked on Google to the the the browser creator and so when you start putting that lens on then you then you start have to think like okay So Google needs to sort of be Switzerland because they need to be ubiquitous and have everybody use them But if this android strategy is to you know make sure that that first some significant number of people they're they're controlling the whole experience like android has to be credibly on par with iOS and if the table stakes have now risen to level where you need to do like ridiculous hardware integration and potentially even like manufacture your own stuff to enable the types of features that people expect from their phone experiences now or will expect in a few years when some of the stuff um, you know face ID uh, AR kit um a lot of the performance and um um Power management stuff like when that becomes completely commodity like Google's gonna be hosed on this whole android strategy if They um, you know, they don't have that and so this thing that they've been doing forever of like hey guys Like we're not gonna you can all samsung you can make money on android phones by making them and we'll just produce the operating system Like that could be falling apart because that's no longer competitive with apple in this way this new world Could be falling apart and could be falling apart quickly and it's interesting also to think about you know Go back to our our episode on the snap IPO and the narratives around snap um And it's I think it's still too early to make a call on on them as a company but but what we decided was Their fate is gonna lie with do they You know can they essentially paddle over to this wave that is what we're talking about Call it a r call it wearable, you know, whatever it is, but it's essentially Devices receding into the background and technology just being part of your ambient life um, you know, what are what is snap investing in what are they doing like spectacles, you know What room is there for Google and android in that world? Not a lot basically in a in a spectacles world whether it's spectacles that win or don't win or whatever There is no room for Google anymore Hmm Both either at a at a hardware level or a platform level or an advertising level Yeah, I look at that differently like for Google's core businesses making money off of people who are looking for information Um, and I don't I just don't think snapchat. I mean snapchat is more um I I don't I don't think it's apples and apples apples enough. I mean, I I agree with you where Um, it's clear that snapchat is making an investment and trying to become a little bit more of a hardware company and now Google's following in suit um Oh, yeah, no I I I didn't necessarily mean that as like snapchat itself is going to de-throw in google but like think about this right like Take the iPhone event last week or the apple event last week. You've got the iPhone 10 um, which clearly Whether it's this year or next year or two years like they are laying the groundwork for an AR slash ambient future that the iPhone is part of or or a hub of um, you've got uh, you've got the apple watch series three which I'm super excited about by the way um, which is like there is no you know uh There there is no phone there is no you know um Device really it's a thing that sits on your wrist and like all the computing is just around you um, you know, then you've got you've got snap and where you've got spectacles Uh, not to mention the snapchat experience then you've got Facebook Um, and you've got everything they're doing with Oculus and then and the core Facebook platform itself like you can start to see a world where like all of those Devices and services all work together really nicely um and like where's Google in that world? Mm Yeah, I see we're going there This actually this deltale is nicely with uh, I don't know if I've talked about this on the show before but I I think um So Google is in many ways their own existential threat And I think uh So follow my logic on this for a minute. So Google Their core competency as a business is making money off of showing you a list of things and then charging somebody to be in that list and Their core competency from an engineering perspective is you know recently machine learning but you know So dating back to their beginning sort of distributed computing distributed storage Um, all these things are sort of stepping stones to the to becoming like the best company at machine learning and There that that leads in many ways to them being the best company in this voice world where the Google home and Google assistant is a really really You know pioneering fantastic voice service relatively others and so Google's engineering Um The things that they make them good in engineering um are Are pushing them toward a future where they don't really show you a list of things anymore because voices is When it's an output is not a really good way to ever like list off stuff It's a good way to like just do one thing So you you tell to do a thing and it does a thing and like imagine if you're no longer searching getting a bunch of blue links and getting one blue link That's paid for and it's more like You just yell something at it and then it gives you the answer and like where where do they start charging for things in that world Like do they start blending um paid and organic results where sometimes you're getting a sponsored one or do they Start moving shifting their business model where they're realizing that well actually You know, we're about to be best in class at this new form of hardware and new form of experience that people want Maybe we just double down on that and actually own the full you know user experience at the hardware level Yeah But again, it's dangerous and uh Maybe we should officially move and detect the aims here and and this is this is where right like I think Google's in a Challenging spot because they're sort of being forced to compete on this playing field that we've been describing for the last you know 40 minutes here But 40 45 minutes um But they are fundamentally a horizontal company and the playing field we just described as a vertical vertically integrated playing field Yeah, I guess I guess what I'm saying is I think the horizontal company Maybe at risk Um, and that business may not be something they can keep riding for the next decade and um, they made they mean They It's hard to say this yet because they're so dominant, but like you could imagine a world in a few years where like Search revenues start declining um, because they're getting the the the best user experience that wins in search is providing you one answer And like they need to do something dramatic and this really sets them up to to try and shift to a vertical company Yep, yep, but again, they're really far behind. I mean, yeah, they have to do it like this is For all the money and resources Google has and and all of the Threats that we've been talking about and again, where we're probably being dramatic uh Given where we stand here in September 2017 um But you know like if there's one constant in the tech world It's that it changes and it changes fast. I mean even as we've been talking through this episode and the timelines Thinking about on some of these devices like it was not that long ago, you know like 2011 though six years ago HTC was on top of the world and like coming out with the first true broadband, you know smartphone That feels like ancient history now Um, so anyway. Yeah, I mean, it's I guess I guess the interesting thing is like Uh, how fast will we get to a post-search world and is there anybody who can beat Google to that punch? Yep And if so then they got to verticalize quickly and try and beat whoever that is Um, I don't know. I mean the the counter argument to that is searches an incredibly hard problem They have so many years of doing it. They have so much data Um, they've built all these incredibly You know really well oiled systems that um Give them a you know many many many year start against anybody But it's also yeah, that's true, but I think it's also getting it's They're getting attacked on all sides right. It's getting chipped away Bit by bit vertical by vertical as well. We you know in there are booking episode right like Try to remember. What was the figure that we talked about that they spend Is it three three and a half billion a year in ad words? Um, like an insane amount right? But then Airbnb spends like I'm sure they spend a little bit of money in ad words, but like A tenth of that at most you know at most because they've actually established that they are the place to go Because when you're looking for a place to stay you go to You don't go to right Um, or you go to airbnb's you know experience whether that's Or their app or whatever or you know you're looking for Transportation and you don't go to google and search for you know a Car rental in in whatever city you're visiting you just go there and you open your uber app Yep, and then it's happening Will and will more zillows get started right where like that was google's business to lose They should have just had a amazing search for homes thing And they could have integrated it nicely with like google maps or google earth and then the ads next to that could have been for real Estate agents, but they didn't and then the whole rise of zillows so like what other companies will get started well at the same time Like where you know, where's google's biggest bread and butter? It's like you know, it's it's buying stuff right and like you know is your you search on google for something and There's something you want to buy and you buy that right but now there's amazon I mean, there's been amazon for a long time, but like There's there's those true. I don't know what any of the figures are, but I've seen crazy graphs where it's like the shift of um People starting their search on amazon sort of starting their search on google for products That's very real. Yeah, yeah, I think it's super real Question is and this gets back to the culture question is can you actually change the DNA of a company and shift it to a vertical products focus company um and and they need to be good at so many things because like just being good like apple needs to get better at services right because what you actually need to be good at now And in this if if we're postulating that google needs to be sort of Uh in a vertical good good in a vertical sense. It's it's good at all the things right it's like all the way down to Silicon and hardware Manufacturing and design and software and services like all the things that they're good at now also Yep, well, I'll tell you I mean this is uh Just purely based on um Surface level reading into what's going on here um, but I think if I If I Saw this and I felt that these threats were real What I wouldn't do is go in one fell sleep swoop by 2000 engineers who I sort of know but don't really know and didn't hire and aren't part of my culture and go graph to them onto my company Right like I would go find a Tim cook and give him 10 years to Build this capability or we don't have time for that. We don't have time. Uh I'm on fire. It's about it is It is right but uh like culture. It's a thing Yeah Yeah Okay, this is kind of an interesting before we go into grading even though you're hinting at it Uh has any company ever successfully done this and is that is there like a whole high profile example of someone that shifted from From being horizontal to being vertical in a big way like a bet the company way I mean you get like that your best transitions and your best save the company things ever tend to be like Knowing that one market is drying up and entering another market like when you have uh intel leaving Memory and going into CPUs or you have apple betting with the big with um the iPhone um, but Does anyone well actually disney sort of doing it or disney's about to sort of be doing it Right like that with this announcement of a disney only streaming service and starting to pull their content off netflix Like they're saying where we need to be the best content creators and we need to be the best user experience for viewing it It's gonna be hard Yeah, maybe IBM uh So IBM made and sold devices and products and then they shifted to purely services um But is that really vertical in a horizontal in the same way? I'm not sure people usually go the other way right like they get it's like To me IBM made like a you know, they were a vertical company that made and sold these main frame and they made and sold PCs And now they're like horizontally selling consulting services to anybody that you know cares to hear about Watson well like and It yeah, I mean as you know, right like we all know but you you you lived it right like microsoft tried to go from horizontal to vertical And then I was like, oh, you know fortunately kind of in in time Realized And went back hardcore to horizontal which was totally the right move Yeah Yeah, that's interesting listeners if you've got ideas um We'd love to talk to you in the slack Um, because I think that's an interesting topic and I think it actually could be a whole new podcast that someone should start is like Companies that manage to make that shift and like individual case studies on on how that happened Yep Well Man, I all this discussion and I haven't normally I like form a little bit of a thesis on what to grade and I'm uh I don't have one so if you want to start I'll probably just go I mean, I mean I was I was I was hitting it this earlier and I know when we started recording this episode I didn't have a grade in mind going through it but uh going into it but through the discussion um I don't think this is going to work out well for google um You know, I again, we're being dramatic on this episode, but this particular like this is their second bite at the apple And so what they chose to do was to buy two thousand engineers does the nest in Taiwan Can we close their third bite at the apple? Well, yeah, maybe Literally bite at the apple here and that's what's going on But uh, yeah, I don't think this is gonna work right like buying two thousand engineers from HTC Uh halfway around the world that aren't part of your culture Even though you've been working together with them on the pixel for a year, you know, whatever But um that's better than nothing but having that go up against like the apple, you know What they've built uh in everything we've been talking about on this show for the last what really the whole life of the company the last 40 years Um, I don't think that's gonna work. Well, wait. Let me let me play devil's advocate real quick here. So uh The pixel product is going quite well. I mean, I don't know the unit sold but it's a great product that's getting lots of love Uh, do you think by okay? How many pixels have you seen in the wild? Uh, yeah, I don't I don't actually know and figures aren't seem hazy. It's in the low single digit millions I believe Of number that they sold but my question is do you think uh it could get any worse? Like do you think vibrate these this team in house like It could get worse Well I mean presumably if they just kept doing the same thing it each of these prize we get better People would start to buy this phone over time and it has to do at least that by bringing them in house, right? Yeah, well, but at the end of the day, it's a culture problem, right? Like this is You've talked about it on the show before like this when you were in Microsoft, right? Like And Microsoft was trying to be a go to being a vertical company and you're like, but we should just ship office for iPad because that's what we do You know The like that's that's the problem that Google is going to face here They're bringing in these 2000 people who are um, you know 2000 Yeah 2000 people wow Who are you know hardware and supply chain and device people and they're coming into a Google culture where The crown jewel of you know Google's mobile strategy is android and android is predicated on being horizontal and so like Eventually there's gonna be you know a fight of like are we gonna prioritize our new You know hardware and vertically integrated team and then like What are the people running android who probably have a lot more juice within the company gonna say about that? Um You should say your grade so I can then disagree Okay, I'm going with a D. Oh wow. All right. Well, I don't know what I'm going with yet, but I'm gonna start talking and see where I land um, the The counterpoint I want to make to that is um, I think they're deciding like I think if you're not if you're if you're on android OEM right now you better figure out what your strategy is because I don't think it's putting android on your phones anymore Like to me. I don't think they're they are conflicted internally anymore like I think they've decided and I think so they're willing to get a war with Sam saying That's that's what I'm looking at here Hmm I mean, I think they're bet is we're gonna start creating experiences that like you just have to be in house to you gotta be bundled to be able to make Hmm, like I think they they they're seeing what Apple is doing and saying yep, we're bought in on that Well, okay, interesting. I mean, maybe they can do that because like Samsung doesn't really have any leverage and they can't go anywhere else Like what are they gonna do make their own operating system? They can't do that. They tried that and didn't work Yep, yep, it didn't work Um, so okay, like yeah, Google could play hardball with with Samsung and say like You're just coming along or or you're you're dead Uh, can Google make enough phones like that's another interesting question. It's like well, but yeah, that's yeah, right Like people buy Samsung phones to Samsung make their own phones are they their own manufacturer? Uh, I believe so I believe so yeah, so like it or even if they're not they have enough a deep enough relationship with the Fox cons of the world that like right I mean that's the thing right like pixels a great phone, but I've never seen one in public and I've seen millions and millions of iPhones and galaxies I think two years from now we'll revisit this and go wow Google's ecosystem of OEM partners try to fast Yeah That's a heck of a transition Uh, I mean, well, there's gonna be all this capacity right like if if Google If Google starts to shift this way like there's a lot of people that need to make a lot of phones that are suddenly gonna be available Yep Um, you know, and I mean maybe Maybe uh Samsung does and um Google just commoditized the Samsung even further Or maybe maybe Apple just like Like really continues to dominate in this world like they have capacity like um, their supply chain is the best in the world Yeah Well, so here's kind of a funny thing is this is the same price that of of Instagram right so it's it's funny to like make this little apples to apples comparison of like which would you have rather pot? Um, but and one other lens that I want to look through it as is um if you are HTC there's two other lenses one is um I think it's about 500k per head Um, so that's kind of an interesting stat to look at lots of talent acquisitions are a million dollars in engineer And obviously these aren't our knowledge engineers But um, that's kind of an interesting if it's 2,000 people then it's 500k per head and it comes with this access to the patent portfolio So so that's that's an interesting. It's not that expensive Um, the other thing is we have no idea what deal what the deal looked like between HTC and Google going forward, but you have to assume that if you're HTC Um, or you know what the terms of their their contracting agreement was to to make the phones Um, but you have to assume if you're HTC then basically Uh, you're doing some kind of some of future cash flows here um and saying like well, you know over the next four years You're going to make this much revenue from this thing. So yeah, we're fine with it being worth 1.1 billion and Impossible for us to know what the the Cash flows what it looks like, but um You know, uh something tells me this actually isn't that expensive for Google um, I No, 1.1 billion to Google is nothing. Oh, and I mean from the perspective of like what the alternative was in terms of paying HTC out over time Like I think HTC has so little leverage and needs cash Um, that they're very willing to do a deal here and I don't think they looked at the work they were doing for Google as their core competency anyway Um, and I'm speculating here, but I I think Google If they can do this integration will got a pretty good deal on um, on you know hiring 2,000 people Um, that are strategically, you know, perfectly trained to do the thing that Google needs to do And I really do think Google needs to do this and and Android needs to become much more like like the iPhone So Android and pixel phones kind of need to become become one and uh Um, you know, if if that's the plan and if Google's going to actually execute that, I think this is this is a great move Um, and uh You know hard to grade because I think there's lots and lots of variants on where I could go but The question is so something like actually saying anything yeah, I don't think we're saying anything that different I'm just super skeptical to this is gonna work But do you think uh, do you think they're actually gonna go the direction of of Dehorizonalizing Android to all the OEMs? Yeah, I don't know. I mean They kind of have to right like you can't compete with what Apple's doing if You in the current Android ecosystem Yeah, unless you believe that doesn't them none of the things that they're doing To optimize matter, but I think that's the death by Yeah, but I think also like Google has clearly shown that they do believe that like AR and ambient computing is the future and if you believe that then That doesn't work in the Android ecosystem as is yeah, and I mean the the fact that Google is doubling down with Google home And they're doing daydream and they're releasing their own phones like they're becoming a hardware company and this is going to dramatically help them Good So I'm going It's gonna be somewhere between a B and a C, but I'm trending closer to a B Um, at this point in time. All right, disagreement Ha ha ha Uh cool carve outs Yeah, I'm a huge Odeza fan if you're If you're into sort of like ambient trap like powerful Sit in a concert and bob your head It's it's it's it's awesome awesome band really great to listen to while you're working while you're running um And they're actually from from um bamer giland which is pretty cool from from Seattle area cool I didn't know that they are they are and they just came out with a new album and it is uh it is awesome and I think there's this great um Pitch for quote from the review that uh But I want to read real quick that describes the album very well and you can choose the this may or may not appeal to you but um They nail it by saying it derives its power from its supersized subtlety exaggerated gestures a kind of weaponized softness And the album is called a moment apart. So if that sounds like your jam go check it out. It's uh it's great listen Wow weaponized self-suffice I know that in itself is like an album name Yeah, well that's great um Well, you've inspired me. I'm gonna call an audible do not what I wanted to but um um music uh, this is by me. I uh uh listened to I recently this was actually I think this was re Re-placed in the feed on fresh air fresh air With Terry Gross on mpr on their podcast um was They just re-released an interview that she did about a year ago with Bruce Springsteen and uh, it's great uh done in his studio in his home studio in new jersey Um just talking about you know He'd written an autobiography of the come out and and he's now doing a one-man show on Broadway Uh, and um, that's uh, that'll be premiering soon Um, which I think is why they re-released this this interview um And it's just really cool. He talks about uh He he talks about his his persona of of Bruce Springsteen and um That like I you know, I always just assume that like Bruce Springsteen is Bruce Springsteen But like the real Bruce Springsteen is not that much like you know The the Bruce Springsteen that you see on stage uh and um and he talks about like where that persona came from and You know how it's shaped his life so really really great interview He's a very very smart guy and um, you know has lived an amazing life so highly recommend. Oh very cool Well listeners, that's it if you aren't subscribed and you want to hear more You can subscribe from your favorite podcast client and if you feel so inclined we would love a review on iTunes Feel free to join us in the slack at and uh, that's all we've got so Uh, thanks for listening and um, you know enjoy your own speculation drop us a link in the slack if uh if we miss anything Okay, we'll see you next time later