I love the outdoors. Some of my best moments have been spent backpacking in the Pacific Northwest or, more recently, rafting the rivers of Colorado and Utah.

So, last fall, when Apple introduced a new iPhone 14 SOS feature that allowed users to send emergency messages via low-orbit satellites from the wilderness, I was intrigued. I bought the new device, walked through a demo explaining how to use the technology, and then basically forgot about it — until June 28, 2023. 

Satellite connectivity seemed like a beneficial feature, but hopefully one I’d never have to use. The ability to send a text to search-and-rescue teams from beyond cellular range could save my life or the life of a hiking companion. 

Little did I know that the feature would spark a multi-person search for me — including a helicopter crew — while I was hiking in Dinosaur National Monument near the Colorado and Utah border this summer. 

The incident was one of the most embarrassing moments of my life. (I was safe, after all.) It also made me question the use of technology in the backcountry. 

Tuesday’s big Apple iPhone 15 launch — which opened with a dramatic montage of people escaping life-threatening situations thanks to the SOS satellite technology — rekindled a story I’ve been meaning to tell. (This time beyond family and friends.) 

It’s the story of an iPhone butt-dial that went horribly wrong. Here’s what happened. 

A chance to disconnect and recharge

My brother — a Seattle environmental consultant who earned his master’s degree in geology from Northern Arizona University — spends a week or two each summer leading geological-based rafting trips on the Yampa and Green rivers. It’s a hobby, and a deep love of his.  

Friends, family members and others who simply want to escape our always-on society tune out of the technological rat race to float through the glorious Weber Sandstone cliffs, get splashed at the Warm Springs rapid or observe bighorn sheep frolicking by the riverside.

The trips have become a regular tradition in our family. 

This year, on the second to last day of our five-day voyage on the Yampa and Green rivers, our crew took a side hike along Jones Creek. It’s one of the most beautiful places in Dinosaur National Monument. 

The hike is capped off with an amazing geological feature in which a person (typically a teenager, in this case my son) can plug (with their rear end) a running stream to build up water in a pool that then — when the butt is lifted — unleashes a powerful torrent of ice cold runoff that cascades about 12 feet below onto a sweaty hiker. 

It’s amazing, and refreshing. 

It’s also one of my favorite moments to capture on video, especially of newbies who’ve never experienced anything quite like this in the wilderness. Check out GeekWire reporter Lisa Stiffler, who was also on the rafting trip, getting doused here:

Trouble at ‘Butt Dam Falls’

And this is where it appears things went a little haywire. 

I actually debated whether I should bring my iPhone 14 on this trip. (My sister-in-law lost hers in the river, by the way.) The device was packed away for most of the voyage, and I only brought it out when capturing some fun moments on side hikes — like the one up Jones Creek to what most of us affectionately call “butt dam falls.”

In the process of turning off the phone (or what I thought was turning off the phone by simultaneously holding the volume and side button), I inadvertently — and to this day I do not know what happened — set off a satellite SOS alert. 

Thinking my phone was turned off, I tossed it into my fanny pack and headed back down the canyon. 

Little did I know that the SOS alert activated more than a dozen search and rescue personnel miles away. 

They were looking for me. But I didn’t need help. 

I blissfully continued down the trail, stopping at points to take in the views. About midway on the hike, I took out my phone for a photo of the striking landscape and noticed a text message in red from SOS Emergency Services. 

The message read:

Emergency SOS Report:

—Sickness or Injury

Information Sent

—Emergency Questionnaire

—Medical ID

—Current Location

There was no indication that the message was about me. The message did not ask if I was OK or if I needed help. 

It appeared impersonal, automated, and generic. 

I didn’t think twice that it was meant for me, since I had not (in my mind) activated the SOS alert through the normal mechanisms by which the satellite messaging is triggered. I figured someone was lost or hurt in the National Monument, and search and rescue personnel were sending out a general alert to those in the area. Kind of like an alert of flash flooding or wildfires.

I turned off my phone and continued hiking for another 25 minutes or so, crossing Jones Creek to return to our camp where a couple guides had remained. A few minutes later we heard the whir of a helicopter buzzing 30-feet above Jones Creek, making an impressive 360-degree turn at the confluence with the Green River and then heading back up the side canyon. 

I first wondered if anyone in our group — those hiking behind me — might be hurt. A sprained ankle in the creek crossing? A fall from a cliff?

And then it clicked. 

Was this because of the SOS alert from my device? Could they be looking for me? 

I got out my phone, and consulted with the lead guide of our trip to see a series of additional text messages. 

My heart sank. 

Indeed, they were looking for me. 

Flustered, I handed the phone to our lead guide who activated the satellite functionality, and sent a text message: “Jones 1. No emergency” — referencing our camp location. 

To this day, I can’t explain what happened. 

I never heard an audible alert on my phone, saw bright lights or felt haptics, warnings that Apple says notifies users before emergency personnel are contacted and gives time for people to disable the call for help. To my knowledge, I also did not drag the slider bar to activate the SOS call, nor did I receive a questionnaire (on the initial message). 

Apple does note that in backcountry settings that messages may take “from 15 seconds to more than a minute to get through depending on conditions” and, if under heavy foliage or surrounded by other obstructions, “you might not be able to connect to a satellite.” 

Even still, all of this remains a mystery. It’s supposed to be a multi-step process to activate the SOS alert, and I didn’t consciously do any of those things.

An inadvertent butt call, from butt dam falls. 

Later that evening, a Dinosaur National Monument park ranger arrived at our camp, seeking answers on the mishap. 

I apologized, and expressed my gratitude to the search and rescue teams. He was stern, but understanding. Mainly, he was glad I was safe. 

(Interestingly, on my brother’s voyage on the Yampa River the following week, one of the guides was stricken with severe heat stroke and dehydration, and a helicopter crew was called via a Garmin inReach satellite device for a dramatic beach rescue.)  

Searching for answers

I’ve continued to rack my brain on what happened that June afternoon. I’ve studied Apple’s literature and stories about the satellite SOS functionality. I still can’t explain it. 

Later, I questioned why the same buttons used to turn the phone on and off — the side and volume buttons — are used to activate the satellite SOS alert. Turning the phone on and off is a common occurrence when I’ve been in the wilderness, so as to preserve battery life.

There are two ways to activate the satellite SOS.  One is by holding the side button and one of the volume buttons simultaneously, activating a slider bar on the phone’s main display that shows “SOS Emergency Call” as an option. The other is by pressing the side button in rapid succession five times, which also prompts the slider bar. 

Apple declined to comment for this story. 

I contacted the National Park Service to see if I was just one of many examples. Has the introduction of the iPhone 14 with its satellite SOS functionality caused a wave of false alarms in the wilderness?

The short answer: No. 

“Looking over the current data, we have not seen a significant uptick in the iPhone 14 false alarms or unintentional activations, but we’ve had a couple,” said Brian Sikes, deputy chief of emergency services at the National Park Service. 

Sikes noted that satellite phones and other communication devices have been deployed in the backcountry for years. While the ubiquity of the iPhone could eventually drive additional inadvertent calls, for now he said “we’ll take an acceptable amount of false alarms to ensure that we respond to people who need help.”

Jason Griswold, chief ranger at Dinosaur National Monument, where my incident occurred, said they’ve not noticed a big trend in false alarm calls in the past 12 months. 

However, he said my incident in late June marked the second accidental activation involving an iPhone in about a year, with the other occurring over a cellular network from the Deerlodge area of the park. He also noted there were two other accidental activations in that time period from other satellite devices. 

Anecdotally, guides on our trip said they’ve noticed an increased number of helicopters flying over the monument.  

As of earlier this summer, Griswold said the park was not considering new rules to limit the use of satellite phone technology in Dinosaur National Monument. 

Sikes also said there’s no policy at a national level related to the satellite SOS functionality, though some parks with a lot of backcountry usage may decide to incorporate additional educational information into their briefings. Right now, he said false alarms from iPhones are not “high on my list of concerns.”

“Talk to me in five years and my position may have changed,” he said. “But with the current data that’s in front of us, I’m happier that they are there, than not being there, that’s for sure.”

Search and rescue calls actually have dropped over the past six years, from 5,395 in 2016 to 3,428 in 2022, according to the National Park Service. The National Park Service did not have detailed numbers available on search and rescue activities this year. 

Apple’s new satellite feature

Of course, the iPhone 14 with satellite connectivity was released last September, so it has only been on the market for 12 months. With Wednesday’s release of the iPhone 15, many more phone users will trek into the wilderness either knowingly or unknowingly with satellite SOS on their phones. 

In fact, Apple on Tuesday made a big splash with the rollout of the iPhone 15, touting an adjacent technology that connects users with roadside assistance via AAA over satellite.  

There certainly have been high-profile incidents in which the SOS satellite technology helped save lives, most recently during the devastating fires in Lahaina. A woman from Issaquah, Wash., and her friend survived in a pool while the fires raged around them, using the iPhone’s satellite functionality to contact emergency personnel. A stranded hiker in California also used the technology earlier this summer to call for help. 

Dozens of other inspiring stories have emerged over the past year, several highlighted in Apple’s slick launch event on Tuesday in which the company declared: “In an emergency, iPhone has your back.”

However, Apple also faced criticism earlier this year when skiers, mountain bikers and other athletes using iPhone 14s and Apple Watches inadvertently set off the crash-detection alerting system after a fall, causing havoc for 911 operators in many mountain towns in the U.S.. 

After my satellite mishap on Jones Hole trail, I was nervous to turn on the iPhone for the rest of the rafting trip. 

On subsequent hikes, I’ve made a point of switching my iPhone to airplane mode, which nullifies the ability to make a satellite call.  It also stops the ability to get important safety messages, so that should be taken into consideration when spending time in the backcountry.

And speaking of satellites, a strange thing happened the night before my inadvertent butt call.

I was sleeping outdoors under the brilliant stars with my family, when I awoke early in the morning. 

Looking up to thousands of stars above, a parade of more than 50 bright Starlink satellites marched in unison in a solid line across the night sky. The procession lasted less than two minutes before they disappeared on the opposite horizon. 

The brightness and intensity took me back for a moment to modern civilization, away from a place where we’d been pondering the wonders of geologic time. 

It was cool to see this procession, the second time I’ve spotted a satellite train in the night sky. 

I woke up later that morning, and after explaining to the group what I saw, I had mixed emotions.  

Yes, the technological marvel — and connectedness provided by the satellites — was impressive. 

But aren’t there some spots where you’d rather not be tethered by a device to a convoy of satellites above? Places where connectivity is about the attachment to 300 million year-old sun-baked canyon walls or rushing rivers or endless starry nights.

Next time I’m in the backcountry, I think I’ll leave my phone turned off … unless I need it for a true emergency. 

Some of Microsoft’s biggest missteps over the years have come not from being too late but rather too early, leaving the door open for competitors — especially Apple, it seems — to popularize a product category years later, when the technology and the market are ready.

• Pocket PC … iPhone
• Tablet PC … iPad
• HoloLens … Vision Pro?

That last one sure looks like a possibility after Apple unveiled its new augmented reality headset this week. The device, which looks like a pair of high-tech ski goggles, lets users navigate with gestures in a manner very similar to Microsoft’s mixed reality headset, the first version of which was unveiled in 2015 and shipped in 2016.

The similarities even extend to the language used by Apple CEO Tim Cook on Monday, and then-HoloLens leader Alex Kipman at a Microsoft event in 2015.

Cook: “Vision Pro is a new kind of computer that augments reality by seamlessly blending the real world with the digital world. … You can see hear and interact with digital content just like it’s in your physical space. And you control Vision Pro using the most natural and intuitive tools: your eyes, hands and voice.”

Kipman: “A few years ago we started asking ourselves … could Windows make your digital life more powerful by connecting it with your real life? … Could we place your digital content right into your world, right into your life? The HPU [Holographic Processing Unit] gives us the ability to understand where you’re looking to understand your gestures, to understand your voice.”

Vision Pro ships next year for $3,500, the same price as HoloLens 2.

The future of the Microsoft headset is unclear after the departure of Kipman, the HoloLens leader, and layoffs on the HoloLens team earlier this year amid Microsoft’s broader cutbacks.

But Apple will also be competing with the likes of Facebook parent Meta, which makes the Rift VR headsets; and Magic Leap, which released the second version of its AR headset last year, led by former Microsoft execs Peggy Johnson (CEO) and Julie Larson-Green (CTO).

Apple hopes to popularize what it calls spatial computing by using Vision Pro to supersize the screens around us in the virtual world, with strong connections to iPad and Mac.

It’s also taking a new approach with a feature called EyeSight.

“When a person approaches someone wearing Vision Pro, the device feels transparent — letting the user see them while also displaying the user’s eyes,” the company said in the Vision Pro announcement. “When a user is immersed in an environment or using an app, EyeSight gives visual cues to others about what the user is focused on.”

That may be the Vision Pro’s most important feature, says John Tomizuka, co-founder and CTO of Seattle-based tech company Taqtile, on this week’s episode of the GeekWire Podcast.

Taqtile, which makes augmented reality work instruction software, has been working on HoloLens applications since the beginning, and the company said this week that it plans develop for the Vision Pro, as well.

EyeSight promises to make the device less socially awkward for the people using it, allowing them to interact with those around them.

That’s “the brilliant move that they made,” Tomizuka said, explaining that Apple is focused on “making this accessible and acceptable for people to use in a more widespread way.”

He cited the past precedent of Apple Airpods, which might have looked weird when first introduced, but have since become ubiquitous.

“They have a track record of making these things more socially acceptable, which is super important for our industry,” he said.

Tomizuka said the adoption curve for Vision Pro could resemble that of the Apple Watch, where the initial version doesn’t reach widespread usage, but still gives Apple important feedback that allows the company to iterate and ultimately make the device more popular and useful.

“As it gets smaller, faster, better, I really think they’ll own this market to a certain degree,” he said, “and it will heavily impact our lives.”

Listen above, or subscribe to GeekWire in Apple Podcasts, Google Podcasts, Spotify or wherever you listen.

Apple newly announced headset positions the company as a contender in the evolving field of virtual and augmented reality, and highlights the divergent paths that major players are taking through the current state of VR/AR.

While VR/AR has been relatively quiet compared to its pre-COVID boom period, the industry hasn’t gone anywhere. In fact, 2023 has seen the field get intense, with both new and old competitors bringing new products and platforms into the field.

• Apple looks like it’s placing an early bet on the theory that augmented/mixed reality will fundamentally change much of how we interact with the world and enhance both productivity and everyday life. Its presentation for the Vision Pro device on Monday featured use cases for working from home, watching movies, or drowning out obnoxious passengers on long airplane rides. While the Vision Pro can be used to play games on Apple Arcade, its utility as a gaming device was treated as an afterthought, at least for now.

• Meta’s Quest Pro headset is fully focused on its utility as a professional tool, to aid multi-tasking, creation, and collaboration. Apple wants you to treat its Vision Pro as a constant companion, while the Quest Pro is a virtual office environment that fits on your face.
• Meta’s other headsets, the Quest 2 and Quest 3 (announced last week), are relatively cheap, entry-level options for hobbyists and VR newcomers. While the Quests are distinctly marketed as gaming devices, they also both feature multiple options and apps for engaging with AR and the metaverse.
• Sony is all about VR gaming. There are a couple of ways to run other media apps like Netflix through your PSVR2 headset, the same way that you can on the Meta Quest 2, but the PSVR2 is primarily meant for video games.
• Valve Software’s Index is a gaming-focused high-end headset that’s still a popular method of playing VR games on Valve’s storefront Steam. With its recent portable gaming PC, the Steam Deck, Bellevue, Wash.-based Valve has shown that it’s willing to target an audience of modders and tinkerers.

These four companies represent four different approaches to the VR/AR scene at time of writing, which also represents a visible point of divergence in how the technology is being adapted and used.

Apple is, on the face of it, flying in the face of several recent movements in the space. The old problem with — and argument against — VR was that it was a boutique product, aimed at hobbyists who had a lot of disposable income and at least one spare room to dedicate to their VR rig.

With better tracking, smarter controllers, and wireless technology, Meta changed a lot about the VR/AR scene with the Quest 2. It’s a standalone product that doesn’t require you to hook it up to a PC or install base stations. More importantly, it’s priced like a normal video game console, at $349 or less.

Apple’s Vision Pro, conversely, is planned to ship at $3,499. Even for an Apple product, that’s a steep ask. I’ve seen some guesses that the plan with the Vision Pro is chiefly to sell it to developers, in order to build out a new VR/AR wearables space for Apple that’ll mature in a few years with a more affordable edition of the Vision. That doesn’t seem entirely in step with Apple’s traditional playbook, however.

The Meta Quest Pro has ended up looking like a hasty attempt to head Apple off at the pass. Unlike the Vision, Meta is pitching the Quest Pro primarily as a metaverse tool and productivity guide. Sure, the Pro has controllers and is compatible with the Meta store, so you can use it for games, but Meta seems most excited about what it’ll do to office life.

Finally, there’s Sony, which has fully focused its PlayStation VR2 on video games. There are a couple of ways to run other media apps like Netflix through your PSVR2 headset, the same way you can on the Meta Quest 2, but the PSVR2 is meant for entertainment.

Its recent announcements at the PlayStation Showcase include a VR adaptation of the recent remake of Capcom’s Resident Evil 4 and a sequel to zombie shooter Arizona Sunshine. Productivity, as a rule, is not high on Sony’s menu.

All three of these devices have one real thing in common, and that’s building a “walled garden” around their own individual ecosystems. Many PSVR2 games are published by Sony itself and are exclusive to the platform. While Sony’s recently started bringing many of its first-party titles to PC via Steam, such as God of War, many of its past VR titles like Blood & Truth have stayed on PSVR.

As for Valve, we’ve known since roughly 2021 that it’s at least working on a follow-up to the Valve Index, because the company filed several patents for it. There have been rumors about a theoretical “Index 2” for years, but Valve famously works on its own internal schedule. As Robin Walker told me in 2020, Valve is entirely self-owned, so it’s got the freedom to explore whatever it wants to do without having to worry about issues like frantic shareholders.

Against this backdrop, however, the interesting thing about a potential Index 2 comes from what Valve has done with its portable gaming PC, the Steam Deck. Specifically, the Deck has no built-in digital rights management, so anyone who wants to use it for homebrew projects is fully able to do so without any hacks or exploits.

While you can’t say Valve doesn’t have its own “walled garden,” considering it owns the Steam digital storefront, it is, if anything, a little too easy to get onto Steam in 2023.

More importantly, if it carries forward the same mod-friendly policies from the Steam Deck to a theoretical Index 2, it could pose an interesting disruption to the overall VR/AR scene. A big part of Apple and Meta’s current game plan comes from their built-in, captive audiences, but in a theoretical scenario where Valve releases an Index follow-up that also doubles as a homebrew-friendly dev kit, it could do a lot to open up indie development in a space that’s currently dominated by major players.

A new lawsuit alleges that an agreement between Amazon and Apple, ostensibly intended to crack down on counterfeiters, illegally restricted competition and raised prices for iPhones, iPads, and other Apple devices on Amazon’s online marketplace.

The proposed class-action suit, filed Wednesday in federal court in Seattle, piggybacks on an Italian antitrust investigation into the agreement.

Apple and Amazon have denied the allegations in the past. An initial $225 million fine against them in Italy has since been overturned by an administrative court.

The pact, signed in 2018, reduced the number of Apple resellers on Amazon from more than 600 to approximately seven, according to the lawsuit. Amazon received wholesale discounts from Apple of as much as 10%, while getting “a clear lane to distribute them free of nearly all platform competitors,” the suit alleges.

What was in it for Apple? The suit alleges that the deal “increased the chances that Apple customers would purchase from Apple’s own online store.”

The suit uses a series of charts, including this one, to show the impact on prices for Apple devices, nearly eliminating the discounts previously available.

“The agreement thus effectively inverted the competitive conditions on Amazon’s platform,” the suit says. “Whereas third-party merchants previously dominated sales of iPhones and iPads on Amazon Marketplace, the agreement eliminated this competitive threat and reallocated those marketplace sales to Amazon.”

Apple and Amazon did not respond to a request for comment on the new lawsuit. The case was filed on behalf of Steven Floyd, a resident of Williamsport, Pa., by Seattle consumer rights law firm Hagens Berman.

PC users will be able to access pictures from their iPhones via the Windows 11 Photos app through a new integration announced by Microsoft this morning.

It’s a significant move to bridge Apple’s popular smartphone and Microsoft’s widely used operating system. It also highlights what continues to be a missing link: the inability to access Apple’s proprietary iMessage protocol or Messages app natively from Windows machines.

This gap can make it difficult to transition smoothly between Apple Macs and Windows PCs for iPhone users who like the option to send and receive text messages from their desktop or laptop computers.

Messages is available on Mac but not on Windows. Some Windows PC users opt for Android devices so that they can text via their computers using Microsoft’s Phone Link app or Google Messages on the web.

In a similar way, Google Photos on the web has served as a popular method of connecting Windows machines to photos taken on the iPhone, but the new Windows 11 Photos feature provides a direct link.

The photos integration will be “seamless,” promised Panos Panay, Microsoft chief product officer, announcing the news this morning along with a series of updated Surface devices and accessories. Windows 11 users will need to install the iCloud app for Windows from the Microsoft store and sync their iCloud Photos.

Microsoft says the integration will roll out starting today to participants in the Windows Insider preview program and to all Windows 11 users next month.

In addition, Microsoft said Apple Music will join Apple TV on Xbox consoles, and both apps will officially launch on Windows next year, with preview versions available in the Microsoft Store for Windows PCs later this year.

Apple is joining the growing list of tech companies calling workers back to the office, setting April 11 as a deadline for corporate workers to be back in person at least one day per week.

According to a memo sent Friday by CEO Tim Cook, and first reported by Bloomberg, three weeks after April 11, employees will be expected in the office twice per week. By May 23, the requirement rises to at least three days per week.

Apple has a significant presence in the Seattle area, where it has offices at the 333 Dexter Building in South Lake Union. Before the COVID-19 pandemic, the Cupertino, Calif.-based company announced plans for a major expansion in Seattle in June 2019. The company said at the time that it would grow to 2,000 employees in the city over the next five years, calling Seattle a “key engineering hub.”

Before the Dexter development, Apple had about 500 employees in Seattle, working out of Two Union Square, a 56-story office tower downtown. GeekWire reached out to Apple for latest Seattle employment figures and will update when we hear back.

“In the coming weeks and months, we have an opportunity to combine the best of what we have learned about working remotely with the irreplaceable benefits of in-person collaboration,” Cook said in the memo, according to Bloomberg. “It is as important as ever that we support each other through this transition, through the challenges we face as a team and around the world.”

Apple’s move follows return-to-office announcements from others, including Google, which employs about 7,000 people in Seattle and Kirkland, Wash., and wants employees back in a hybrid work model three days per week starting April 4. Microsoft and Expedia are also bringing workers back.

A federal judge ruled Friday that Apple can no longer prohibit individual developers from offering their own independent payment options in the iOS App Store. However, the same judge also stopped short of declaring Apple a monopoly, which foiled one of the primary points brought in a suit by Epic Games.

That’s the short version of the judgement on Epic Games vs. Apple, which was delivered in a Northern California District Court on Friday morning. Both sides got some of what they wanted, which could lead to a lot of big changes in how modern mobile marketplaces conduct their business.

Under the terms of the injunction, developers of iOS apps store no longer have to go always through Apple’s systems for payment processes. Apple is no longer allowed to delist or otherwise penalize the makers of apps that include options by which a customer could pay those makers directly, such as external links.

The changes have 90 days to go into effect, until Dec. 9, unless stopped by a higher court.

However, Judge Yvonne Gonzalez Rogers did not rule in favor of Epic’s contention that Apple’s control of the App Store is enough to legally qualify as a monopoly. The judge did find in favor of Epic in that Apple engages in “anti-competitive conduct” under California law, but Apple’s processes were not found by the court to be monopolistic.

North Carolina-based Epic Games, which has offices in Bellevue, Wash., originally filed its suit against Apple in August 2020, Testimony during a May trial divulged a lot of information that would ordinarily be kept under wraps, such as Microsoft’s profit margins on individual Xbox sales, which made it a big story in tech circles.

Epic is the primary publisher and developer behind the hit free-to-play game Fortnite, as well as the popular Unreal Engine software. While Fortnite can be downloaded and played for free on all of its available platforms, players have the option to buy extra amounts of Fortnite‘s in-game currency, V-Bucks, for actual money.

V-Bucks can be exchanged in-game for exclusive but cosmetic items like special outfits or character animations. The sale and use of V-Bucks is the primary way in which Fortnite makes money, and reportedly brought in $9 billion for Epic over the course of 2018 and 2019.

Under the present terms of both the App Store and Google Play, both storefronts take an automatic 30% cut of all revenue that’s generated by or within apps. Further, as part of the terms of service, any app with in-game purchases, like V-Bucks, was forced to go through the storefont’s payment system.

That 30/70 split, which was the industry standard for years across all digital storefronts, has historically rubbed Epic CEO Tim Sweeney the wrong way. It was a non-trivial part of why the Epic Games Store, launched in 2019, offers an 88/12 split to developers instead.

In Aug. 2020, as part of a larger plan that Epic called “Project Liberty,” it implemented a 20% price reduction on V-Bucks across every version of Fortnite, but only for players who went directly to Epic for the sale. Users who went through Apple or Google wouldn’t get the lower price.

Both Apple and Google, as one might expect, immediately delisted Fortnite from their respective storefronts. Epic then filed separate lawsuits against both companies, alleging antitrust and anticompetitive behavior.

The Google lawsuit has ended up being a story all its own, which has revealed a startling amount of crazy accusations against Google. It has not yet gone to trial.

The Apple suit, conversely, may have begun the process of tearing down the walls around the iOS garden, so to speak. Apple has previously used its control over the store’s rules to create some incredibly specific policies, such as those that it used last year to keep Microsoft from directly launching an Apple version of the Xbox Game Pass.

Now, other big companies could theoretically bring their apps directly to the iOS marketplace without going through Apple’s systems. The ruling caused Apple’s stock to take a 2% drop on Friday, according to CNBC.

Today’s ruling isn't a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers. https://t.co/cGTBxThnsP

— Tim Sweeney (@TimSweeneyEpic) September 10, 2021

It’s hard to see this as any kind of win for either company. Epic had hoped to force Apple to relax its restrictions entirely, and didn’t get that. The “Project Liberty” sale was also found in the judgement to be a violation of Apple’s terms of service. Epic has to pay Apple a fee equivalent to 30% of the money it made off of selling V-Bucks on iOS between last August and now. It adds up to over $3.5 million.

However, it did open the door for big players to go around Apple entirely for their products on iOS. Any mobile game on iOS that offers in-app purchases, such as Valve’s Dota Underlords, can now offer cheaper prices or other perks if players go directly to its developer, which could theoretically cost Apple billions. Epic got something out of this.

An Epic spokesperson reportedly told NPR late on Friday morning that the company plans to appeal the decision.

Rep. Pramila Jayapal’s Amazon-busting legislation, the “Ending Platform Monopolies Act” that would potentially force the company’s dismantling, has earned Biden administration support, the 7th District Democrat said in an interview with GeekWire.

“They are supportive, actually,” Jayapal said in a recorded interview. “And you might have seen that they appointed some of our best people that we were pushing, (Federal Trade Commission chair) Lina Khan, (National Economic Council deputy director) Bharat Ramamurti, (special assistant to the President) Tim Wu, many others.

“And even the Attorney General for antitrust (Jonathan Kanter), great choice. We’re excited about him. So it’s looking very good.”

The legislation, which appears to target Amazon by limiting its antitrust restrictions to retail sales companies that are “larger than $600 billion” in market capitalization, is part of a five-bill antitrust package to limit the power and reach of the big four technology companies: Amazon, Facebook, Google, and Apple.

The Ending Platform Monopolies Act, as one component of the overall legislative package, seeks to stop dominant platforms’ abilities to leverage power across multiple business lines in a way that puts competitors using the same platform at a disadvantage. For example, the bill could eliminate the Amazon Basics line because Amazon owns the platform and with those Basics products competes directly with other users who sell similar items.

An Amazon spokesman declined to comment on the recent Jayapal interview and instead referenced a June statement from the company’s vice president of public policy Brian Huseman.

“We are still analyzing the bills, but from what we can tell so far, we believe they would have significant negative effects on the hundreds of thousands of American small- and medium-sized businesses that sell in our store, and tens of millions of consumers who buy products from Amazon,” Huseman wrote.

“More than a half-million American small- and medium-sized businesses make a living via Amazon’s marketplace, and without access to Amazon’s customers, it will be much harder for these third-party sellers to create awareness for their business and earn a comparable income.”

Doug Ross, a law professor and antitrust expert at the University of Washington, said he has little doubt that the administration is at least warm to the legislation. He agreed with Jayapal that the appointments of Khan, Wu, and Kanter indicate a rethinking of antitrust law at the highest levels of government.

But, he added, he doesn’t believe that the way Amazon runs its business is a violation of current antitrust standards — at least as courts have interpreted them for the past 40 years.

“The legislation is saying, ‘you can be a marketplace or a seller or goods — you can’t be both'” Ross said. “But you go into Safeway and you see national brands of peanut butter. And you see Safeway’s house brand. But no one sees that as an antitrust violation.”

This is true, antitrust experts agree. But it’s also true that supermarkets seldom, if ever, place their own house brands in a preferred shelf placement over more popular national brands — something Amazon often is accused of doing in its own online marketplace.

Plus, Jayapal said, Amazon has access to substantial amounts of its supplier’s data and takes unfair advantage of that in a way a supermarket can’t.

“They then collect all of the data on every seller that sells on the marketplace,” Jayapal said. “And then they produce their own private label goods to compete with those that are on the marketplace. All of that means that a small business has really an extremely unfair situation where they’re not playing by the same rules, all of their data is being taken.”

Taken as a whole, the five bills would create a framework to dismantle large tech companies into smaller ones (Amazon and Amazon Web Services, for example); to make mergers more expensive and difficult; to break up businesses that use their dominance in one area to get a stronghold in another; and to stop companies that create purportedly open marketplaces and only to game it to favor their own products.

The sweeping package from House Democrats and Republicans comes after months of study and congressional inquiries about the enormous power and financial reach of Big Tech and the existing regulations to curtail it.

Spokespeople from Facebook, Google, and Apple all declined to comment on Jayapal’s disclosure that her legislation has administration backing. And all pointed to earlier comments that opposed the package of legislation as harmful to businesses and consumers.

The tech companies’ focus on consumer harm is no accident, Ross said. Modern antitrust law since the late 1970s has been shaped by the view that consumer welfare should be the overriding concern — not mandating competition. The view, championed by the late U.S. Supreme Court nominee Robert Bork, and subsequent court decisions have essentially kept antitrust statutes at largely bay when it comes to Big Tech.

After all, the thinking goes, what is the antitrust consumer harm when a product is offered largely for free such as Google and Facebook?

But that consumer-focused thinking about antitrust wasn’t always the case, Ross said.

Originally, antitrust law was developed from the Sherman Antitrust Act of 1890. The act, which forced the breakup of the Standard Oil monopoly (also called a trust), specifically targeted anti-competitive business practices such as buying up or forcing out competitors to control a given market.

“But we’re redefined what’s lawful and what’s unlawful since then,” Ross said.

Jayapal’s legislative push, along with the bipartisan group of lawmakers who are backing the entire antitrust package, amounts to an attempted partial return to the original concept of antitrust, that business competition and innovation should be the paramount concern — an idea publicly backed by Wu and Khan.

In fact, it was Khan’s seminal paper on this exact issue as it relates to Amazon that likely helped her appointment as the FTC chairperson.

Jayapal said she hopes the house can get all five bills to the Senate, “within the next three to six months.”

Ross doesn’t see the need. He thinks the consumer focus of the antitrust theory was a logical evolution of the law from the monopolies of the late 1800s and early 1900s to the modern, efficient, consumer-oriented economy. “I think the antitrust laws we have now are sufficient to address any antitrust issues we have,” he said.

Rep. Adam Schiff, in separate letters to bosses of tech giants Amazon and Facebook, criticized the efforts of both companies to curb the spread COVID-19 and related vaccination information.

The pair of letters, dated a day after Sen. Elizabeth Warren’s missive also sharply rebuked Amazon for vaccine misinformation, accused both companies of “directly profiting” on the spread of false vaccine and virus information on their respective sites.

To Facebook CEO Mark Zuckerberg, Schiff wrote, “As long as these materials remain on your site, Facebook is directly profiting from the sensationalism of antivaccine misinformation, while these conspiracy theories continue to directly contribute to COVID-19 deaths.”

And to Amazon CEO Andy Jassy, Schiff pointed out that Amazon’s own algorithms can be gamed to push people toward false information. “Further, Amazon algorithms and lists have been easily manipulated by bad actors through false reviews, targeted purchasing, miscategorization, or even intentional misspellings,”  he wrote.

“As long as these materials remain on the site, Amazon is directly profiting from the sensationalism of antivaccine misinformation.”

An Amazon spokesperson said when it comes to vaccines, the company leads by example. “As a company, we continue to encourage our employees to get vaccinated, and we believe it is an important step for communities to stay healthy and recover from the pandemic.”

A company spokesperson also confirmed the company will respond to Warren’s questions.

The pointed criticism from the two powerful Democrats comes at a fraught time for the four tech giants — Amazon, Facebook, Google and Apple — as Congress probes both the power and reach of a handful of the most valuable companies in the world.

Seattle Rep. Pramila Jayapal’s Amazon-busting legislation, the “Ending Platform Monopolies Act” would potentially force the company’s dismantling, has both bipartisan and Biden administration support, the 7th District Democrat said in a recent interview with GeekWire.

Her legislation is part of a five-bill package that seek to create a framework to dismantle large tech companies into smaller ones (Amazon and Amazon Web Services, for example); to make mergers more expensive and difficult; to break up businesses that use their dominance in one area to get a stronghold in another; and to stop companies that create purportedly open marketplaces and only to game it to favor their own products.

Schiff’s and Warren’s comments don’t appear to indicate any softening of the tone toward at least two of the companies. Schiff had contacted both companies about similar issues in 2019, at the pandemic’s outset.

And while he conceded that the pair were trying to curb COVID-19 misinformation, neither had gone far enough.

“It is, of course, inevitable that malicious users will attempt to propagate harmful content, and I appreciate Facebook’s efforts to provide accurate information on COVID-19 when possible,” Schiff wrote in his letter to Zuckerberg.

“Research has shown, however, that combatting anti-vaccine conspiracies by posing factual and counter-factual information as opposing, but equal viewpoints is ineffective at combatting misinformation and disinformation.

In a statement issued after he sent the letters, Schiff said the social media companies are helping to perpetuate the pandemic.

“Vaccine hesitancy fueled by misinformation stands between us and truly ending the COVID-19 pandemic. And nowhere is that misinformation more apparent, potent, and transmissible than on social media and e-commerce sites,” Schiff said. “As the administration of vaccines around the country continues, misinformation is on the rise on major online platforms.”

Schiff asked the companies to respond to a series questions including:

• What is the size of your content moderation operation, including numbers of staff and resources devoted, and what are your goals for depth and breadth of moderation? What is the status of progress toward meeting these goals?
• What steps are you currently taking to ensure that algorithms are not used to promote misleading or false health information?

A spokesperson for Facebook said the company is working aggressively to remove false information.

“Since the beginning of the pandemic, we have removed over 20 million pieces of COVID misinformation, labeled more than 190 million pieces of COVID content rated by our fact-checking partners, and connected over 2 billion people with reliable information through tools like our COVID information center,” the spokesperson said in a statement.

“The data shows that for people in the US on Facebook, vaccine hesitancy has declined by 50% since January, and acceptance is high. We have removed over 3,000 accounts, pages, and groups for repeatedly violating our COVID-19 and vaccine misinformation policies and will continue to enforce our policies and offer tools and reminders for people who use our platform to get vaccinated.”

Read both letters below.

Few lawmakers have gotten Amazon’s attention like the one who hails from the company’s hometown, Rep. Pramila Jayapal. The 7th Congressional District Democrat has made the powerful tech industry a primary focus and in particular what she sees as potentially monopolistic practices of the Big Four: Amazon, Facebook, Google, and Apple.

Recently, Rep. Jayapal sat down with GeekWire to talk about her “Ending Platform Monopolies Act” (H.R. 3825) — legislation she says has the support of the Biden administration — as well as her passion for the U.S. to be a leader in vaccine distribution worldwide and why paid child leave should be a part of infrastructure plans. 

The Q&A below has been edited for brevity and clarity. Watch or listen to the full interview in the podcast or video below.

GeekWire: You find yourself in a bit of a dustup with the state’s largest employer and one of the country’s largest employers in Amazon. Before we get into the specifics of your legislation, the Ending Platform Monopolies Act, how do you see Amazon as both a company and as an employer?

Rep. Jayapal: Look, I am really grateful for the innovation that exists in our district and the fact that Amazon was born here and provides many, many good-paying jobs to people across the state and across the country. But none of that changes the fact that monopoly power as a whole actually prevents creativity and innovation, the kind of which led to Amazon’s creation, and led to Seattle and the 7th district being as successful as it is in those areas.

The reality is that when you have this kind of concentrated monopoly power, and you do not have antitrust regulation of the kind that we are proposing, then what happens is you concentrate all of the power with just a couple of Big Tech companies, and you disadvantage small businesses, you disadvantage consumers, and equally important you disadvantage innovation and competition.

I understand that probably a significant portion of my constituents work for Amazon. This is not at all about the people that work for Amazon, but it is about concentrated power and the government’s role in regulating and reining back that concentration so other small businesses can thrive and survive.

GW: Let’s talk a little bit about your legislation. Can you explain what you mean about “conflict of interest” and antitrust, specifically, as it relates to Amazon and what your legislation would do?

Rep. Jayapal: It’s sort of like when you have two teams on a field. And the person that is the referee, the (same) person that sets the rules for the game, the person that calls all of the plays, and the person that happens to play on one of the teams, everybody would say, ‘well, that’s not fair, that doesn’t make any sense.’ Well, that’s what conflict of interest in the antitrust world means with these tech companies.

We’ll take the example of Amazon. Amazon is a marketplace, they control the marketplace, they set the rules of the game for the marketplace. If you want to sell on Amazon’s marketplace, you have to follow those rules. They then collect all of the data on every seller that sells on the marketplace. And then they produce their own private label goods to compete with those that are on the marketplace.

All of that means is that a small business has an extremely unfair situation where they’re not playing by the same rules, all of their data is being taken. 

Amazon knows exactly what’s selling and to whom and how much it costs, and how much consumers are willing to pay. So they can undercut and push a seller out of business or they will acquire the company which you know, for some companies, that’s great that you acquire it, but it takes away all of the competition.

GW: So what is the practical application? Is essentially the idea is to break Amazon into at least two — if not more — companies?

Rep. Jayapal: Well, if Amazon or any other tech company didn’t comply and had a conflict of interest, then yes, you would have to separate them. Now there are other things that could happen in the process — they could essentially spin off a company, the ownership would have to be different. You couldn’t just spin it off and call it something else. But there are lots of things that could happen along the way. But if they still refuse to comply, then yes, the solution would be to break up the company and to make sure that there is a structural separation between the buy and the sell side, if you will.

GW: Andy Jassy is now in charge of the company. This legislation is sitting out there and other bills are sitting out there that I’m sure he is taking a keen interest in. Have you met with Andy Jassy? And do you see any possibility of new leadership there opening the door to some form of dialogue?

Rep. Jayapal: I have not met with him, yet. But I would be happy to meet with him. I was happy to meet with Amazon before. That was not something they sought out. I think we had an early meeting that didn’t go particularly well. But I think that the reality is that the tech companies that understand that this regulation is coming. And by the way, it’s not just in Washington, D.C. This is happening around the world, in the European Union and other parts of the world, the same kinds of regulations are coming into play.

GW: Where do you what do you expect the trajectory particularly to the monopoly platform act? And is the White House supportive?

Rep. Jayapal: They are supportive, actually. And you might have seen that they appointed some of our best people that we were pushing, (FTC Chair) Lina Khan, (National Economic Council deputy director) Bharat Ramamurti, (special assistant to the president) Tim Wu, many others. And even the Attorney General for antitrust, (Jonathan Kanter) great choice. We’re excited about him. So it’s looking very good. The trajectory will be that the Senate will introduce the same House bills, ideally with bipartisan co-sponsorship again, and then we will try to move the bills through the house as quickly as we can. Obviously, we’re focused on reconciliation now. But my hope is that within the next three to six months, we could move those bills through the House.

[Editor’s Note: When we asked Amazon for comment, the company referred us to a June statement by Brian Huseman, its vice president of public policy, on Jayapal’s bill and others in the House seeking to regulate tech marketplace competition.

In essence, Amazon contends that the bills would have “significant negative effects,” making it tougher for businesses to reach and market to Amazon customers and make a living via its marketplace, while reducing price competition and probably increasing prices for consumers. Amazon called on Congress to slow down and “thoroughly vet the language in the bills for unintended negative consequences.”]

GW: Let’s focus on Washington state. Are you supportive of the idea of mandatory vaccine mandates?

Rep. Jayapal: I am supportive of that. We have done everything that we possibly can to incentivize people to get vaccines. Unfortunately, there’s a lot of misinformation out there. I’m not talking about the people who can’t get vaccines because of their compromised immune status. I’m not talking about people who just haven’t gotten a day off of work and so can’t get to a place to get a vaccine. I’m talking about people that are willfully spreading misinformation about vaccines.

There are many vaccines that you get to protect yourself, but they don’t really have an effect on anybody else. That is not the case with the COVID vaccine. The COVID vaccine is about protecting yourself, but it’s actually about protecting everybody around you. Because the more people that are unvaccinated, the more the virus has the ability to transmute into more and more dangerous, you know, variants, and to kill more and more people. So unless we achieve vaccination status at a certain threshold, we are going to continue to deal with this and see more and more deaths of people who are vaccinated and unvaccinated because the virus will continue to change and transmute.

GW: What should be at the top of Washington’s wish list when it comes to infrastructure, from the federal government infrastructure funding?

Rep. Jayapal: Well, it depends on how you define infrastructure. I just have to start with that because infrastructure as being not only roads and bridges but everything that you need to get on the road. That means childcare, that means community college so that people can get training. So to me, it’s all one big picture. But in terms of physical hard infrastructure, what I believe is that we have to address all of the pieces of infrastructure that have crumbled underneath us. That is not just roads and bridges. It is also our lead water pipes. We need to get drinking water clean. We need to make sure that we are investing in green energy solutions, including electric vehicles, transit, all of the things that allow us to take on climate change at the same time.

In an effort to promote more business and labor competition, President Biden today will issue a sweeping executive order to limit the concentration of money and power in many American businesses, particularly technology and healthcare.

The order, to be announced Friday, would promote increased scrutiny of large corporate mergers particularly by “dominant internet platforms,” limit the use of non-compete clauses that restrict employee pay and mobility, and seek to re-establish net neutrality standards rolled back by the Trump administration.

But it doesn’t stop with broad initiatives. It also specifically mandates more competition among drugmakers by pushing state and tribal programs that import cheaper prescription drugs from Canada while also allow hearing aids to be sold over the counter at drug stores. And it will pressure airlines to offer refunds when inflight Wi-Fi doesn’t work.

Let me be clear: capitalism without competition isn’t capitalism. It’s exploitation.

— President Biden (@POTUS) July 9, 2021

Taken as a whole, the executive order is the president’s response to both the bipartisan concerns about the reach and scope of giant tech companies such as Facebook, Apple, and Amazon as it is a nod to labor analysts who have said that the overuse of restrictive non-compete clauses has damped the labor market mobility and pay.

“Having healthy competition is vital to an effective capitalist system,” said Brian Deese, Biden’s top economic adviser, in the New York Times. “It is a driver of higher wages, lower prices, more innovation, and more business creation.”

The order, in part, dovetails with a phalanx of bills in Congress that also seek to limit the largest tech companies in the country.

Currently, five federal bills would create a framework to dismantle large tech companies into smaller ones; to make mergers more expensive and difficult; to break up businesses that use their dominance in one area to get a stronghold in another; and to stop companies that create purportedly open marketplaces and only to game them to favor their own products — an antitrust accusation both Apple and Google face in their proprietary app stores.

While the bills face steep roads in Congress, executive orders or proclamations by a president bypass Congress entirely but vary somewhat on reach and legal weight. Generally, they are directives for federal agencies — not citizen — and often target levels of enforcement or regulation of existing law.

For example, today’s executive order requires the Federal Trade Commission to limit or ban certain non-compete agreements — which has been a growing source of contention particularly among lower-paid workers and tech contractors.

In a joint statement issued by FTC Chair Lina Khan and Acting Assistant Attorney General of the Justice Department Antitrust Division Richard A. Powers, the agencies that oversee large corporate mergers vowed both scrutiny and skepticism to protect consumers.

“We must ensure that the merger guidelines reflect current economic realities and empirical learning and that they guide enforcers to review mergers with the skepticism the law demands,” the statement said.

“The current guidelines deserve a hard look to determine whether they are overly permissive. We plan soon to jointly launch a review of our merger guidelines with the goal of updating them to reflect a rigorous analytical approach consistent with applicable law.”

Two years ago, Washington state overhauled its laws regulating non-compete clauses to end non-competes for employees who earned less than $100,000 per year and independent contractors who made under $250,000 a year in 2020.

Additionally, the order also tasks the FTC with scrutinizing large corporate mergers and acquisitions such as Amazon’s bid to buy MGM Studios.

Federal lawmakers introduced a wave of legislation Friday that collectively seeks to change the way large tech companies such as Amazon, Apple, Google, and Facebook do business and dominate their respective marketplaces.

The five bills would create a framework to dismantle large tech companies into smaller ones (Amazon and Amazon Web Services, for example); to make mergers more expensive and difficult; to break up businesses that use their dominance in one area to get a stronghold in another; and to stop companies that create purportedly open marketplaces and only to game it to favor their own products.

The sweeping package from House Democrats and Republicans comes after months of study and congressional inquiries about the enormous power and financial reach of Big Tech and the existing regulation to curtail it. As the New York Times noted, “Amazon, Apple, Facebook, and Google have a combined market capitalization of $6.3 trillion, four times more than the value of the country’s 10 largest banks.”

One bill regarding data portability — perhaps the least contentious of the group — would require companies to allow users to switch platforms more easily by allowing data to migrate from one platform to another. All of the measures have varying amounts of bipartisan support.

Margaret O’Mara, a University of Washington history professor who has written extensively about the history of the tech industry, said regulation of these companies is one of the few areas of mutual political interest.

“At a time when Washington D.C is so divided — the Republicans and the Democrats are so far apart — the power of the tech companies is one of the things where both parties find common ground,” she said.

That common interest, she said, isn’t always bad for the tech industry.

The Senate recently approved the bipartisan Endless Frontier Act which, if passed by the House, would put nearly $250 billion into promoting specific emerging technologies in the U.S. that China seeks to dominate, including quantum computing, artificial intelligence, and robotics among other things.

Friday’s legislative package is based on the House’s antitrust hearings over the past 16 months. If approved by Congress and signed by the president, the bills would be the most significant overhaul of competition laws dating back to what was known as the “gilded age” of railroad, oil, and steel magnates and their monopolies in the early 20th Century.

O’Mara said the country has traded the gilded age for the tech age. And like the former, people should expect some change in the most powerful companies. The bipartisan nature of the tech regulation package, she said, means that “something will come out of this. We just don’t know what yet.”

Microsoft revealed in a court appearance this week that it does not, and has never, earned money on the per-unit sales for the Xbox. Each console is sold at a loss, and the profit from the project for Microsoft comes entirely from software sales.

This was disclosed during a Microsoft executive’s testimony in the Epic v. Apple bench trial, which began on Monday in Oakland, Calif. The trial is not televised, but the proceedings have been broadcast to the public via a teleconference call; that call, in turn, has been hosted and rebroadcast via several other platforms, such as Twitch and Discord.

Epic is suing Apple over its rules for third-party apps on the iOS store, where Apple takes a cut of both game and in-game sales. Epic, the publisher of Fortnite, is accusing Apple of employing anticompetitive business practices, and hopes to force Apple to let developers use their own in-app payment methods for games sold on iOS.

Microsoft’s Lori Wright, vice president of business development for Gaming, Media & Entertainment, was called to the stand as an expert witness on Wednesday, to give testimony related to Microsoft’s well-publicized attempts to work around Apple to get its Project xCloud service on the iOS store.

Much of the discussion in the Epic v. Apple trial has come down to the amount of sales revenue that a digital storefront owner should be entitled to collect. As part of that, Wright was asked how much the profit margin is on Xbox consoles.

“We sell the consoles at a loss,” Wright said.

One of Epic Games’ lawyers then asked, “Does Microsoft ever earn a profit on the sale of an Xbox console?” Wright said, “No.”

For people who follow the business side of the games industry, this may initially sound like old news. It’s long been understood that Microsoft and Sony sell their video game consoles on a “razor and blades” model, where the company subsidizes its hardware and sells it at a loss in order to make the money back on software and services. (Nintendo, on the other hand, makes a slight profit on every Switch it sells.)

Like a lot of the hard data in the video game industry, there’s a certain amount of analyst speculation involved here. Neither Sony nor Microsoft are inclined to reveal their internal math, so we’re left with tests like various third-party “tear-downs” that estimate each console’s per-unit costs.

As per those independent estimates, both the PlayStation 4 and Xbox One were sold at a slight loss when you consider shipping and marketing costs. However, as a console ages, its components become cheaper, which would theoretically translate to a per-unit profit near the end of the console’s life cycle.

What’s interesting about Wright’s testimony, if you take it at face value, is that Microsoft has never gotten to that point. It’s coming up on the Xbox’s 20th anniversary in November, and in that time, every individual console that it’s ever shipped was being sold at a loss.

Microsoft has made up the difference via taking a 30% cut of revenue from developers who ship games for the Xbox. While it recently announced that it will reduce that cut to 12% for publishers who ship games for the Windows 10 store, the Xbox remains at a 70/30 split.

That, in turn, explains a lot about Microsoft’s recent moves to decouple the Xbox experience from the physical Xbox unit. While its gaming division is posting billions in quarterly revenue, its actual hardware seems to have traditionally been its weakest link.

Wright’s testimony is one of many small revelations that have kept the games industry glued to Epic v. Apple all week. One of the trial’s side effects, as it pits two of the most influential and connected companies in the field against one another, is a slow drip of interesting pieces of information. Given how secretive the games industry traditionally is, various disclosures that were made for the sake of the trial have effectively amounted to a cavalcade of unplanned leaks.

This has included what Epic has paid various third-party developers to secure their titles as weekly free downloads on the Epic Games Store; Epic’s low-key battle with Sony to enable cross-platform play for Fortnite; and some of the “guest characters” that Epic may bring to Fortnite in the future, including Metroid‘s Samus Aran.

Kicking off in federal court today, the closely watched battle between the makers of Fortnite and Apple will include an attorney who is well known for her role in one of the seminal antitrust fights in tech history: U.S. v. Microsoft.

On the legal team for Epic Games is Christine Varney, the lawyer who represented Netscape in its antitrust suit against Microsoft in 2001. The Microsoft case ended with an initial judgment to break up the Redmond-based software giant, a decision which later was walked back under a 2002 settlement agreement.

Varney also was the U.S. assistant attorney general of the U.S. Department of Justice’s antitrust division in the Obama administration. In 2011, the Wall Street Journal characterized Varney tenure at the DOJ as willing to push antitrust cases but with a focus on the middle ground.

“In practice, Ms. Varney sought a middle road between those who wanted the Justice Department to challenge more deals as anticompetitive and those who said the market should be left largely to its own devices,” the paper published in a profile near the end of Varney’s time at the DOJ.

The Epic Games v. Apple antitrust fight focuses on Apple’s control of the App Store. Specifically, the case is centered on whether or not the company’s App Store is a monopoly that unfairly takes a 30% cut of all purchases within the store. Epic filed the lawsuit after Apple banned the popular game app Fortnite when Epic created a virtual currency purchase which bypassed Apple’s toll.

The New York Times reported that the trial could “upend the economics of the $100 billion app market” if Epic wins. 

The Microsoft antitrust fight from the 1990s could be used in the Epic v. Apple lawsuit, Recode reported, noting that Epic will likely reference the DoJ’s campaign against Microsoft. 

Last year, Microsoft President Brad Smith called for more scrutiny on app store policies imposed by its competitors such as Apple and Google.

“They impose requirements that increasingly say there’s only one way to get on to our platform, and that is to go through the gate that we ourselves have created,” Smith said in an interview with Politico. 

While Microsoft can relate to Apple’s position, given its antitrust battle nearly two decades ago that investigated how the company bundled Internet Explorer with its Windows operating system, Smith said today’s smartphone app stores are different.

“Increasingly you’re seeing app stores that have created higher walls and far more formidable gates to access to other applications than anything that existed in the industry 20 years ago,” said Smith, who joined Microsoft in 1993.

Derrick Morton, CEO of Seattle gaming startup FlowPlay, said the Epic v. Apple lawsuit could prove to be a massive pivot point for mobile gaming. 

“The current App Store system caters to developers with the most money to spend,” he said in a statement. “It extorts developers into paying nearly one-third of their revenue solely to gain access to consumers. And it severely reduces the ability of the developer to get creative in the marketing and presentation of the product they have worked so hard to create.”

Apple’s legal defense will assert, among other things, the App Store can’t be a monopoly given that Apple’s operating system has fewer users worldwide than Google’s Android. It will also argue that Apple does not have a monopoly of the entire gaming market. 

This isn’t Apple’s only antitrust fight regarding the App Store. It currently is battling EU regulators over its 30% toll for Spotify and UK and Australian consumer advocates over similar claims. 

For years, Apple Maps has lacked the cycling-specific routing that for a decade has made Google Maps the popular choice among bicyclists. Not anymore. With the recently updated iPhone software, Apple tucked a nice Seattle surprise into Maps, according to MacRumors. 

Along with bicycle routing, the new cycling functions add elevation changes, traffic density, and off-bike features within a route such as stairs.

App users simply click on the bicycle icon after seeking directions to a specific location. They can choose things to avoid on routes, such as hills or busy roads, and set cycling as a preferred transportation mode by default.

While cycling directions have had a limited place in Apple Maps for a short time — Portland, California, London, and mainland China have been recently added — the addition of Seattle is a welcome improvement, said Paul Tolme, spokesman for Cascade Bicycle Club.

“We are excited that Apple is making it easier for people to choose to pedal instead of using a car,” Tolme said.

Apple has plans to add additional cities in the coming months. 

Construction fencing has come down in recent days around the perimeter of the office building, which sits on the edge of Amazon’s urban campus. And white street-level signs bearing a blue Apple logo have gone up, along both Dexter Avenue to the east and Seventh Avenue to the west.

Apple first announced its plans for a major expansion in Seattle in June 2019. The company said at the time that it would grow to 2,000 employees in the city over the next five years, calling Seattle a “key engineering hub.”

The Cupertino, Calif.-based tech giant has had about 500 employees in Seattle, working out of Two Union Square, a 56-story office tower downtown.

The signage in South Lake Union is a departure from what GeekWire reported in 2018, when the company’s name wasn’t even listed on the main directory in the Two Union Square lobby. “Most floors have little-to-no trace of Apple’s presence except key card readers outside entrances asking people to swipe their Apple ID badges,” GeekWire noted at the time.

But in the tech epicenter established by Amazon and now occupied by other large companies such as Google and Facebook, competition for engineering talent is fierce. Google’s rainbow-colored name is splashed across its multiple buildings just to the south of the shores of Lake Union.

Dexter 333, built on the site of the old KING 5 broadcasting headquarters, includes two 12-story office towers totaling 630,000 square feet. Using conventional office space ratios, the complex could hold approximately 3,000 to 4,500 workers.

Apple did not respond to GeekWire’s inquiry about how many workers it now plans to put in the space, what they’ll work on or when they might be moving in — especially as many tech workers are now doing their jobs remotely during the pandemic. We’ll update this post when we hear back.

ENGINEERING OUTPOSTS: Track who has set up shop in the Seattle region.

In 2019, Apple said it would be hiring for a wide range of engineering roles including in hardware and software and that the company was actively recruiting for iCloud in Seattle.

Apple’s plan to expand significantly outside of Silicon Valley took on a much different tone than Amazon’s so-called HQ2 search. In early 2018, Apple announced plans to build a second campus with little fanfare and quietly spent the year making its decision. In December 2018, it revealed more details about the project, unveiling a plan to build a 15,000-person campus in Austin, with smaller 1,000-person offices in Seattle, Culver City, Calif., and San Diego.

In the time since Apple settled on 333 Dexter, the other tech giants in South Lake Union have been scooping up more office space away from Seattle, on the other side of Lake Washington. Amazon has big plans in Bellevue; Google is growing in Kirkland; and Facebook bought what was going to be REI’s giant new HQ in Bellevue.

Microsoft is releasing new versions of its Office productivity apps that run natively on Macs with Apple’s internally developed M1 processors, rolling out via a software update starting today.

The updates, announced Tuesday morning, continue a longstanding tradition of cooperation between the Microsoft Office and Apple Mac teams. The practice dates back to the mid-1980s, when Microsoft released Word and Excel for Mac, and it has endured even as the companies have competed aggressively on other fronts.

Outlook, Word, Excel, PowerPoint and OneNote will run faster on M1 Macs as a result of the update, taking advantage of improved processor performance, says Bill Doll, Microsoft 365 senior product marketing manager, in a post announcing the updates. The apps are universal, allowing them to run on Intel-based Macs, as well. They’ve also been redesigned to adopt the look and feel of macOS Big Sur.

Microsoft says it’s working on a similar M1 universal app update for its Teams collaboration software, which can run in Rosetta emulation mode on Macs with the new chips in the meantime.

Apple released the first Macs with Arm-based M1 chips in November. The big unanswered question now is whether Microsoft will change its Windows licensing terms to let the Arm-based version of Windows 10 run natively on M1 Macs. The traditional version of Windows can currently run on Intel-based Macs via Apple’s Boot Camp virtualization software.

Craig Federighi, Apple’s senior vice president of software engineering, told Ars Technica in November that the decision was up to Microsoft.

“We have the core technologies for them to do that, to run their ARM version of Windows, which in turn of course supports x86 user mode applications,” he told the site. “But that’s a decision Microsoft has to make, to bring to license that technology for users to run on these Macs. But the Macs are certainly very capable of it.”

If the Keanu Reeves’ pedal-to-the-metal thriller “Speed” had a COVID-19 sequel, James Heath would be a worthy candidate for a lead role. As the president of Seattle’s Institute for Systems Biology, Heath has been working at a breakneck pace to tease out COVID’s biological secrets to advance the understanding and treatment of the novel coronavirus. He boarded his metaphorical racing bus nine months ago.

“This has been crazy,” Heath said. Pre-pandemic the chemist and biotech entrepreneur was conducting cutting-edge cancer research. “Doing cancer immune therapy is fast moving,” he said, “but it’s downright sleepy compared to this. Most of us haven’t taken a day off since March. Not even Sundays. No day at all.”

Heath and colleagues have been collecting blood samples from people shortly after they are diagnosed with an infection and following survivors through their recovery. Their results from a study of 139 infected people ranging from mild cases to hospitalizations and from an additional control group were published this week in print in the peer-reviewed journal Cell. Another paper on less severe cases is in review.

The scientists are deconstructing the human biological response to COVID by studying thousands of markers found in blood and plasma. That includes proteins, metabolites, and gene sequences for receptors found on immune-system cells. The objective was to cast a broad net rather than to focus on a certain set of immune cells, for example, in order to capture the big picture of what’s going on. The approach gives insight into the functions of various organs as well as the immune response.

It also generates a massive volume of information. The Institute for Systems Biology scientists are using Amazon Web Services (AWS) to coordinate the research with patients, collect clinical data and process the vast numbers of data points. The cloud resources also help them collaborate with other researchers.

Support for the project came from the COVID-focused AWS Diagnostic Development Initiative, which provided AWS in-kind credits and technical support. Amazon did not disclose the monetary value of the assistance.

The study’s results delivered some surprises, Heath said. There were distinct immune response differences between mild versus moderate or severe infections. In the sicker patients, the scientists found all of the varieties of immune cells they would expect to see, as well as some that were novel or dysfunctional. They also discovered anomalies in the metabolites — the products of metabolism — in hospitalized patients.

“The viral infection is demanding a stronger and stronger immune response from the patient, but the metabolites are vanishing,” Heath said.

The result suggests that there might be non-pharmacological, dietary supplements that could help sick patients, but it’s not clear yet what they might be — and there’s a risk that the wrong supplement could make things worse. Heath said they’ve been in conversations with nutritionists to be understand the implications of this effect.

In their work at Institute for Systems Biology, a 20-year-old nonprofit biomedical research organization, Heath’s lab describes itself as tackling “fundamental scientific bottlenecks.” Going forward in the realm of COVID, the group is focusing on three areas:

• Studying how COVID patients recover, and what sends some people down the path of long-term “long-hauler” symptoms. Heath noted there were reports from the 1918 Spanish flu of people experiencing lasting ill-effects of the disease.
• Combining datasets with two other research cohorts to increase the ethnic diversity of the patients to include Hispanic and Black cases, which provides information on the possible role of genetics in disease response.
• Understanding the biological impact of COVID compared to other infections, which could help inform treatments for Ebola, Lyme disease and to prepare for the next pandemic.

For all of the long days toiling over COVID, Heath said he expects lasting benefits to the research field. Given the urgency of the situation, his organization developed new protocols for collecting blood samples that should make it easier to recruit study participants for projects in the future. The pandemic has demonstrated a new level of collaboration between research institutions and the pharmacological sector. And the work has helped investigators think about illness at the cellular level in new ways, which Heath’s team is already applying to concepts of aging.

What has been accomplished is remarkable: Heath said scientists have learned more about COVID in six months than is known about any other ailment.

“Pick your disease, this is how you want to study it,” he said. “It’s really opened people’s minds to what you can do.”

Amazon Web Services will provide software developers with access to macOS on-demand in the cloud for the first time, promising to speed up the process and reduce the cost of making software for Apple’s computers and devices.

Announced on the eve of the AWS re:invent conference Monday night, Amazon EC2 Mac Instances represent an unexpected expansion beyond Linux and Windows for AWS. Amazon says it was motivated by a desire to meet the needs of the community of more than 28 million developers who offer apps through the Apple App Store.

“Until now, development of these apps for the Apple platform was not possible within the AWS cloud,” said Dave Brown, AWC EC2 vice president, during the event. “Many of our customers had to manage their own fleet of Macs for their build processes.”

Amazon says developers will be able to use the Amazon EC2 Mac Instances to build, test, package and sign Xcode apps for macOS, iOS, iPad OS, tvOS, watchOS and the Safari browser, according to an AWS blog post. The instances run on Mac mini hardware with 8th generation Intel Core i7 processors, but Amazon says it plans to offer EC2 instances in the future based on newer Mac minis running Apple’s M1 chip.

EC2 is shorthand for Elastic Compute Cloud, Amazon’s flagship service for accessing computing in the cloud. The macOS instances use the AWS Nitro System. 

As with other cloud services, developers will be able to increase or reduce capacity depending on their needs at any given moment. Amazon says the macOS instances will be available under its standard pay-as-you-go pricing model.

The extent to which Amazon and Apple partnered on the initiative isn’t yet clear, but an Amazon news release quotes Bob Borchers, Apple’s vice president of worldwide marketing, saying Apple is “thrilled to make development for Apple’s platforms accessible in new ways, and combine the performance and reliability of our world-class hardware with the scalability of AWS.”

The announcement of Amazon EC2 Mac Instances was the surprise news during the traditional late-night session on the eve of the first AWS re:Invent keynote. The company has made some of its more offbeat announcements at the late-night session in the past, such as the AWS Snowmobile semi truck for transporting data.

AWS re:Invent, normally held in Las Vegas for one week each year, is taking place virtually this year, live-streamed from the Amazon campus in Seattle and spanning three weeks. AWS CEO Andy Jassy will deliver his keynote Tuesday morning.

The past year has brought a pandemic, a national reckoning over race, plus antitrust investigations and charges against major tech companies, with massive swaths of the tech workforce working from their bedrooms. But also record profits, a booming IPO market, and trillion-dollar valuations at the same time. Does this suggest a disconnect, or point to a “correction” in the future? 

That’s the first question we posed this week on our GeekWire Summit panel, “View from the Press Box: Tech in 2020 and Beyond,” with Ina Fried, chief technology correspondent for Axios and editor of its daily tech newsletter, Login; and Karen Weise, Seattle tech correspondent for The New York Times.

This week’s episode of the GeekWire Podcast features highlights from the discussion, including thoughts on the direction of the tech economy, the future of Amazon and Microsoft, the antitrust cases against US tech giants and the potential implications of the upcoming election.

Listen below or subscribe to GeekWire wherever you listen to podcasts. Watch a video highlight above, and continue reading for edited excerpts.

Disconnect between tech and the economy

Todd Bishop, GeekWire: Ina, do you have a sense for what the situation is with these seemingly disparate trends and phenomena in the economy and tech industry?

Ina Fried, Axios: A lot of things are happening at once, more than I think we’re even capable of processing as humans. And I think that is some of the challenge we’re seeing on the information side. You have a significant portion of the country just giving up on facts. You’re seeing a bad overall economy but tech grabbing an even larger share of it and accelerating some of the transformations that would have happened anyway. So things like curbside pickup, probably would have become a major force in retail.

But now it’s obviously become essential and a bunch of the digital laggards basically faced with their survival to quickly get online, have done so. And then some of the industries that have been slow to move online, sometimes for good reasons, sometimes just red tape, like telehealth, for example, really just taking off. So I think it’s been a lot, and I didn’t even get into antitrust and all that. But I do think what you’re seeing on the economic front is a very challenging economy for a lot of people, a lot of job loss. And yet for the tech sector, software’s eating more of the world, faster.

Karen Weise, New York Times: I think that’s exactly right. The companies were doing well because they were ahead of the curve on some of these trends are able to capitalize on these trends that have just accelerated because of the pandemic. So you think about e-commerce or cloud computing. Microsoft has seen crazy growth in Teams, their collaboration software.

It is a very strange thing to be reporting on the broad economy all the calamity that’s happening and then when earnings roll around, it’s just like, wow, they made a lot of money. And it is a “big, getting bigger” moment in general we’re seeing. Which ties in, of course, to the antitrust focus and stuff that’s happening right now. The pandemic is obviously aberrational, but we’ve seen that everything reinforces existing patterns in many ways.

Bishop: Is there a moment, though, when this comes back and comes home to roost, either through the economy and everyday consumers and businesses not being there to boost IT spending or consumer spending on tech. And through antitrust, where some of the biggest tech companies in the world, Microsoft not included, are being scrutinized on a level that they’re just not accustomed to, at least in terms of the extent of the action. Does it reach a point, perhaps in 2021, where some of this starts to match up more — where the tech industry is actually more in line with the struggles of the broader economy?

Weise: You think about a company like Amazon or the e-commerce providers, they need people to be spending money to buy things. So there is a connection to the broader economy. What has happened, though, is that the switch to online commerce, in the case of Amazon, has outpaced any pullback we may have seen in consumer spending.

So it is a good question, if the duration of the pullback extends long enough, if that multi-year compression of growth doesn’t make up for that anymore. With Microsoft, for example, they’ve talked about spending in high impact sectors like hospitality or the aviation industry pulling back, but it was made up for with accelerated spending on other fronts. So a lot of this gets down the duration (of the downturn).

[Related story from Weise and her New York Times colleagues: Big Tech Continues Its Surge Ahead of the Rest of the Economy]

Fried: The duration, and the intensity. … If the tech companies are getting hurt, it means the broader economy is getting hurt even worse. So tech will still outperform the broader economy. And then on antitrust, it’s interesting, because there’s a lot of criticism, but it’s not the same criticisms.

So you have the right and the left criticizing big tech broadly, and then specifically Section 230. They’re saying the same headline, but they mean totally different things. Other than these lawsuits from the DOJ, like we just saw against Google, I don’t think the broader measures will really move forward until there’s some agreement on what it is people are actually wanting, and what it is people are upset about.

Antitrust, competition and the election

John Cook, GeekWire: Antitrust is really interesting to watch right now. We had Bill Gates make some news here at the GeekWire Summit a couple weeks ago, when he mentioned kind of what you’re saying, Ina, that these companies shouldn’t all be grouped together. They all face very, very different aspects to what they do. Obviously, with the suit against Google, certainly a claim can be made that they have a monopoly in search.

But when you look at a company like Amazon, it’s a completely different industry and business they’re operating in, and it seems very strange to me why they marched all these CEOs in front of Congress, with such different business concepts and ideas and antitrust questions in front of them.

Weise: Conceptually, the idea was that they all ran dual-sided marketplaces, essentially. So for Amazon, it’s both the merchants that they’re pairing with us, the consumers, and their retail business. So that’s one dynamic that they focused on a lot. For Apple, the App Store was a big focus, where they’re matching developers with us consumers, but also have their own apps in it. Google’s matching consumers with advertisers essentially. But they all manifest themselves in such different ways.

Fried: We know how they compete with each other at the edges, but a fascinating dynamic that hadn’t gotten as much attention is how they help each other stay in their entrench monopolies more than they actually compete. So the Apple-Google deal, for example, and we’ve kind of pushed on this for a while. I finally got Tim Cook to talk about it a couple of years ago in an HBO interview I did.

Google writes a giant check to Apple for the right to be the default search provider, and that deal actually entrenches both of their dominant market positions. It gives Apple a ton of profits that it can use to invest in all of its businesses. And it makes sure that it’s very hard to compete with Google in search when. When all those searches [from Apple and Android] are going to Google, there’s just not that much of the market left to compete over.

Bishop: This is one issue – antitrust – where the two political parties seem to be aligned, even though they’re going after this for different reasons, and for different ideological purposes and from different ideological backgrounds. I think Amazon’s worst nightmare could be Elizabeth Warren being named the next Attorney General in a Biden administration, for example, but you could also look at this and say that they could actually be having even more issues if the Trump administration continues.

Weise: In the hearings in the House there was actually much less Republican opposition to Amazon, in part because they don’t really play in the social media or information space. There’s little bits here or there. The Section 230 debate has been the dominant argument against other large tech companies.

For someone who was there to be listening to the Amazon component of things, there was much more on the Democratic side. Bezos-Trump feuds and the Post Office mess aside, a Democratic administration is probably more complicated for them, or an Elizabeth Warren-led Department of Justice, for sure.

Amazon’s alternative realities

Bishop: One thing that strikes me about society in 2020 is the alternative realities in which we’re all living. With Amazon in particular, you saw this manifest itself with internal strife at the company, in terms of employees coming out, speaking out against the company in a variety of ways, and also  investigations from journalistic organizations going in and finding things that were off base inside the company. Particularly in terms of injuries, a report just recently from the Center for Investigative Reporting.

Karen, you pay really close attention to Amazon here as the Seattle tech correspondent for the New York Times. How do you square these alternative realities of Amazon, the company’s positions and statements about itself versus what we actually see when somebody takes a close look at what they’re doing?

Weise: It’s very challenging to square it all, because it is such a large company in so many different lines of businesses, and because of the way it operates. It’s hard to get a comprehensive view of the company, because different teams don’t even know what’s happening in different parts of the company. And it operates in a way that really pushes responsibility down into teams. And so often what you’re seeing are things that are dismissed as being against policy, but they’re still happening.

As a journalist, how do I bridge this? I have this person saying they’re not doing enough to protect workers from COVID. And I have this person saying, I stayed up all weekend trying to protect workers from COVID. And they’re probably both telling me the truth of their experience. And so that’s a huge challenge I find in reporting. I’m always trying to bridge those two sides.

It’s the second largest direct employer in the country right now. That doesn’t include its growing contract workforce. And so I think the fact that you see a lot more scrutiny is not necessarily surprising. With the pandemic compounding that, and the George Floyd-Black Lives Matter movement compounding a look at how companies are treating their workforce, it’s not surprising that they’ve become a focus of attention.

And the reality is, it’s always balanced with the fact that people buy a lot of stuff from them, because they generally deliver on time. There’s an expectation, and they generally meet it. They will no doubt point to all the surveys that show how much people trust them. So it’s this dichotomy that they hold in the balance, pretty much all the time.

Fried: As journalists, and I know Karen does this in her work, really embracing the complexity there [is important]. It’s not so simple. The story that perfectly illustrates that, to me, is the headline a few weeks ago about how many thousands of Amazon workers had gotten COVID. And the first stories I saw had this very large total number of employees. And I was like, wow, that’s shocking.

But then when you looked at how large their workforce was, it was actually a fairly small percent, and a case could be made that it was lower than the general population. So are workers getting it? Yes. Is Amazon doing more to protect them? Probably. And it might be the case, and this is more complicated than I think we have the capacity to do, but look at all the companies they’re competing against: Amazon’s workplace might be safer for COVID. I’m not getting into the workplace accidents. So these things are really complicated.

Cook: I agree, it’s super complicated. Amazon, especially, is so interesting in how decentralized it is, as you were saying, Karen. They’ve surprised me for years in terms of how entrepreneurial the organization has stayed, even as they’ve grown to over a million employees. I’m curious what you think is the biggest risk to Amazon, when you think about this.

They are investing in so many different areas. They are able to maintain their entrepreneurial energy. They’re generating massive, massive profits through AWS that they’re funneling into fuel all this other startup activity under the umbrella. What do you both see as the biggest risk in front of them as they go forward?

Weise: It’s hard for me to think of like the biggest. I think they would say a “Day Two” mentality seeping through. And not to parrot back things, but it’s something that people who work there, people who have left there, talk about as a constant struggle. So purely from a business perspective, I think that’s what Amazon would say. And I think that makes sense over a long haul. The flip side of that is, there are opportunities for change if you break some of the status quo.

There was almost no diversity on the S team (Amazon’s senior leadership team) until up last month or something like that. And you could argue that that could actually help customers and help a business to have more diversity among your senior leaders, who haven’t been there forever.

There’s multiple different market forces, of course that could hit it. Or what would happen if there were a forced breakup or something like that? Retail actually makes more money than people realize. And if AWS were to be forced or spun off in some way, I don’t think people quite have really grasped how profitable the marketplace model is, and how that is actually fueling a lot of the investments on the consumer side of the business.

Cook: My own thought, and it gets back to this decentralized nature of the company, is that they just kind of implode. I’s just that in my mind, you can’t operate at the scale that they are with as many different pieces, parts moving around the organization, where, as you said, people aren’t really talking to one another. I’m just baffled that they’re able to operate in the way that they do. And folks I talk to inside the company, they confirm exactly what you’re saying, that it is totally decentralized. It’s very entrepreneurial.

Fried: Just watching Amazon from a little bit more afar than both of you do, because I don’t spend as much of my time watching them as closely, but I obviously pay a lot of attention to the broader dynamics. I would have to think antitrust (is the biggest threat), because they are so good at thinking four and five steps ahead. And they are constantly expanding the market that they’re eyeing.

Everyone has always underestimated Amazon, particularly rivals, but I think all of us. I remember when people thought of them as a bookstore. And they were really a broader online retailer. People thought of them as a broad online retailer, and they were moving into physical retail. They are always just grabbing and expanding and growing and doing it in a way that customers appreciate. And that’s going to make it very hard, I think, for rivals to compete.

One of the things that’s really interesting about the broad big tech, antitrust stuff, but particularly with Amazon is, people love these companies. There are workers that are criticizing Amazon, there are critiques of Amazon, but their customers love the service they’re getting. And that’s only increased during the pandemic. Things like Amazon Go, people really like it. Again, there’s labor critiques, there’s equity critiques initially. Some people only have access to cash and it was cashless.

But by and large, they’re very appreciated by the customer base for what they do. So yes, I would say probably number two would be an internal implosion. But I really think only antitrust scrutiny is going to slow down what’s been the most impressive land expansion I’ve ever seen from a company.

The full discussion and other content from the GeekWire Summit, including exclusive interviews with Bill Gates and other leaders in tech and science, is available exclusively to registered attendees. You can still sign up at geekwire.com/summit to access the content on-demand.

Podcast produced by Curt Milton. Theme music by Daniel L.K. Caldwell.

Apple showed off its new iPhone, the first with 5G, along with a new HomePod Mini device at its much-anticipated event on Tuesday.

Apple’s first product unveiling was its new HomePod Mini, a smaller version of the company’s smart speaker that competes with Amazon’s Echo. HomePod Mini has iPhone integration; features “computational audio”; and recognizes multiple voices. It ships the week of Nov. 16 and retails at $99.

Next up was the iPhone. “Today is the beginning of a new era for iPhone,” Apple CEO Tim Cook said, highlighting new 5G features and benefits such as faster speeds and lower latency. Cook invited Verizon CEO Hans Vestberg on stage to talk about the benefits of the carrier’s 5G network, which is available nationwide today.

Apple then showed off the new iPhone 12, the first iPhone with 5G, starting at $799.

The new device comes with an aluminum frame with flat edges, similar to the iPhone 4 design, and comes in black, white, green, blue, and red colors. It’s 11% thinner; 15% smaller; and 16% lighter than the iPhone 11. There’s a dual-camera system with a 12-megapixel wide camera, a new A14 Bionic chip, and is designed to use 5G only when necessary to save battery life. It has a 6.1-inch screen that comes with “Ceramic Shield” that is “tougher than any smartphone glass.” Apple added MagSafe to the back of the phone to help attach to wireless chargers.

Apple next unveiled the iPhone 12 mini, which has a 5.4-inch screen and starts at $699. It has all the features of the iPhone 12.

Then came the iPhone 12 Pro devices. The iPhone 12 Pro starts at $999, and iPhone 12 Pro Max at $1,099.

The iPhone 12 Pro has a 6.1-inch screen, and the iPhone 12 Pro Max has a 6.7-inch screen, the biggest ever for an Apple phone. They come in gold, graphite, blue, and silver. The Pro comes with advanced camera features and other enhanced specs such as LIDAR technology for augmented reality apps. It also has a stainless steel design, versus aluminum on the iPhone 12.

iPhone 12 and iPhone 12 Pro are available for preorder on Oct. 16, and shipping Oct. 23. iPhone 12 Mini and iPhone 12 Pro Max pre-orders start Nov. 6 and ship Nov. 13.

Here’s the new iPhone lineup below. See more details on the iPhone 12 and Mini here, and the iPhone 12 Pro here.

Original post: All eyes are on Apple today as the tech giant gets ready to unveil its highly-anticipated new iPhone 12. The event starts at 10 a.m. PT — you can watch at Apple’s website, in Apple TV, or on YouTube.

Well-known leaker Evan Blass posted leaked iPhone 12 images Tuesday morning, revealing the expected four versions of Apple’s newest smartphone: the iPhone 12 mini, iPhone 12, iPhone 12 Pro, and iPhone 12 Pro Max. The devices are rumored to have a new square design and some sort of 5G capability.

https://t.co/UH5rpcaRfa

— Evan Blass (@evleaks) October 13, 2020

Analysts say this could be Apple’s most important iPhone event in years given the notable changes and potential key upgrade cycle.

Apple may also announce a new HomePod speaker and over-the-ear headphones on Tuesday.

Apple last month held a separate event to show off new Apple Watches, iPads, and its Apple One services bundle.

We’ll update this page with more details as Apple reveals its products on Tuesday.

The commitments include giving developers “the freedom to choose whether to distribute their apps for Windows through our app store,” and promising to allow competing app stores on Windows. In addition, Microsoft said in the post that it “will not block an app from Windows based on a developer’s business model or how it delivers content and services, including whether content is installed on a device or streamed from the cloud.”

The principles, published Thursday morning by Rima Alaily, Microsoft deputy general counsel, largely restate Microsoft’s existing practices. The company says it’s building on the ideas of the Coalition for App Fairness, which includes Epic Games, Spotify, Match Group and others that oppose Apple’s practices.

However, Microsoft is openly carving out an exception for the store on its Xbox console, with this reasoning:

Game consoles are specialized devices optimized for a particular use. Though well-loved by their fans, they are vastly outnumbered in the marketplace by PCs and phones. And the business model for game consoles is very different to the ecosystem around PCs or phones. Console makers such as Microsoft invest significantly in developing dedicated console hardware but sell them below cost or at very low margins to create a market that game developers and publishers can benefit from. Given these fundamental differences in the significance of the platform and the business model, we have more work to do to establish the right set of principles for game consoles.

Microsoft’s publication of the 10 principles follows a blistering report this week from the U.S. House Judiciary antitrust subcommittee, culminating a 16-month probe into the market power of Facebook, Google, Apple and Amazon. The report focused in part on Apple’s monopoly power over the distribution of apps on iOS devices.

Proposed remedies include “Prohibitions on abuses of superior bargaining power, proscribing dominant platforms from engaging in contracting practices that derive from their dominant market position, and requiring due process protections for individuals and businesses dependent on the dominant platforms.”

Some of Microsoft’s principles address the core issues at the heart of Apple’s ongoing dispute with Epic over distribution of Fortnite on the iOS App Store. Microsoft has also clashed with Apple over its attempts to bring its cloud gaming and streaming services to iOS devices.

Snowflake, the data warehousing company, came out with a bang this week in its public debut, raising $3.4 billion in the largest software IPO ever. It reignited a debate over the the IPO process and inequality in the allocation of shares when a company goes public. Snowflake’s IPO was also a successful outcome for Seattle’s Madrona Venture Group, resulting from a departure from its normal investing strategy. We’ll explain what happened, and what it could mean for the future.

When Bill Gates Sr. died this week at age 94, he was mourned in Seattle and around the globe, not just because he was the dad of the Microsoft co-founder, but because of his profound impact on his community. Microsoft, the Gates Foundation and many other institutions wouldn’t be what they are without him. He always said the three most important things in his life were family, friends and public service … in that order.

• Bill Gates Sr., 1925-2020: Microsoft co-founder’s father made his own mark on Seattle and the world
• Bill Gates Sr. at 90: A giant impact on technology, philanthropy and the Seattle region [2015 GeekWire profile]
• How Bill Gates Sr., late father of the Microsoft co-founder, helped Howard Schultz buy Starbucks

The new Apple Watch Series 6 will be able to check your blood oxygen level while you wear it. Apple and University of Washington researchers plan to launch a study later this year to determine if the device can detect early signs of acute respiratory infection such as the flu or COVID-19.

Listen above, and subscribe in any podcast app.

With GeekWire’s Todd Bishop and John Cook. Produced by Curt Milton. Theme music by Daniel L.K. Caldwell.

The blood oxygen measurement feature in the newly announced Apple Watch Series 6 will provide one of the key inputs for a study seeking to determine if the device can detect early signs of acute respiratory infection such as the flu or COVID-19.

Apple and University of Washington Medicine researchers plan to launch the study later this year, tracking participants during the upcoming flu season.

Announced during Apple’s virtual event on Tuesday morning, the “first-of-its-kind study” will “allow scientists to draw a relationship between associated symptoms, signals from Apple Watch and iPhone, and test results for influenza and COVID-19,” according to a UW news release that offers more details on the plans.

In addition to blood oxygen, the study will take into account data such as heart rate, physical activity and sleep patterns. The research will also incorporate and study behavioral interventions such as reminders for Apple Watch users to wash their hands. Participants will use home testing kits that detect flu and the SARS-CoV-2 virus, which causes COVID-19.

“The hope is that physiological signals from the Apple Watch will make it possible to identify people who are falling ill, and get them tested quickly so they can self-isolate and break the chain of transmission of the virus in the community,” says Dr. Jay Shendure, director of the Brotman Baty Institute and a UW School of Medicine professor of Genome Sciences, in the news release.

Researchers from Apple, the UW School of Medicine, the Brotman Baty Institute for Precision Medicine, and the Seattle Flu Study will conduct the research. They will provide participants with an Apple Watch for purposes of the study.

Apple says the blood oxygen feature works by shining green, red and infrared light onto the user’s wrist, measures the amount of light reflected back, and uses algorthims to calculate the color of the person’s blood, which indicates the amount of oxygen present in the blood. The new blood oxygen app takes a measurement in 15 seconds, the company said during Tuesday’s presentation.

If the study proves successful in identifying signs of respiratory disease, additional regulatory approval could be required to take the approach beyond the research phase. As spotted by some eagle-eyed observers, the fine print after the Apple presentation noted, “Blood Oxygen app measurements are not intended for medical use and are only designed for general fitness and wellness purposes.”

There it is, in the tiniest of possible type at the end of the #AppleEvent video:

“Blood Oxygen app measurements are not intended for medical use and are only designed for general fitenss and wellness purposes.”https://t.co/vDqoZALUgz pic.twitter.com/6wIqGAAt29

— Geoffrey A. Fowler (@geoffreyfowler) September 15, 2020

Researchers say they will recruit a diverse group of participants, including front-line workers and people from under-represented groups that have been disproportionately impacted by the COVID-19 pandemic.

The collaboration with the University of Washington is one of three research studies announced by Apple in conjunction with the unveiling of the Apple Watch Series 6 on Tuesday. The company is also partnering with UC Irvine and the Anthem health insurance company to study blood oxygen and asthma; and with Ted Rogers Centre for Heart Research and the Peter Munk Cardiac Centre at the University Health Network to study blood oxygen and heart failure.

The potential trade-off between personal privacy and public health has emerged as one of the key issues as researchers look to use technology to monitor and slow the spread of COVID-19. Data for the UW study will be collected via the Apple Research app, which researchers say will provide built-in privacy safeguards.

In a separate initiative, Apple and Google have collaborated on smartphone technology that helps states implement COVID-19 contact-tracing systems, but the technology is only available so far in a handful of states.

Independent of the research studies, Apple Watch Series 6 will be available starting Sept. 18 in the U.S. starting at $399.

Apple will allow cloud game streaming services on its App Store, but its new guidelines are still not good enough for Microsoft.

Services such as Microsoft’s xCloud and Google Stadia can now exist on iOS or iPadOS, but they must submit each streaming game to the App Store as an individual app “so that it has an App Store product page, appears in charts and search, has user ratings and review, can be managed with ScreenTime and other parental control apps, appears on the users device, etc.,” according to the new rules.

Those services can also offer a “catalog app” to help users sign up for the service and find games on the App Store.

Microsoft, which voiced opposition to the App Store rules last month, said users should “not be forced to download over 100 apps to play individual games from the cloud.”

Here’s the full statement from a Microsoft spokesperson: “This remains a bad experience for customers. Gamers want to jump directly into a game from their curated catalog within one app just like they do with movies or songs, and not be forced to download over 100 apps to play individual games from the cloud. We’re committed to putting gamers at the center of everything we do, and providing a great experience is core to that mission.”

Under Apple’s new guidelines, each game streaming on xCloud would still be subject to Apple’s 30% cut of in-app purchases, a controversial fee that led Fortnite maker Epic Games to sue Apple last month.

For the second time this month, Microsoft is speaking out publicly against Apple’s actions toward third-party developers, making a statement of support for Epic’s Unreal Engine in the game technology company’s lawsuit against the iPad and iPhone maker.

Microsoft filed a statement in federal court in California over the weekend, after Epic accused Apple of threatening to revoke its access to its Apple developer accounts and tools. It’s the latest twist in a larger dispute over the Fortnite maker’s use of an in-app currency system that sidestepped Apple’s traditional payment mechanism and the accompanying 30% fee.

Phil Spencer, head of Xbox, said on Twitter over the weekend that ensuring Epic has access to the latest Apple technology is “the right thing” for gamers and the industry.

Today we filed a statement in support of Epic's request to keep access to the Apple SDK for its Unreal Engine. Ensuring that Epic has access to the latest Apple technology is the right thing for gamer developers & gamers https://t.co/72bLdDkvUx

— Phil Spencer (@XboxP3) August 23, 2020

Microsoft’s court filing explained the company’s position in detail.

“Denying Epic access to Apple’s SDK and other development tools will prevent Epic from supporting Unreal Engine on iOS and macOS, and will place Unreal Engine and those game creators that have built, are building, and may build games on it at a substantial disadvantage,” wrote Kevin Gammill, Microsoft’s general manager for Gaming Developer Experiences, in the company’s declaration.

He continued, “If Unreal Engine cannot support games for iOS or macOS, Microsoft would be required to choose between abandoning its  customers and potential customers on the iOS and macOS platforms or choosing a different game engine when preparing to develop new games.

“Because iOS is a large and growing market for games, Apple’s discontinuation of Unreal Engine’s ability to support iOS will be a material disadvantage for the Unreal Engine in future decisions by Microsoft and other game creators as to the choice of an  engine for new games.”

Microsoft previously spoke out against Apple’s App Store policies, saying it would not be able to bring its game subscription services to Apple devices because of the associated rules and restrictions.

Microsoft issued a statement Thursday evening calling out Apple for its App Store policies amid a controversy over the Redmond, Wash. tech giant’s new cloud gaming service.

Microsoft terminated its xCloud game streaming test on iOS on Wednesday after announcing the xCloud app will only be launching on Android devices in September.

At the time, Microsoft did not provide an explanation for why its iOS test ended early. But now the company is making its stance known. Here’s the full statement:

“Our testing period for the Project xCloud preview app for iOS has expired. Unfortunately, we do not have a path to bring our vision of cloud gaming with Xbox Game Pass Ultimate to gamers on iOS via the Apple App Store. Apple stands alone as the only general purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass. And it consistently treats gaming apps differently, applying more lenient rules to non-gaming apps even when they include interactive content. All games available in the Xbox Game Pass catalog are rated for content by independent industry ratings bodies such as the ESRB and regional equivalents. We are committed to finding a path to bring cloud gaming with Xbox Game Pass Ultimate to the iOS platform. We believe that the customer should be at the heart of the gaming experience and gamers tell us they want to play, connect and share anywhere, no matter where they are. We agree.” – Microsoft spokesperson

Earlier on Thursday, Apple told Business Insider that the reason for not allowing xCloud on the App Store is related to not being able to review each game.

Not having xCloud available to iOS users would be a big roadblock for Microsoft’s cloud gaming ambitions. The service, similar to Google’s Stadia offering, lets users play high-powered Xbox games such as Halo on their smartphones.

Microsoft has criticized Apple for the tight control it exercises over its App Store. Microsoft President Brad Smith told Politico in June that the time has come “for a much more focused conversation about the nature of app stores, the rules that are being put in place, the prices and tolls that are being extracted, and whether there is really a justification in antitrust law for everything that has been created.”

Apple CEO Tim Cook was asked to testify before Congress last week on antitrust issues along with the chief executives of Amazon, Facebook, and Google. Cook was grilled on Apple’s decision to remove screen time and parental control apps from its App Store, just after the tech giant released its own competing feature as part of iOS 12.

Apple has its own gaming subscription service called Apple Arcade.

The Information reported that Microsoft’s Smith advised the House antitrust subcommittee on competition in the tech industry and took the opportunity to call out Apple’s current practices.

The House subcommittee did not ask Microsoft to testify at the hearing; the company has largely escaped the antitrust scrutiny its peers are experiencing, having faced its own investigation in the late 1990s and early 2000s. But Microsoft’s bid for the wildly popular social media app TikTok could put the company back in the hot seat.

Apple confirmed plans to shift its Mac lineup to its own processors, moving its notebook and desktop computers away from Intel chips after 15 years, and said Microsoft and Adobe are already updating their software for the new architecture.

Microsoft’s involvement continues a longstanding partnership with Apple, dating back to the early careers of Bill Gates and Steve Jobs, which has persisted even as the companies have competed in a sometimes acrimonious rivalry.

RELATED: WWDC roundup: Top news and best tweets from Apple’s big developer conference

Just last week, Microsoft President Brad Smith criticized Apple’s App Store for its treatment of third-party developers, joining a broader call for antitrust scrutiny of Apple’s business.

“Apple and Microsoft have worked together to bring great Office productivity to Mac users from the very beginning, and we’re excited to bring Office to this new era of the Mac,” a Microsoft spokesperson said in a statement to GeekWire.

The switch to Apple processors will make Macs more powerful and responsive, and give users the ability to install and run iPhone and iPad apps directly on the Mac due to the common architecture, the company said. Particularly given the iPhone’s popularity, the changes have the potential  to make the Apple computers more of a threat to Microsoft’s Windows business.

Apple had about 7% of the worldwide personal computer market in the first quarter, shipping 3.5 million Macs, down 6.2% from the comparable period a year earlier, according to the Gartner research firm. Three Windows PC vendors — Lenovo, HP and Dell — currently dominate the market.

But this scenario, in which companies simultaneously compete and partner in different areas, has become common in the tech industry.

“We’ve been working with our friends at Microsoft, and they already have Office up and running natively on our new Macs,” said Craig Federighi, Apple’s senior vice president of software engineering, showing versions of Word, Excel and PowerPoint running on the new Mac processors.

Federighi touted the smooth scrolling and responsiveness of the Microsoft apps, including a processor-intensive 3D view of the slides in a PowerPoint presentation.

Adobe is updating Creative Cloud software including Lightroom and Photoshop for the new Mac processors.

Apple CEO Tim Cook called it “a truly historic day for the Mac,” addressing developers Monday during the announcement at the company’s virtual WWDC conference. The company also unveiled the next version of macOS, dubbed Big Sur, which will take advantage of the new Mac processors.

The success or failure of the new processor strategy will depend heavily on the willingness of developers to update their software to run on the new Mac processors. The new version of Apple’s development environment, Xcode 12, will let developers create universal apps to run on both Intel-based Macs and new Macs using Apple’s silicon.

Apple says the process of shifting to the new processors will take about two years, with the first Macs based on Apple silicon set to ship by the end of this year. Apple says it “will continue to support and release new versions of macOS for Intel-based Macs for years to come, and has exciting new Intel-based Macs in development.”

Apple rolled out a bevy of new product features today at its annual WWDC event, held virtually for the first time due to the global pandemic. Here’s what you need to know, with selected commentary. Watch the full presentation below.

My sleepy self just entered the kitchen and found this. ? #WWDC pic.twitter.com/t7wJ0LtRf8

— Ben Scholtysik (@Elektrojunge) June 22, 2020

Apple silicon

Perhaps the biggest news from Monday was Apple’ confirming plans to shift its Mac lineup to its own processors, moving its notebook and desktop computers away from Intel chips after 15 years. Apple will ship the first Mac with “Apple silicon” this year and make a full transition by 2022. “The transition to Apple silicon represents the biggest leap ever for the Mac,” Apple said in a statement. Apple said Microsoft and Adobe are already updating their software for the new architecture.

MacBook Air battery is down to 39% from 100% since this keynote video started. ARM transition is welcome.

— Brian X. Chen (@bxchen) June 22, 2020

iOS 14

First look at iOS 14! ?#WWDC2020 #WWDC20  #WWDC2020 pic.twitter.com/fRhlwnPrRl

— Rajeev Rajput (@TheRoyalRaajput) June 22, 2020

And that’s iOS 14…Wooosh, it’s pretty awesome! pic.twitter.com/J51V5W0ken

— Michael Kukielka ? (@DetroitBORG) June 22, 2020

The new iPhone operating system now includes support for Widgets on the Home Screen, eliciting this brilliant tweet from The Verge’s Tom Warren:

I just installed iOS 14, and wow pic.twitter.com/ucDkR1yo2x

— Tom Warren (@tomwarren) June 22, 2020

There’s an App Library, which organizes apps; picture-in-picture support for FaceTime calls; and App Clips, which lets users quickly access specific in-app actions. More jokes:

App Clip, because it clips 30% of your revenue.

— Ben Thompson (@benthompson) June 22, 2020

New iMessage features include more support for group chats, such as inline replies and pinned chats. There’s also a new feature to unlock car with your iPhone, and a way to set default email and browser apps.

iPadOS 14

Apple’s newest tablet OS has new design changes for apps such as Photos, Music, and Calendar. Universal Search lets users launch apps, find documents, and search within apps. Scribble converts handwriting to written text. And you can now set default email and browser apps on the iPad as well.

iPad OS 14 allows you to set a default browser and comes with a feature called scribble which converts handwriting into text #WWDC2020 pic.twitter.com/M3vKvh1Mgz

— Product Hunt (@ProductHunt) June 22, 2020

watchOS 7

Apple Watch will now track sleep and hand-washing.

I've been "hacking" Sleep Mode for years by putting Apple Watch in "Theater Mode" when going to sleep so it doesn't turn into a lighthouse every night at the slightest movement. Good change. #WWDC

— M.G. Siegler (@mgsiegler) June 22, 2020

Apple Watch will automatically recognize when you wash your hands based on the movement of your hands combined with the sound of water running and squishing soap. It then kicks off a timer mode to help make sure you wash for the right amount of time! #WWDC2020 #coronavirus pic.twitter.com/OYV483T9av

— Rich DeMuro (@richontech) June 22, 2020

macOS Big Sur

The latest version of the Mac operating system will get a notable redesign, as well as a Control Center and an updated Messages app. The Notification Center will group notifications together. There are new features for Safari, such as a custom start page and a new Privacy Report, and a revamped Maps experience.

I definitely like this new OS X design. Clean.

– New icons
– Control center in the top right
– Refreshed app designs pic.twitter.com/Fc9LBbfq0w

— Marques Brownlee (@MKBHD) June 22, 2020

tvOS 14

Apple TV users will be able to access HomeKit-enabled video cameras and accessories, as well as multi-user features for Apple Arcade.

Watch the full WWDC presentation here:

Not everyone loves Apple’s App Store, it seems. This week, it became a target of criticism for its arcane rules and business practices. Even Microsoft President Brad Smith got into it when he said in an interview that he wants more scrutiny on app store policies imposed by its competitors, such as Apple and Google. What is everyone so ticked off about?

• Microsoft president calls for antitrust scrutiny of app stores: ‘The time has come’
• Apple’s App Store Draws Antitrust Scrutiny in European Union
• 1 big thing: Tech giants’ life cycles shape their crisis responses
• The pandemic has shown that Amazon is essential—but vulnerable
• Supreme Court’s denial of Trump’s attempt to rescind DACA is a win for Dreamers and Microsoft

A pandemic seems like a crazy time for companies to be pricing their stock and going public, but that’s precisely what several tech firms are doing. We talk about why they’re doing it right now (and why they might be in a hurry) and what this IPO rush might mean for several Seattle-area firms.

• The Tech I.P.O. Comes Roaring Back in the Pandemic

It’s no secret that Todd struggles to keep up with the email pouring into his inbox. He is looking forward to trying HEY, a new email management program offered by Basecamp, but John isn’t sure it’s going to make much of a difference. Discuss!

Listen above, and subscribe in any podcast app.

Twenty-five years ago, more than a decade before the debut of the iPhone, a different piece of technology had people lining up outside stores around the world: Microsoft’s Windows 95.

“Everything was mayhem,” recalls Brad Chase, the former Microsoft executive who was in charge of marketing the operating system. “This was the product that ended up ushering computers and Microsoft and arguably Bill Gates into the mainstream. Everybody wanted to know everything about it.”

“One time I even went on press tour and tried to calm everybody down because I wanted them to know Windows 95 would not solve world hunger,” he jokes.

But beyond the sheer hype, Windows 95 was the culmination of Microsoft’s strategy — the company’s bet that there would be a market for a computer on every desk and in every home (and running Microsoft software, executives would add privately.)

Chase explores the ingredients of successful business strategies in his new book, “Strategy First: How Businesses Win Big,” published today, with examples from across the world of business and technology.

On this episode of the GeekWire Podcast, Chase analyzes the strategies of today’s tech giants, explains the components of effective strategies, and talks about the role of strategy in addressing challenges facing the world (a topic he also explores in this column on how companies can advance racial justice.) As a bonus on the podcast, he tells the inside story of how he struck the deal with the Rolling Stones to supply the iconic track for the Windows 95 advertising campaign.

Listen above, subscribe in any podcast app, and read on for edited highlights. 

How do you define strategy?

Brad Chase: Strategy is your plan to compete. And your plan to compete is all about making bets. We all make bets every day. Strategy is about making those bets in order to compete effectively. Any strategy is comprised of three key components. The first is customer value, the second is market potential, and the third is execution, how you run the business every day.

I riff off of the famous equation, arguably the most famous equation in the world, Einstein’s E = mc². But in my case, the ‘Strategy First’ model is E x mc². And that’s to help you remember that the three key components are, E for execution, M for market potential, and C for customer value, and the C is squared, because in most cases, customer value is the most important thing. And one last thing to remember is that your strategy only matters relative to the competition.

How do you create a winning strategy?

Chase: Try to have the best customer value you can relative to competition, execute well, and pick a market where you think there’s good market potential. … I have five key tips that people can use to help build those winning strategies:

1. Seek change. Change is always a strategic opportunity. (Example: Netflix capitalizing first on DVDs by mail and then the shift to video streaming.)
2. Mine the gaps. Whenever you are in a business, there may be opportunities because certain companies don’t provide enough customer value, or they don’t execute well. (Example: Uber and Lyft offering a superior user experience to traditional taxis.)
3. Expand the universe. Grow new businesses through acquisitions, new customer sets and new products.
4. Adapt to the tides. That’s how you deal with all the external factors. COVID is a great example. It’s actually more than a tide. It’s like a tsunami.
5. Build tall walls and climb short walls. Earn customer loyalty. Create a great ecosystem of products. Find low barriers to opportunity.

When you look at the strategies of today’s tech giants, such as Facebook, Amazon, Microsoft, Google or Netflix, which companies today stand out as textbook examples of the formula?

Chase: They all have done amazing things. So let’s talk about Apple as an example. One of the things about Apple that’s impressive is they have innovated a lot, and then they have built a lot of tall walls. … It’s really hard if you’re an iPhone user to switch because you use your AirPods, and you use FaceTime and you use Apple text messaging.

With Amazon, how many companies can you think of that have built two big bets in two very different businesses? Amazon Web Services is a great product. Microsoft is doing a good job with competing with them with Azure, and those are the two main players in the game, but AWS is still the leader and they’ve done a great job. And then, of course, the core e-commerce business. If you think about the customer value, you get your products quickly, the prices are good, their market potential is huge. They’ve just done a great job.

Is there a way for political leaders to look at the world’s challenges through the lens of strategy?

Chase: The answer is yes. …  We’re at a time where there’s greater awareness of the challenges of COVID on business and life. There’s greater awareness, due to the horror of George Floyd’s death, of the history of racial oppression in our country. … Politicians could learn a lot about how to internalize voters’ frustrations about those things. … If they don’t address those things, and they’re tone deaf about those things, they will not do well. … What’s the value you’re going to provide your voter? … The model works very well in a political environment.

I also think that this might be a milestone moment: we might see that customers care more about buying products from, and being associated with, companies that are doing better for moral good. We’re coming to that time where companies will have to broaden their perspective and contribute more to the greater good and to their communities.

“Strategy First: How Businesses Win Big,” by Brad Chase, is published by Greenleaf Book Group Press, with a foreword by Microsoft CEO Satya Nadella.

Word leaked out this week that Uber is considering buying food-delivery service Grubhub, and it turns out there are many Seattle connections behind the possible deal, including links to Expedia and several other companies.

Food delivery is a tough market to make a buck in, for companies and their drivers, so what’s in the deal for Uber?

• Uber Eats is #2 and Grubhub is #3 in food delivery services, behind leader DoorDash. DoorDash grew its market share 42% in March while Grubhub stayed flat. Uber Eats grew 20% (it has a Starbucks contract).
• Seattle connections: Brian McAndrews, Grubhub board chair, is the former CEO of aQuantive and also served as a managing director at Seattle venture capital firm Madrona Venture Group. Zillow Group co-founder Lloyd Frink is also on Grubhub’s board. Frink had executive roles at Expedia where Uber CEO Dara Khosrowshahi cut his teeth.
• Australian hedge fund Caledonia Investments owns 16% of Grubhub and has large ownership in Zillow.

Thousands of Jump ride-share bicycles vanished from Seattle streets recently in the latest shakeup in the troubled mobility service field. The pandemic isn’t making it easy for bike- and scooter-share companies. Will their rides return to Seattle once the pandemic is over?

• Not sure when they’ll be back but industry will look very different on other side of COVID-19 crisis: Industry will become more consolidated. Not clear if demand will return to pre-pandemic levels. Micro-mobility companies will focus on profitability.
• There were more than 2.2 million bike-share rides in Seattle last year, averaging more than 6,000 per day, according to the Seattle Department of Transportation.
• Last week, Uber invested $170 million in Lyme and said it would hand its bike-share program off to Lyme.
• Before the pandemic, Uber, Lyft, Lime, Spin, Bird, Ojo, and a handful of other companies were interested in launching electric scooter services in Seattle and elsewhere but now those plans are in limbo.

Amazon unveiled a virus-zapping robot on “60 Minutes” last Sunday, but it’s possible they were just trying to distract from the rest of the report, which focused on working conditions in the company’s warehouses during the pandemic.

We get our first look at Microsoft’s new $199 Surface Earbuds and their appearance provokes some interesting reactions. Did someone say “Frankenstein’s bolts?” Plus, we raise a toast to Seattle allowing restaurants to sell takeout cocktails during the pandemic.

Listen above, and subscribe in any podcast app.

With GeekWire’s Todd Bishop, Monica Nickelsburg, Taylor Soper and John Cook. Produced by Curt Milton. Theme music by Daniel L.K. Caldwell.

The coronavirus crisis quickly became an unexpected life raft for the technology industry’s image as even its biggest critics enlist Big Tech’s help. The scale of large technology companies — seen as a liability just a few months ago — offers unique advantages in a global health crisis and they are buoying the industry’s reputation.

In a new Harris Poll of more than 2,000 Americans, 38% said their view of the technology industry has become more positive since the start of the outbreak. What’s more, 40% believe the tech industry should provide solutions during the pandemic.

Those solutions are already underway. The nation’s biggest tech companies are using their considerable might to solve various challenges posed by COVID-19.

Apple and Google are working on software updates for iOS and Android that will trace the mobile phones that come into close contact with COVID-19 patients. Contact tracing is viewed as a critical tool for mitigating disease outbreaks and tech companies are stepping in to automate parts of a traditionally laborious process.

Coronavirus Live Updates: The latest COVID-19 developments in Seattle and the world of tech

Amazon is adding 175,000 workers to continue delivering items and groceries to thousands of consumers around the world who are sheltering at home.

Microsoft is leveraging its global supply chain to get personal protective gear to frontline healthcare workers. Microsoft also partnered with the University of Washington to develop a concept app that seeks to balance the need for contact tracing with privacy concerns.

The initiatives appear to be currying favor with the American public. Harris polling found 71% of Americans said they are willing to share their own location data and receive alerts about possible exposure to the virus. A public registry of COVID-19 cases is also popular; 65% of respondents said they favored some kind of database that would show if their neighbors tested positive for the virus.

GeekWire readers appear to be more circumspect, according to a small informal Twitter poll. About 57 percent disagreed with Google CEO Eric Schmidt’s assertion that Big Tech deserves more gratitude for its response to the pandemic.

Former Google CEO Eric Schmidt said we should be more “grateful” for Big Tech companies after the coronavirus pandemic: https://t.co/2pk1TW47Ah

Do you agree?

— GeekWire (@geekwire) April 16, 2020

The tech industry is poised to gain more than a reputational boost from the pandemic. Shares of Amazon hit record highs last week and other large technology companies are seeing boosts from the shift to remote work and education.

Steven Davidoff Solomon, a professor at the University of California-Berkeley, wrote in The New York Times that large tech companies can also take advantage of a “failing firm exemption” for M&A deals due to the pandemic.

“If past crises are any guide, the big technology companies are about to sidestep antitrust laws and get even bigger,” he said.

The shift shows how abruptly the coronavirus has reshaped our reality. Just a few months ago politicians on both sides of the aisle were calling for more regulation of the technology industry, citing antitrust, free speech, and data privacy concerns.

“This is the natural endpoint of an online privacy debate that has always been more about culture war and competition policy than actual, empirical evidence of harm,” said Alex Stamos, director of the Stanford Internet Observatory and former Facebook security chief, in a tweet.

On the brink of this sea change, it’s worth remembering that it wasn’t theoretical fear about data mining that led to a global appetite for more regulation. The Cambridge Analytica scandal revealed personal data to be a powerful political tool in the hands of those who know how to wield it.

Privacy is often one of the first social moors to be loosened in a crisis. Congress significantly expanded government surveillance powers through the Patriot Act just 45 days after the 9/11 attacks. That paved the way for the National Security Administration’s secret PRISM program in which the government collected private data on Americans from companies like Microsoft and Google.

Despite the privacy concerns, the unprecedented nature of the coronavirus crisis presents an opportunity for the technology industry to rebuild trust. Apple and Google say the contact tracing tools they are building will be voluntary and will not outlive the crisis, assuaging some concerns from civil rights groups.

“To their credit, Apple and Google have announced an approach that appears to mitigate the worst privacy and centralization risks, but there is still room for improvement,” said the ACLU’s Jennifer Granick in a statement. “We will remain vigilant moving forward to make sure any contact tracing app remains voluntary and decentralized, and used only for public health purposes and only for the duration of this pandemic.”

The listening capacity of digital assistants like Alexa and Siri has become a major privacy sticking point in the last year. A group of researchers out of Northeastern University and Imperial University of London have been studying smart speakers for the last six months to learn more about what triggers them, and whether or not they are “listening” all the time.

The ongoing study found “no evidence to support” the possibility that digital assistants are always listening. The devices did get activated often in the study, primarily by words that sound similar to the phrases meant to wake them up — for Alexa, examples include words with “k” sounds such as “exclamation”, “kevin’s car” and “congresswoman” — but they only stay on for short intervals of a few seconds up to nearly a minute.

The researchers set up several smart speakers — a couple of Echos, a Google Home Mini, Apple HomePod and a Microsoft Cortana-powered Harman Kardon Invoke — and built an area where they could monitor and record when and how they were activated. The team played 125 hours of shows on Netflix with heavy dialog, including The Office, Gilmore Girls and Grey’s Anatomy and recorded which phrases — outside of the traditional “wake words” — activated the devices.

The study found that the Echo Dot 2nd Generation and the Invoke stayed awake the longest, between 20 and 43 seconds. The rest of the devices had shorter activation period, with nearly half of them lasting 6 seconds or less.

While words that sounded like the wake phrases triggered devices, it was challenging to get repeat results. The team repeated its experiments 12 times, and only 8.44 percent of the activations occurred consistently.

The definition of “listening” in this context can get confusing, even for the people who make the devices. Under questioning on an episode of PBS Frontline last week, Amazon devices chief Dave Limp was asked how Amazon could convince millions of people to install “listening devices” in their home. Limp appeared to misstep when answering the question, insisting that Alexa isn’t a listening device, before describing how it’s “listening,” then backtracking.

“I would first disagree with the premise. It’s not a listening device,” Limp said. “The device in its core has a detector on it — we call it internally a ‘wake word engine’ — and that detector is listening — not really listening, it’s detecting one thing and one thing only, which is the word you’ve said that you want to get the attention of that Echo.”

The question of how these virtual assistants are monitoring for wake words will become even more important as they spread to different types of Internet of Things devices, such as a smart ring and Alexa-enabled eyeglasses unveiled by Amazon last year.

Throughout 2019, reports surfaced that teams of employees at tech giants including Google, Amazon, Apple and more listen in to some audio clips of utterances made to their smart speakers to improve the digital assistants. Amid privacy concerns, the companies began allowing users to opt out of having their audio clips reviewed.

The report is only step one of a larger project. Future updates will look into how many activations lead to audio recordings sent to the cloud versus processed only on the device; whether cloud providers accurately show all cases of recorded audio; if the speakers adapt and adjust to what they’ve heard; and how the gender, ethnicity, accent and other factors affect activations of the speakers.

Microsoft’s Surface hardware business reached an all-time high of nearly $2 billion in revenue for the December quarter, but the company indicated that the result would have been higher if not for unspecified “execution challenges” in the consumer side of the Surface business.

The company said the quarterly revenue of $1.98 billion in the Surface business fell short of its internal expectations, indicating a less-than-stellar holiday shopping season for the Surface lineup.

That’s a surprise in part because Microsoft’s big product unveiling prior to the holidays generated lots of positive buzz from the media. However, two of the biggest products it unveiled at the time, the dual-screen Surface Neo and Duo, aren’t due until later this year. And more to the point of missing expectations, the company subsequently delayed the release of its new $249 wireless Surface Earbuds to spring 2020.

Product-making is about the relentless pursuit to get all the details right, which takes time…sometimes more than we planned on. To ensure we deliver the best possible experience for you, our fans & customers, Surface Earbuds will now launch worldwide in Spring 2020 #Surface

— Panos Panay (@panos_panay) November 21, 2019

Amy Hood, Microsoft’s chief financial officer, told analysts and investors Wednesday afternoon that continued strength in the Surface commercial segment “was partially offset by execution challenges in the consumer segment.”

Hood indicated later on the earnings call that Microsoft hasn’t gotten past those challenges yet: “In Surface, we expect revenue growth in the low single digits as we work through the execution challenges in the consumer segment.”

Microsoft hasn’t yet provided further details on the nature of those challenges, and whether they extend beyond the Surface Earbuds delay.

Curious if Microsoft, when referring to "execution challenges", meant Surface Earbuds? I forgot those are delayed until sometime in spring 2020.

Could be a million things: chip supply, Q&A issues/returns, margins, manufacturing problems, shipping. https://t.co/RFAG3IyU6S

— Daniel Rubino (@Daniel_Rubino) January 29, 2020

Earlier this week, Apple credited growth in AirPods and Apple Watch sales for fueling a 37% increase in its Wearables, Home and Accessories segment, which surpassed $10 billion in revenue for Apple’s December quarter, or about 10 percent of Apple’s $91.9 billion in overall revenue for the quarter.

RELATED: Microsoft revenue rises 14% to $36.9B, profits exceed estimates, cloud rises and games fall

Surface revenue of $1.98 billion represented about 5.4 percent of Microsoft’s overall revenue of $36.9 billion for the December period, the second quarter of the company’s 2020 fiscal year. That compares to Surface revenue of $1.86 billion, or 5.7 percent of the company’s $32.4 billion in revenue, in the same quarter a year earlier.

Commercial segments are Microsoft’s traditional strength. The company launched products including the Surface Pro 7 and the Surface Laptop 3 during the quarter.