The Talk Show

00:00:00 ◼   ► Glenn Fleischmann, it is so good to have you back on the show.

00:00:03 ◼   ► It's a pleasure to be back.

00:00:05 ◼   ► There is so much going on.

00:00:07 ◼   ► There's a lot going on.

00:00:09 ◼   ► A lot going on this week.

00:00:10 ◼   ► Which is good news, I guess, if you're in the business of talking about stuff that's going on.

00:00:15 ◼   ► It's bad news if you're like me and at a couple of weeks here where it's just been really hard to make time to record a podcast.

00:00:21 ◼   ► I feel like I'm looking at the show notes I made and I'm like, "Oh my God, this is like a month's worth of shows."

00:00:27 ◼   ► - It's July, there's not supposed to,

00:00:29 ◼   ► well it's August now, there's not supposed to be any news.

00:00:30 ◼   ► - It hasn't been like that.

00:00:32 ◼   ► It hasn't been like that all this summer.

00:00:33 ◼   ► It's great though, really, it really is.

00:00:35 ◼   ► I remember when it used to be

00:00:38 ◼   ► when there was nothing going on in August.

00:00:41 ◼   ► - Yeah, WWDC would happen,

00:00:42 ◼   ► and then it would just sort of peter out,

00:00:44 ◼   ► there'd be no news, but now we have lawsuits,

00:00:46 ◼   ► we have Chinese intervention,

00:00:48 ◼   ► we have hackers being arrested on their way out of DEFCON,

00:00:52 ◼   ► we got all kinds, or Black Hat, or other--

00:00:54 ◼   ► - No, I thought it, or was it--

00:00:55 ◼   ► Anyway.

00:00:56 ◼   ► - Was it Defcon?

00:00:57 ◼   ► - I forget.

00:00:58 ◼   ► But they used to be-- - It's Defcon.

00:00:59 ◼   ► - Apple used to have little quiet Mac events in August.

00:01:02 ◼   ► Remember those?

00:01:03 ◼   ► Like, I think like--

00:01:05 ◼   ► - Were they introducing new Mac models, not--

00:01:08 ◼   ► - Yeah, or maybe like when they first came out

00:01:10 ◼   ► with the iWork Suite, they did it like in August.

00:01:13 ◼   ► It was like, you know, it'd be like--

00:01:14 ◼   ► - It's in August!

00:01:16 ◼   ► I never went down for those.

00:01:17 ◼   ► I would go down for hardware,

00:01:18 ◼   ► but not software in the olden days.

00:01:21 ◼   ► But I remember going down to like Aprils

00:01:22 ◼   ► and Septembers, typically.

00:01:24 ◼   ► Those events, that was before my time of attending events.

00:01:26 ◼   ► That was when I did everything remotely from Philadelphia.

00:01:30 ◼   ► But I don't even know if I would go out.

00:01:32 ◼   ► I guess I would go out for it,

00:01:33 ◼   ► but they don't really do small events anymore.

00:01:35 ◼   ► Not like that.

00:01:37 ◼   ► - Yeah, there's nothing small,

00:01:38 ◼   ► 'cause everything they do is a $10 billion

00:01:40 ◼   ► more line of business, or starts at that and then goes up.

00:01:44 ◼   ► - Right.

00:01:44 ◼   ► So where do you wanna start?

00:01:46 ◼   ► What do you think is the one thing?

00:01:49 ◼   ► - Jeez, well, I'm interested,

00:01:51 ◼   ► the Chinese market is interesting to me.

00:01:53 ◼   ► We start with the VPN?

00:01:54 ◼   ► And we have things to say about that.

00:01:56 ◼   ► Although it's also a little more, it's a funny situation.

00:02:00 ◼   ► 'Cause so Apple removed some.

00:02:03 ◼   ► I thought there was this, neutrally it sounded like,

00:02:06 ◼   ► 'cause you can't really check the Chinese app store

00:02:08 ◼   ► from another country very easily.

00:02:09 ◼   ► It sounded like a lot of VPN apps,

00:02:12 ◼   ► virtual private network apps that were being removed.

00:02:15 ◼   ► And so there's this thing that, the background is too,

00:02:18 ◼   ► so China has various kinds of interception

00:02:20 ◼   ► and blocking tools to keep people who are either

00:02:24 ◼   ► residents or citizens of their country from

00:02:28 ◼   ► reaching outside the country for data.

00:02:30 ◼   ► And so, some things are approved and some are not,

00:02:33 ◼   ► but they've really been cracking down on a lot of

00:02:36 ◼   ► ability to get outside of China or get out at least

00:02:39 ◼   ► at some kind of speed that makes it functional

00:02:41 ◼   ► to do things.

00:02:42 ◼   ► And Google famously left China in 2010 and set up

00:02:45 ◼   ► shop in Hong Kong, even though that's, you know,

00:02:47 ◼   ► part of China, but it's very confusing little

00:02:49 ◼   ► relationship, how that works, that's an ongoing change.

00:02:54 ◼   ► And Apple stayed in, it's gotten bigger and bigger.

00:02:57 ◼   ► But so the Great Firewall of China is an effort

00:03:00 ◼   ► by the Chinese government to, so like standard VPNs,

00:03:03 ◼   ► my understanding is you can't just use,

00:03:05 ◼   ► you can't just sign up for like a regular VPN service,

00:03:08 ◼   ► forget the app part and just use it inside China.

00:03:11 ◼   ► So the standard protocols are now being broadly blocked.

00:03:14 ◼   ► So you have to use a service that does some other kind

00:03:16 ◼   ► tunneling or uses SSL-based or some other system

00:03:19 ◼   ► that's not just using the old-fashioned stuff

00:03:22 ◼   ► like IPSec and over L2TP and all that.

00:03:26 ◼   ► So that's my understanding.

00:03:27 ◼   ► So all these services have thrived

00:03:28 ◼   ► because they use different ways,

00:03:31 ◼   ► and a lot of them are sold worldwide,

00:03:32 ◼   ► so it's not just they're being sold in China.

00:03:34 ◼   ► Some are China-specific and some are worldwide.

00:03:36 ◼   ► And so three of them at least have been removed

00:03:39 ◼   ► from the App Store by Apple

00:03:40 ◼   ► because the Chinese government says

00:03:43 ◼   ► they lack the appropriate license

00:03:46 ◼   ► that allows them to operate in China.

00:03:48 ◼   ► And Apple said hundreds of other VPN apps remain available,

00:03:53 ◼   ► including those by companies that are outside China.

00:03:56 ◼   ► So the VPN companies themselves are kind of peeved.

00:04:01 ◼   ► They made a lot of noise about it,

00:04:02 ◼   ► but it gets us the whole question of like,

00:04:05 ◼   ► what is compliance to local law?

00:04:08 ◼   ► So we don't think that this law requiring registration

00:04:12 ◼   ► of services and compliance with whatever rules China has

00:04:15 ◼   ► that might allow blocking and sniffing and other things,

00:04:18 ◼   ► this doesn't comport with our feelings,

00:04:20 ◼   ► and it might, you know, not,

00:04:21 ◼   ► I'd argue it's probably in violation

00:04:23 ◼   ► of the Universal Declaration of Human Rights

00:04:26 ◼   ► in terms of freedom of expression and freedom from--

00:04:29 ◼   ► - Well, and let's just stop it right there and admit

00:04:31 ◼   ► that whether this particular move is in violation

00:04:35 ◼   ► of the Declaration of Human Rights,

00:04:38 ◼   ► the People's Republic of China has an awful lot,

00:04:40 ◼   ► as official policy, has a lot of policies

00:04:42 ◼   ► that are violations of human rights.

00:04:44 ◼   ► So fundamentally, this is the thing

00:04:49 ◼   ► that frustrates me about that.

00:04:50 ◼   ► It is an interesting story.

00:04:51 ◼   ► It is absolutely worth noting.

00:04:54 ◼   ► It is worth making a stink about.

00:04:55 ◼   ► But the knee-jerk reaction from a ton of people,

00:05:00 ◼   ► even after I tried to painstakingly,

00:05:02 ◼   ► and this is just feedback from people who read my site,

00:05:05 ◼   ► but painstakingly tried to say,

00:05:06 ◼   ► "Hey, you could be upset about this.

00:05:09 ◼   ► "You can even object to what Apple's done,

00:05:11 ◼   ► "but you can't just say Apple should've said no

00:05:14 ◼   ► and kept the apps in the App Store.

00:05:16 ◼   ► Right.

00:05:16 ◼   ► Because it's like--

00:05:18 ◼   ► I sort of didn't really use the analogy that great.

00:05:21 ◼   ► But I said, you pull that thread--

00:05:23 ◼   ► like, OK, it's just a little thread, which is saying,

00:05:25 ◼   ► no, we're not removing any of these apps from the App Store.

00:05:30 ◼   ► You can't say Apple should pull that thread

00:05:32 ◼   ► without acknowledging that an awful lot of stuff

00:05:34 ◼   ► is going to happen after they pull that thread.

00:05:36 ◼   ► It isn't something that they can do in isolation

00:05:38 ◼   ► and not expect retribution.

00:05:40 ◼   ► My guess is if Apple just said,

00:05:44 ◼   ► "No, we're keeping these available in the App Store,"

00:05:46 ◼   ► that the great firewall would start blocking

00:05:48 ◼   ► the App Store entirely.

00:05:50 ◼   ► - Apple would very likely have to exit the market.

00:05:53 ◼   ► So there's things in China that are official policy,

00:05:57 ◼   ► that are promulgated as laws and regulations,

00:05:59 ◼   ► and there's things that are informal,

00:06:00 ◼   ► and the government demand stuff happens behind the scenes,

00:06:03 ◼   ► and it doesn't conform to any process, right?

00:06:05 ◼   ► So this, to some extent, you could say,

00:06:08 ◼   ► is like a promulgated law.

00:06:09 ◼   ► there's a regulation, you can look it up. They announced they're going to be doing this big

00:06:13 ◼   ► enforcement action. So, you have to say, then Apple is saying, we are in opposition to a law

00:06:21 ◼   ► regulation in a country in which we're doing business, and we are resisting it without using

00:06:24 ◼   ► the channels available to us. Because we don't know, the Chinese, you know, legal system is

00:06:29 ◼   ► very opaque. We don't know if they've gone through judicial processes, if they've been working

00:06:32 ◼   ► through government agencies. I assume they have. I mean, Apple is no, there's no reason for Apple

00:06:36 ◼   ► to court to go like, "Yeah, yeah, we'll just remove whatever they say." So, I presume they've

00:06:40 ◼   ► spent the six or seven months since China said they were going to step up this policy in January.

00:06:44 ◼   ► I presume they've been lobbying and just saying, "Look, you know, what can we do? What can we do

00:06:49 ◼   ► to make this happen where we're not creating a public relations nightmare for everybody,

00:06:54 ◼   ► it doesn't become a deal?" And you know, China, I don't think per se cares,

00:07:00 ◼   ► the Chinese leadership cares about that part because it's not, it's not something that

00:07:07 ◼   ► affects how they govern the country to worry about the response to it, right?

00:07:13 ◼   ► Tom Bilyeu (01h00m 10s): The question is, should Apple be in China or not? And honestly,

00:07:19 ◼   ► and if they are, if they're going to sell iPhones and Macs in China, this is the sort of thing that

00:07:25 ◼   ► they have to do because it is compliant,

00:07:27 ◼   ► it's complying with the law.

00:07:28 ◼   ► I don't think, for example, that Apple is particularly happy

00:07:35 ◼   ► about the Amber Alert thing that your iPhone does

00:07:41 ◼   ► when it goes off.

00:07:43 ◼   ► I don't think they like that sound.

00:07:44 ◼   ► I don't think, frankly, I don't think it's a good law.

00:07:48 ◼   ► I think it's, to my knowledge,

00:07:51 ◼   ► it's never once helped rescue a child.

00:07:54 ◼   ► - No, I think it did once. - Or has it?

00:07:56 ◼   ► - It didn't really?

00:07:57 ◼   ► - Yeah, I think there was, well, versus the phone,

00:08:00 ◼   ► I believe that some of the alerts

00:08:02 ◼   ► that have gone up on highway signs and through other means,

00:08:05 ◼   ► I think that has actually helped track people down.

00:08:08 ◼   ► - But has it helped to have everybody in a certain area

00:08:11 ◼   ► have their cell phone make a terrible noise all at once?

00:08:13 ◼   ► - Right, I mean, everybody in the north,

00:08:15 ◼   ► I got one the other day where it said,

00:08:16 ◼   ► like, Meade, Washington, just yesterday at 84,

00:08:19 ◼   ► like, Meade is hundreds of miles from here,

00:08:22 ◼   ► And I totally get the reasoning behind it.

00:08:25 ◼   ► It's not regionalized enough, right?

00:08:27 ◼   ► That's the problem.

00:08:27 ◼   ► - Right, so, but does Apple have a choice in the matter?

00:08:29 ◼   ► No, the law says in the United States,

00:08:32 ◼   ► if you're gonna sell a cell phone,

00:08:33 ◼   ► it has to, you know, made after a certain date,

00:08:35 ◼   ► it has to do this thing.

00:08:36 ◼   ► I guess, I think there's a way to turn it off.

00:08:39 ◼   ► I think I'm pretty sure I turned it off on my phone.

00:08:41 ◼   ► - Oh yeah, you can disable it, that's right.

00:08:44 ◼   ► - Right, but by law though, it has to be on by default.

00:08:47 ◼   ► - Right.

00:08:49 ◼   ► And again, this is not an issue of human rights.

00:08:53 ◼   ► It's not an issue of free speech,

00:08:55 ◼   ► but it's just the nature of being

00:08:57 ◼   ► a multinational corporation that sells

00:09:00 ◼   ► in a bunch of countries is you've got to be compliant

00:09:02 ◼   ► with the law in every country you're in.

00:09:04 ◼   ► I mean, it's a, you know, there's a reason

00:09:07 ◼   ► why Apple's legal department is humongous.

00:09:09 ◼   ► It's not because Apple has just allowed it

00:09:12 ◼   ► to grow into a giant bureaucracy just for the hell of it.

00:09:16 ◼   ► It's a hell of a thing.

00:09:17 ◼   ► And China is a country where complying with the law

00:09:19 ◼   ► is gonna involve things that deeply offend,

00:09:22 ◼   ► in my opinion, correctly so, the sensibilities

00:09:24 ◼   ► of people in Western civilized democracies.

00:09:28 ◼   ► Or democracies anywhere, really.

00:09:31 ◼   ► - Yeah, and then of course, and then there's this very easy,

00:09:35 ◼   ► the what about-ism response,

00:09:36 ◼   ► which you can look up on Wikipedia.

00:09:38 ◼   ► It's a great entry for what about-ism.

00:09:40 ◼   ► Then you say, well, what about the US?

00:09:42 ◼   ► We have all this garbage we do here.

00:09:43 ◼   ► We have warless wiretaps.

00:09:46 ◼   ► have extraordinary rendition, we have secret FISA courts, all this stuff. But you say,

00:09:50 ◼   ► by and large, things come out. Like, by and large, there's a process and most of the, I would say,

00:09:55 ◼   ► most of the friction we have about government, let's see, like a continuous thing under any

00:10:01 ◼   ► administration, I want to say like, not most of the friction we have about government, but one

00:10:05 ◼   ► of the big issues about privacy is that so much of what should be subject to due process and

00:10:13 ◼   ► constitutional protections seems to have been exempted without any review of the constitutionality

00:10:18 ◼   ► without a good way to overturn that. So, you have lots of organizations in the United States working

00:10:22 ◼   ► on that, but we have a process, we have courts, we have SCOTUS, we have a thing that we agree

00:10:26 ◼   ► as a mechanism. So, even when we veer towards something that is anti-constitutional, there

00:10:30 ◼   ► should be a way to veer back. And it may take sometimes years or decades for that to happen,

00:10:34 ◼   ► but we tend to hew towards upholding constitutional rights, which include upholding, you know,

00:10:41 ◼   ► which broadly upholds human rights. And we'd argue maybe that, so, my what aboutism is like,

00:10:46 ◼   ► well, okay, we're criticizing China for this. But America has all these issues. You know,

00:10:49 ◼   ► we have all these things we've done. We've got people in Guantanamo, we've got, you know,

00:10:53 ◼   ► trillions of bytes of data being collected every month by people on black budgets who are

00:10:58 ◼   ► contractors to the government, sorting through, you know, blah, blah, all this stuff's going on.

00:11:02 ◼   ► But I would say we are still fundamentally, we are a democracy with a rule of law,

00:11:06 ◼   ► with a justice system that's judiciary, that's independent, and has review,

00:11:10 ◼   ► and were wrestling with some of those fine points. So, when Apple opposed the FBI in the

00:11:14 ◼   ► San Bernardino case, Apple had a process. It was not ordered to do something, people didn't come

00:11:18 ◼   ► in with guns the middle of the night and, you know, point them at Tim Cook and make him march

00:11:23 ◼   ► out and find engineers. They went through a process, most of it was public, and the FBI

00:11:28 ◼   ► eventually bought tools from hackers to break into the phone and found apparently nothing useful.

00:11:34 ◼   ► So, we'd argue, I guess, that in China, it's, you know, partly they have, don't have the same

00:11:39 ◼   ► orientation towards the primacy of human rights and individual expression that many other countries

00:11:45 ◼   ► do and that we believe is kind of the foundation of, you know, I believe—I don't agree with

00:11:50 ◼   ► China's approach to human rights and freedom of expression. I'm not sure it's a valid—I can't

00:11:54 ◼   ► even say I think the approach is a valid one in terms of how it crushes the human spirit, right?

00:12:01 ◼   ► But I can also understand if I step back and say objectively, they have a different orientation

00:12:05 ◼   ► to that, and they are a sovereign nation. They've established their sovereignty. And if Apple wants

00:12:09 ◼   ► to work in that market, they have to work within the constraints of a system that is not organized

00:12:14 ◼   ► in a way to provide this kind of a judicial access and appeals process and transparency to what they

00:12:19 ◼   ► do. Yeah, I totally agree. I think the thing that we do as the United States that's most objectionable

00:12:24 ◼   ► on our front are those, the secret orders. I think you mentioned it, right? The ones where

00:12:29 ◼   ► the company.

00:12:29 ◼   ► Pete: Oh, the FISA court things, right?

00:12:31 ◼   ► Is that, or there's also-

00:12:32 ◼   ► Michael Gentry. Legally not,

00:12:33 ◼   ► legally not allowed to notify the person that it's been issued, which is bullshit. That's,

00:12:38 ◼   ► that's to me, a violation.

00:12:40 ◼   ► Pete; That is a different thing. Those aren't FISA,

00:12:42 ◼   ► has that FISA court, it's, that's a different thing where the government, right, can issue a,

00:12:46 ◼   ► right, and that's where you have the canary documents on the site, right? Where you can say,

00:12:50 ◼   ► Apple, I forget which site everybody has it, but you have a document that says,

00:12:53 ◼   ► the government hasn't asked us for this yet. And if that document were to disappear,

00:12:57 ◼   ► that's legal, and it means the government has asked them for something, right? That's a

00:13:02 ◼   ► great little mechanism to get around that limitation of—because right, there's an argument that it's

00:13:07 ◼   ► probably not constitutional if it were firmly tested. I don't believe SCOTUS has taken up

00:13:12 ◼   ► that particular issue.

00:13:14 ◼   ► Tom Scott No, I don't think so. So, I really do. I just,

00:13:19 ◼   ► it frustrates me that people don't, really don't think this through. And I really do think, so,

00:13:26 ◼   ► Somebody, and then some people I've seen,

00:13:28 ◼   ► some people arguing that Apple should

00:13:29 ◼   ► just pull out of China.

00:13:31 ◼   ► They should not, they just should not sell products

00:13:34 ◼   ► in a country with policies like this.

00:13:37 ◼   ► And I think there is a line that,

00:13:40 ◼   ► and I think there are lines that China could feasibly,

00:13:44 ◼   ► it might actually happen where China would make a demand

00:13:47 ◼   ► that would prompt Apple to actually pull out of China

00:13:50 ◼   ► and sacrifice all the money.

00:13:51 ◼   ► I think, for example, if China mandated

00:13:53 ◼   ► that there has to be a backdoor to get into the,

00:13:57 ◼   ► like a San Bernardino backdoor, some kind of golden key

00:14:00 ◼   ► so that a confiscated phone in the People's Republic

00:14:03 ◼   ► of China that the government could decrypt it.

00:14:06 ◼   ► And any phone sold in the country

00:14:09 ◼   ► must have such a mechanism.

00:14:11 ◼   ► I don't believe Apple would make a separate SKU

00:14:14 ◼   ► for iPhones to comply with that.

00:14:17 ◼   ► I really don't.

00:14:18 ◼   ► - I don't think so either.

00:14:20 ◼   ► I think, so there's this issue of would China push Apple to a point where it knows that Apple

00:14:26 ◼   ► would exit? And that might actually occur because China, I mean, I forgot if you had Ben Thompson

00:14:31 ◼   ► on to talk about this or you were talking about it. He wrote that great thing several months ago

00:14:36 ◼   ► about the key, and I've seen it repeated a number of times since, and I don't know if his insight

00:14:41 ◼   ► was original, but it's Ben's, so I'll claim it was. That in China, the app has primacy, not the

00:14:47 ◼   ► ecosystem, right? So you have WeChat and Alipay and other kinds of things that are app-based,

00:14:53 ◼   ► and they work the same across every platform that's available. So you can buy a cheap Linux

00:14:58 ◼   ► phone that's not Android even, you can buy Android phone, whatever, iPhone, and you're using the apps

00:15:04 ◼   ► and the apps are the thing that are primacy. So this explains just not as much, even though there

00:15:09 ◼   ► was originally very clearly this brand awareness and brand desire for iPhones in China, it sounds

00:15:15 ◼   ► like that's faded somewhat, and we can see that in sales and so forth, and that people have now

00:15:20 ◼   ► kind of very rapidly switched over to just thinking about the efficacy of the individual apps.

00:15:25 ◼   ► So, Apple has less of a, I don't know, like when they were selling more devices and were a more

00:15:31 ◼   ► critical part of that market, they might have had more leverage. I think this boils down to,

00:15:35 ◼   ► you know, would China care if Apple left the market? Would it harm China as a country?

00:15:40 ◼   ► Probably not that much, because they have all the alternatives they need. It wouldn't be harming

00:15:44 ◼   ► competitiveness or whatever, it does, of course,

00:15:47 ◼   ► then you get into this whole, okay, well, you

00:15:48 ◼   ► know, Apple not only does it make like, made $10

00:15:51 ◼   ► billion in the most recent quarter in revenue in

00:15:54 ◼   ► China, which was down year over year, but they

00:15:56 ◼   ► have all this manufacturing operation that they

00:15:59 ◼   ► contract, Foxconn and everybody else, some

00:16:01 ◼   ► billions and billions of dollars. I don't know

00:16:02 ◼   ► what the scale is that's dedicated to Apple. What

00:16:04 ◼   ► happens to that? If Apple refuses to obey, just

00:16:07 ◼   ► suddenly all those production lines get shut

00:16:09 ◼   ► down and they're incapable of making iPhones? I

00:16:11 ◼   ► I really don't know what would happen there,

00:16:15 ◼   ► but the Chinese government is supreme and centralized,

00:16:18 ◼   ► and it can do whatever it wants at some level.

00:16:21 ◼   ► - Right, Apple's relation with China is unique,

00:16:26 ◼   ► and the only other country where they have a relationship

00:16:29 ◼   ► as unique would be the United States,

00:16:31 ◼   ► since their headquarters is here,

00:16:33 ◼   ► and most of their employees live here.

00:16:35 ◼   ► I would argue that Apple's relationship

00:16:39 ◼   ► with the United States, though,

00:16:40 ◼   ► though it's almost not a relationship because it's like,

00:16:43 ◼   ► that's, this is where the roots of the company are.

00:16:47 ◼   ► You know, it's like intertwined.

00:16:49 ◼   ► Their American identity is almost,

00:16:51 ◼   ► you don't even think of them as having a, quote,

00:16:53 ◼   ► "relationship" with the United States because they're here

00:16:55 ◼   ► and that's where their headquarters is.

00:16:57 ◼   ► But their relationship with China is inordinately complex

00:16:59 ◼   ► and China is not just the second biggest market.

00:17:03 ◼   ► You know, and the people who want to be cynical about it

00:17:07 ◼   ► and say that Apple is bending over, you know,

00:17:11 ◼   ► kowtowing, kowtowing, how do you say the word?

00:17:14 ◼   ► - Cowtowing. - Cowtowing.

00:17:17 ◼   ► Just because of the money.

00:17:19 ◼   ► And that would be true if, let's say,

00:17:23 ◼   ► they did all of their manufacturing in Japan,

00:17:26 ◼   ► or I don't know, Taiwan's not a good example

00:17:29 ◼   ► because it's sort of tied to China.

00:17:31 ◼   ► But let's just say that they didn't have

00:17:33 ◼   ► any actual manufacturing and assembly footprint

00:17:35 ◼   ► in mainland China.

00:17:36 ◼   ► That still would be a tremendous,

00:17:40 ◼   ► just the size of the market makes it important.

00:17:42 ◼   ► But because that's actually not true,

00:17:44 ◼   ► they do have a massive manufacturing

00:17:47 ◼   ► and assembly footprint in China,

00:17:49 ◼   ► and so many of their suppliers also are there.

00:17:53 ◼   ► I mean, part of the whole success of Foxconn in China

00:17:57 ◼   ► is the proximity.

00:17:58 ◼   ► It's not just Apple and Foxconn.

00:18:01 ◼   ► It's the proximity to the companies

00:18:03 ◼   ► that drive the trucks in every day

00:18:05 ◼   ► with pallets full of one tiny little thing for the camera.

00:18:10 ◼   ► It's the proximity to it that also,

00:18:15 ◼   ► that further tightens, would make it so hard

00:18:18 ◼   ► for Apple to move manufacturing somewhere else.

00:18:21 ◼   ► And it's, let's face it, so Apple's relationship with China

00:18:26 ◼   ► on any of these matters is way more complicated

00:18:29 ◼   ► than simply, than it would be if they were simply

00:18:32 ◼   ► products to the people of the country.

00:18:33 ◼   ► Yeah, I totally agree with all that.

00:18:36 ◼   ► It's that you can't—I mean, and I thought Tim Cook expressed the frustration pretty frankly.

00:18:40 ◼   ► I was sort of surprised in the analyst call a few days ago, where it was, you know, he has to be very

00:18:46 ◼   ► careful what he says, but it wasn't—what do I want to say?

00:18:53 ◼   ► It was a very—it was balanced, but I thought it was also sort of frank about the fact that they

00:18:59 ◼   ► want to engage with what's going on. And if they can't, you know, as we said, they can't just say,

00:19:05 ◼   ► "No, that's not going to, you know, that's not going to cut anything for them just to say no."

00:19:12 ◼   ► But because they don't have the basis under the law or in process to do that, and, you know,

00:19:19 ◼   ► I was saying, you know, Apple, I actually feel like Apple should take a stronger stance,

00:19:22 ◼   ► even if it's not saying no. I feel like they should be making more effort, and I think Tim's

00:19:28 ◼   ► comments went more towards that. Because one of my concerns is that by agreeing to Chinese

00:19:34 ◼   ► restrictions, regardless of how legal they are under Chinese law, even in self-consistent,

00:19:39 ◼   ► it empowers more countries to ask for more, and the US and UK in particular are asking for it.

00:19:45 ◼   ► So, with that in mind, I feel like there's a danger that this, and this is kind of an ongoing

00:19:53 ◼   ► thing, the bigger power China gets, the more it was seemingly going to have to liberalize because

00:19:58 ◼   ► It was facing the reality of more citizens with more money, a higher standard of living,

00:20:02 ◼   ► and a middle class demands more indifferent, and it's more comfortable, and thus it's not

00:20:06 ◼   ► as malleable, and there's more power that's distributed when money is distributed that way.

00:20:10 ◼   ► So, the Chinese government, I think, I mean, not to get, I'm not a Chinese scholar, Chinese scholar,

00:20:15 ◼   ► I don't know how long the current structure can stand. It seems very fragile to me,

00:20:20 ◼   ► and there's all this money and pressure and what have you. But as it's grown as a power,

00:20:25 ◼   ► as economic and market and world power, people are learning the wrong lessons from it. So,

00:20:31 ◼   ► democracies have adopted more restrictive policies. I mean, you see Russia, which has always

00:20:35 ◼   ► had kind of totalitarian, centralized, whatever, like when has Russia actually been free?

00:20:40 ◼   ► Pete: Right.

00:20:40 ◼   ► Alan: Maybe sort of under Yeltsin, but I don't know. But it's, it's frustrating to see that

00:20:46 ◼   ► the wrong lessons are being learned, they're being imported into democracies, that democracies learn

00:20:50 ◼   ► how they can repress their own citizens better because they're seeing it demonstrated with

00:20:54 ◼   ► with no repercussion in countries that are not democratic.

00:20:57 ◼   ► - I think that, so somebody on Twitter,

00:21:02 ◼   ► and it seems like he deleted the tweet.

00:21:04 ◼   ► I don't know if he's somebody who deletes his,

00:21:06 ◼   ► it was like a conversation, a public conversation we had.

00:21:11 ◼   ► But I'm not gonna, I still have it here to read,

00:21:13 ◼   ► but I won't say his name, but just because I'm worried

00:21:18 ◼   ► that he deleted it for a reason.

00:21:20 ◼   ► But anyway, it was somebody who objected to,

00:21:24 ◼   ► accused me of defending Apple, just blindly in the face,

00:21:28 ◼   ► simply as, and I said, well seriously,

00:21:31 ◼   ► what would you have them do differently?

00:21:32 ◼   ► Do you really want them to pull out of China?

00:21:36 ◼   ► And let's face it, when we talk about this,

00:21:38 ◼   ► pulling out of China is not just a decision

00:21:40 ◼   ► to forego about 25% of their current revenue.

00:21:43 ◼   ► It quite possibly would, it could,

00:21:48 ◼   ► I mean, cost Tim Cook his job, I mean,

00:21:51 ◼   ► because it's quite possible that a majority

00:21:54 ◼   ► of Apple's shareholders would look at this

00:21:58 ◼   ► and say this is not worth pulling out of 25% of our revenue

00:22:03 ◼   ► for the foreseeable future

00:22:06 ◼   ► and jeopardizing our relationship with this country.

00:22:08 ◼   ► - Apple actually makes a ton of profit,

00:22:11 ◼   ► so it's not making all its profit in China,

00:22:14 ◼   ► but voluntarily giving up all that revenue

00:22:16 ◼   ► and all that profit, right?

00:22:18 ◼   ► And so this person was reasonable though.

00:22:21 ◼   ► It was a good, it was a very, it was an adult argument.

00:22:26 ◼   ► Argument gets a bad rap as a word

00:22:28 ◼   ► 'cause everybody, you become so overly sensitive

00:22:31 ◼   ► that we think argument is a fight.

00:22:33 ◼   ► But no, it's a logical argument.

00:22:35 ◼   ► But his thing was that Tim Cook

00:22:36 ◼   ► should personally state his opposition on Twitter

00:22:39 ◼   ► as he has to many other political issues in the US.

00:22:42 ◼   ► Like he has, for example, Tim Cook has publicly come out

00:22:46 ◼   ► in opposition to the Trump administration's

00:22:48 ◼   ► immigration policies.

00:22:50 ◼   ► - Right.

00:22:51 ◼   ► - I don't think, that's a reasonable opinion

00:22:57 ◼   ► to say that Tim Cook should do that.

00:22:59 ◼   ► That wouldn't cost Tim Cook his job.

00:23:01 ◼   ► He could do that.

00:23:02 ◼   ► I'll bet he's thought about it.

00:23:03 ◼   ► I wouldn't be surprised if he does at some point.

00:23:06 ◼   ► But, you all, and again, I'm not a Chinese expert

00:23:09 ◼   ► in any way, neither are you, I don't,

00:23:10 ◼   ► but I do know enough about China that

00:23:15 ◼   ► politically you must be extraordinarily delicate.

00:23:20 ◼   ► It is a culture and a government that,

00:23:25 ◼   ► on both sides, both in what they say

00:23:28 ◼   ► and what they expect to hear,

00:23:29 ◼   ► they value subtlety.

00:23:34 ◼   ► - I'll tell you something, I talked to a Chinese expert,

00:23:37 ◼   ► this fellow whose name is Rajer Krimers, who's Dutch.

00:23:42 ◼   ► He's an expert in Chinese law and governance,

00:23:45 ◼   ► of studied this kind of thing. I said, what could Apple do? And he has some, you know,

00:23:49 ◼   ► what kind of response could they have other than what they did? And he said, you know,

00:23:52 ◼   ► this is Chinese—we talked about this earlier here—but he said this is Chinese law. And

00:23:56 ◼   ► they could become part—there's a board, the TC 260 is the committee that oversees this. Microsoft

00:24:02 ◼   ► and Cisco are members of this board, Apple is not. They could. He thinks that actually,

00:24:08 ◼   ► I think his stance is very interesting for someone who is from a Western democracy. Like I say,

00:24:14 ◼   ► I believe he's from the Netherlands, he's taught and researched the Netherlands and

00:24:19 ◼   ► England and Oxford, and he thinks that actually this sort of unfettered ability of expression

00:24:25 ◼   ► on the internet may actually not be in the best interest of citizens, not just a governmental

00:24:30 ◼   ► thing, which is an interesting stance.

00:24:33 ◼   ► The reason we limit rights by law is that their unfettered exercise might cause undue

00:24:39 ◼   ► harm limiting the liberty of others.

00:24:41 ◼   ► It's long overdue.

00:24:42 ◼   ► notion is introduced to the online sphere. Acts that are unlawful in real law should not be

00:24:46 ◼   ► condoned just because one happens to commit them in cyberspace." And after having seen—so,

00:24:50 ◼   ► that's distinct from free speech, right? People would read that, and originally I thought, well,

00:24:53 ◼   ► that seems awfully harsh. And then I thought, aren't I one of the people who would like to

00:24:57 ◼   ► see consequences happen when people commit, you know, basically crimes in Twitter, or have some

00:25:04 ◼   ► consequential mechanism for things that are not simply about the ability to state an opinion

00:25:09 ◼   ► and exercise free speech, but have a real world consequence,

00:25:13 ◼   ► like doxing things that are in fact illegal under some state

00:25:16 ◼   ► and federal laws.

00:25:17 ◼   ► But he says this, which is I think interesting.

00:25:18 ◼   ► He says, "The Chinese starting point is that historical

00:25:21 ◼   ► political mission needs to be fulfilled,

00:25:23 ◼   ► which requires the mobilization of the entire society

00:25:26 ◼   ► and therefore the imposition of discipline.

00:25:28 ◼   ► This requires the state not to be limited and controlled

00:25:31 ◼   ► in its power, but to have the ability to quickly

00:25:33 ◼   ► and decisively intervene to clear roadblocks.

00:25:35 ◼   ► That is anathema to the US and to most democracies,

00:25:39 ◼   ► But I, you know, it's good to get insight from

00:25:41 ◼   ► someone who studied this so deeply, who says

00:25:42 ◼   ► this is, you know, their guiding philosophy is

00:25:45 ◼   ► that that is the most important factor.

00:25:47 ◼   ► We have, in our country, we want to be able to

00:25:49 ◼   ► carry our, you know, our guns and our liquor and

00:25:51 ◼   ► drive 100 miles an hour.

00:25:53 ◼   ► All at the same time.

00:25:54 ◼   ► And not have anybody pull us over.

00:25:55 ◼   ► All at the same time.

00:25:56 ◼   ► We want the drive-through liquor store and

00:25:57 ◼   ► whatever.

00:25:58 ◼   ► And there's Americans.

00:25:59 ◼   ► With a gun on the passenger seat.

00:26:02 ◼   ► Right.

00:26:03 ◼   ► Right, you got broken glass in the back seat

00:26:05 ◼   ► with your child sitting in it, no seat belt, and

00:26:07 ◼   ► that's what you want.

00:26:08 ◼   ► I mean, I'm making a character sure, but it's true is that we favor individual expression,

00:26:13 ◼   ► individual rights, there's a primacy of it that's encoded in the central tenet of our government,

00:26:18 ◼   ► and there's various, I mean, look, we have a lot of disagreements about what those limits are. But

00:26:23 ◼   ► what Roger's talking about is really that is like, some political parts of the political spectrum

00:26:30 ◼   ► want to impose more rules in some ways on people's bodies or property and others want less. And it

00:26:35 ◼   ► It surprises me sometimes which end of the political spectrum wants government to impose

00:26:40 ◼   ► rules on others in those fashions.

00:26:42 ◼   ► With China, it's just a much more monolithic—the society becomes paramount, and this ability

00:26:49 ◼   ► for us to control things and mobilize all the forces at once and move us forward in

00:26:53 ◼   ► a single, central direction is the most important thing.

00:26:56 ◼   ► Dave: I really do think—and I have yet to be proven wrong, and I know that there are

00:27:01 ◼   ► There are some people who simply say Apple is a for-profit corporation and because they're

00:27:07 ◼   ► so insanely profitable, literally the most profitable country in the world for the last

00:27:11 ◼   ► few years.

00:27:12 ◼   ► I mean, that won't last.

00:27:13 ◼   ► That's true.

00:27:14 ◼   ► No.

00:27:15 ◼   ► Yeah, that's a bite.

00:27:16 ◼   ► There's zero doubt in my mind that that won't last because it never lasts.

00:27:19 ◼   ► That's the sort of thing, but they should remain very profitable for a very long time

00:27:26 ◼   ► and that inherently any for-profit corporation is full of shit and nothing they say can be

00:27:30 ◼   ► believed and they're usually, usually you should default to assuming that they're lying

00:27:34 ◼   ► in anything they say. Okay, but in my experience as a very close watcher of this particular company

00:27:41 ◼   ► and somebody who has a personal relationship with their PR department, I've never been lied to

00:27:48 ◼   ► by anybody at Apple. Not off the record. Never. Not once have I been told something that turned

00:27:55 ◼   ► out not to be true. They often give no answer. They often refuse to answer. Every once in

00:28:01 ◼   ► a while, they give a circuitous answer, but not one that is like Bill Clinton style, depends

00:28:11 ◼   ► what the meaning of the word is, is or something like that. And I say this as a huge Bill Clinton

00:28:16 ◼   ► fan. I'm just saying, I found them to be, I think that they are a tremendously honest

00:28:22 ◼   ► And again, they don't necessarily say,

00:28:25 ◼   ► they'll give a lot of non-answers.

00:28:27 ◼   ► And I think Tim Cook's public statements,

00:28:31 ◼   ► if anything, if there was anybody in the company

00:28:35 ◼   ► who said things that weren't true, it was Steve Jobs.

00:28:37 ◼   ► And that he wasn't really a liar, but that he would,

00:28:41 ◼   ► the reality distortion thing.

00:28:46 ◼   ► So I would say in the post-jobs era,

00:28:48 ◼   ► the company has been, one difference

00:28:50 ◼   ► between the Steve Jobs era and the post Steve era

00:28:53 ◼   ► is that the company has become completely honest,

00:28:56 ◼   ► in my opinion.

00:28:57 ◼   ► And I think Cook's remarks on the call

00:29:00 ◼   ► were honestly what he meant.

00:29:03 ◼   ► And I think you're right that they were very carefully

00:29:07 ◼   ► considered so that he could state his opposition

00:29:11 ◼   ► in terms that were politically digestible

00:29:15 ◼   ► to the Chinese ears.

00:29:16 ◼   ► But I think his overall argument of,

00:29:19 ◼   ► we think it's better to be engaged than not engaged,

00:29:22 ◼   ► was true, and that's also what he said

00:29:25 ◼   ► about his involvement with the Trump administration,

00:29:28 ◼   ► that it's better to be involved,

00:29:30 ◼   ► and if I can get his ear and make my case

00:29:33 ◼   ► for why he's wrong on these things,

00:29:35 ◼   ► I have a better chance, we have a better chance

00:29:39 ◼   ► of affecting it by being engaged than not engaged.

00:29:42 ◼   ► Do I think he enjoys putting a suit on

00:29:44 ◼   ► and sitting there next to Trump?

00:29:47 ◼   ► And he's always conspicuously right next to Trump

00:29:50 ◼   ► because he's the CEO. - The richest one.

00:29:53 ◼   ► - Right, he's the, you know,

00:29:54 ◼   ► maybe not the person, personally not the richest,

00:29:56 ◼   ► but he certainly is the one of the company

00:29:58 ◼   ► that's the richest.

00:29:59 ◼   ► Do I think he enjoys it? - I thought about that right.

00:30:02 ◼   ► - Do I think Trump? - They probably rank it

00:30:03 ◼   ► by company size, right?

00:30:05 ◼   ► If you're half trillion dollars, you're over there.

00:30:06 ◼   ► If you're three quarters trillion dollars, you're there.

00:30:08 ◼   ► - I don't think the other administrations would do that.

00:30:10 ◼   ► I think Trump though certainly would, you know.

00:30:13 ◼   ► - No, I agree.

00:30:15 ◼   ► I mean, I think it's a direct relationship too,

00:30:16 ◼   ► is, you know, there was an argument, is that Apple, especially with its progressive policies,

00:30:21 ◼   ► with a gay CEO, with its history and interest in immigration, with its employees all over

00:30:28 ◼   ► the world, including in affected countries that were affected by the travel ban, that

00:30:33 ◼   ► they should completely, you know, create a kind of Cold War situation with the Trump

00:30:37 ◼   ► administration and just support and battle elsewhere.

00:30:42 ◼   ► And I, you know, as much as I would prefer Trump to be frozen out, on the other hand,

00:30:46 ◼   ► it doesn't do any good for the US economy, doesn't do any good for Apple, for its employees,

00:30:50 ◼   ► its shareholders, you know, Apple's customers.

00:30:54 ◼   ► It just, it makes things worse, as unpleasant as it might be to see what feels like, you

00:31:00 ◼   ► know, co-opt, being co-opted or being used.

00:31:03 ◼   ► Like Trump's comment, you know, "Oh, they're opening three big, beautiful plants."

00:31:06 ◼   ► This makes things up as we know.

00:31:08 ◼   ► Three big, beautiful plants.

00:31:09 ◼   ► It turns out that was total bullshit.

00:31:11 ◼   ► I thought it was.

00:31:11 ◼   ► - The fox, the fox, can we talk about,

00:31:14 ◼   ► I wanna segue slightly, if that's right.

00:31:16 ◼   ► - Let's hold this, let's hold this thought.

00:31:18 ◼   ► Remember that we're gonna come back to this.

00:31:19 ◼   ► I just wanted to say this.

00:31:20 ◼   ► - I'm gonna pause and fox-

00:31:21 ◼   ► - I wanna say this about the China thing,

00:31:23 ◼   ► is that to me, the thing that I think

00:31:25 ◼   ► that the zealots who want Apple to stand up

00:31:28 ◼   ► and shout a no, no, no about this,

00:31:30 ◼   ► that they are overlooking is the welfare

00:31:32 ◼   ► of the people of China.

00:31:33 ◼   ► Isn't that the most important thing?

00:31:36 ◼   ► It's not the abstract notion of are you,

00:31:40 ◼   ► are you hindering free speech?

00:31:42 ◼   ► Second, the notion of why free speech is important

00:31:48 ◼   ► is fundamentally about are the people,

00:31:50 ◼   ► it's the welfare and the freedoms of the people that matter.

00:31:53 ◼   ► And are the people of China better off or worse off

00:31:56 ◼   ► if Apple completely pulls out of China?

00:31:58 ◼   ► I would say they're worse off.

00:31:59 ◼   ► It's better-- - I think that's the issue.

00:32:01 ◼   ► They're so big, it'd be one thing

00:32:02 ◼   ► if we were a smaller company, they're so big

00:32:04 ◼   ► and they're so intertwined with the Chinese company,

00:32:07 ◼   ► they have sales, they have customers,

00:32:08 ◼   ► they have employees, they have stores,

00:32:11 ◼   ► they have manufacturing partners.

00:32:13 ◼   ► Regardless of what people think about Chinese

00:32:15 ◼   ► outsourcing and manufacture, the iPhone's would not be made

00:32:18 ◼   ► if it were not for China, it would not be affordable.

00:32:20 ◼   ► - China is cracking down on end-to-end

00:32:22 ◼   ► encrypted messaging systems.

00:32:26 ◼   ► They just stopped, they pulled the plug,

00:32:29 ◼   ► well not pulled the plug, but they set up

00:32:30 ◼   ► the great firewall to block WhatsApp two weeks ago.

00:32:34 ◼   ► - But iMessage and FaceTime are still working.

00:32:37 ◼   ► - Right, and iMessage and FaceTime,

00:32:39 ◼   ► and I know that there are cynics out there

00:32:41 ◼   ► who think, ah, Apple probably gave China

00:32:43 ◼   ► the back door or something like that.

00:32:45 ◼   ► They really are engineered, I can't prove this,

00:32:48 ◼   ► I'm not an encryption expert, I don't have the source code,

00:32:50 ◼   ► but everything I know about them is that they were drawn

00:32:53 ◼   ► from the ground up so that there could not be

00:32:55 ◼   ► a man in the middle back door just for China

00:32:58 ◼   ► or something like that.

00:32:59 ◼   ► They really are--

00:32:59 ◼   ► - There is a way to do it, but we require changes

00:33:04 ◼   ► that I think if we discovered that Tim Cook had authorized,

00:33:08 ◼   ► or anyone in the company had authorized

00:33:09 ◼   ► those kind of changes, and they'd been rolled out,

00:33:12 ◼   ► it's possibly he'd be committing a crime under US law.

00:33:15 ◼   ► So it's, right, you wouldn't,

00:33:17 ◼   ► I don't think he could do it.

00:33:19 ◼   ► It would be, it could be fraud.

00:33:20 ◼   ► I mean, their marketing materials,

00:33:22 ◼   ► everything they say says they don't do it,

00:33:23 ◼   ► so they would be committing certain kinds

00:33:25 ◼   ► of consumer and criminal fraud potentially

00:33:27 ◼   ► if they changed that.

00:33:28 ◼   ► - Right, the hit to their credibility

00:33:29 ◼   ► would be worth more money financially

00:33:31 ◼   ► than the Chinese market.

00:33:32 ◼   ► It would absolutely devastate the company.

00:33:34 ◼   ► It would crater the company.

00:33:35 ◼   ► And do I think, is it possible

00:33:38 ◼   ► that they might start blocking iMessage?

00:33:39 ◼   ► And is that the line where they would pull out of China?

00:33:42 ◼   ► No, probably not.

00:33:43 ◼   ► I'm just saying, I cited iMessage and FaceTime

00:33:46 ◼   ► as end-to-end encrypted things

00:33:48 ◼   ► that completely work in China.

00:33:50 ◼   ► Not as that's the only reason why Apple should stay in China

00:33:54 ◼   ► but just one example of why I think it should.

00:33:56 ◼   ► And that the main thing is to think about,

00:33:58 ◼   ► is it good or better or worse for the Chinese people?

00:34:02 ◼   ► Anyway, that was my thing.

00:34:04 ◼   ► What do you wanna talk about?

00:34:05 ◼   ► You had a Foxconn idea?

00:34:07 ◼   ► - Well, I just wanna, this is a little bit of a segue,

00:34:09 ◼   ► but it's kinda very similar.

00:34:10 ◼   ► So you know, Foxconn, so Trump had that big announcement

00:34:12 ◼   ► with Scott Walker in Wisconsin that,

00:34:14 ◼   ► "Hey, I've brokered this deal and Foxconn's coming,

00:34:17 ◼   ► "even though the deal has been in progress since 2014."

00:34:19 ◼   ► And Foxconn's been talking about it.

00:34:21 ◼   ► Foxconn's enabling the presidency

00:34:22 ◼   ► by allowing these kinds of messages to be said,

00:34:25 ◼   ► and you know, so that's a deal.

00:34:27 ◼   ► But so here's the thing that cracks me up,

00:34:28 ◼   ► is this is the kind of good deal we're getting,

00:34:30 ◼   ► is that, of course, states unfortunately work—they're actually all competing against each other to

00:34:37 ◼   ► lure businesses, and it winds up—Boeing got billions of dollars from my state, Washington

00:34:41 ◼   ► State, and then immediately, almost immediately, started laying people off and restructuring

00:34:44 ◼   ► its operations.

00:34:45 ◼   ► And there's a lot of anger here about Boeing because of that, because they got, I think,

00:34:49 ◼   ► the largest single tax incentive plan, and it was not structured to only be in effect

00:34:54 ◼   ► if—based on employment issues.

00:34:57 ◼   ► So you know, they're able to locate new production lines elsewhere.

00:35:00 ◼   ► So Wisconsin is very happy to offer $3 billion in state tax breaks, which winds up being

00:35:06 ◼   ► $230,000 per worker, assuming the factory employs 13,000 jobs.

00:35:14 ◼   ► So this is a 15-year deal, and in 15 years, 13,000 jobs probably won't generate tax revenue

00:35:19 ◼   ► that even approaches that much.

00:35:21 ◼   ► I mean, there's the issue about the tax, there'll be revenue booked from the plant that they'll

00:35:25 ◼   ► get taxed from.

00:35:26 ◼   ► There's other things, although because of this, we don't know what the final thing would

00:35:30 ◼   ► be, but I'm just like, this is the kind of big, beautiful deal that's being made, is

00:35:33 ◼   ► just giving all this money away. The state's giving away so much that it's going to wind up

00:35:38 ◼   ► maybe never making more money. It's great.

00:35:41 ◼   ► [laughter]

00:35:43 ◼   ► I really, while we're on it, I just have to say that this thing where Trump—was it an interview

00:35:47 ◼   ► with the Washington Post? I forget who it was with.

00:35:49 ◼   ► Oh, was nothing in your—no, which one is this?

00:35:52 ◼   ► I don't know. The one where he said that—I talked to—Tim Cook called me up. He said,

00:35:57 ◼   ► "Don, we're gonna build three big beautiful plants

00:36:00 ◼   ► "right here in the US."

00:36:03 ◼   ► - Yeah, Wall Street Journal.

00:36:03 ◼   ► - Wall Street Journal.

00:36:05 ◼   ► - Yeah, that was that interview

00:36:06 ◼   ► where they didn't release the transcript originally

00:36:08 ◼   ► and then it got released later.

00:36:09 ◼   ► They got leaked and eternity said all kinds of crazy things.

00:36:12 ◼   ► This part was reported.

00:36:13 ◼   ► - Apple did not respond.

00:36:15 ◼   ► I wasn't sure if that had something to do with

00:36:19 ◼   ► that they were only a week away

00:36:20 ◼   ► from the earnings call or whatever,

00:36:21 ◼   ► but it was obviously asked on the earnings call.

00:36:24 ◼   ► and Tim Cook gave another very politically--

00:36:28 ◼   ► - That was a very good answer, I thought.

00:36:29 ◼   ► - Well considered, but the translation is,

00:36:32 ◼   ► we have no idea what the fuck he's talking about.

00:36:35 ◼   ► - Right. - We have no plans.

00:36:35 ◼   ► - Well, I think the Foxconn, like, it's just,

00:36:38 ◼   ► he doesn't, nobody--

00:36:39 ◼   ► - I guess that's the kernel. - Summarizes things

00:36:40 ◼   ► where he puts it in a bullet point.

00:36:41 ◼   ► - I guess that, you know, 'cause he did,

00:36:43 ◼   ► he did make political hay out of this Foxconn plant

00:36:46 ◼   ► in, not Minnesota, it's Wisconsin.

00:36:50 ◼   ► Yeah, speaking of Ben, Ben Thompson.

00:36:51 ◼   ► - Yeah, Wisconsin, yeah.

00:36:54 ◼   ► And I guess somehow that rattled around

00:36:57 ◼   ► in that big emptied skull of his,

00:36:59 ◼   ► and somehow Foxconn makes Apple stuff.

00:37:03 ◼   ► And so a Foxconn plant for flat panel TVs in Wisconsin

00:37:08 ◼   ► turned into three huge factories for iPhones.

00:37:11 ◼   ► - It's great.

00:37:14 ◼   ► - It literally is the case that Apple hasn't even,

00:37:17 ◼   ► the flat panels that they're making at this Foxconn plant

00:37:19 ◼   ► aren't even part of anything that Apple would use.

00:37:22 ◼   ► So they're not even, there's no,

00:37:24 ◼   ► it could obviously change and perhaps

00:37:27 ◼   ► they could start making different types of flat panels there

00:37:30 ◼   ► and Apple obviously makes an awful lot of devices

00:37:32 ◼   ► that use displays.

00:37:33 ◼   ► So in theory, it's possible that displays made

00:37:37 ◼   ► in that facility might end up in Apple products someday,

00:37:39 ◼   ► but it's certainly not an Apple plant

00:37:41 ◼   ► in any way, shape, or form.

00:37:43 ◼   ► - But the thing I was more excited about

00:37:45 ◼   ► is that Cook said they're gonna invest all this money

00:37:47 ◼   ► in US manufacture, which is great.

00:37:49 ◼   ► I think the big story, so here's the big story

00:37:51 ◼   ► I think of the next 10 years is,

00:37:53 ◼   ► So, you know, a lot of the thing in China that makes it possible to manufacture goods

00:37:56 ◼   ► there very affordably is not just the labor costs, which have been going up steadily.

00:38:00 ◼   ► Labor is a tiny, tiny percentage of, at one point I think it was 1% of the retail price

00:38:05 ◼   ► of the iPhone was actual labor to assemble it.

00:38:08 ◼   ► And a lot of the times you have chips coming from all over the world, you've got components

00:38:11 ◼   ► coming from a bunch of places, but the main stuff is all being made and integrated in

00:38:15 ◼   ► China and it's the locked-in value of having all of these different industries that work

00:38:20 ◼   ► together, making components all in these, you know, sometimes one city or one area that form

00:38:26 ◼   ► these close relationships, that's the lock-in advantage they have. But labor is becoming less

00:38:30 ◼   ► and less of so, especially as robotic assembly is going to become, you know, even more so than

00:38:35 ◼   ► today. But so, what I'm interested about is this, the trend of the next 10 years is how much stuff

00:38:39 ◼   ► gets made domestically, whether it's domestically in the US or China for Chinese products for Chinese

00:38:45 ◼   ► which is a big push China has as well, is trying to

00:38:48 ◼   ► make high-tech products and other things that are

00:38:50 ◼   ► made in other countries, which still exists in

00:38:52 ◼   ► large quantities. Remember, the U.S. is still the

00:38:55 ◼   ► number one, or maybe we're down to the number two,

00:38:57 ◼   ► manufacturing economy in the world, despite the

00:38:59 ◼   ► fact that we've decreased employment in that

00:39:01 ◼   ► industry because we're so efficient. So, there's

00:39:04 ◼   ► this big trend. Stuff's going to come back here

00:39:06 ◼   ► because everything's gotten more, it gets more

00:39:08 ◼   ► expensive to move things around. It gets more

00:39:10 ◼   ► expensive to, like, I was just reading a great

00:39:14 ◼   ► a great article the other day about companies that are switching to software development in like,

00:39:19 ◼   ► you know, companies are hiring in Indiana and smaller states and mid-sized cities, not rural

00:39:24 ◼   ► yet or small towns, but they're hiring in these places where they have plenty of qualified people,

00:39:29 ◼   ► people willing to be trained. They pay them a great salary for the area, but it's a fraction

00:39:33 ◼   ► of the salary in Silicon Valley or New York or Seattle. They're in the same time zones or within

00:39:40 ◼   ► companies you're dealing with, they're native

00:39:42 ◼   ► English speakers. And as much as I want to, I mean,

00:39:45 ◼   ► I am not making any bias against people who learn

00:39:47 ◼   ► English as a second or third or fourth language,

00:39:49 ◼   ► because many people communicate perfectly well

00:39:51 ◼   ► in those. But when you add all the things up, it's

00:39:53 ◼   ► like they're finding, and wages in India have now

00:39:56 ◼   ► gone up as well as China. So, this article noted

00:39:59 ◼   ► that I think wages are now maybe, maybe cost half

00:40:01 ◼   ► as much on an hourly basis for a programmer in

00:40:04 ◼   ► India, but they're, all the things added up make

00:40:06 ◼   ► it harder to turn stuff as fast. It makes, it puts

00:40:09 ◼   ► it puts in enough friction that these companies

00:40:12 ◼   ► are now delighted to have people they can call

00:40:13 ◼   ► and work with in real time who are in the culture

00:40:18 ◼   ► and in the regulatory environment

00:40:20 ◼   ► and it's all kind of in the same place.

00:40:21 ◼   ► So I think that is exciting to see Apple invest

00:40:24 ◼   ► into more of the US manufacturing economy

00:40:27 ◼   ► because stuff is coming back and more of it will

00:40:30 ◼   ► as the cost and quality of life improves

00:40:33 ◼   ► in developing countries.

00:40:35 ◼   ► - That's well said.

00:40:36 ◼   ► All right, I'm gonna take a break here

00:40:37 ◼   ► I wanna thank our first sponsor.

00:40:39 ◼   ► Long time sponsor of the show, but they're back

00:40:41 ◼   ► and they have a new product, so don't,

00:40:43 ◼   ► just stay tuned even if you've heard of it.

00:40:44 ◼   ► It's Eero.

00:40:46 ◼   ► Eero makes WiFi mesh network equipment for your home.

00:40:50 ◼   ► They have a new second generation product, just came out,

00:40:52 ◼   ► I really think it might have been even last month,

00:40:54 ◼   ► it's brand new.

00:40:56 ◼   ► Second generation base station.

00:40:57 ◼   ► Looks exactly like the first one, almost.

00:40:59 ◼   ► You actually have to turn it upside down

00:41:01 ◼   ► and look at the model number to really tell the difference.

00:41:03 ◼   ► And they sort of did a little slightly different treatment

00:41:05 ◼   ► of the Eero logo on the thing,

00:41:08 ◼   ► but it's the same size, same shape.

00:41:10 ◼   ► And it can integrate, right?

00:41:11 ◼   ► If you already have Eero, you can buy the new stuff.

00:41:13 ◼   ► You can buy the new base stations

00:41:15 ◼   ► and they hook right into the network.

00:41:17 ◼   ► But the new one, they've added a new thing.

00:41:19 ◼   ► It's called the Eero Beacon, and it's about half the size.

00:41:22 ◼   ► The Eero's are really, really small, the base stations.

00:41:25 ◼   ► But now they have a beacon.

00:41:26 ◼   ► And in the original setup, the first gen Eero setup,

00:41:29 ◼   ► all of the stations were the same.

00:41:30 ◼   ► You'd get these little Apple TV style things.

00:41:32 ◼   ► One of them's your main one.

00:41:33 ◼   ► you hook it up to your ethernet for your cable,

00:41:36 ◼   ► wherever your internet comes into the house.

00:41:38 ◼   ► And then the other ones you put around the house.

00:41:41 ◼   ► Well now they've got this thing, and they were the same,

00:41:42 ◼   ► you just pick one to be the main one,

00:41:43 ◼   ► hook it up to the internet and you didn't have to do it.

00:41:46 ◼   ► Well now they have these ones called beacons,

00:41:47 ◼   ► and the beacons are half the size, they're smaller,

00:41:50 ◼   ► they don't even have a power cord.

00:41:51 ◼   ► What you do is you just plug it right into the wall.

00:41:53 ◼   ► It's just a little device that plugs in the wall.

00:41:56 ◼   ► Like a nightlight, except it actually has

00:42:01 ◼   ► a nightlight feature, which is awesome.

00:42:03 ◼   ► It's really, really clever.

00:42:04 ◼   ► And if you don't want that, you can turn it off.

00:42:07 ◼   ► And it's smart, and it knows it has ambient light sensors,

00:42:09 ◼   ► so it only comes on when you want it to.

00:42:12 ◼   ► But this second generation thing with the beacon

00:42:15 ◼   ► adds a third 5 gigahertz radio.

00:42:19 ◼   ► And so the second generation Eero is now tri-band,

00:42:21 ◼   ► and it makes it twice as fast as its predecessor.

00:42:24 ◼   ► And I had the first gen setup in my house,

00:42:27 ◼   ► and it's the fastest Wi-Fi I've ever had in the house.

00:42:30 ◼   ► and we have a four-story house,

00:42:34 ◼   ► gets really good internet up in the fourth floor,

00:42:38 ◼   ► which never would have,

00:42:39 ◼   ► with a base station that's on the first floor.

00:42:40 ◼   ► So it never could have happened with like a traditional,

00:42:44 ◼   ► try to blanket your house from one base station

00:42:47 ◼   ► Wi-Fi system, just wouldn't work.

00:42:48 ◼   ► If you don't know Eero,

00:42:50 ◼   ► the basic idea is that they set up a mesh network

00:42:53 ◼   ► where it's like this type of network

00:42:56 ◼   ► that like a big office would have at great expense

00:42:58 ◼   ► with a professional setup.

00:42:59 ◼   ► And instead, you don't have to be an expert at all.

00:43:04 ◼   ► You just use the excellent, excellent Eero app

00:43:07 ◼   ► right on your phone.

00:43:08 ◼   ► And it tells you, walks you right through how to set it up.

00:43:10 ◼   ► It gives you advice on where to position them

00:43:13 ◼   ► related to stairs and stuff like that.

00:43:15 ◼   ► The beacon makes it even easier

00:43:18 ◼   ► to just blanket your whole house

00:43:22 ◼   ► with really, really strong wifi signal.

00:43:25 ◼   ► It's a great product.

00:43:26 ◼   ► I really, really love the company.

00:43:28 ◼   ► and the second generation one is just better in every way.

00:43:31 ◼   ► It's literally faster.

00:43:32 ◼   ► The beacons really, really make it better.

00:43:35 ◼   ► And last but not least,

00:43:37 ◼   ► Eero has incredible customer support,

00:43:39 ◼   ► and it's something that the company

00:43:40 ◼   ► has really invested a lot in.

00:43:41 ◼   ► They wanted to emphasize that I mentioned it here

00:43:43 ◼   ► on the ad read.

00:43:44 ◼   ► They'll get you, hook you up, you call them up,

00:43:47 ◼   ► and they'll put you in touch with a Wi-Fi expert

00:43:49 ◼   ► within 30 seconds.

00:43:51 ◼   ► I didn't need it.

00:43:52 ◼   ► I don't think you would either,

00:43:53 ◼   ► but just in case you have a weird thing

00:43:54 ◼   ► or you run into something,

00:43:56 ◼   ► You can get somebody on the phone in 30 seconds

00:43:59 ◼   ► and they know what they're talking about.

00:44:01 ◼   ► Really, really, this is just a great product.

00:44:03 ◼   ► So go there, figure it out, and you go to the Eero.com

00:44:06 ◼   ► and buy enough equipment based on the size

00:44:10 ◼   ► of your apartment or home or whatever

00:44:12 ◼   ► you're trying to set it up.

00:44:13 ◼   ► And remember this code, the talk show, the talk show.

00:44:17 ◼   ► And you use that code when you buy your Eero kit

00:44:20 ◼   ► and you will get free overnight shipping.

00:44:21 ◼   ► So literally, you could just pause this podcast right now

00:44:24 ◼   ► and go order up your Eero.

00:44:26 ◼   ► If you were thinking, if you've been thinking for a while

00:44:28 ◼   ► about getting a new Wi-Fi setup,

00:44:30 ◼   ► and you've just been putting it off,

00:44:31 ◼   ► well now's the time to do it,

00:44:32 ◼   ► 'cause the Eero version two is out, so go get it.

00:44:35 ◼   ► Pause the podcast, come back when you're done,

00:44:37 ◼   ► and it'll show up at your house tomorrow for free.

00:44:40 ◼   ► So my thanks to Eero, great product.

00:44:43 ◼   ► Back to the show.

00:44:45 ◼   ► - I don't wanna provide any, what's the rest,

00:44:50 ◼   ► endorsement of products I haven't used,

00:44:51 ◼   ► but I have not used Eero yet,

00:44:52 ◼   ► but oh my God, is everybody talking about it?

00:44:54 ◼   ► So I've gotta try this.

00:44:55 ◼   ► As a long time Wi-Fi guy,

00:44:57 ◼   ► I have a ridiculously working network now

00:44:59 ◼   ► with like TP-Link and Apple routers and CRUD

00:45:02 ◼   ► and lots of wires, so.

00:45:03 ◼   ► - You used to.

00:45:04 ◼   ► - Eero is my future for testing.

00:45:05 ◼   ► - For those who don't remember,

00:45:06 ◼   ► Glenn used to write a Wi-Fi blog, right?

00:45:10 ◼   ► - Every day.

00:45:12 ◼   ► - There was, the early days of Wi-Fi,

00:45:14 ◼   ► there was so much news that you actually could,

00:45:16 ◼   ► and did legitimately have a daily updated Wi-Fi blog.

00:45:20 ◼   ► - I've attempted to reboot it.

00:45:22 ◼   ► I shut it down in 2011.

00:45:23 ◼   ► still get a lot of traffic, which is hilarious.

00:45:25 ◼   ► One of the most popular articles in that story is a link, not an article, but a link to David

00:45:30 ◼   ► Pogue's review in like 2007 of some Wi-Fi connected speakers, because the Internet's

00:45:35 ◼   ► a weird place, man.

00:45:36 ◼   ► But I've been tempted to reboot it just to write about mesh, because there's so much.

00:45:39 ◼   ► I just wrote like an overview.

00:45:40 ◼   ► What was the name of the blog?

00:45:41 ◼   ► For Macworld.

00:45:42 ◼   ► No, what was the name of your blog?

00:45:44 ◼   ► Oh, Wi-Fi networking news.

00:45:45 ◼   ► So, it's Wi-Fi netnews.com.

00:45:46 ◼   ► Still there, still there.

00:45:47 ◼   ► The main part, major article is, hey, I shut this thing down.

00:45:50 ◼   ► just wrote a mesh explainer for TechHive, a part of a Macworld sister site, and part of it was

00:45:57 ◼   ► just kind of like, you know, so, like, why do you want to, like, what's the point of this? And

00:46:03 ◼   ► really, there's like seven or eight systems out there, some are from startups, some are from third,

00:46:08 ◼   ► you know, existing companies, and the deal is people are just sick, sick to death of dead

00:46:13 ◼   ► areas and configuring things. And you know, I wrote for Harry McCracken, the first article I

00:46:19 ◼   ► I wrote for PC World, I want to say it was 10, 12 years ago when Harry was the editor-in-chief,

00:46:25 ◼   ► they had gotten this thing back from the survey. They used to do customer surveys at PC World. It

00:46:28 ◼   ► was great. They'd go out to read those surveys and get huge amounts of information. And they

00:46:32 ◼   ► had found the return rate on Wi-Fi equipment was like 30% to retail. And I would not be surprised

00:46:39 ◼   ► if for conventional Wi-Fi stuff, like just the base station router stuff that you get, not the

00:46:44 ◼   ► mesh things if the rate wasn't still 30 percent. Just based on people's frustration

00:46:49 ◼   ► with setting it up.

00:46:52 ◼   ► I just can't say enough good things about the way that Eero works. I know that AdRead's

00:46:56 ◼   ► officially over, but I don't care. It's a part of the show.

00:46:58 ◼   ► I have to find the thing. Everybody's talking about it.

00:47:01 ◼   ► You know how you get like—I had to do it with the stupid cable modem I got from Comcast

00:47:07 ◼   ► when I moved, where you end up going to a web page in there. Like, go to this web page

00:47:12 ◼   ► and you configure things there.

00:47:14 ◼   ► - Yeah.

00:47:15 ◼   ► - Always feels janky configuring something

00:47:17 ◼   ► from a web app or a web forum

00:47:19 ◼   ► and you're typing in IP numbers

00:47:21 ◼   ► and you're seeing IP numbers and stuff like that.

00:47:22 ◼   ► Setting up an Eero is nothing like that.

00:47:24 ◼   ► And you don't, it's one of those things too

00:47:27 ◼   ► where you do it on your phone, not on your computer,

00:47:30 ◼   ► and it feels right that you're doing it on your phone.

00:47:33 ◼   ► It actually, 'cause the experience is so just tap this,

00:47:36 ◼   ► tap that, you know, okay this,

00:47:38 ◼   ► that doing it on a phone doesn't feel

00:47:41 ◼   ► like you're trying to,

00:47:43 ◼   ► Like if you're, a lot of times when you do something

00:47:45 ◼   ► on the phone instead of on a computer,

00:47:47 ◼   ► it feels like you're drawing, getting water

00:47:49 ◼   ► from a very, very narrow straw.

00:47:51 ◼   ► And it's like, oh my God, if I was on my Mac,

00:47:53 ◼   ► I could just drink it as fast as I want.

00:47:55 ◼   ► (laughing)

00:47:55 ◼   ► That's how I feel. - Exactly.

00:47:57 ◼   ► - But with the Eero setup, doing it on the phone

00:47:59 ◼   ► is actually ideal because it really is just a big fat,

00:48:03 ◼   ► tap this, tap that type of process.

00:48:05 ◼   ► Also the build quality on their equipment is amazing.

00:48:10 ◼   ► Absolutely amazing.

00:48:11 ◼   ► It feels like Apple quality.

00:48:13 ◼   ► I really, they can't say that I guess,

00:48:15 ◼   ► but that's what I would say.

00:48:16 ◼   ► It's like--

00:48:17 ◼   ► - This is really, it's a Sonos strategy, right?

00:48:19 ◼   ► It's that Sonos was ex-Apple people,

00:48:21 ◼   ► but Sonos made a thing that is,

00:48:23 ◼   ► as the people liked as much as they like Apple products,

00:48:25 ◼   ► which is really hard to do.

00:48:26 ◼   ► It had the build quality, the features,

00:48:28 ◼   ► they charged a premium price,

00:48:29 ◼   ► 'cause they did a premium thing.

00:48:30 ◼   ► - I'll trash a company.

00:48:32 ◼   ► I'll name it, and I'll say Linksys.

00:48:33 ◼   ► You ever have Linksys equipment?

00:48:35 ◼   ► And I've had it, I've had it.

00:48:36 ◼   ► But just, don't even talk about the experience of it,

00:48:38 ◼   ► but just the type of plastic that they use.

00:48:40 ◼   ► They use the cheapest shit plastic that you could ever do.

00:48:43 ◼   ► And if you squeeze the device, it creaks,

00:48:46 ◼   ► as a brand new device, it creaks in a way that,

00:48:48 ◼   ► you know what I'm talking about,

00:48:49 ◼   ► like a cheap plastic gadget.

00:48:51 ◼   ► - I, yeah, it's just.

00:48:52 ◼   ► - Eero stuff is so solid, it is amazing.

00:48:54 ◼   ► What did they say here?

00:48:56 ◼   ► There's something in their talking points about it.

00:48:57 ◼   ► - Does it give off a pleasant scent also?

00:49:00 ◼   ► - No, but it has no scent whatsoever.

00:49:01 ◼   ► And it doesn't have that cheap scent, you know what I mean?

00:49:04 ◼   ► Here, this is from their talking points.

00:49:06 ◼   ► Our manufacturing process rejects any performance flaw

00:49:09 ◼   ► cosmetic defense larger than the tip of a needle. And I believe it. They look like museum objects.

00:49:16 ◼   ► Anyway.

00:49:16 ◼   ► Pete: That's good, though. That's part of the thing. Yeah, it's Wi-Fi still painful,

00:49:21 ◼   ► or still, I'm sorry, still painful enough people are inventing more solutions to solve it,

00:49:25 ◼   ► like 15 years, 16 years into Wi-Fi being a widespread thing.

00:49:28 ◼   ► Ted, that's the truth.

00:49:28 ◼   ► Yeah. So, speaking of that, it rolls right out of the Eero topic, or Eero read, is the XKCD comic

00:49:35 ◼   ► I linked to this week.

00:49:36 ◼   ► Pete; Oh my God, that was great.

00:49:38 ◼   ► Where, what's his name, Randall, whatever his name is.

00:49:42 ◼   ► The comic is--

00:49:43 ◼   ► - Monroe.

00:49:44 ◼   ► - Yeah, over time with phone, like starting in 2007,

00:49:49 ◼   ► 'cause that's like the AD one of the iPhone era,

00:49:54 ◼   ► there was this sense of you'd be doing things

00:49:59 ◼   ► and if you're trying to do it on the cell network

00:50:01 ◼   ► on your phone, you'd say, ah, this is flaking out,

00:50:04 ◼   ► this won't load or it's not fast enough or whatever,

00:50:08 ◼   ► I gotta do this on Wi-Fi.

00:50:09 ◼   ► And that at some point a handful of years ago,

00:50:12 ◼   ► around 2011 or so, the reliability of the cellular network

00:50:17 ◼   ► surpassed this reliability of Wi-Fi networks.

00:50:20 ◼   ► And more often than the other way around,

00:50:22 ◼   ► when you're doing something on Wi-Fi,

00:50:24 ◼   ► you wind up turning off Wi-Fi and turning on cellular

00:50:27 ◼   ► to get it to load.

00:50:31 ◼   ► And I find personally for me, that is absolutely true.

00:50:34 ◼   ► And I will even say, not here at home with my Ero setup,

00:50:39 ◼   ► and I really am saying that, I mean this sincerely,

00:50:42 ◼   ► I'm not saying this because they were the sponsor,

00:50:44 ◼   ► but Wi-Fi in general, like Wi-Fi at just,

00:50:50 ◼   ► like my mother-in-law's house or my parents' house

00:50:52 ◼   ► or anywhere else where I might have Wi-Fi,

00:50:54 ◼   ► or like at a hotel or something like that.

00:50:56 ◼   ► I never get the Wi-Fi, the hotel Wi-Fi anymore.

00:50:58 ◼   ► I just use my phone, unless it's like video.

00:51:03 ◼   ► it's a funny, I totally, I was laughing my head off when you linked to this because I was just

00:51:08 ◼   ► thought, oh my God, I'm thinking of the number of times when I'm, so I have, like I said, I have a

00:51:13 ◼   ► hilarious router set up in my house, so it all works, so I haven't changed it out yet because

00:51:17 ◼   ► I have good performance everywhere and I paid the money and so at some point I will just swap it all

00:51:21 ◼   ► out for mesh because this is ridiculous what I'm doing. I have wires running, I'm a wifi guy, I've

00:51:26 ◼   ► got ethernet running all over the house. It's ridiculous, makes me mad. It's terrible. But so,

00:51:32 ◼   ► I'm thinking the number of times I am out of my

00:51:34 ◼   ► house somewhere and it has a Wi-Fi network and I

00:51:37 ◼   ► have to, I'm like, oh God, and I go and I swipe up

00:51:39 ◼   ► control center and I turn off Wi-Fi. How many

00:51:42 ◼   ► times are you doing that? I mean, I, we get by, my

00:51:45 ◼   ► wife and I get by with a three gigabyte a month

00:51:48 ◼   ► pooled plan with AT&T. We are very low, we don't

00:51:53 ◼   ► spend that much time away from Wi-Fi networks or

00:51:55 ◼   ► the house or whatever. And we're starting to

00:51:57 ◼   ► exceed it because the networks are so bad and

00:51:58 ◼   ► we're like, oh, we're going to have to spend

00:51:59 ◼   ► another like $200 a year to upgrade to the next

00:52:02 ◼   ► mark because we're burning through it because we need it elsewhere. But it's

00:52:07 ◼   ► true. Judging by the reaction I got from people, I got a whole bunch of "yes,

00:52:12 ◼   ► that's amazing, I never really thought about it." And I have to admit, until I saw that

00:52:14 ◼   ► comic, I just never really thought about it because my first impression,

00:52:20 ◼   ► and I think this is true in so many ways psychologically, and it's, for

00:52:26 ◼   ► example, just one that everybody who listens to this show is familiar with,

00:52:31 ◼   ► with.

00:52:33 ◼   ► It took Apple 15 years after it should

00:52:38 ◼   ► have been the conventional wisdom

00:52:40 ◼   ► that this is a thriving company.

00:52:43 ◼   ► I would say it was at least 15 years

00:52:45 ◼   ► after the consensus of the business world

00:52:47 ◼   ► is that this is a very successful company that has

00:52:49 ◼   ► a bright future ahead.

00:52:51 ◼   ► 15 years of Apple as a company that's on the verge of collapse

00:52:55 ◼   ► because they were on the verge of collapse in 1997.

00:53:01 ◼   ► And they were on really shaky ground.

00:53:03 ◼   ► And people who formed their opinion of Apple

00:53:05 ◼   ► as a business in that time, it stuck.

00:53:09 ◼   ► It stuck long after it shouldn't have,

00:53:11 ◼   ► because that was the first impression.

00:53:13 ◼   ► And it was true at the time.

00:53:15 ◼   ► And I think that the fact that cell networks are flaky

00:53:19 ◼   ► and can't be depended on, and Wi-Fi is definitely

00:53:23 ◼   ► a better, more sturdy technology than cellular,

00:53:26 ◼   ► was absolutely the truth worldwide, everywhere.

00:53:29 ◼   ► And the fact that that's different now,

00:53:33 ◼   ► I never really reconsidered that.

00:53:35 ◼   ► Even though it was subconsciously without thinking about it,

00:53:38 ◼   ► I was raising the window shade and turning off the,

00:53:42 ◼   ► whatever you call the thing, the control center,

00:53:44 ◼   ► and turning off Wi-Fi.

00:53:45 ◼   ► - No, I had the same reaction for a long time.

00:53:48 ◼   ► I was a big fan of LTE when it started rolling out,

00:53:51 ◼   ► and we got it here in Seattle reasonably early, feels like.

00:53:54 ◼   ► And the first time I was testing it, I was like,

00:53:57 ◼   ► "Wow, I'm actually getting,"

00:53:59 ◼   ► like 20 megabits per second or 10. It was something

00:54:01 ◼   ► outrageous compared to 3G, even HSDPA+ or whatever

00:54:06 ◼   ► it was at the time that was the big thing. It was

00:54:08 ◼   ► like, all right, this is really great, and we're at

00:54:10 ◼   ► the bottom of LTE. Like, we're still in the US,

00:54:13 ◼   ► we're still, it's not that other countries are that

00:54:16 ◼   ► far ahead, but the general LTE flavor that's being

00:54:19 ◼   ► deployed or that's deployed everywhere is really

00:54:21 ◼   ► still the bottom. Like, we're going to, just like

00:54:23 ◼   ► with Wi-Fi where we started at like, you know, 11

00:54:26 ◼   ► megabits per second, but it was much higher, it was

00:54:28 ◼   ► but it was much lower. And then we went up to 54 and higher and higher. Now we have 802.11ac,

00:54:33 ◼   ► and there's different models. You can push, if you're lucky, you can push a gigabit per second

00:54:37 ◼   ► or more across two different frequencies with your one base station now, right? And that's amazing

00:54:43 ◼   ► when it works correctly. But LTE, yeah, and LTS, so, and there's more advanced, these Wave 2 AC

00:54:51 ◼   ► units that are coming out that are going to be, that are much better for throughput and range and

00:54:54 ◼   ► because they do beamforming, so they focus energy

00:54:56 ◼   ► in the right place.

00:54:57 ◼   ► But the LTE still has, there's so much headroom in LTE,

00:55:00 ◼   ► and 5G is still a long way away, but like 4G LTE,

00:55:03 ◼   ► we will have networks eventually that are hundreds

00:55:05 ◼   ► of megabits per second that are just gonna be

00:55:07 ◼   ► generally available, and then you have to deal with

00:55:08 ◼   ► what the bandwidth cost will be when you're,

00:55:10 ◼   ► that kind of thing.

00:55:12 ◼   ► But here's the thing, John, this is I think the big thing,

00:55:14 ◼   ► is that we forget sometimes, I have gigabit internet

00:55:18 ◼   ► at my home, which I am delighted with,

00:55:19 ◼   ► and I'm paying too much for it, like 100 and,

00:55:22 ◼   ► hundred and, well, I think I'm paying 156 bucks a month and it includes a phone line.

00:55:26 ◼   ► If I didn't get the phone line, it would cost $40 a month more, because that's how bundling works.

00:55:30 ◼   ► Pete: Cracks me up. Do you actually get, what speed do you actually get?

00:55:34 ◼   ► Pete; I get like 600 up and 300 down.

00:55:38 ◼   ► Pete; Wow, that's fantastic. That is, wow.

00:55:40 ◼   ► Pete; And sometimes more.

00:55:41 ◼   ► Pete; I'm coming over.

00:55:42 ◼   ► Pete; But it's like, you know, it's awesome.

00:55:43 ◼   ► Pete; I'm coming over. I'm coming to see you.

00:55:44 ◼   ► Pete; My friend, you know, your friend of mine, Jeff Carlson, is going to come over,

00:55:47 ◼   ► we're going to lunch someplace in a few weeks and he's going to come over in the morning and just,

00:55:51 ◼   ► do his back plays back up. He's got like 700 gigabytes to go and he's like, can I plug in

00:55:55 ◼   ► for a few hours? But yeah, come on over. Use some of my untapped bandwidth. But most people in the

00:56:00 ◼   ► country, so I think the average bandwidth, I just found a number from last year, but it's like 50

00:56:06 ◼   ► megabit per second downstream is now the average. That's because there is more gigabit and 100

00:56:10 ◼   ► megabit per second internet being pushed out. But the, let's see where we're at now. I think it's

00:56:16 ◼   ► I think it's the, oh here it is, 18 megabits per second

00:56:18 ◼   ► is the 10 fastest average speeds right now.

00:56:22 ◼   ► So it's still, I think most people in the US

00:56:26 ◼   ► have home broadband that's much slower than LTE

00:56:31 ◼   ► in the same area they're at.

00:56:33 ◼   ► - Yeah, at my new house we have much,

00:56:36 ◼   ► my internet used to be a running joke

00:56:38 ◼   ► about how bad the internet was at my old house.

00:56:40 ◼   ► It really was, and it really did.

00:56:41 ◼   ► I know, Merlin, I still don't know if Merlin believes me,

00:56:44 ◼   ► but we've had a couple of, we had that one,

00:56:46 ◼   ► one of my favorite episodes of this show ever

00:56:48 ◼   ► was with Merlin and we were talking about Comcast

00:56:50 ◼   ► and the stupid webpage they had with the,

00:56:52 ◼   ► (laughing)

00:56:54 ◼   ► the giant orange cone that was,

00:56:56 ◼   ► if it was in proportion to the van,

00:56:59 ◼   ► it's like a 20 foot, there's a dog chasing a cat.

00:57:03 ◼   ► Anyway, but it really did, in my old house,

00:57:06 ◼   ► it really did, the internet service

00:57:08 ◼   ► suffered tremendously when it rained.

00:57:10 ◼   ► (laughing)

00:57:12 ◼   ► I swear to God.

00:57:14 ◼   ► - Oh my God.

00:57:14 ◼   ► - So like if I was set to record the show

00:57:16 ◼   ► and it was a rainy day, I knew that we were in for trouble.

00:57:20 ◼   ► - That's 'cause there's old rotted cables

00:57:22 ◼   ► that rain infiltrates and it disrupts the,

00:57:25 ◼   ► there are just holes in your coax.

00:57:27 ◼   ► - I forget how long ago it was.

00:57:29 ◼   ► There's an episode of it.

00:57:30 ◼   ► I'm pretty sure I'm not making this up.

00:57:32 ◼   ► There was an episode of the talk show

00:57:33 ◼   ► a couple hundred episodes ago.

00:57:34 ◼   ► Might have even been back in the Dan Benjamin era,

00:57:36 ◼   ► but it was so many Skype drops because it was a rainy day

00:57:39 ◼   ► that we literally edited the show

00:57:41 ◼   ► and just kept the Skype drops in.

00:57:44 ◼   ► Instead of editing around them seamlessly,

00:57:46 ◼   ► we just played the Skype connection sound

00:57:49 ◼   ► over and over again.

00:57:50 ◼   ► What do I get?

00:57:53 ◼   ► So here's what I get.

00:57:54 ◼   ► It depends, but I can get, I have some speed tests here

00:57:58 ◼   ► where I'm getting 220, 230, 238 down,

00:58:03 ◼   ► and that's over Wi-Fi.

00:58:06 ◼   ► That's Wi-Fi.

00:58:08 ◼   ► but up is on the same test, 12, 12, 12.

00:58:13 ◼   ► Yeah, it's super consistent.

00:58:14 ◼   ► - 12 megabits per second?

00:58:16 ◼   ► - Yeah.

00:58:16 ◼   ► - 12 megabits per second, what the?

00:58:18 ◼   ► Yeah, so this is what I love,

00:58:19 ◼   ► so CenturyLink is one of the old baby bells,

00:58:21 ◼   ► or no, I'm sorry, it's not one of the old baby bells exactly.

00:58:24 ◼   ► It was like, there were different smaller companies,

00:58:27 ◼   ► like rural telephone companies, and it all kinda merged.

00:58:30 ◼   ► They took over, it was US West and then Quest,

00:58:32 ◼   ► and CenturyLink was like Century something else

00:58:35 ◼   ► and whatever.

00:58:36 ◼   ► they have like the worst portfolio. They have like all wired phone lines and they're kind of like a

00:58:42 ◼   ► junk, I mean, I'm being too harsh because I don't know all the business model issues, but you know,

00:58:45 ◼   ► like Verizon spun off all of its wired phone lines. Like, Verizon doesn't own any POTS anymore.

00:58:51 ◼   ► Pete: Right.

00:58:51 ◼   ► Pete; And Sprint, I think, got rid of their, so like,

00:58:53 ◼   ► excuse me, there's still millions and millions of wired phone lines in the country, even as they

00:58:59 ◼   ► decline super rapidly, it's like, you know, how many modems are in use? We're in that title of

00:59:03 ◼   ► Oh my God, wait, sidebar, I'm starting to watch Futurama from the beginning with my

00:59:07 ◼   ► other son who is 10.

00:59:08 ◼   ► We got to an episode in season two, which is a joke about logging.

00:59:11 ◼   ► Good news, everyone! I started, I tried to log on starting weeks ago. We finally got

00:59:15 ◼   ► through to AOL. And, you know, it sees they're putting on virtual reality to go this whole thing.

00:59:20 ◼   ► And I'm like, oh my God, we pause, my wife and I are explaining for like 10 minutes to my 10-year-old.

00:59:25 ◼   ► Okay, so there was a phone and you dial, and he's like, I'm like, so there was a time when the

00:59:30 ◼   ► when the internet wasn't always on, it wasn't always available. He's like, "Really?" He's just

00:59:34 ◼   ► like, looking at me like an anthropologist, like, "How did that work?" Because we dialed up and it

00:59:39 ◼   ► made noises, and it was a thousand times slower than our current connection.

00:59:42 ◼   ► Pete: Maybe more. It might be more than a thousand times slower.

00:59:45 ◼   ► Pete: What's, what is 56k divided by gigabit? I got a, I got a math program here.

00:59:50 ◼   ► Pete: Yeah.

00:59:50 ◼   ► Pete: But so, that was hilarious. But so, I interrupted myself.

00:59:54 ◼   ► Pete: Do the math. Can you do the math?

00:59:55 ◼   ► Pete; I have, yeah, I use Solver, which lets you pipe an arbitrary S-O-U-L-V-R.

01:00:00 ◼   ► I love that.

01:00:01 ◼   ► You can type in, I can type 56 kilobits per second

01:00:03 ◼   ► divided by one gigabit per second,

01:00:05 ◼   ► and it tells me, wait, I got the units wrong.

01:00:07 ◼   ► It's in percentage.

01:00:10 ◼   ► I'm gonna put a link in the show notes to solve it.

01:00:12 ◼   ► I'm doing it wrong, wait.

01:00:12 ◼   ► One, I gotta do it.

01:00:14 ◼   ► One gigabit per second divided by 56,

01:00:16 ◼   ► I did it the wrong way around.

01:00:18 ◼   ► 56 kilobits per second.

01:00:19 ◼   ► Oops, I can type right in real time.

01:00:21 ◼   ► It is, oh, it's, so I have a connection

01:00:24 ◼   ► that is 2200 times as fast as I did.

01:00:27 ◼   ► I was correct that it was more.

01:00:29 ◼   ► - You're right, more than a thousand.

01:00:30 ◼   ► - So mine, 200 megabits would be what?

01:00:34 ◼   ► Divide by five, so like 500 times faster, 600 times faster?

01:00:38 ◼   ► - Yeah, like 400, 446 times faster.

01:00:41 ◼   ► Yeah, so and the scale of things, right,

01:00:43 ◼   ► like you know, it's one thing when you say I have--

01:00:45 ◼   ► - Did you explain to your son that if somebody picked up

01:00:48 ◼   ► one of the phones while you were connected that it would--

01:00:50 ◼   ► - Oh yeah, my wife was like, Flynn was saying,

01:00:52 ◼   ► so you know, so understand honey,

01:00:54 ◼   ► that if you use the phone to connect to the internet,

01:00:57 ◼   ► you couldn't use it for something else.

01:00:58 ◼   ► He's like, "Huh."

01:01:00 ◼   ► He wasn't incredulous.

01:01:00 ◼   ► He was sort of like, "This is, okay."

01:01:03 ◼   ► - If somebody picked up the phone,

01:01:04 ◼   ► it would instantly disconnect you.

01:01:05 ◼   ► And if they quick hung up, it didn't put you back on.

01:01:07 ◼   ► You had to start all over again.

01:01:09 ◼   ► - That's right.

01:01:10 ◼   ► There was that call waiting feature

01:01:11 ◼   ► that was added in some version of v.something.

01:01:15 ◼   ► So that was hilarious.

01:01:17 ◼   ► - Yeah, you could even have your connection drop

01:01:20 ◼   ► just because a call came in.

01:01:22 ◼   ► And you didn't even, even if you don't answer.

01:01:25 ◼   ► - Oh, you didn't even call anything.

01:01:26 ◼   ► Oh, I know what I remember.

01:01:27 ◼   ► So, CenturyLink, so this is the thing, the reason we have Gigabit Internet in Seattle

01:01:31 ◼   ► by our phone company is that they are desperately trying to, they're putting in fiber as fast

01:01:36 ◼   ► as they can possibly string it up in order to replace the income that they're losing

01:01:40 ◼   ► much more rapidly.

01:01:41 ◼   ► So what I'm hoping, I assume, and this is probably rude of me because, I don't know,

01:01:45 ◼   ► it's a company, I assume at one point, at some point, CenturyLink will be unable to

01:01:49 ◼   ► sustain their business model and I will have to switch to Comcast, which now has something

01:01:53 ◼   ► that's cheaper but has its limits. So, I have uncapped internet. When I switched over to

01:01:58 ◼   ► Blackblaze, gosh, a while ago now, I switched over and I had like, I don't know, 1.2 terabytes

01:02:04 ◼   ► to upload. I think it uploaded in like a day or something, like a day and a half. It was

01:02:08 ◼   ► ridiculous. I set it to 10 concurrent threads. It's like, you're uploading at 500 megabits

01:02:13 ◼   ► per second. I'm like, right on! And I had my whole, you know, life back up there. So.

01:02:17 ◼   ► That's crazy.

01:02:18 ◼   ► I know. And so, I'm paying it through the nose for it, but as a home worker and as what I need,

01:02:22 ◼   ► I could have saved money and got 100 megabit per second.

01:02:26 ◼   ► - I would spend it if I could.

01:02:27 ◼   ► We don't have the, as far as I know,

01:02:29 ◼   ► what I have is the fastest internet

01:02:30 ◼   ► that I could possibly get in Philadelphia.

01:02:32 ◼   ► Because we're--

01:02:33 ◼   ► - It'll keep changing though.

01:02:34 ◼   ► Yeah, home of former Adelphia Comcast headquarters.

01:02:37 ◼   ► - Well no, they're still there.

01:02:38 ◼   ► They're building a new tower one block over.

01:02:40 ◼   ► They have the two--

01:02:41 ◼   ► - Yeah, so you gotta--

01:02:42 ◼   ► - Two biggest skyscrapers in town.

01:02:44 ◼   ► Welcome to cable town.

01:02:45 ◼   ► - So, oh my god.

01:02:47 ◼   ► - But that's why we don't have fiber.

01:02:48 ◼   ► There is no fiber in Philadelphia.

01:02:50 ◼   ► Because Comcast keeps it.

01:02:51 ◼   ► - Docsis 3, this requires them,

01:02:54 ◼   ► they have to keep rejiggering channels

01:02:55 ◼   ► 'cause they give up certain things,

01:02:56 ◼   ► but people, they don't need as much

01:02:57 ◼   ► and eventually you will be able to get it,

01:02:59 ◼   ► but it'll be subject to the one terabyte,

01:03:01 ◼   ► not cap, but I guess non-overage fee thing that they do.

01:03:07 ◼   ► But it'll come.

01:03:08 ◼   ► I mean, I think it's fascinating.

01:03:09 ◼   ► I thought actually the rollout of much higher speed internet

01:03:12 ◼   ► would take a lot longer than it has

01:03:14 ◼   ► because I thought the incentives were

01:03:15 ◼   ► in keeping it scarce and charging through the nose.

01:03:17 ◼   ► But I think we're seeing just small enough competition

01:03:20 ◼   ► And I think the cellular pricing on some networks,

01:03:23 ◼   ► especially with T-Mobile with its unlimited thing,

01:03:25 ◼   ► even though you can't tether,

01:03:27 ◼   ► like the migration to mobile services

01:03:29 ◼   ► away from desktop computers

01:03:30 ◼   ► and conventional television watching,

01:03:32 ◼   ► especially through tablets,

01:03:33 ◼   ► I think is forcing the wire line,

01:03:37 ◼   ► fiber, cable, DSL firms,

01:03:40 ◼   ► I think they've had to up what they do

01:03:41 ◼   ► faster than they wanted to.

01:03:43 ◼   ► - I'm sitting here looking,

01:03:44 ◼   ► I wanted to see how much internet I've been using.

01:03:47 ◼   ► And I couldn't find the app on my phone.

01:03:49 ◼   ► and I swear to you, I'm telling you the truth.

01:03:51 ◼   ► So you know how Comcast rebranded their home services

01:03:54 ◼   ► as Xfinity, right?

01:03:56 ◼   ► Because the Comcast name is so sullied

01:03:58 ◼   ► that they have to call it something new.

01:04:00 ◼   ► - Something you can't spell, right?

01:04:02 ◼   ► - Right.

01:04:02 ◼   ► But their app that you use to see your account and stuff,

01:04:08 ◼   ► the icon for the app, the icon has some kind of little logo

01:04:12 ◼   ► and then it says on the icon Xfinity.

01:04:14 ◼   ► But the name of the app, this is for the iPhone

01:04:19 ◼   ► so I can't rename the app.

01:04:20 ◼   ► The name of the app is called My Account.

01:04:23 ◼   ► (laughing)

01:04:26 ◼   ► I swear, I swear to God, go to the App Store

01:04:28 ◼   ► and look for it.

01:04:29 ◼   ► I swear to God.

01:04:31 ◼   ► - That's great.

01:04:33 ◼   ► - Like they literally don't even know how you name apps.

01:04:36 ◼   ► Can you, I mean, that they put the name on the icon.

01:04:40 ◼   ► So anyway, my whole problem was that I couldn't,

01:04:43 ◼   ► you can't just go to whatever that,

01:04:46 ◼   ► The, what's the search feature called?

01:04:49 ◼   ► In, you know, when you pull down on the iPhone

01:04:52 ◼   ► and you can search for your apps, whatever you call it.

01:04:54 ◼   ► - Oh, the spotlight thing or whatever spotlight?

01:04:55 ◼   ► - Yeah, so you can't search for Xfinity or Comcast,

01:04:58 ◼   ► you have to search for--

01:04:59 ◼   ► - Oh, 'cause it's not named that.

01:05:01 ◼   ► - It's called My Account.

01:05:02 ◼   ► - It's great spotlight work, too.

01:05:06 ◼   ► - Oh my God, you can't make this stuff up.

01:05:08 ◼   ► Let me see here.

01:05:13 ◼   ► How much, how much internet did I use here?

01:05:16 ◼   ► I don't know, I can't find it in the app.

01:05:18 ◼   ► I don't know, we use a shocking amount.

01:05:20 ◼   ► I thought it was a mistake, I really did.

01:05:22 ◼   ► I thought that that was like, well,

01:05:23 ◼   ► we can't possibly use that much per month,

01:05:25 ◼   ► but I think having a--

01:05:27 ◼   ► - Use over a terabyte?

01:05:29 ◼   ► - I think so, yeah.

01:05:30 ◼   ► Yeah, I think it was--

01:05:31 ◼   ► - I think it's pretty easy.

01:05:32 ◼   ► If you stream video and you have backups,

01:05:34 ◼   ► so do you do internet-based backups, right?

01:05:35 ◼   ► You got backplays or something running.

01:05:36 ◼   ► - I do.

01:05:37 ◼   ► - Yeah, I mean, I'm sure that I am sending

01:05:41 ◼   ► several hundred gigabytes a month with backplays,

01:05:44 ◼   ► I take, if you take photos and you use iCloud photo library and you do anything else, you're just,

01:05:50 ◼   ► I mean, I'll go out, you know, my wife was like, why is my phone falling? I'm like, oh my God,

01:05:54 ◼   ► you have like 15 gigabytes of images on there and she had a sync issue and whatever, but you don't

01:05:59 ◼   ► feel like you're creating that much. And it just adds up so fast. Cause the, and I'm shooting raw

01:06:04 ◼   ► sometimes and on my cameras, cause I like shooting raw and editing later. So yeah, it's easy to add

01:06:10 ◼   ► I think Jason stills out of himself,

01:06:12 ◼   ► but I think he easily crosses a terabyte a month too

01:06:15 ◼   ► with his service.

01:06:16 ◼   ► So then you have to pay the overage fee.

01:06:17 ◼   ► - Yeah, it's, I don't know if I get, I don't know.

01:06:20 ◼   ► I don't even look at my bill.

01:06:22 ◼   ► So I don't know.

01:06:23 ◼   ► I don't know if they're hitting me with overage fees or not.

01:06:25 ◼   ► I just have auto pay on and just pay it.

01:06:28 ◼   ► - They're charging you for a modem

01:06:29 ◼   ► you didn't rent 15 years ago probably.

01:06:30 ◼   ► - No, I finally, you know what?

01:06:31 ◼   ► That was great.

01:06:32 ◼   ► That was one of the good things about moving is that we--

01:06:35 ◼   ► - Finally got rid of it.

01:06:36 ◼   ► - Yeah, well, we like canceled the old account.

01:06:39 ◼   ► And so any kind of thing that went back in my head

01:06:41 ◼   ► that was like a nagging, like am I paying for like

01:06:45 ◼   ► some goofy, you know, like you said,

01:06:47 ◼   ► like a modem 10 years ago or whatever,

01:06:49 ◼   ► like I know that I'm not.

01:06:51 ◼   ► Like I have a good, whatever you want to call it,

01:06:56 ◼   ► a clean, I was gonna say conscience.

01:07:00 ◼   ► - They charged me, I had business service

01:07:02 ◼   ► for obscure reasons, 'cause I moved,

01:07:04 ◼   ► they wanted to charge me.

01:07:05 ◼   ► They have a 75% cancellation fee for your entire contract

01:07:08 ◼   ► if you cancel business service within the term,

01:07:11 ◼   ► which should be illegal and somehow is not,

01:07:14 ◼   ► 'cause, so it's ridiculous.

01:07:15 ◼   ► So I moved from a business location to my home

01:07:17 ◼   ► and I kept the business service

01:07:18 ◼   ► and they absorbed all the costs, which was nice.

01:07:20 ◼   ► And eventually, I switched to what I have now.

01:07:23 ◼   ► They started charging $5 a month for a modem

01:07:25 ◼   ► because they didn't have,

01:07:27 ◼   ► you couldn't get like an over-the-counter one

01:07:28 ◼   ► that worked with their business flavor, which was fine.

01:07:30 ◼   ► Then at some point, they upped the rate to like $13 a month

01:07:33 ◼   ► and the modems were like 50 bucks.

01:07:35 ◼   ► So, I finally realized this and canceled it.

01:07:38 ◼   ► Then they just kept keep charging me,

01:07:39 ◼   ► and every month I'd be like, "You charged me again."

01:07:40 ◼   ► They're like, "Oh, we should be able to take that off."

01:07:42 ◼   ► And then at some point I got somebody who's like,

01:07:43 ◼   ► "Oh, this is ridiculous."

01:07:44 ◼   ► I mean, I got someone actually at Comcast

01:07:45 ◼   ► who thought it was ridiculous

01:07:47 ◼   ► that I had to be working that hard to get it off.

01:07:49 ◼   ► Like, somebody must have been new.

01:07:50 ◼   ► And they even think they gave me a credit even.

01:07:52 ◼   ► Like, they pulled it off and it never got charged again

01:07:54 ◼   ► and I got like a $20 credit 'cause it's such a hassle.

01:07:57 ◼   ► But that's their business model.

01:07:59 ◼   ► And that person didn't know, they weren't trained yet.

01:08:01 ◼   ► (laughing)

01:08:03 ◼   ► I was flashing back on the Ryan Block call

01:08:06 ◼   ► with Comcast.

01:08:07 ◼   ► - I can't find my usage.

01:08:08 ◼   ► I have no idea.

01:08:09 ◼   ► (laughing)

01:08:10 ◼   ► - It's the perfect Comcast infinity experience.

01:08:13 ◼   ► - Oh, here it is.

01:08:13 ◼   ► Data usage, here we go.

01:08:15 ◼   ► Data usage overview.

01:08:18 ◼   ► 95 gigabytes used this month.

01:08:19 ◼   ► And that's--

01:08:20 ◼   ► (laughing)

01:08:21 ◼   ► - Okay.

01:08:22 ◼   ► - That's August.

01:08:23 ◼   ► - Three days in as we've heard this.

01:08:26 ◼   ► Two and a half days in.

01:08:27 ◼   ► - Right, so--

01:08:27 ◼   ► - Oh, that's good.

01:08:28 ◼   ► That's all right.

01:08:29 ◼   ► That's what it's there for to use it.

01:08:31 ◼   ► - Right, I am getting--

01:08:32 ◼   ► - I am getting, so what they promised me

01:08:34 ◼   ► is 200 megabits down and 10 megabits up.

01:08:37 ◼   ► So the 12 megabits up that I'm seeing over WiFi

01:08:41 ◼   ► is actually more than they promised, but.

01:08:43 ◼   ► - Oh my God.

01:08:44 ◼   ► - That's great, it's cable town.

01:08:45 ◼   ► - Wait till you get better, someday.

01:08:47 ◼   ► - Oh, all right, let's take a break.

01:08:48 ◼   ► I wanna thank our next sponsor.

01:08:49 ◼   ► It's our good friends at Fracture.

01:08:51 ◼   ► Oh, do I love this company.

01:08:52 ◼   ► You know Fracture.

01:08:53 ◼   ► Fracture's the photo decor company that is out to rescue

01:08:55 ◼   ► your favorite images from the digital ether.

01:08:58 ◼   ► You shoot photos, you pick the ones you like,

01:09:01 ◼   ► And then every couple months, go to Fracture,

01:09:04 ◼   ► take your favorites, go through your photo favorites,

01:09:08 ◼   ► and get a couple of them printed.

01:09:09 ◼   ► And what they do is they print them directly on glass,

01:09:13 ◼   ► and they add a laser-cut rigid backing.

01:09:15 ◼   ► So what they ship you, you open the box,

01:09:17 ◼   ► and it's ready to display right out of the box.

01:09:19 ◼   ► They even include the wall anchor

01:09:21 ◼   ► if you wanna hang it on the wall.

01:09:23 ◼   ► And what you get is absolutely amazing

01:09:25 ◼   ► 'cause it's edge-to-edge, there's no frame around it.

01:09:28 ◼   ► It's just an edge-to-edge piece of glass

01:09:31 ◼   ► with your photo on it.

01:09:34 ◼   ► And it looks like it's printed directly on glass.

01:09:36 ◼   ► It's not like they take a piece of paper

01:09:38 ◼   ► where the photo is printed on

01:09:40 ◼   ► and glue it to a piece of glass.

01:09:42 ◼   ► I don't know how they do it.

01:09:43 ◼   ► I don't know anybody else who does anything like it.

01:09:45 ◼   ► And the effect is simply amazing.

01:09:47 ◼   ► It's like the platonic ideal of how to hang a photograph

01:09:52 ◼   ► because there's nothing else to distract from it.

01:09:54 ◼   ► It's just the photo on a piece of glass.

01:09:56 ◼   ► It's almost like the ideal of where like phones

01:09:58 ◼   ► are going, like as the rumors come of the bezels

01:10:02 ◼   ► on the iPhone getting smaller and smaller and smaller.

01:10:04 ◼   ► Well, there's no bezel on a fracture print.

01:10:07 ◼   ► It's literally nothing.

01:10:08 ◼   ► It's just edge to edge photo.

01:10:09 ◼   ► It is so great.

01:10:10 ◼   ► Fantastic gift idea.

01:10:12 ◼   ► It is a gift idea for family that you'll never, ever,

01:10:15 ◼   ► ever get anything but the highest compliments on.

01:10:18 ◼   ► And each fracture is handmade in Gainesville, Florida

01:10:23 ◼   ► from US source material in their carbon neutral factory.

01:10:27 ◼   ► So for more information and 10% off your first order,

01:10:31 ◼   ► go to fractureme.com/podcast.

01:10:34 ◼   ► And then don't forget to mention the talk show

01:10:37 ◼   ► in their one question survey.

01:10:39 ◼   ► Guess what the question is?

01:10:40 ◼   ► Where did you hear about Fracture?

01:10:42 ◼   ► That's literally all they do.

01:10:44 ◼   ► So it helps support the show when you remember

01:10:46 ◼   ► that you came from here.

01:10:48 ◼   ► So go check them out.

01:10:49 ◼   ► Really, really, this is just another,

01:10:51 ◼   ► It's another sponsor that it's just a pleasure

01:10:53 ◼   ► to do the read for because I'm such a big fan

01:10:55 ◼   ► of their product.

01:10:56 ◼   ► It really is a great company and a great product.

01:11:00 ◼   ► All right, moving on.

01:11:03 ◼   ► What else do we have on the agenda?

01:11:04 ◼   ► So we knocked China out.

01:11:06 ◼   ► You wanna do the Apple Park?

01:11:08 ◼   ► - Yeah, let's talk about that.

01:11:10 ◼   ► Let's talk about that.

01:11:12 ◼   ► - Sometime in the interim between the last episode

01:11:14 ◼   ► of the show and this one, there was a really,

01:11:17 ◼   ► really fascinating and well-written

01:11:19 ◼   ► beautifully photographed profile of Johnny Ive and Apple's new campus, Apple Park, in

01:11:28 ◼   ► the Wall Street Journal's like Weekend magazine. Lots of interesting details. I guess I should

01:11:33 ◼   ► put a link to the article in the show notes. But the part that stuck out, at least in our

01:11:40 ◼   ► community, were the pictures of the workspaces for like, you know, the whatever you want

01:11:46 ◼   ► you wanna call them, the enlisted men,

01:11:48 ◼   ► the rank and file Apple employees.

01:11:51 ◼   ► - Enlisted men, yes.

01:11:55 ◼   ► - It's largely open floor plans,

01:11:58 ◼   ► which is not the way Infinite Loop is set up.

01:12:02 ◼   ► Infinite Loop, now Apple's existing campus,

01:12:04 ◼   ► they have more than a campus.

01:12:07 ◼   ► It's funny 'cause when I was out there

01:12:10 ◼   ► back in April for that little Mac roundtable

01:12:13 ◼   ► that a handful of press people got invited to.

01:12:16 ◼   ► We got to walk around and we went to the new cafeteria,

01:12:22 ◼   ► which is, according to this article,

01:12:25 ◼   ► I guess somebody said that to me when we were at lunch

01:12:28 ◼   ► before we had the meeting.

01:12:30 ◼   ► But it was built as sort of a prototype

01:12:33 ◼   ► of the cafeteria in Apple Park.

01:12:35 ◼   ► There's a new Cafe Max and it's huge and it's spacious

01:12:40 ◼   ► and it must be three stories tall

01:12:43 ◼   ► and the fit and finish is just phenomenal

01:12:46 ◼   ► in the way that everything lines up,

01:12:48 ◼   ► like the floor tiles where they meet.

01:12:51 ◼   ► If you look, meet perfectly where the beams are

01:12:55 ◼   ► that are supporting the weight

01:12:56 ◼   ► and then you look at the ceiling

01:12:57 ◼   ► and there's tiles in the ceiling

01:12:59 ◼   ► and they're not just beautiful,

01:13:00 ◼   ► but where the seams are perfectly aligned,

01:13:03 ◼   ► either center with something else.

01:13:05 ◼   ► There's nothing that you could say,

01:13:07 ◼   ► oh, if you had thought of it,

01:13:08 ◼   ► you'd have that centered between these two things.

01:13:11 ◼   ► Everything like that is like that, it's so beautiful.

01:13:13 ◼   ► But the walk from Infinite Loop, like where you park,

01:13:17 ◼   ► like where the press usually parks,

01:13:19 ◼   ► - Yeah.

01:13:20 ◼   ► - To this cafeteria, it's a couple block walk,

01:13:22 ◼   ► and you just realize as you walk it.

01:13:24 ◼   ► Oh, and the other thing I got to see a lot of too

01:13:27 ◼   ► is 'cause I stayed at a hotel across the street,

01:13:30 ◼   ► I forget the name of it, but it's right there by the,

01:13:33 ◼   ► instead of staying in San Francisco like I usually do,

01:13:35 ◼   ► I was like, I'm just here for Cupertino,

01:13:37 ◼   ► so I'll just stay there.

01:13:39 ◼   ► But the walk from my hotel to where I had to go

01:13:41 ◼   ► in the morning, I don't know,

01:13:42 ◼   ► a nice little 10 minute walk, beautiful,

01:13:44 ◼   ► 'cause it's sunny California.

01:13:46 ◼   ► But you realize as you walk down Bandly Boulevard,

01:13:52 ◼   ► every building is Apple's now.

01:13:53 ◼   ► They just bought everything.

01:13:55 ◼   ► Anything that's not like a restaurant is an Apple office.

01:13:58 ◼   ► And so they have a bunch of offices at the quote,

01:14:00 ◼   ► "old campus" that aren't really part of what you would

01:14:03 ◼   ► think of as the old Apple campus.

01:14:05 ◼   ► They're just any office space anywhere down there

01:14:08 ◼   ► they've bought.

01:14:08 ◼   ► But anyway, that is to say,

01:14:12 ◼   ► I still think most of those offices though,

01:14:14 ◼   ► even the ones that are just random real estate pick-ups

01:14:16 ◼   ► that Apple's made in the last 10 years.

01:14:18 ◼   ► - Yeah.

01:14:19 ◼   ► - Most Apple employees have their own office.

01:14:21 ◼   ► That's a very long way of me getting to Apple.

01:14:24 ◼   ► Most people at Apple have their own office.

01:14:27 ◼   ► They always have and they always did

01:14:30 ◼   ► and those who are moving to the Apple campus too now won't.

01:14:34 ◼   ► I'm shocked by it, because it's not like Apple is run by a bunch of managers who are

01:14:43 ◼   ► disconnected from what they do, right?

01:14:46 ◼   ► This is, you know, I try not to say if Steve Jobs were live, X, and I feel like this is

01:14:50 ◼   ► one of those things I'm baffled by, because again, I don't think Apple is confused internally

01:14:56 ◼   ► about how people work best.

01:14:57 ◼   ► They have their own history.

01:14:58 ◼   ► I wonder about that, though, because it seems like Jobs really was deeply

01:15:04 ◼   ► know, they had the spaceship to, you know, famously, his last public appearance was before

01:15:08 ◼   ► the Cupertino City Council to pitch this thing, and they had drawings of it. And so I feel like

01:15:15 ◼   ► he might have, you know, he and Johnny were both on board with this.

01:15:19 ◼   ► Pete: I guess, but it just, I mean, there's decades of really good research about

01:15:24 ◼   ► productivity. I mean, people were throwing up studies left and right, because it's not,

01:15:28 ◼   ► it's like, we all have our own anecdotal experience. And anybody who's a programmer or

01:15:32 ◼   ► writer, I would say virtually, gosh, can I say like 100% of people? That's probably not 100%.

01:15:38 ◼   ► But I don't know anybody who's a programmer or writer, and I'm not disparaging people in other

01:15:42 ◼   ► professions, but I know specifically where your job is to stare at words and type on a screen and

01:15:47 ◼   ► maintain a state of flow. With that, you're not on the phone all the time, where if you're on a

01:15:52 ◼   ► phone, you also need privacy and whatever, but you're not on the phone all the time,

01:15:54 ◼   ► you're not walking around, you're not constantly in meetings with other people. Your job is,

01:15:59 ◼   ► as much of it as you can maintain is a relationship with that screen, right? Is what you're doing.

01:16:06 ◼   ► I don't know anybody who wants to be in a place where people are walking around them. They want

01:16:10 ◼   ► a place where they can close the door and have as little visual disruption as possible, as well as

01:16:15 ◼   ► oral disruption. So, I can't imagine talking to any 10 people in Apple who did those jobs,

01:16:20 ◼   ► and any 10 of them saying, "Yeah, that'd be great. I'd love to be in a place where I have to wear

01:16:24 ◼   ► headphones all the time, and I have to almost wear blinders to keep, you know, from being disrupted

01:16:28 ◼   ► by people walking by."

01:16:28 ◼   ► - And they're not doing it because they're cheaping out.

01:16:31 ◼   ► There's nothing about this project

01:16:34 ◼   ► that is about being cheap.

01:16:35 ◼   ► It is like an Apple product

01:16:37 ◼   ► and like any Johnny Ive obsession.

01:16:39 ◼   ► It is about, you know, maybe not quite spare no expense,

01:16:43 ◼   ► but it is, you know, spare little expense

01:16:46 ◼   ► at making it exactly what they want.

01:16:48 ◼   ► - Yeah, and looking at the photos,

01:16:49 ◼   ► it's not like they're saving space per se.

01:16:51 ◼   ► It looks like there's a lot of really kind of opened spaces

01:16:54 ◼   ► for people to work where you could easily have,

01:16:57 ◼   ► even if it was two people to an office,

01:16:58 ◼   ► which is not uncommon, or some other thing,

01:17:00 ◼   ► at least some spaces that could be closed.

01:17:02 ◼   ► - Yeah, and I think that-- - I don't get it.

01:17:05 ◼   ► - I realize that there are a ton of people listening to us

01:17:10 ◼   ► talk about this now who work in an open floor plan.

01:17:12 ◼   ► I realize that that is certainly the modern way

01:17:14 ◼   ► to do things.

01:17:15 ◼   ► I know that a lot of startups, it's almost assumed

01:17:18 ◼   ► that that's how they're going to lay out the floor plans.

01:17:22 ◼   ► I realize whether it's for cost-cutting reasons

01:17:25 ◼   ► or cultural reasons, because I think startups think

01:17:28 ◼   ► fosters a collaboration or whatever.

01:17:32 ◼   ► The difference is that Apple already has a culture,

01:17:37 ◼   ► an accompanying culture.

01:17:38 ◼   ► And it also is sort of self-selecting,

01:17:41 ◼   ► where if you're a software engineer

01:17:46 ◼   ► and you like having an office,

01:17:51 ◼   ► that might be one of the reasons

01:17:52 ◼   ► you went to work for Apple in the first place.

01:17:56 ◼   ► I don't know, I find this very, very, to me, alarming.

01:17:59 ◼   ► I honestly feel like it's,

01:18:00 ◼   ► and I've been saying for years,

01:18:02 ◼   ► - Oh.

01:18:03 ◼   ► - And I always, I have to give him credit.

01:18:04 ◼   ► Like Guy English had a blog post, oh man,

01:18:07 ◼   ► it might have been, I don't know if it was right before

01:18:09 ◼   ► or after Steve Jobs died, but it was right around that time,

01:18:12 ◼   ► and just like, what are the biggest,

01:18:14 ◼   ► what's the biggest thing Apple should be worried about?

01:18:15 ◼   ► And his take was, number one is talent retention.

01:18:19 ◼   ► The single biggest threat to the--

01:18:20 ◼   ► - Oh God, yes.

01:18:20 ◼   ► - The single biggest threat and concern for Apple

01:18:23 ◼   ► as a company is talent retention.

01:18:25 ◼   ► and that, you know, this was written,

01:18:29 ◼   ► he wrote it at a point where the iPhone was clearly,

01:18:32 ◼   ► you know, it was on that trajectory

01:18:34 ◼   ► where you could see what a sensation, you know,

01:18:36 ◼   ► it was going to be for years to come.

01:18:39 ◼   ► And obviously was built by a fantastic army of employees,

01:18:44 ◼   ► designers, hardware engineers, software engineers.

01:18:47 ◼   ► But that having, you know, that's a conquered thing

01:18:53 ◼   ► and that the type of people who can make a world

01:18:58 ◼   ► where everybody has a flip phone to create the iPhone,

01:19:02 ◼   ► those type of people are drawn to new things.

01:19:06 ◼   ► Let's tackle the next amazing new thing,

01:19:09 ◼   ► not keep making the best, the new 10th iPhone.

01:19:13 ◼   ► Obviously, there's a ton of interest.

01:19:16 ◼   ► If we have time, we might even get to talk about it.

01:19:18 ◼   ► There's a ton of interest in the 10th iPhone.

01:19:22 ◼   ► But you could lose those people if they're bored.

01:19:26 ◼   ► And there's all sorts of other reasons

01:19:27 ◼   ► that people might leave companies,

01:19:29 ◼   ► is that there's other thriving companies in the area

01:19:30 ◼   ► that might offer them more money, et cetera, et cetera.

01:19:33 ◼   ► So we could spend a whole show listing the reasons,

01:19:36 ◼   ► the challenges that Apple has

01:19:38 ◼   ► at maintaining the talent they have.

01:19:41 ◼   ► Where they work, your work environment, is absolutely huge.

01:19:47 ◼   ► Because it's every day, it's all day, every day.

01:19:49 ◼   ► It's one of the biggest, to me,

01:19:51 ◼   ► It's one of the biggest things possible.

01:19:52 ◼   ► And think about the people who work at Apple.

01:19:57 ◼   ► That it's not just like any random,

01:19:59 ◼   ► if they have 10,000 software engineers.

01:20:02 ◼   ► Well, it's not just any random 10,000 software engineers

01:20:05 ◼   ► from the area, it's a self-selecting group

01:20:08 ◼   ► of the sort of people who care about the things

01:20:10 ◼   ► that Apple cares about, which is like, how nice is this?

01:20:14 ◼   ► Is this app nice to look at?

01:20:18 ◼   ► Is the user interface logical?

01:20:21 ◼   ► Apple draws people who care about those things.

01:20:23 ◼   ► And it's good for Apple that they do

01:20:26 ◼   ► because then it reinforces,

01:20:29 ◼   ► when the quality of your app or the design of your app

01:20:33 ◼   ► draws engineers who are interested in designing nice apps,

01:20:36 ◼   ► it makes the apps even better, right?

01:20:38 ◼   ► Well, one of the things that people who care

01:20:41 ◼   ► about stuff like that care about

01:20:42 ◼   ► is they care about their work environment.

01:20:44 ◼   ► I mean, I'm sure, I know that there are people,

01:20:47 ◼   ► I got email from them when I wrote about this,

01:20:49 ◼   ► that there are people who are like,

01:20:50 ◼   ► "Ah, I work in an open office,

01:20:52 ◼   ► "and I don't really like it.

01:20:53 ◼   ► "I'd love to have my own office, but I don't care."

01:20:55 ◼   ► It's all right, I put headphones on and I don't care.

01:20:58 ◼   ► - Although, well, some of the open offices,

01:21:01 ◼   ► I mean, the one advantage of cubicle farms

01:21:03 ◼   ► is that you lose some of the visual clutter

01:21:05 ◼   ► and some of the noise clutter too.

01:21:06 ◼   ► So if you're literally in an open office,

01:21:08 ◼   ► and I've seen, I think Wired,

01:21:10 ◼   ► when they published that big thing

01:21:11 ◼   ► of the $3 million office space they opened

01:21:13 ◼   ► that looked like it was for a photo shoot a few years ago,

01:21:17 ◼   ► editor has since left, you know, and they were laying people off after that. It's great optics.

01:21:21 ◼   ► Great optics. Anyway, that space had a lot of spaces that looked intolerable to me because

01:21:26 ◼   ► you're just, you know, you're going to be cheek to jowl with other people. There's no—you're

01:21:29 ◼   ► just sitting at like long tables and things. I see some of that in some of the Apple photos,

01:21:33 ◼   ► too, where you're just going to be like among people.

01:21:35 ◼   ► Yeah, it's not even a cubicle. It's like you're—

01:21:38 ◼   ► No. Cubicle would offend Johnny's sensibility. I have a funny story that's like, it's an anecdote

01:21:43 ◼   ► that I would relate to this, which is, my grandfather, one of my grandfather's first

01:21:47 ◼   ► cousins, so my first cousin twice removed, was the first chair, or sorry, second chair,

01:21:51 ◼   ► oboist in the New York Philharmonic for many decades. And he came through, when I was growing

01:21:56 ◼   ► up in Eugene, Oregon, the New York Philharmonic, came through Eugene, Oregon. We had this beautiful

01:22:00 ◼   ► new convention, or concert hall, and the local whatever boosting group managed to book them.

01:22:08 ◼   ► And so we got to hear him play and spend some time with him. And he said, "I love your hall so much,

01:22:12 ◼   ► You can hear everybody, you can hear every other instrument. He said, "You know,

01:22:15 ◼   ► Avery Fisher Hall, which is the famous hall that was built for the Philharmonic,

01:22:18 ◼   ► was originally called Philharmonic Hall, was built in 19—" I was looking this up,

01:22:22 ◼   ► it was built in 1962. He said, "We were on tour when the hall, they were interviewing the architect

01:22:29 ◼   ► who was building the hall, and he said, 'Wood is an overrated material for concert halls.'" So,

01:22:33 ◼   ► we said, "Oh, no." And we get back there and we play in the hall and it's terrible. It's so dead

01:22:36 ◼   ► you can't hear people, two people away. And I found an article from 1974, I just searched on

01:22:42 ◼   ► Lady Official Hall, 1974, this article in the New York Times is discussing what a disaster

01:22:48 ◼   ► this space is. And they made some changes over the years, whatever. But he said,

01:22:53 ◼   ► "We know there's concrete in the floor. They swear there isn't. It took many years." I think it was

01:22:56 ◼   ► only 10 years ago they were renovating the hall, maybe 15. They discovered there was concrete under

01:23:01 ◼   ► the stage. They had been told there was no concrete. They pulled it out and the halls,

01:23:06 ◼   ► you know, acoustics change.

01:23:07 ◼   ► And I was like, it's such a perfect example.

01:23:10 ◼   ► We're gonna make a beautiful new conference hall,

01:23:11 ◼   ► it's specifically designed,

01:23:13 ◼   ► and you're telling the people who know what they need,

01:23:16 ◼   ► no, no, no, no, you don't need to hear, you know,

01:23:18 ◼   ► wood is an overrated material for acoustical properties.

01:23:21 ◼   ► Like, ah!

01:23:22 ◼   ► So I sort of feel like I'm hearing that story right now.

01:23:26 ◼   ► - I got tons of feedback from Apple employees

01:23:31 ◼   ► who either read my settings or maybe listened to the show.

01:23:34 ◼   ► And if any of you are out there

01:23:35 ◼   ► who have an opinion on this, I would love to hear from you and you can trust me.

01:23:39 ◼   ► I'm proud to say that there's not one person who's ever told me anything in confidence

01:23:47 ◼   ► that might harm their job if I publicize it or whatever. Not one person has ever told me anything

01:23:54 ◼   ► in confidence that they have come to regret telling me. I know how to keep my mouth shut.

01:23:58 ◼   ► So anyway, if any of you at Apple have interesting stories to tell about this

01:24:02 ◼   ► open office space, I'm all ears.

01:24:05 ◼   ► - I'm particularly interested if Apple did,

01:24:08 ◼   ► because you know Apple famously doesn't do focus groups

01:24:10 ◼   ► for its products, did they have stakeholder meetings

01:24:13 ◼   ► with programmers and marketing or whatever

01:24:15 ◼   ► to ask them what they wanted from a space?

01:24:17 ◼   ► I'm guessing not.

01:24:18 ◼   ► - Here's a story I heard that I cannot confirm

01:24:20 ◼   ► because it was third hand, so I cannot confirm it.

01:24:23 ◼   ► It could be totally false, but it sounds true to me

01:24:27 ◼   ► and I think it would be easily checked

01:24:29 ◼   ► because if it's true, people will know about this.

01:24:34 ◼   ► But I heard that when the floor plans were announced,

01:24:38 ◼   ► that there was, I don't know, either a meeting,

01:24:41 ◼   ► or however it got were Gianni Cerucci's team,

01:24:43 ◼   ► that he's in charge of Apple Silicon,

01:24:46 ◼   ► the A10, the A11, all of their custom silicon.

01:24:50 ◼   ► Obviously a very successful group at Apple,

01:24:53 ◼   ► and a large and growing one with a lot on their shoulders.

01:24:56 ◼   ► When he was shown the floor plans,

01:24:57 ◼   ► he was more or less just, fuck that, fuck you, fuck this,

01:25:02 ◼   ► this is bullshit. - Oh my God.

01:25:04 ◼   ► - And they built his team, their own building,

01:25:07 ◼   ► off to the side on the campus.

01:25:08 ◼   ► So they're not even in-- - Oh my God.

01:25:10 ◼   ► - Not only are they, they're not going along

01:25:12 ◼   ► with the open floor plans, but that Suruji's team

01:25:14 ◼   ► is in their own building.

01:25:15 ◼   ► And they might, maybe internally, they're saying

01:25:18 ◼   ► it's for security or that it's, you know,

01:25:21 ◼   ► that they're just off, you know,

01:25:24 ◼   ► that there's a logical reason for it,

01:25:25 ◼   ► But my understanding is that the building was built

01:25:30 ◼   ► because Suruji was like, fuck this,

01:25:32 ◼   ► and my team isn't working like this.

01:25:34 ◼   ► - Don't I remember too, the spaceship

01:25:36 ◼   ► is already totally outstripped, right?

01:25:38 ◼   ► Like they built it, they already have more people, yeah.

01:25:41 ◼   ► So that's gonna be a fraction of the,

01:25:43 ◼   ► can I talk to Amazon for a second?

01:25:45 ◼   ► This will sound like a segue or whatever,

01:25:47 ◼   ► but it's really about this.

01:25:48 ◼   ► I'm working on a story right now for Fast Company.

01:25:50 ◼   ► I'm not giving away a secret by, it's not out yet,

01:25:52 ◼   ► but I'm looking into like, it's not a secret,

01:25:55 ◼   ► nothing proprietary about it. It's just, I'm living in Seattle. John, I don't know if you know,

01:26:00 ◼   ► if you've seen any of the coverage about what's happening to my city? Does it make the newspaper?

01:26:04 ◼   ► Like, okay, it's crazy.

01:26:05 ◼   ► I know we were just talking about it privately, but I did see it somewhere. I did.

01:26:09 ◼   ► Outrageous. We have more cranes, we have almost twice as many cranes in our skyline right now in

01:26:14 ◼   ► the city as Los Angeles, which has six times the area of Seattle. We have more, a higher

01:26:20 ◼   ► percentage of open jobs in software and related fields than Silicon Valley. We have, you know,

01:26:26 ◼   ► we have the richest or second richest, actually sorry, we have the first and second richest people

01:26:30 ◼   ► in the world in our area. We have—

01:26:32 ◼   ► Trenton Larkin That would be Jeff Bezos and Bill Gates in that order.

01:26:35 ◼   ► David Zucchino Yeah, they're competing right there. Well, except I think it shifted back,

01:26:39 ◼   ► like they lost a buck—

01:26:40 ◼   ► Trenton Larkin Ebs and flows by Microsoft and Amazon stock price.

01:26:44 ◼   ► David Zucchino We have so much construction going on. So,

01:26:46 ◼   ► We had this minimum wage debate, and we got a socialist on the city council, and she is

01:26:51 ◼   ► a firebrand, and she reignited this thing in our liberal progressive town, which is

01:26:55 ◼   ► very proud of itself for being liberal progressive.

01:26:57 ◼   ► And, but hey, you know, wages!

01:26:59 ◼   ► They're like, "No, no, no, we don't want to rock the vote, no honor buck."

01:27:01 ◼   ► She comes in, she makes this her thing, and then everybody takes it up, because they don't

01:27:06 ◼   ► want to be left behind.

01:27:07 ◼   ► We now have, we are on track, we have a $15 an hour minimum wage if you're a large employer,

01:27:13 ◼   ► 500 or more employees, and you don't pay towards medical benefits.

01:27:16 ◼   ► If you're a small employer in Dew, it's 11.

01:27:18 ◼   ► We're on track, we have a staggered introduction.

01:27:21 ◼   ► So it's inflation-based, so it's gonna keep going up.

01:27:24 ◼   ► In a few years, it's gonna be like $18 an hour.

01:27:26 ◼   ► It's gonna keep going up from there.

01:27:28 ◼   ► So, and everyone predicted doom and despair,

01:27:30 ◼   ► all the restaurants would close, whatever.

01:27:31 ◼   ► We have more restaurants now, more openings.

01:27:33 ◼   ► All the restaurants, the restaurateurs

01:27:35 ◼   ► who threatened to leave have opened more off.

01:27:38 ◼   ► You know, it's hilarious.

01:27:39 ◼   ► We have a shortage of short-order cooks.

01:27:42 ◼   ► We're becoming aspen in terms of people being able to live

01:27:45 ◼   ► in the city affordably and work in the city, even though the wages have gone up.

01:27:49 ◼   ► You know, the $15 an hour is a starting point for these larger companies, and you can be like

01:27:55 ◼   ► a bottle washer, and you can get a rate of $16, $17, $18 an hour. So, we're in the middle of this

01:28:00 ◼   ► weird, crazy, overwhelming prosperity. Our housing prices went up by more in the last period of time,

01:28:07 ◼   ► like 18% versus like 5% nationwide. Like, everything is out of control here. And Amazon,

01:28:13 ◼   ► And I say this with all happiness, too.

01:28:15 ◼   ► Amazon is, they have two giant buildings downtown.

01:28:19 ◼   ► They built these signature sphere, biosphere thing

01:28:22 ◼   ► that's actually, I was appalled by when I first saw the plans.

01:28:25 ◼   ► It's actually really cool.

01:28:26 ◼   ► I've been letterpress-printing a book at a school

01:28:30 ◼   ► that is like two blocks from the Amazon headquarters,

01:28:33 ◼   ► and they're building a third big tower.

01:28:35 ◼   ► They have like 30-something buildings.

01:28:37 ◼   ► They own, Amazon is leasing almost 17%

01:28:39 ◼   ► of all office space in Seattle right now,

01:28:42 ◼   ► of all office space.

01:28:43 ◼   ► not just downtown. The whole pace, they have 8 million square feet and they're on track to

01:28:48 ◼   ► like 10 in a couple years. They have 10,000 open jobs in our state. I think that's just

01:28:53 ◼   ► like white collar jobs, not including, I mean, just in our state, I think mostly downtown.

01:28:58 ◼   ► So, the pace, it's just unbelievable. But the most interesting thing to me is they chose to

01:29:03 ◼   ► stay downtown. They were kind of always around there. Like, Jeff founded the business in his

01:29:10 ◼   ► his garage in Bellevue, which is on the east side,

01:29:12 ◼   ► not Seattle proper, and that was just a temporary thing.

01:29:14 ◼   ► But then they had an office down south

01:29:17 ◼   ► of what used to be the Kingdome, we still call it Soto,

01:29:19 ◼   ► next to Pecos Pit, the best barbecue in Seattle.

01:29:21 ◼   ► Then they were in the beautiful

01:29:23 ◼   ► heroin district of Seattle.

01:29:24 ◼   ► That's when I worked there for about six months,

01:29:26 ◼   ► 11 years ago.

01:29:28 ◼   ► We were across the street from the methadone clinic.

01:29:31 ◼   ► And then they started, then they moved to the,

01:29:33 ◼   ► the Lex Luthor building on the hill.

01:29:35 ◼   ► It's the tallest building, or the highest point in Seattle

01:29:37 ◼   ► with a giant building on it.

01:29:38 ◼   ► It's an old medical center.

01:29:39 ◼   ► They immediately outstripped that.

01:29:41 ◼   ► Then they started having all these, they started

01:29:42 ◼   ► leasing all these Paul Allen buildings, and then

01:29:45 ◼   ► they have all this stuff built.

01:29:46 ◼   ► So, Vulcan and some other local, Vulcan is Paul

01:29:48 ◼   ► Allen's real estate company.

01:29:50 ◼   ► They've been selling property to Amazon, other

01:29:52 ◼   ► local contractors.

01:29:53 ◼   ► Anyway, so it's this massive, massive building

01:29:56 ◼   ► boom, and it's not just Amazon, it's Google and

01:29:58 ◼   ► Facebook have bigger and bigger operations.

01:30:00 ◼   ► I was in Facebook's kind of small temporary

01:30:03 ◼   ► offices, which I think has like a thousand people

01:30:05 ◼   ► in it, that's not quite in downtown, and they're

01:30:08 ◼   ► and they're building a big, so it's out of control.

01:30:10 ◼   ► But here's my thing, they're downtown

01:30:14 ◼   ► and Apple is in Cupertino, Facebook's in what,

01:30:17 ◼   ► Mountain View or something?

01:30:18 ◼   ► They're out in the middle of nowhere.

01:30:19 ◼   ► All these other companies are often the burbs

01:30:22 ◼   ► 'cause they got founded out there and they grew

01:30:23 ◼   ► and there's no, they're not part of the life of the city.

01:30:26 ◼   ► So, this whole long thing is employee retention,

01:30:29 ◼   ► a lot of young people and a lot of people looking

01:30:31 ◼   ► for a change in life who are not necessarily young, young,

01:30:34 ◼   ► they want to be in a city and they're making wages

01:30:36 ◼   ► where they can afford to have a condo and apartment

01:30:38 ◼   ► that's very nice and it's within walking distance

01:30:41 ◼   ► or we have streetcars and light rail now and all this stuff.

01:30:44 ◼   ► So being, you know, the spaceship in the suburb

01:30:47 ◼   ► is maybe not the best strategy for future retention.

01:30:49 ◼   ► - Seattle's not cheap, but it's the,

01:30:51 ◼   ► like housing is not crazy like San Francisco.

01:30:53 ◼   ► San Francisco housing.

01:30:54 ◼   ► - Yeah, we're like half or something.

01:30:56 ◼   ► We're like half as much, I think,

01:30:57 ◼   ► but it's growing very rapidly, but we're still much--

01:31:01 ◼   ► - But that's a big, and it is a recruiting problem

01:31:03 ◼   ► and it certainly is true for the younger you are,

01:31:05 ◼   ► the more likely you are to wanna live in a city

01:31:07 ◼   ► and it's a big problem for these valley companies

01:31:09 ◼   ► because they can shove all the money they want

01:31:12 ◼   ► and make the buses as nice as they can,

01:31:14 ◼   ► and they are, by all accounts, very nice buses,

01:31:17 ◼   ► so that if you live in San Francisco,

01:31:21 ◼   ► you can catch the Apple bus instead of driving to work

01:31:24 ◼   ► and be annoyed.

01:31:25 ◼   ► - Yeah, but you're still on,

01:31:26 ◼   ► it's like still an hour plus on the bus, right?

01:31:28 ◼   ► - Right. - Something or more,

01:31:29 ◼   ► there's an hour at least on the--

01:31:30 ◼   ► - It depends on the time of day.

01:31:31 ◼   ► - Which is a lot of Amazon employees,

01:31:33 ◼   ► there are a lot of Amazon employees

01:31:34 ◼   ► who are living in an apartment

01:31:36 ◼   ► like, a view of the water and they go downstairs and they walk a few blocks and they're at work,

01:31:40 ◼   ► which may be healthy or not, but, or we have, like, there's all these condos, I mean,

01:31:44 ◼   ► I've lived in Seattle for 20 something years and I much prefer, talking to non-profits too,

01:31:50 ◼   ► about how this has affected them. Non-profits serve like, endangered communities, women who

01:31:55 ◼   ► need shelter and homeless, voting homelessness and so forth. And everyone's saying the same thing

01:32:00 ◼   ► as like, this is really hard on everybody, the housing increase, but would we prefer the reverse?

01:32:04 ◼   ► no, like less money, no growth, no jobs, no, that's terrible.

01:32:09 ◼   ► So we can, with money and resources,

01:32:11 ◼   ► we can kinda help people and lift up folks,

01:32:14 ◼   ► 'cause there's the work there for them,

01:32:15 ◼   ► but it is like being in one of those cartoons

01:32:19 ◼   ► where there's going bum, bum, bum, bum, bum, bum, bum,

01:32:21 ◼   ► bum, bum, bum, bum, bum, bum, bum,