The Viking who is taking on Silicon Valley

FT_Vestager

Terrific Financial Times profile of Margrethe Vestager, the EU’s Competition Commissioner, who is really getting up the noses of Silicon Valley’s overlords. Because of public hostility to the craven deal that HMRC negotiated with Google over back-taxes, many people here will be rooting for her. (She’s said that she is prepared to examine the deal.) But if her probe into Apple’s weird tax arrangements with the Irish government results in a colossal back-tax bill for the company, then we will really have moved into new territory.

For one thing, it’ll unravel a crazy system of international tax laws that dates back to 1928. And it’ll open all kinds of worm-cans — Amazon pretending that it’s based in Luxembourg; Facebook, Apple, Microsoft and Google pretending they’re based in Dublin; and so on. And of course the US will be mightily pissed off. Not bad for the daughter of two Lutheran pastors. Just as well that she’s a tough cookie. The FT profile has a nice story about her time as Deputy Prime Minister of Denmark. An opposition spokesman complained in Parliament that her proposed spending plans were “small”.

“Some think it is a rather small plan,” she retorted, with a mischievous grin. “But I am a bit cautious about trusting any judgments on size from men, and perhaps — but this might be a woman’s perspective — I am more interested in the effect.”

The “has Apple peaked?” meme is back. Sigh.

But some horse-sense from Farhad Manjoo :

If Apple is now hitting a plateau, it’s important to remember that it’s one of the loftiest plateaus in the history of business. The $18.4 billion profit that Apple reported on Tuesday is the most ever earned by any company in a single quarter.

Yep. If this is failure, then I’d like some of it, please.

Corporate logic

Apple has over $200B in cash, and yet it borrows money to fund buy-backs of its shares — to keep its investors happy. How come?

Simple, says the NYT:

Mr. Maestri [Apple’s CFO] said that Apple would continue to raise money in debt markets in the United States and abroad to continue to return money to investors in the form of dividends and stock buybacks. Because Apple houses the majority of its $216 billion in cash overseas, it has borrowed money over the last three years to pay out more than $9 billion to investors.

And why is that $216B housed overseas? Equally simple: if Apple repatriated it to the US, it would have to pay tax.

Remembering the first ‘Killer App’

This morning’s Observer column:

Tidying my office the other day, as one does at this time of year, I came upon a shabby, brown, dust-covered, A5 plastic ring binder. It was the kind of thing one throws into a skip without a moment’s hesitation. Except this wasn’t something to throw away, for embossed on the spine of the binder was “VisiCalc”. Inside was a 5.25in floppy disc and a glossy manual. And as I stood there looking at it I had one of those epiphanies that James Joyce was so keen on. I was suddenly transported back to late November 1979. I had bought an Apple II computer on a research grant – the more expensive 32k model, which had an external disk drive. An academic colleague who was on sabbatical at MIT had sent me a postcard saying that he had seen an Apple II running some weird software for business planning that was driving people wild. So I asked him to get me a copy and it arrived via FedEx.

VisiCalc was the world’s first spreadsheet program. It was written by Dan Bricklin and Bob Frankston and came from an insight Bricklin had one day while attending Harvard Business School….

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The new sun in the tech universe

This morning’s Observer column:

The Christmas holidays are the time of year when different generations of the family gather around the dinner table. So it’s a perfect opportunity for a spot of tech anthropology. Here’s how to do it.

At some point, insert into the conversation a contemporary topic about which most people have strong opinions but know relatively little. Jeremy Clarkson, say. There will come a moment when someone decides that the only thing to be done to resolve the ensuing factual disputes is to “Google it”. Watch what happens next…

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So even Apple can’t break into my iPhone?

Hmmm… I wonder. This from SiliconBeat:

Apple says it would be burdensome — and mostly impossible — for it to unlock people’s iPhones upon the request of law enforcement.

In a legal filing this week, the iPhone maker answered a question posed by U.S. Magistrate Judge James Orenstein, who had been urged by federal prosecutors to force Apple to unlock an iPhone. Orenstein said last week that he would defer ruling until Apple let him know whether it’s feasible to bypass an iPhone’s passcode.

Here’s the meat of Apple’s response, which comes amid law enforcement officials’ growing frustration over tech companies’ increased privacy and security efforts:

“In most cases now and in the future, the government’s requested order would be substantially burdensome, as it would be impossible to perform. For devices running iOS 8 or higher, Apple would not have the technical ability to do what the government requests—take possession of a password protected device from the government and extract unencrypted user data from that device for the government. Among the security features in iOS 8 is a feature that prevents anyone without the device’s passcode from accessing the device’s encrypted data. This includes Apple.”

The new Holy War — and its collateral damage

This morning’s Observer column:

The novelist Umberto Eco wrote a deliciously insightful essay in 1994, in which he argued that the Apple Mac was a Catholic machine, in contrast to the PC, which, he argued, was clearly a Protestant device. How so? Simply this: the Mac freed its users/believers from the need to make decisions. All they had to do to find salvation was to follow the Apple Way. When the Mac was launched, for example, a vigorous debate broke out among user-interface geeks about whether a computer mouse should have one or two buttons. Some were critical of the fact that the Macintosh mouse had only one button. But when queried about this, Steve Jobs – then, as later, the supreme pontiff of the Church of Apple – was adamant and unrepentant. Two buttons would undermine the rationale of the Mac user interface. He spoke – as his Vatican counterpart still does – ex cathedra, and that was that.

In contrast, Eco pointed out, the poor wretches who used a PC had, like the Calvinists of yore – to make their own salvation. For them, there was no One True Way. Instead they had to choose and install their own expansion cards and anti-virus software, wrestle with incompatible peripherals and so on. They were condemned to an endless round of decisions about matters that were incomprehensible to them but on which their computational happiness depended.

Spool forward 21 years to today and nothing much has changed, other than that the chasm between computational Catholics and Protestants now applies to handheld computers called smartphones, rather than to the desktop machines of yore…

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Ad-blocking and the future of the Web

This morning’s Observer column:

There is, alas, no such thing as a free lunch. What’s even more depressing is that there is no such thing as a free internet service. Most people nowadays probably understand that in relation to, say, social networking services, if the service is “free” then the users (or, more precisely, their personal data) are the product. But this also applies to stuff that you haven’t signed up for – websites that you browse, for example. The site may be free to view, but there’s often a hidden cost.

One part of that cost comes from surreptitious tracking of your browsing habits by outfits that sell that information to advertisers. (If this is news to you just install the Ghostery browser extension to see who’s monitoring your browsing.) The other cost comes from ads that are placed on a webpage either directly by the site owner or as the outcome of a real-time auction that goes on in the depths of the internet.

And as the web has evolved, and more of our lives conducted online, internet advertising has steadily increased. It’s now at the stage where it’s really annoying…

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