Author: Fast Company

11.28.23

Analog film photography is making a comeback in a Generative AI world

BY Fast Company 4 MINUTE READ

I love the photographs I take with my iPhone 15 Pro, but I know I’m not really doing most of the work. Sure, I frame the shot. But once I press the shutter button, the iPhone runs the image through tens of thousands of processes to give me the best photo possible. This is known as “computational photography,” and while it makes my photos look stunning, it also means the resulting photo is 10% mine, 90% the iPhone’s.

Now, computational photography, which smartphones and digital cameras have used for over a decade, is about to give way to generative AI photography. Last month, Google introduced its new Pixel 8 series, which allows you to take AI-manipulated photographs. One feature, called “Best Take,” allows the Pixel software to choose the best expression on each person’s face in a group shot. No longer will your child’s eyes be closed in that otherwise perfect family snap. Another tool, called “Magic Editor,” allows you to reposition entire people or objects in the photo after you take it, with AI filling in the background where the subjects had originally been.

As a middle-aged Gen Xer, these new camera technologies never cease to amaze me. But as someone who was also trained in analog photography— capturing images on actual strips of celluloid that I then developed in a dark room manually—these new technologies also leave me feeling that the gap between photographer and photograph is now so wide the two almost aren’t connected anymore. And as that gap broadens with additional generative AI processes, I fear that the photographer will one day become nothing more than a biological tripod for the camera. Once that happens, the capturing device becomes the creator.

Still, I am hopeful. In the past year, there’s been an upswing of professional photographers returning to analog film cameras.

ANALOG CAMERA SALES AT LEICA SURGE

Leica is one of the most respected camera manufacturers in the world. The company has been around since 1869. Its analog film cameras were wielded by some of the 20th century’s best photographers to capture some of its most renowned photographs. In the early 21st century Leica, like all major camera makers, embraced digital photography. The digital versions of its Leica M series cameras are a must in many pro photographers’ toolboxes and have grown to massively outsell its analog Leica M series cameras. By 2015, Leica sold just 500 of its analog M series cameras annually.

But recently, there’s been a reversal. In 2023, Leica expects to sell 5,000 analog M series cameras—10 times more than it sold nearly a decade earlier. To put that surging number into further context, Leica expects to sell around 12,000 digital M series cameras this year. The fact that analog cameras will be selling at 40% of the volume of the company’s digital cameras is staggering, especially considering that Leica is still innovating in digital photography on almost every front.

As for why film photography is seeing a resurgence among professionals, each photographer probably has their own reasons. But I can guess at some of them, because they would be my own. Analog photography gives the photographer a connection to their photographs that digital photography does not provide. You assume a physical role in birthing the photograph through everything from selecting the film stock, to manually adjusting optical filters, to mixing the perfect solution in a warm water tub to develop the film under the red light of the dark room. There’s an intimacy in the analog process and a period of anticipation that makes seeing the final result exciting.

Going forward, as generative AI photos become the norm and a person can take a picture with the “perfect” sky in the background or the “perfect” expression on their subjects’ faces, I can envision professional photographers turning to analog film photography even more, using negatives as physical proof not just that their photograph actually captured reality but that the photographer, and not their AI-powered camera, is the artist.

I don’t expect celluloid photography to make a mainstream comeback. Digital photography is too convenient for most people. Gen Z has really never known anything else. For Gen A, a photograph will have always been a malleable thing. It will be expected that a camera can apply any expression to a subject’s face or even entirely reposition them if needed.

As for me, I’ll know that when I’m looking at a negative, I’m looking at the work of an artist who’s connected to not just their work, but to the process. And that’s enough to put a (non-AI generated) smile on my face.

MICHAEL GROTHAUS

Michael Grothaus is a novelist and author. His new novel, the speculative fiction ‘BEAUTIFUL SHINING PEOPLE’, is out now. You can read more about Michael at – michaelgrothaus.com

FASTCOMPANY

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11.24.23

How Microsoft turned the OpenAI-Sam Altman lemon-like situation into a marketing lemonade

BY Fast Company 3 MINUTE READ

On Friday, when OpenAI’s board suddenly announced it had relieved CEO Sam Altman of his duties, it came as a shock to the tech world. Notably, it also reportedly blindsided Microsoft, OpenAI’s 49% shareholder after its reported $10 billion investment in January.

The ensuing whirlwind since Altman’s ouster has been nothing short of breathtaking. One colleague described it on Monday as akin to “logging on to five seasons of Succession dropping all in one night, omg.” While OpenAI’s brand has endured several days of being treated like a piñata at a 5-year-old’s birthday party on Twitter and other social media platforms, Microsoft, by contrast, has somehow emerged—so far, at least!—as the brand image winner of this bonkers news cycle.

With all the usual cautionary caveats that this OpenAI drama remains a developing story, it seems that Microsoft has recovered quickly from its initial surprise at the Altman news to turn OpenAI’s boardroom lemons into brand lemonAIde. How it’s done so showcases how brand power is not only relevant in an emerging technology but also amid complete freaking chaos.

Let’s start with Microsoft CEO Satya Nadella’s tweet late Sunday night. “We remain committed to our partnership with OpenAI and have confidence in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and in continuing to support our customers and partners. We look forward to getting to know Emmett Shear and OAI’s new leadership team and working with them. And we’re extremely excited to share the news that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team. We look forward to moving quickly to provide them with the resources needed for their success.”

Notice how Nadella first reiterated his support for the company that Microsoft initially backed in 2019, and then showed his loyalty to and belief in the duo who had exited that same company. How can you lose when you’re supporting both sides—and you appear to be genuine?

Again, this is a fluid situation and maybe this won’t play out as Nadella outlines. Much of the speculation Monday was that this move to hire Altman and Brockman and anyone who follows them is designed to force the OpenAI board to bring Altman back (and almost certainly get removed in the process). What if that doesn’t work? Regardless, Microsoft has hedged its bet in a way that burnishes its brand image as a shrewd innovator and signifies that this is the place to do the most exciting work in AI.

The reaction to Microsoft’s moves illustrates the dramatic shift in the company’s brand image over the past decade or so. As the legendary venture capitalist Bill Gurley tweeted, “If you told me 10 years ago that a group of the smartest engineers in the land would evoke the threat, ‘Do what I say or I will go to work at Microsoft,’ I would not have believed you. Amazing shift in corporate reputation (and much credit to Satya).”

Microsoft’s bold investment in OpenAI and then its aggressive integration of its tech into Microsoft products—the company has put OpenAI’s GPTs into its Bing search engine, sales and marketing software, Azure cloud services, GitHub coding tools, and the Microsoft 365 productivity bundle—erases any memory of its history of missing out on several major cultural shifts in tech. Remember that this is the company that brought a Zune to an iPod fight? You don’t, and that’s because it acquired the pole position on the most important tech jump since the internet itself, just as OpenAI’s ChatGPT went viral.

Now Microsoft looks equal parts innovator and great stabilizer. Safe, secure, and reliable.

Interbrand just released its 2023 Best Global Brands report, and Microsoft ranks second overall, behind only Apple. Daniel Binns, Interbrand’s chief growth officer and North America CEO, tells me that Microsoft is unique on the list, which includes Google, Amazon, Samsung, Coca-Cola, and Nike in its top 10, given how much of its business is B2B. But Binns notes that the many ways people interact with the brand, whether through gaming and Xbox, or at work through its suite of Office products, is what keeps it in high esteem.

“To be able to make this move [for Altman] is just further proof of the potency of the Microsoft brand,” Binns says. “For Sam Altman to come lead [AI] with Microsoft’s resources is phenomenal. Leaning into the maturity of the corporate culture, leaning into visionary leadership, leaning into innovating in an area that is of most interest in the tech world right now, it feels like a golden opportunity for Microsoft to double down on all of those things.”

In a statement about Interbrand’s report, Kathleen Hall, Microsoft’s chief brand officer,​​ said the combination of brand perception and financial performance is a great indicator of the company’s brand health and relevance. “With our acquisition of Activision Blizzard, our prominent leadership position in AI, and our continued commitment to make a positive impact on society, we aspire to be a brand people can trust and build a responsible future with,” Hall said.

On Friday, as the OpenAI news broke, Microsoft’s stock took a 1.7% dip. But after Nadella’s Altman announcement, it quickly recovered to hit a record high on Monday.

FastCompany

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11.23.23

The ChatGPT boss returns to OpenAI: The Other view

BY Fast Company 5 MINUTE READ

The tech industry was still reverberating from OpenAI’s surprise firing of CEO Sam Altman late last week when the announcement came late Tuesday that an agreement (“in principle”) had been reached for Altman to return as CEO. President and former board chair Greg Brockman, who quit in protest of Altman’s dismissal, will also return to the company. This came after a majority of OpenAI employees signed a letter demanding just that, and a newly formed OpenAI board of directors.

The new “initial” board of directors, as OpenAI calls it, is still a work in progress. Bret Taylor (Salesforce co-CEO) will be its chair. Former Commerce Secretary Larry Summers will get a seat. Quora CEO Adam D’Angelo is the lone holdover from the previous iteration of the board. No telling how permanent these appointments are. “We are collaborating to figure out the details,” OpenAI tweeted Tuesday night. It’s unclear which of the former board members, other than D’Angelo, will retain their seats.

Some observers might wonder what this dramatic fire drill was all about. Altman’s back at the helm, and we still don’t have a clear explanation as to why he was fired in the first place. Based on the reporting I’ve seen, and on talks with my own sources, I suggest that Altman’s firing was the flashpoint of an ideological competition between two of the companies’ founders—Altman and chief scientist Ilya Sutskever—on how to run an AI company.

Sutskever is something like OpenAI’s spiritual leader. OpenAI people speak about him in reverent tones. He studied under one of the fathers of AI, Geoffrey Hinton in Toronto, and has made several landmark discoveries in machine learning. A large, abstract, oil painting by Sutskever of the OpenAI logo watches over the first floor hustle and bustle in OpenAI’s headquarters. He’s also, by all appearances, not too interested in capitalism, instead sticking to the tenets of the effective altruism movement, which means distributing the benefits of his company’s AI widely and evenly and not performing for investors every quarter. Sutskever’s brand of effective altruism means a slower research pace and slower productization. And above all, it means very carefully managing the downside risks of AI with safety research applied rigorously at every stage of R&D. Sutskever has said that AI could pose serious threats to humanity sometime in the future if not managed carefully today.

Altman’s approach is totally different. He acknowledges the risks of AI but is less hesitant to release the technology into the world. He was, after all, an entrepreneur who went on to run the Y Combinator startup accelerator. Altman is, in many ways, a creature of Silicon Valley, focused on developing products and quickly finding the product-market fit that leads to rapid growth. And Altman was reportedly very keen to take advantage of ChatGPT’s momentum to launch new AI products. At OpenAI’s DevDay in early November, Altman skillfully presided over the announcement of an impressive lineup of new models for developers and tools for consumers. Afterwards, Brockman and Altman spoke to media in the press room. Sutskever, on the other hand, was nowhere to be seen. DevDay may have been the trigger for the board’s decision to fire Altman.

For one long weekend, Sutskever’s slow-and-safe approach to running OpenAI won out. But the proponents of Altman’s product- and profit-centric worldview marshaled their forces over the weekend. OpenAI’s investors, focused on scale and returns, quickly began howling for Altman’s reinstatement Friday and through the weekend. One report says that the investors even contemplated legal action to bring the CEO back. Now they won’t have to. OpenAI’s employees—770 (over 90% of its workforce) of whom signed a letter demanding Altman’s reinstatement—have varying levels of financial interest in the company’s financial performance, too.

The question now is whether anything will change at the company. And even though the board may have handled Altman’s ouster poorly, we should leave open the possibility that its intentions were good, and correct. OpenAI’s product, after all, could be catastrophically dangerous in the hands of the wrong people. Silicon Valley’s “move fast and break things” mantra makes about as much sense in AI as it would with nuclear weapons. AI companies have to spend lots of time studying the potentially harmful use cases, and there’s a strong argument that building safeguards against such uses—for example, triggers to detect and shut down destructive applications of the model—should progress alongside development of any product. But Altman’s return could also signal that Sutskever’s bid for a slower, more cautious OpenAI has simply been defeated.

And the stakes could be higher than we know. It’s possible that OpenAI has made more progress toward general AI than it has said publicly, as I wrote Monday. This would raise the safety stakes considerably and may put the Altman drama in a new, and scarier, light.

HOW OPENAI’S ORGANIZATIONAL STRUCTURE WORKS

Sutskever’s nontraditional morals-over-profits approach is reflected in the OpenAI charter and mission. OpenAI was founded as a nonprofit in 2015; though the company eventually shifted to a for-profit model, OpenAI Inc.—and its board of directors—remained the controlling shareholder. That transition came when it became clear that OpenAI would need more capital to fund its massive amounts of compute power to support its supersized large language models.

“While the for-profit subsidiary is permitted to make and distribute profit, it is subject to this mission,” the OpenAI charter reads. “The Nonprofit’s principal beneficiary is humanity, not OpenAI investors.”

Cloud computing company Casebook PBC CEO Tristan Louis tells me that OpenAI’s convoluted structure is partly to blame for the current dysfunction and poor communication among company leadership and board. Louis says that if OpenAI had adopted a public benefit corporation structure (like Anthropic), its charter would have been clearer about how the company handles misalignments from an operational and legal perspective. “This would have allowed the tough discussions they now appear to be having in public to be held behind closed doors and settled without the current drama before the company received outside investments,” he says.

MICROSOFT GETS NAMED IN A COPYRIGHT LAWSUIT AGAINST OPENAI

Just to make this week’s AI Decoded an OpenAI trifecta, we’ll end with something that has nothing to do with Altman’s firing (as far as we know!). Lawyers in New York filed a proposed class action on behalf of best-selling author Julian Sancton (Madhouse at the End of the Earth) and other writers against OpenAI and Microsoft, alleging that the companies trained several versions of ChatGPT using copyrighted materials from nonfiction authors without permission. A flurry of copyright suits have already been filed against OpenAI, but this is the first one that also names Microsoft, the plaintiffs believe.

The lawsuit, which was filed in the U.S. District Court for the Southern District of New York, says the tech companies are “reaping billions off their ChatGPT products” without paying anything to authors of nonfiction books and academic journals. Plaintiffs seek damages for copyright infringement and an injunction stopping the unauthorized ongoing use of copyrighted material. OpenAI and Microsoft lawyers will argue that training AI models using content scraped from the web is covered under the fair use provisions in Section 107 of the U.S. Copyright Act. We’ll track the progress of the suit.

In a related story, the VP of audio at AI developer Stable Diffusion, Ed Newton-Rex, resigned from his job because he believes the company is stretching the meaning of the fair use doctrine to justify the way it collects audio training data for its models.

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11.21.23

Why Microsoft seems to be the winner in the OpenAI battle?

BY Fast Company 3 MINUTE READ

It’s going to be some time before the dust settles from the implosion of OpenAI’s management suite, but (for the moment at least), Microsoft appears to be the clear winner from the AI imbroglio.

As of Monday morning (and given the rapidly shifting landscape in this story, it’s important to mark that time), former CEO Sam Altman and former OpenAI president Greg Brockman were expected to join the tech giant to lead a new advanced AI research team—-though The Verge reports Altman is still angling to return to OpenAI. At the same time, Microsoft CEO Satya Nadella posted on X (the social media platform formerly known as Twitter) that the company “remain[s] committed to our partnership with OpenAI … [and] look[s] forward to getting to know Emmett Shear and [OpenAI’s] new leadership team and working with them.”

It’s the tech equivalent of having your cake and eating it too, but it does raise some questions. Namely, how exactly will the company work with both OpenAI and its own AI division?

To answer that, says Sarah Kreps, professor of government and director of the Tech Policy Institute at Cornell University, it helps to know a little bit about the game of Blackjack. Every once in a while, players will get dealt a hand where they have an opportunity to double their bet. It’s a risky maneuver, but it can result in big payoffs. Microsoft, when it comes to AI, has basically done just that.

“It’s the equivalent of doubling down at Blackjack,” says Kreps. “Finding talent in AI—people who are smart, have good ideas, and are determined–is the holy grail in tech. Recruiting [Altman and Brockman] is not just a wise investment, it just saved [Microsoft] lots of time and resources.”

It is hard to picture how Microsoft could have wound up in a better position. The company already has a perpetual license to OpenAI’s IP, including its code base and model weights. The only exception is the generative AI portion. But there have been some internal complaints this year that Microsoft isn’t spending on its in-house AI.

That, obviously, has changed.

Analysts and pundits had for the last few months questioned whether Microsoft had the talent to exploit the OpenAI technology, especially if there was a talent exodus from that company. Based on the events of the past few days, the answer to that not only appears to be a resounding yes, but a good percentage of the OpenAI talent pool seems determined to move over to Microsoft.

It is, in some ways, a de facto acquisition of OpenAI on Microsoft’s behalf. But the move came without costing Microsoft a penny—and, more importantly, in a fashion that prevents the FTC from launching an antitrust investigation.

OpenAI, meanwhile, still has ChatGPT, the de facto leader in generative AI, which it has already started monetizing. Given some of the comments of the board, of course, there are questions about whether it wants to build on that commercialization. (The company was, of course, founded as a non-profit.) That answer will reveal itself in due course.

Microsoft and OpenAI have always had an odd frenemy relationship, competing for customers, while still relying on each other. And both have achieved notable success so far. With the talent exodus, however, it’s hard to imagine Microsoft will not put some distance between the two.

“I think this chaos explains why these partnerships between Big Tech and relative newcomer make sense,” says Kreps. “Microsoft has already experienced its growing pains in the 1990s and now has a CEO who has shown an ability to incorporate new ideas and thinking and match that with Microsoft’s deep pockets. OpenAI has been around since 2015 but only in the last year has exploded and tripled in value. The succession drama starting with last Friday is evidence of [its] amateur status.”

FastCompany

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11.20.23

Sam Altman will not come back at OpenAI, Emmett Shear is in

BY Fast Company < 1 MINUTE READ

After a weekend of boardroom drama, news reports suggest the board of OpenAI has decided not to reinstate fired CEO Sam Altman, who was let go Friday, and instead to install former Twitch CEO Emmett Shear as its new interim CEO . The news, which was first reported by The Information, follows an astonishing weekend of back and forth about the future of the groundbreaking company. On Friday, Altman and President Greg Brockman were suddenly let go amid apparent disputes about AI safety, and the company’s CTO, Mira Murati, was installed as interim CEO.

By Sunday, reports were that the company’s investors were pushing the board to rehire Altman—who returned to the company’s offices for negotiations. But late Sunday evening the news broke that Shear would be named interim CEO. Shear was one of the founders of Justin.TV, the livestreaming site that eventually spun off Twitch (since purchased by Amazon for nearly $1 billion), where Shear became the CEO. He resigned from that position in March 2023.

The news will have large ramifications across the tech industry. Microsoft, which is one of OpenAI’s largest investors and is using OpenAI products as the foundation of its own forays into AI, already saw its stock tumble Friday after the news of Altman’s departure broke. And many OpenAI employees signaled over the weekend that they supported Altman and Brockman, who could potentially start their own new venture—and possibly take many of those employees with them.

FastCompany

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11.18.23

Is Sam Altam irreplaceable?

BY Fast Company 2 MINUTE READ

At this time last year, OpenAI was weeks away from releasing ChatGPT into the world. It was a move that thrust the field of artificial intelligence into the spotlight and turned the company’s then relatively unknown CEO, Sam Altman, into a household name and AI soothsayer who has since commanded audiences with presidents and prime ministers, charming them with his sober-eyed assessments of where the technology is headed and what they ought to do about it.

What a difference a year makes.

On Friday, roughly two weeks shy of the one-year anniversary of ChatGPT’s public launch, OpenAI dropped a bombshell of a blog post announcing that the company’s board would be replacing Altman as CEO, citing “a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities.” The board, the post read, “no longer has confidence in his ability to continue leading OpenAI,” and appointed the company’s chief technology officer, Mira Murati, as interim CEO.

The underlying details of Altman’s exodus remain hazy. OpenAI declined to comment further, and Altman’s post on X revealed very little. “I loved my time at OpenAI,” he wrote. “It was transformative for me personally, and hopefully the world a little bit. Most of all I loved working with such talented people. Will have more to say about what’s next later.”

What is clear, though, is that Altman’s ouster will have an outsize impact not just on OpenAI but on the field of artificial intelligence writ large. Altman was not just the most high-ranking executive at one of the world’s most valuable startups. He also played a bigger role than arguably any of his peers in shaping how global leaders and lawmakers think about a technological transformation that—if his own predictions bear out—would have unimaginable impacts on nearly every facet of life.

Whereas many of the tech moguls who preceded him skirted Washington, D.C., for as long as they could until they were dragged all but kicking and screaming there, Altman charted a more convivial course. He courted policymakers early on in his assent and openly acknowledged AI’s biggest risks. He also, most crucially, urged lawmakers to adopt rules that he and his company would then conveniently help craft. And for the most part, it worked.

“Having talked to you privately, I know how much you care,” Connecticut Senator Richard Blumenthal gushed when Altman testified before the Senate this spring.

But his sudden, stunning removal as CEO of OpenAI—particularly under such puzzling circumstances—seems certain to change that dynamic. For some, the change may be a welcome one. Altman’s focus on the supposed existential risks of AI always looked to his critics like something of a marketing campaign, distracting from AI’s very real immediate dangers, and amping up interest (and investment) in his company.

This approach made Altman the guiding hand in shaping the global AI agenda. Now the question is whether that agenda will outlast him, or whether it even should.

FastCompany

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Sam Altman has been fired as CEO of ChatGPT parent company OpenAI

BY Fast Company < 1 MINUTE READ

Sam Altman, the CEO of OpenAI, the company behind ChatGPT, has been removed from his position and will leave the board of directors, following a review process that “concluded that he was not consistently candid in his communications with the board.”

Mira Murati, the company’s chief technology officer (whom Fast Company profiled in March 2023), will take over as interim CEO, effective immediately, the board said in a statement.

“Mr. Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities,” the company wrote in a release. “The board no longer has confidence in his ability to continue leading OpenAI.”

OpenAI is best known for its AI chatbot ChatGPT that was released to the public last year. The language model allows users to have text conversations that can do things like plan vacations, solve problems, and write cover letters. The surge of popularity ended up pushing several other large firms, like Alphabet, to heavily fund their own AI work.

OpenAI’s board of directors consists of the company’s chief scientist, Ilya Sutskever, Quora CEO Adam D’Angelo, Tasha McCauley, and Helen Toner. While the release stated that Greg Brockman, OpenAI’s president, was stepping down as chairman of the board but would remain in his role at the company, he later announced that he was quitting altogether “based on today’s news.”

FastCompany

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11.17.23

Here’s how Apple makes money. Hint: non-hardware

BY Fast Company 3 MINUTE READ

Apple is the world’s first $3 trillion market value company, and it got there by generating tens of billions of dollars in revenue per quarter. Historically, that revenue has primarily come from hardware sales, but more recently the company’s coffers are being filled by non-hardware products, and thanks to DOJ’s ongoing antitrust trial against Google, we now know a lot more about the impressive non-hardware revenue Apple generates.

For the first 30 years of its existence, Apple was officially called Apple Computer, Inc. The name was appropriate because for those three decades, Apple earned nearly all its revenue from one type of product: computers. But when Apple founder and CEO Steve Jobs took the stage at the Macworld Expo in January 2007 to introduce the iPhone, he also famously announced the company was dropping “Computer” from its name. The reason? “The Mac, iPod, Apple TV, and iPhone. Only one of those is a computer. So we’re changing the name,” Jobs said.

In the years since, the iPhone has become the main revenue driver for Apple, though the company still makes tens of billions per year on its other hardware products: the Mac, Apple Watch, iPad, and AirPods. But that’s not to say the company hasn’t also embraced and excelled in non-hardware revenue streams: Indeed, Apple’s so-called Services division has also become a huge moneymaker.

In Apple’s Q4 2023, which just ended, the company made $22.3 billion in services and $67.1 billion in “products” (ie: hardware). In other words, nearly 25% of the money Apple made in the quarter didn’t come from hardware. And in all of Apple’s fiscal 2023, “services” accounted for $85.2 billion in revenue—the largest revenue category behind the iPhone, which generated $200 billion in sales. That means Apple’s services now generate 42.6% of what the company’s flagship iPhone generates on an annual basis.

But just what do these non-hardware services consist of? A quick perusal of Apple’s latest 10-K SEC filing tells us what Apple considers services:

Advertising: Apple sells ads inside of its apps, such as News, the App Store, and Stocks. It generates revenue from the sale of those ads.

AppleCare: The company’s optional extended warranties on its products is another service the company offers.

Cloud Services: This consists mainly of iCloud Plus subscriptions, which gives iCloud users more online storage and security options.

Digital Content: Apple subscription services that aren’t iCloud Plus fall under “digital content.” This includes Apple Music, Apple News Plus, Apple TV Plus, and Apple Fitness Plus. It also includes Apple’s up-to-30% cut from apps sold on its App Stores, its cut of in-app purchases, and its cut of media purchases from its movies, TV shows, and iTunes music stores.

Payment services: Every time you use Apple Pay, Apple earns money on the transaction. The company also offers its Apple Card credit card, which earns Apple money.

Since Apple doesn’t break down its services revenue by individual services, we can’t be sure how much Apple is making from, say, Apple Music subscriptions or its advertising sales, but Apple is also likely not listing everything it groups into its Services category, either.

In addition to the above, Apple also generates non-hardware revenue from licensing agreements and things called “information services agreements” (ISA). And Apple has one very important ISA, which may account for as much as $20 billion of its annual services revenue: its search deal with Google.

Since 2002, the Google search engine has been the default search engine on Apple devices. Google pays Apple for the privilege. And since Apple devices—especially its iPhones—are insanely popular, the more people who use Apple devices, the more people who potentially use Google search, making it a win-win for both companies.

Just how much Google pays Apple to remain the default search engine on Apple devices is a closely guarded secret—and one that is the focus of the Justice Department’s antitrust trial against the search giant. It’s thought that Google probably paid Apple around a billion dollars a year in 2002 when the ISA started. But since that time, the annual amount Apple makes from its Google ISA is thought to have skyrocketed.

Last month, The Register reported that analysts at Bernstein estimated Google paid Apple between $18 billion and $20 billion a year. If that’s accurate and if Apple includes the Google revenue in its Services category, that means nearly a quarter of all its Services revenue comes from Google cutting Apple a big check.

And this week, Google’s main economics expert told the court further information that lends credence to Bernstein’s sky-high estimates. During his testimony, University of Chicago professor Kevin Murphy revealed that Google pays Apple 36% of the ad revenue it makes from searches done via Apple’s Safari web browser. As Bloomberg’s Leah Nylen wrote, “John Schmidtlein, Google’s main litigator, visibly cringed when Murphy said the number, which was supposed to remain confidential.”

Apple also has ISAs with Microsoft (for the Bing search engine) and Mozilla (for the Firefox search engine), yet neither of those agreements would generate revenue anywhere near what Apple earns from Google. And if Google loses the trial, it’s possible it may be forced to cease its ISA with Apple—cutting the company off from billions of service dollars every year.

Still, even without Google’s revenue, Apple’s Services offerings now represent a huge portion of the annual revenue Apple generates and shows that the company is not a hardware-dependant enterprise any longer.

FastCompany

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11.16.23

The Future of the Fridge according to Whirlpool

BY Fast Company 4 MINUTE READ

The design, size, and even location of refrigerators is about to change forever. Whirlpool Corporation, the parent company of appliance brands JennAir, KitchenAid, and Whirlpool, has just created a new way to insulate refrigerators that can dramatically increase their capacity and reduce their energy usage. It’s opening up wild new opportunities for the way refrigerators look, and how they could be evolving away from being a big box in everyone’s kitchen.

The new approach is called SlimTech, and it replaces the thick polyurethane foam and plastic that form the walls and doors in almost every refrigerator on the market. Instead, SlimTech is a vacuum insulation structure that contains a thin layer of compressed and proprietary powder sealed inside walls of steel.

Doors using SlimTech will be up to 60% thinner than the typical refrigerator door, and will increase the interior capacity by 25%. In another configuration, slightly thicker SlimTech installations could improve the internal temperature control so much that energy use would drop by 50%.

In an exclusive interview, Whirlpool Corporation chairman and CEO Marc Bitzer calls the technology a step change in the way refrigerators are designed and built. “This is one of the biggest innovations in refrigeration in the last 50 years,” he says.

After more than six years in development, 180 patents, and tens of millions of dollars in research and development, the first refrigerators using SlimTech will begin production early next year, for the high-end JennAir brand. Whirlpool Corporation expects to display one at the Consumer Electronics Show in January.

To put this new technology in context, almost every refrigerator built since the 1960s has relied on foam and plastic to insulate the interior and keep the cabinet cool, according to Whirlpool engineer Paul Allard. He’s been working on SlimTech for several years, and says SlimTech will revolutionize the form of refrigerators. “It’s completely different,” he says.

Current refrigerators have walls that are five centimeters thick. SlimTech shrinks that down to two centimeters. And because the insulation is sealed in a steel structure, it can have straighter lines and sharper angles than the molded plastic that forms the inside of the typical refrigerator, Allard explains, increasing capacity from 17 cubic feet to more than 21 cubic feet. “It’ll be a big improvement in being able to use the space in your kitchen more efficiently,” Allard says.

Bitzer says this new form of insulation is as much a product innovation as a manufacturing one. Whirlpool Corporation has spent years trying to figure out how it can produce these new kinds of refrigerator doors and cabinets in factories that have long been optimized for the old and time-tested way of making refrigerators. “It’s not just a technology. I’ve got to change the factories,” Bitzer says. “It’s just a different production methodology.”

The necessary change to the manufacturing process alone has cost $16 million, and is focused on one of Whirlpool’s smaller factories, in Ottawa, Ohio. Bitzer equates the change to “open heart surgery,” and says it will be a while before such changes are made to bigger and higher volume factories.

The company always knew that moving to this new technology was going to be a long game. But over the last six or seven years, Bitzer says the company went through moments of doubt about whether all this effort and expense was worth it.

“It’s a lot of money with a long payback period,” he says. “We’re a publicly listed company so we have quarterly results, and if you invest a big part of your entire innovation budget into a technology which is still years away, it’s a big decision.”

There were times when Bitzer and his team considered pulling the plug. It would have been a painful repeat of another major R&D effort into solid state cooking that was eventually scuttled after five years of work and investment. But Bitzer says the potential for the SlimTech technology to change the refrigerator was too big to ignore.

Initially SlimTech will make refrigerators either more spacious or more energy efficient. Eventually, though, Bitzer says this approach to insulation could radically alter how refrigerators look and how we use them.

“Today you have this one big, 25 cubic foot refrigerator in the kitchen,” he says. “What if you had a small one in the kitchen and a small one in the living room, because all of a sudden you don’t have the energy loss or the space loss.”

He envisions small refrigerators being used throughout the house for cooling things like medication or cosmetics. They could even shapeshift away from the typical cabinet formfactor.

“Down the road I think we start thinking about refrigeration like furniture,” he says. “You don’t have these big clunky doors and walls anymore. You could think about distributed refrigeration throughout the house.”

For now, SlimTech will have a modest debut in the form of a conventional cabinet-style 30-inch wide JennAir refrigerator, priced in the same range as other similar models. Bitzer expects the production of JennAir refrigerators using the technology to number in the thousands. By comparison, Whirlpool Corporation’s many appliance brands produce between 15 and 20 million refrigerators per year.

The hope, Bitzer says, is for SlimTech to make its way into more and more of the corporation’s refrigerators over time. There are already plans to integrate the technology into the mid-range brand KitchenAid, but no precise timeline.

Bitzer knows the first refrigerators using SlimTech will pencil out as a loss for the company, but he sees the project as a way to avoid stagnation for a company that’s been around for 112 years. “We have a couple of these bets out. Some will work out, some won’t work out,” he says. “This one I’m convinced will work out.”

FastCompany

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11.15.23

Huawei Joins AfricaCom 2023 and Advocates for Accelerating Digital Africa for a Prosperous and Sustainable Continent

BY Fast Company 3 MINUTE READ

In his opening keynote for AfricaCom 2023, Africa’s largest tech conference, currently underway in Cape Town; Leo Chen, President of Huawei Sub-Saharan Africa laid out how two transformative forces, digitalisation and decarbonisation, are driving humanity towards an intelligent world. Africa, he said, can ride a new wave of “digital-physical convergence”, which marks a new phase of digitalisation, to leapfrog development in the digital economy era.

To achieve these goals, Chen believes that, “Africa’s first priority must be to accelerate the development of connectivity infrastructure.”

“That is because, in the future, more people, things, and applications will be connected,” he said. “This process will generate far more data than it does today. So, we need a more secure, reliable, and developed network to act as the foundation for digitalisation.”

This infrastructure, he pointed out, should be more advanced, more future-proof, and more inclusive and accessible. Achieving the first of these simply means ensuring that African countries have access to the same leading-edge connectivity technology as the rest of the world, such as Huawei’s 4G, 5G and even 5G-Advanced solutions. To be future-proof, meanwhile, infrastructure should support future application scenarios, like smart solutions in vertical industries and smart homes. And while inclusive connectivity remains a significant challenge on the continent, there is hope on that front too.

For example, Chen said, “Huawei’s cost-effective wireless RuralStar solution can provide remote areas with broadband coverage, access to the Internet, and digital services. This bridges the digital gap and enables inclusive development.”.

According to Chen, embracing the full capabilities of the cloud is another important facet of digitalisation for African countries.

“It is important that African countries establish national cloud data centres to provide computing resources to the governments, public and SMEs,” he said. “This will drive the innovation ecosystem.

“By establishing ‘e-Government Clouds’”, he added, “governments can improve operational efficiency, and provide citizens with one-stop and innovative services.”

Using cloud service is also a simple and economical way for African countries to obtain AI capabilities. For example, as the world’s fastest-growing cloud service provider, Huawei Cloud is equipped with the Pangu AI model which is, “born for industry” and can also be used in Africa for agriculture, and disaster prevention and mitigation, improving the livelihood of African people.

As Chen pointed out, adopting these kinds of digital technologies will also help drive decarbonisation across the continent. In fact, he said, the ICT industry can help reduce global carbon emissions by 20%, equivalent to 10 times its own emissions, and can also make digital energy production more efficient.

Among the examples provided by Chen was its work at Scatec, the largest ground PV plant project in Africa. The project can provide clean electricity to more than 120 000 households. Huawei’s solution, he said, improved the plant’s energy yield by over two percent, and improved O&M efficiency by more than 40%.

“Huawei’s solutions can also help carriers to cut their carbon emissions,” he said. “For example, across more than 10 African countries, we have built over 6 000 green sites, and helped carriers save US40 million.”

“Moreover, Huawei’s Smart PV can be used for scenarios like industrial and commercial, household, and micro-grid solar,” he added “Therefore, it can help the African people gain a sustainable, affordable, and reliable power supply.”

Chen also highlighted the fact that it is ‘people’ that drives all these innovations. “This is why Huawei has always put digital talent cultivation at the centre of the digital ecosystem,” he said. “Over the past five years, Huawei has trained 100 000 digital talents in Sub-Saharan Africa. Between 2022 and 2025, we will train another 100 000.” He also said, Huawei believed in localised joint innovation, and are proud of being supporting the world well-known M-Pesa and Mobile Money innovations in Africa.

“To accelerate digital Africa is to create a prosperous and sustainable Africa,” Chen concluded. “To this end, we are ready to work with all parties to achieve this great mission.”

As a key participant and sponsor at AfricaCom, Huawei presented its latest technologies and solutions in a 350-meter exhibition and supported and organized four forums, including the African Ministerial Forum for a Future-Oriented Digital Infrastructure, Africa Fibre Forum 2023, Africa Operations Transformation Forum 2023, and the Africa 5G Summit.

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