Dating will never be the same. The white-hot local date finder app that reduces courtship to the swiping of photos to say “hot or not,” Tinder, is opened on average 11 times a day by users. Microsoft chased Fitbit, Nike, Jawbone, and half a dozen others into the wearable fitness tech business with its new Band. One more thing to sell at those Microsoft stores popping up everywhere. Maybe someday soon they’ll sell full-fledged computers there… Speaking of Apple, CEO Tim Cook revealed he was gay (which everyone knew) just in time to get in front of news that all those leaked nude photos were coming off a flawed iCloud that didn’t rate limit password attempts. PR geniuses. Android founder Andy Rubin left Google. But he was ousted from power months ago, so it matters little. The tragic failed launch of SpaceShuttleTwo, the second space flight explosion in as many weeks, is showing signs it might be a human error, not a mechanical one. It’s all too early to say for sure, but they are now bringing in some experts to look at that possibility. Alibaba beat revenues estimates but missed on earnings. Sprint missed on both, despite huge price cuts meant to attract customers. An Investor’s Week in TechGreetings, fellow technophiles. This week we’re going to try something new, and I’d like your feedback.Once upon a time, I used to fill the pages of Casey Extraordinary Technology with a monthly summary of noteworthy news from the tech world that investors should be aware of. Predictive, anomalous, or just interesting, the goal was to be information and opinion dense. As the portfolio swelled, that fell to the wayside.Looking to broaden coverage in these weekly letters, it seemed a perfect opportunity to bring that format back and get you something with a lot more “sink your teeth in” depth than just a single topic a week. If you enjoy our usual longer, more in-depth articles, no worries. We’ll keep writing them and cover them below with everything else, if we keep this new format.Please give it a read, then let me know what you think in the comments or by replyingApple Pay Launches with a Thud, Getting Denied at Big RetailersThe pitched battle to replace your wallet—or what’s inside it—just got much hotter. In the race to dominate every aspect of your personal life, Apple premiered its much-hyped Apple Pay service last week. Owners of the new iPhone 6 series of phones can now finally use a technology that has long since been available on tens of millions of Google Android phones to pay for things.Much like those cellphone barcode boarding passes at the airport, the idea is to replace a simple passive object (for the airport, paper; for Apple, the old magstripe credit card) with better technology. The process for paying with Google or Apple’s tech goes like this: you get out your phone, swipe it by a specially equipped machine, enter a pin on the phone (or use your fingerprint in Apple’s case), then select a card account, which then transmits one-time-use credit card info to the machine. Tech proponents say it’s much more secure since an unscrupulous employee or even a hacked payment terminal can’t steal a card number that can be used again. To me, it sounds like a lot of work to do what a card already does without having to worry about dead batteries, crashing apps, etc. Not that I have an opinion…But CVS certainly has one. The store announced that it would disable the near-field communications (NFC) tech that Apple and Google use on its payment terminals, blocking the new service. The move was meant to support CurrentC, an alternative developed by an industry trade group to which CVS, Rite-Aid (which also made the same move), and many other retailers belong. Over the years, CurrentC has deployed simpler barcode-based smartphone apps for a wide variety of platforms, including iOS and Android, but they’ve been known to be terribly buggy and not very convenient. To push back this hard, CVS must see Apple’s involvement in the credit card chain as a major threat to margins. After all, it’s had NFC support for Google Wallet for quite some time (evidence of just how poorly Google executed its Wallet marketing).Reviewers who spent any time with the new solutions came back nonplussed too. Engadget summed it up well (my emphasis):Mobile payments are arguably a lot more secure. Your actual credit card number is never handed over to merchants. Apple Pay uses a Secure Element chip that encrypts user data and assigns a unique device number to each phone, while Google Wallet transactions are made with a virtual prepaid MasterCard that’s different each time. Mobile payments could therefore be the answer to the ever-present threat of data breaches and identity theft.But until we can get it accepted at every merchant and figure out a way we can use the phone to securely carry our ID as well, it simply isn’t going to replace your wallet.Nor are credit card makers content to let the wallet be replaced. They have their own secure solution, “chip+pin” (or EMV), with similar security features. Instead of adding a phone into the mix, they make the credit card smarter, holding on to the credit card number until you enter a code to unlock it. A compromised payment terminal is a risk, like what happened at Aldi a few years back, but then again so is a hacked phone with NFC… and which is more likely?One has to wonder if merchants and Visa will be happy about adding powerful new players into the payment chain. Though, when consumers catch wind of the newest glaring security hole in those chip+pin cards discovered last week, which allows hackers to steal up to a million dollars per card simply by walking near you, they might just demand Apple Pay.Elsewhere in the ecommerce world…US Credit Card Security Push Will Replace Billions in HardwareWe don’t usually lump credit card payment terminals into the “cool gadget” category, but last week the former head of aforementioned Google Wallet—who left to do his own startup (the hard part of being one of Silicon Valley’s big employers is that your best people can easily leave and compete with you)—announced a slick-looking new device to replace those tired-looking payment terminals at cash registers around the US.Dubbed Poynt, the announcement is not coincidentally timed. Next year the US starts adopting new payment security standards, which will require almost every terminal not replaced in the last year or two to be ditched in one fell swoop, lest the merchants using them face big penalty charges for using old, less secure tech. It’s going to be a multibillion-dollar hardware upgrade cycle; thus competitors new and old (like VeriFone) are salivating at the chance to gain some share during the swap.Poynt works with the old magstripe cards we know, but also supports EMV, the standard those who live in Europe, Asia, and even Canada have long had. It’s also wireless, Bluetooth, and NFC compatible—meaning it works with Apple Pay and Google Wallet, if those ever do take off (they won’t). TechCrunch has all the details and lots more slick gadget photos.No Commerce Without Government Sanction? AirBnb Law Sets Ugly PrecedentIt may sound like something out of a fascist regime, but that seems to be the direction we’re headed in America. In the country where Marshmallow Fluff went from a home kitchen to a multimillion-dollar business, it’s anathema to think that today’s laws would make the whole endeavor illegal from the get-go. But evidence continues to mount that we have gone decidedly anti-commerce.The latest turn of events: the People’s Republic of San Francisco is pushing a law to severely restrict the use of HomeAway and AirBnb-style hotelier sites. Prodded by angry neighbors—or by the hotel lobby, do you think?—the city decided to permit only residents of the city to use their property as such. Nonresident owners are being told they cannot do short-term rentals, only long-term ones.The city council says they’re doing it to prevent or lessen a housing shortage in the city. Yet more evidence of government protecting entrenched business models (hotels in this case… just like the ludicrous laws to prevent car manufacturers from selling directly instead of through dealers, meant to slow down Tesla’s onslaught). Thankfully, HomeAway is suing to block the law… as are others.(Curiously, AirBnb isn’t suing, as the law is actually designed to support its business model, requiring the companies arranging rentals to collect taxes centrally, which it can do; HomeAway can’t do that without a big change to its business. This is, at least, according to HomeAway.)It reminds me of the ludicrous battle that occurred down the street from my place in Vermont, where neighbors were mad at The Alchemist, brewers of top-ranked microbrew Heady Topper. Its creators were forced out of their small brewing site by neighbors who didn’t like the traffic from customers. The business was drummed out of town with help from the zoning board. Yet the company couldn’t move to the next town over because a competitor started making a squawk about some rare bird that supposedly nests where The Alchemist wanted to build its new location. The whole debacle is still unfolding many months later.Is this the world we now live in, where success is punishable by law, unless you grease the right palms? Let’s all hope that intelligence prevails in the judiciary of California (just typing that out is depressing), and it upholds the ability of people to engage in commerce without permission. If not, I suspect we’re screwed as a nation. If only our lawmakers would focus on protecting us from real threats like the unprosecuted frauds of the mortgage debacle, instead of piling on superfluous new regulations that just deter or extort business.SSD Consolidation ContinuesThe days of the spinning hard drive are numbered. Cellphones, tablets, etc. have never even considered them an option. They suck way too much power and take up far too much space. The solid state drive (SSD) is less power hungry, shockproof, and WAY faster. Only problem is it’s still an order of magnitude more expensive than its predecessor.So when it comes to storing lots of data that don’t all need to be accessed at lightning speeds, spinning disks still rule. Until that cost gap finally closes, SSD manufacturers are using software to make their devices work in tandem with old-fashioned spinning disks, giving them a way to still be valuable for those big archival data farms. In fact, HDD sales are up 6% over last year, to a projected 423 million shipments this year.The latest sign that SSD makers see this as big game came with Samsung’s purchase of hot San Fran startup Proximal Data. The deal, done at an undisclosed price, was the second for Samsung that also grabbed NVELO, which was working on the same kind of technology in 2012.The Hackings Will Continue Until Morale ImprovesIt looks like viruses are on their way for Mac users, thanks to a big security flaw in the new OSX Yosemite.That just piles on top of the serious flaw in popular content management platform Drupal, which powers such websites as Whitehouse.gov and which left potentially millions of domains exposed and many confirmed hacked last week. Within hours of the October 15 notice to the world that the software was vulnerable, hackers began exploiting it to steal data, inject malicious code, and otherwise take over websites unbeknownst to owners.It’s not just hackers either. ATT and VZW are placing “supercookies” on your phonev to track and report all kinds of stuff. Better start actually reading those terms of service agreements you click right past. Your cellphone company isn’t the only one selling every bit of data it can about you: your ISP at home sells your clickstream too, and lots more. Same with your credit card.The rule is simple: if you need it private, don’t put it on a computer of any kind. At least not one connected to the Internet. It’s unfortunate for all of us, not just the celebutants who had their privacy flagrantly violated for the world’s unscrupulous to see, but it’s the time we live in.If you do want to keep something secret, then follow this fantastic guide to how Edward Snowden did it.Darknet Commerce Is BoomingThe Economist recently published a great overview of the growth of so-called Darknet sites, which use software to keep user identities hidden from prying eyes (a somewhat dubious claim, many studies have shown). With perceived anonymity as cover, all kinds of illicit activity occurs, including the sale of drugs and weapons. The article included this great chart of the comeback since the infamous Silk Road marketplace was shut down:Of course, even on the Darknet—maybe especially on the Darknet—you’re not immune to hackers. Recently, at least one node of the Tor anonymous peer-to-peer network was hacked. Intruders were wrapping any downloaded program with a Trojan Horse, regardless of where it came from, as it passed through the hacked computer. The risk of any proxy service, P2P or centrally managed, is that it provides a bottleneck for hackers to exploit. The same could be done to a commercial proxy as well, or even your ISP, were they to be hacked… so keep that virus scan up to date.Plus, who wants to be on the Darknet anymore, now that it has Facebook?Wii U Sales Boom, Nintendo Profits, Thanks to Go-KartsLast week Nintendo surprised a whole lot of people by finally being profitable again, albeit for a very brief period of time. The company’s Wii U console hasn’t sold nearly as well as previous generations. It’s also losing share to the latest PlayStation and Xbox models—something consensus chalked up to its decidedly kiddie vibe and giant-awkward-touchscreen-joystick-controller-thingies.But last week we found out otherwise. Thanks to the release of the eighth iteration in its Mario Kart series, system sales boomed, and the company finally made some money again… albeit for one quarter. Reuters has the detailed numbers, but with 1.1 million consoles sold in the quarter, putting Nintendo in at well over 7 million total consoles sold, the Wii U is now firmly ahead of Microsoft (which sold 3.9 million Xbox Ones so far) and Sony (4.1 million PS4s) in the console race.Still, the company has been bleeding money up until now. And the gaming and business press have been pushing Nintendo to change its game plan, putting out its famed character games to license for mobile devices and possibly for other consoles, too. Punditry has it that the company could make a lot more money by reaching far more devices. Software certainly has higher margins, especially for Nintendo’s competitors, which sell their beefed-up systems at cost.For now at least, it looks like Satoru Iwata (Nintendo’s 12-year CEO, who is just recovering from cancer surgery) may have had the formula right all along, pushing his marketing budget to the moon to gain share on the back of fun games, not hardware specs. He’s playing the Silicon Valley race, focusing on market domination over profitability up front, only to turn the corner late and hard, sure of his traction, to cement a commanding lead.Microsoft is slashing prices to try to catch up from third place, but as an owner of two Xbox One consoles, I can tell you I’m a little bit jealous of the Wii U crowd right now, wishing there was even one decent exclusive game for my year-old super hardware. Instead, I’ve got a half-working Xbox Fitness with less content than when it launched, and a bunch of boring shoot-‘em-up games (I guess that’s why Microsoft canned its home-baked TV/movie studio).Now that looks like fun… and as Jordan Shapiro points out, it’s much more mature than the shooter fare. No wonder GameStop’s revenue jumped 25% near the same time as Nintendo’s return to profitability.Great games, not hardware specifications, sell consoles. A master lesson from the longtime video game champions, Nintendo.A few other reads of note:Skype is about to go the way of Star Trek, with real-time translation technology! The implications are awesome, but I can also see whole websites dedicated to recorded gaffes. More wearables inanity: Samsung’s next watch is on sale this weekend, and LG’s got way thinner, both months ahead of Apple’s iWatch, which now won’t come until spring. And it’s apparently going to cost as much as $5,000, proof it’s little more than fashion. $50 says Apple’s first day outsells Samsung’s and LG’s prior totals. $100 says that by 2016, no one you want to know wears a smartwatch. Christian Bale bailed as Steve Jobs in the Aaron Sorkin biopic. With Leo DiCaprio doing the same, already one has to wonder if the movie isn’t completely off the rails. But with Seth Rogen as Woz, I won’t miss it. Virtual taxicab startup Uber is apparently pushing subprime loans to its drivers. And in the news of the surreal, alleged criminals are remotely wiping evidence from phones after police seize them.So… what did you think of the format? More valuable? Less? Just right? Comment below, or direct your email to email@example.com (reading this in email? just hit reply) and our top-notch customer service team will forward it to me.
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