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Tech Bytes – Week of May 9

📰 Recent Top Tech News

  1. Apple vs Epic Legal Case Opens up secrets of App Stores

  2. Verizon sells off AOL and Yahoo brands for $5bn, writing off $4bn

  3. Tile Trackers partners with Amazon to stay relevant

The Takeaways

  1. Apple vs Epic (makers of popular Fortnite game) wrapped up their first week in court. Epic claims Apple is a monopoly and is forcing a 30% cut on all transactions in a locked-down App store, hurting customers. Apple claims users have a choice, and the money keeps the system secure and safe for users.

🔎 Our Take

  • Apple has an enormously profitable system with a locked-down App Store, with a $72 Billion revenue in 2020, made from being the only platform where users can buy apps for the iPhone and iPad. Apple has made concessions more recently with a 15% commission for the first $1mn, though email exhibits show that Apple has tried hard to keep big Apps, such as Netflix, to continue using In-App Purchases (and paying 30% to Apple). 

🧁 Your Takeaway

  • Apple knows the value of a convenient way to pay, and that users will rarely go out of their way to get something. Netflix has managed to become an essential brand thriving outside Apple’s payment system, while Epic has failed to gather enough customer loyalty to do the same. If you are on a platform, understand that you are always at the risk of the platform’s decisions, and build up a brand to stay relevant even without it. 

2. Verizon is selling off 90% of its media division, including its brands Yahoo and AOL after acquiring both brands for a combined $9 Billion in 2015. The buyer, Apollo Global Management, is a private equity investor which primarily buys distressed assets, injecting in funds to help them grow. 

🔎 Our Take

  • Verizon initially tried the approach of being an all-rounded mobile network and content provider, but soon saw their approach get pulled down by the growth of Facebook and Google. Yahoo and AOL are still known for their large content brands such as Yahoo Sports, Yahoo Finance, TechCrunch, HuffPost, etc, but they continue to be challenged by user-generated content. Hopefully, with a clear focus on growing content and ads, Yahoo will find ways to stay relevant. 

🧁 Your Takeaway

  • One of the few things that make customers leave their existing platforms, is great and exclusive content. It’s often the only thing that cannot be replaced, and if done correctly, can remain a powerful draw even if competitors replicate everything else. Focus on engaging your customers with the lore of why you do what you do to keep your customers with you.

3. Tile Trackers join the Amazon SideWalk platform after Apple launched a competing AirTag product line. With Amazon’s ecosystem, Tile now gains additional smart home capabilities, as well as a wider network, adding more value to users. 

🔎 Our Take

  • Tile faces a new existential threat with the launch of Apple AirTags, as the nature of lost and found trackers relies on a large network of passing devices (such as the 1 Billion iPhones around). This new partnership between Amazon and Tile allows Tile to make the millions of Amazon smart home devices as a location tracking grid as well. Ironically, this also significantly weakens Tile’s previous argument that Apple has a monopoly in this space.

  • Also, based on how Amazon’s own product strategy has played out in the past, Tile could be acquired by Amazon (good for Tile), or also replaced by Amazon’s own version of Tile (bad for Tile).

🧁 Your Takeaway

  • Look for partnerships you might not be expecting. There are many other businesses and others looking to grow as well, and if are operating even a small business, you likely have some network, and customer base, and a product or service. Seek out partners who can benefit from the collaboration and help each other grow. 

Jargon Buster

  • S3 – Simple Storage Service – this is one of the cheapest way to store data on the Cloud, literally representing a single file accessible anywhere on the internet with a link. Amazon S3 is one of the most popular storage services, and almost every other cloud provider provides a similar compatible service.

    The nature of S3 storage also means that it can be accidentally used incorrectly, with many recent ‘data leaks’ attributed to a system uploading customers databases files without any protection.

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