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Should you be scared of Amazon?

jeff bezosAmazon CEO Jeff Bezos. Amazon bought Whole Foods on Friday for $13.7 billion.REUTERS/Abhishek N. Chinnappa
AMZN Amazon.Com

About a month ago, New York Times columnist Farhad Manjoo helped coin a new term for the top-five tech companies that are increasingly dominating our lives: The Frightful Five, better known as Apple, Google, Microsoft, Amazon, and Facebook.

The top of his list? Amazon.

Farhad’s argument was that he’s increasingly dependent on Amazon for buying stuff and entertaining his family. That’s true.

But I’d argue Amazon’s reach goes deeper than that, deeper than any other company inside or outside the tech world. And its grip on our lives is only getting stronger, which raises some serious questions we haven’t had to ask ourselves about the power and influence a tech company can have over our lives.

Out of the Frightful Five, Amazon is the company you should fear the most.

Amazon’s surprise $13.7 billion acquisition of Whole Foods is the latest example. We already knew Amazon had ambitions to break into the grocery business through the Amazon Fresh delivery service and the futuristic cashier-free convenience stores, but this is a whole other level — a subtle troll that the online retail giant can creep its way back into the physical world and take over a popular chain of supermarkets.

But let’s talk about everything else Amazon has its grip on and how it continues to hold greater influence over:

  • Cloud computing. Amazon Web Services powers many of the apps and websites you use every day. (Remember when an Amazon outage took down a large chunk of the internet?)
  • Artificial intelligence. Amazon has quickly become a leader in AI thanks to its Alexa assistant, which has opened up a new world of voice-powered computing.
  • Logistics. Through Amazon Air, Amazon plans to use drones and its own planes to deliver goods. It’s also experimenting with autonmous trucking. Many have speculated that one day Amazon won’t need to rely on UPS, FedEX, or the Postal Service to deliver stuff.
  • Entertainment. Amazon has dumped millions into original TV programming and movies. It also runs a streaming music service, and lets you buy digital music and video.
  • Food. Between Whole Foods, those futuristic grocery stores, and the Fresh delivery service, Amazon is poised to be one of the largest grocers in the country.
  • Health. According to a CNBC report, Amazon is thinking about getting it the prescription drug business.
  • Retail and e-commerce. This one is self-explanatory.

There’s more. Amazon’s influence extends to other industries indirectly through CEO Jeff Bezos’ personal investments:

  • News media. Bezos owns The Washington Post and a small percentage of Business Insider.
  • Outer space. Bezos owns a rocket company, Blue Origin, that’s building reusable rockets.

That’s a lot of stuff that affects you every day from a company that started selling books online back in the 90s. Now it’s hard to find a need Amazon can’t fill.

That raises some serious, potentially scary questions if Amazon’s influence and capabilities continue to grow. Should one conglomerate have that level of control over the future of so many vital industries people rely on? What kind of check will there be on that power, if any?

Granted, it’s a little early to be thinking about all this. Most of the verticals Amazon is involved in are still dominated by traditional companies. But as we saw in the market’s reaction to the Whole Foods deal on Friday, it’s clear that there’s a strong possibility we’re accelerating toward a future where there’s a digital layer on top of everything we do. And the company best equipped to deliver all is Amazon. There’s literally no one else in a position to compete.

That’s a lot of power concentrated in one conglomerate, and puts Amazon in a position where it’s a company to fear.

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The creator of Android explains how his new phone can take on Apple and Samsung

Andy Rubin at wired business conference Andy Rubin at the Wired Business Conference with the new Essential Phone. Getty Images for Wired

Andy Rubin is best known as the guy who created Android, sold it to Google, and nurtured it into the most popular smartphone operating system on the planet.

But Rubin left Google back in 2014, and now he’s on his own.

His latest gig is Essential, a startup he runs as CEO that’s trying to become a new kind of gadgets company. It starts with a phone, called the Essential PH-1, and the plan is to expand into smart appliances and cars from there.

Rubin spoke Wednesday at the Wired Business Conference in New York and shed a bit more light on Essential’s plans. After the Essential Phone launches this summer, the company plans to release Home, a voice-controlled hub for all the connected appliances in your house. Rubin claims Home will be compatible with the wide variety of smart home platforms, ranging from Apple’s HomeKit to Samsung’s SmartThings, even though it’d take a wild level of technical wizardy to pull it off. Many are skeptical he can pull it off. He calls this new platform Ambient OS.

Beyond that, Rubin teased that he’d like Essential to tackle the car, which is increasingly coming into focus as an area of growth for tech companies.

And questions remain how the Essential Phone, which costs $699, can find success in a market dominated by Apple and Samsung.

Business Insider and some other members of the press spoke with Rubin following his Wired talk. Below is a transcript of that conversation, which has been edited for length and clarity. (I’ve labeled each journalist’s question as just “Question” since so many people were in the room asking questions. I put my name on the questions I asked.)

Q&A with Andy Rubin, CEO of Essential

Steve Kovach: I want to talk more about Ambient OS. You were talking a lot about how you’re really confident you’re going to be able to stitch all these various platforms together.

Andy Rubin: I didn’t say I was confident. I’m definitely going for it.

Kovach: If I’m understanding it correctly, especially with Apple, it’s actually impossible. What they allow people to build into now doesn’t allow what you want to do. Does this thing fall apart if they say no to you?

Rubin: You have to understand this approach. There’s a client and a server. And what Apple has with HomeKit is a bunch of individual consumer electronics companies enabling HomeKit with their products. I don’t know what the percentages are, but they don’t all only speak HomeKit. They speak a whole lot of other stuff as well. And what Apple is trying to do is trying to be the screen that drives these things. And that’s excluding anybody in “Android Land” or Windows from driving those things. So the natural effect will be for those companies to support other products as well, and they’re the ones that are plugging into Apple’s APIs. So the trick that I talked about on stage is: I can produce the same APIs. And I can call it Essential Kit. And those same exact APIs that someone has already developed for their Sonos thing or whatever this point product is, I’m compatible with.

Kovach: But isn’t that just another product like Samsung’s SmartThings?

Rubin: No, no, no, no. You know what this is? This is [like] Windows emulation [on a Mac]. This is Windows emulation for IoT. APIs for all these people who are building these islands. And if I emulate eight things and turn it on, I control 100,000 devices.

Kovach: And have you been able to do that yet in testing?

Rubin: I haven’t launched a product. I’m teasing a product, but it’s going to be awesome. These are all forward-looking statements.

Question: How far in advance are you teasing?

essential home hub A rendering of what Essential Home will look like. Essential

Rubin: We have round LCDs — big ones. What’s after that is basically everything that’s in a smartphone. Right? There’s a bunch of cool things about starting a company today. I have a system in my lobby where I can print badges for people. There’s some startup company whose job it is to do lobby registration now. And when I used to start companies, those guys didn’t exist. But the other thing that happened, obviously, is smartphones have driven the supply base, based on the volume of the component tree of smartphones. And you’ll find those things going into a lot of products like these home assistant products. So it’s kind of a new era as far as leveraging the economies of scale of smartphones into these other products.

Question: So Essential Home is a touch interface. Is it also a microphone?

Rubin: Yeah it has far-field speech recognition. It has an array of microphones.

Question: Is there any plan to add video chat to something like that?

Rubin: Really good question. So once you do this job of bridging these islands, you kind of rise above all these other UIs, and you become a kind of holistic UI for every other product that might be in your life. So if you think of it purely from a UI perspective: Who is your UI developer? I actually thing developing for smartphones is too difficult. It’s almost like you have to go to school to learn how to be an iOS developer or learn how to be an Android developer. The good ones have four or five years of experience, and the industry is not that old. So the reason we created a new OS is to basically solve the UI problem and redefine the definition of who a developer is. I want the guy who owns the home to be a developer, in some regard. I can tell you today, there’s a $13 billion industry of Crestron or AMX or Control 4, and they’re drilling holes in your wall and installing screens in your home. That’s an outdated approach. But the guys that are doing the UIs for those are the same guys that are drilling the holes in your wall. There’s this whole installer thing with these high-end homes which is not a mass-market consumer value proposition. So I need to change who the installer is. And I think we’ve built enough technology for a consumer to kind of do a drag and drop.

Question: There’s this argument that’s been out there that innovation in smartphones has peaked, that they’ve already gotten so good and can do so many things. Where do you see things going? Where does it go from here?

essential ph-1 colors The Essential Phone. Essential

Rubin: When there’s this duopoly with these two guys owning 40% of the market, this complacency sets in where people are like, “Oh what they’re building is good enough. I’ll just go to them.” And that’s the perfect time to start a company like this, when people are complacent and it needs to be disrupted. And the real answer is you guys and the consumers need to tell me if there’s enough new innovation in [the Essential Phone].

I think the 360 camera and the magnetic accessory bus is a pretty good example of the innovation we’re thinking about. And there’s gonna be a string of those things. Let me broadly position this: In the era where smartphones were new and everyone was upgrading from their feature phone to their smartphone for the first time, the product cycle was every six months. There’d be some new thing coming out, everyone’s excited, there was a bubble kind of feeling that you were involved in something completely new and exciting. And then once everybody who wanted a smartphone got one, we’re in a saturated market — at least in the first world. In saturated markets, the upgrade cycle is every 24 months. And the problem with the 24-month cycle, which happens to snap to the carriers’ [ownership] of the consumer, is the consumer doesn’t get to see the innovation. It’s still happening in the background, but it happens every 24 months in these very lumpy onstage announcements. I think there’s a way, and the reason we built this magnetic connector to continuously produce innovation and show it to the consumer happening in real time. It’s almost like software updates for hardware.

Andy Rubin at wired business conference Rubin and his Essential Phone. Getty Images for Wired

Question: Explain how the Essential Phone is different from a modular phone. From the consumer point of view, it’s, “I’m getting this phone and I can snap a camera on and I can snap on a better battery.” Does it matter if it’s magnetic or not?

Rubin: That’s a good question. It’s two things. It’s kind of the core to the way we designed this from a product design perspective. The first one is what’s “modular.” [Google] Ara was the definition of modular, which is you can remove a core component of the phone, like its processor, and replace it with a faster one. We’re not doing that. You buy a phone, the phone works great as a phone. We’re adding stuff onto it. So that’s why I prefer accessory bus as an example. So that’s modular versus accessory.

Now, connectors, in my view, are dumb because they get outdated. So a wireless connector is the holy grail. We’re close to that. We transmit power between two pins and everything else is wireless. Actually, the technology we’re using is wireless USB 3.0. So it’s 10 gigabits a second of USB, and we’ve built these transceivers that do that. The benefit of having a connectorless connector is I don’t suffer from what Moto Mod suffered from, which is every phone they come out with in the future has to have that 33-pin connector in exactly the same location so all the accessories you’ve invested in as a consumer still work. So they’ve painted themselves in the corner. They can never change the industrial design of their next phone because it has to match all these accessories. Or they have to trick the consumer into throwing away all their accessories and getting the new one that fits this new thing.

A completely wireless thing means I can come out with a phone that’s invisible. And as long as it has this magnetic area on it I can use this legacy of accessories that I’ve purchased. Again, this is a pro-consumer brand. It’s not easy to articulate. We’re trying to do right by the consumer where they don’t have to throw away their stuff every time there’s a connector change. Or get some weird dongle. True story, I went and bought one of those beautiful new MacBooks with the OLED TouchBar. And that’s when they changed to the USB-C thing. And in the IT department in my company I needed to plug in to the Ethernet to get the certificate for the new laptop, and I went to the Apple store and I said, “Do you have a USB-C to ethernet dongle?” And they said, “Oh no we don’t have that yet.” So I had to buy a USB-C to Thunderbolt dongle, and a Thunderbolt to Ethernet dongle. So I had two dongles plugged into each other. And that’s the point where I’m just not feeling too good about being a consumer of those products.

Question: Based on the conversations you had today and at the Code Conference, Essential is much more than just a phone company. How do you find that your brand is going to track these consumers?

Rubin: It’s anti-walled garden. We chose Android because that’s a big component of that. We have a team of engineers, a lot of them, doing the job of other people to make our products work with theirs. These other companies, especially the walled gardens, they’re sitting here with their ecosystem and they expect people to come to them. And they get to be the toll gate guys and say “yes” or “no.” So we’re actively going out and making our products work with other people’s products because we know that’s how our consumers want to live.

Kovach: You spoke a lot on stage today about home and the car as major new platforms, but you didn’t mention AR.

Rubin: There’s baby steps into AR, and then there’s all-in. Scoble’s all-in is the shower picture… so the glasses might come later. Cellphones have had augmented reality for a long time…

What the real question is: ‘What is the end product?’ What is the developer going to build with augmented reality? And so far I’ve seen interactive media… movies and game-like movies, where you’re both a participant and a viewer, which I think is a little too mixed reality for me. There’s a lean back where you’re a consumer of this stuff and it happens, or you’re a participant like a game. The mixed part of it hasn’t been proven yet.

I think when consumers are ready to wear things, whether it’s a motorcycle helmet that overlays a map… or if it’s some goggles that they’ll use for a board game… in the end for these big things I think…

One of the problems is the price. It’s just crazy. It’s not ready for prime time. There will be a day where you might have a head mounted display and it costs $199, and you just plug it into your cellphone. And it won’t be ‘I’m wearing this 24 hours a day.’ It’ll be, ‘It’s time to sit down and play Monopoly with the family or something.’ It actually might be more social than what you would do with VR.

Question: Is that why you started the 360 camera? Because it’s a taste of that?

Rubin: This is all speculation, but I’m hoping there’s going to be a format change in the future. I think I can kind of move the needle a little bit in that format change by taking the world’s largest mass-market product and adding something onto it, rather than trying to create something completely new. So it’s more of a slipstream approach.

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It’s a make-or-break moment for Samsung with the launch of the Galaxy S8

DJ Koh, Samsung president of mobile communications, shows the Galaxy S8 and S8+ smartphones during the Samsung Unpacked event in New York City, United States March 29, 2017. Samsung Mobile CEO DJ Koh with the Galaxy S8. REUTERS/Brendan McDermid

Samsung’s big test is coming in less than a week.

On April 21, customers will get their hands on the Galaxy S8, Samsung’s first flagship phone since the embarrassing Galaxy Note 7 debacle that damaged the company’s reputation and wiped about $17 billion from its value last year.

Not a good look.

But early impressions of the Galaxy S8 have been amazing.

From a design perspective, the phone features a gorgeous curved screen that takes up almost the entire front of the phone. (Samsung calls it an “Infinity Display” because it gives you the impression that there are minimal borders on the sides.) It’s also made from all glass and metal, with a svelte body that feels great in the hand or pocket.

Overall, the phone features a larger screen in a slim and light package. The iPhone looks chunky by comparison. The Galaxy S8 is the early favorite for the best phone of 2017.

Plus, there are loads of thoughtful hardware innovations like wireless charging and a top-of-the-line camera that has yet to be beaten by competitors. Even after last year’s stumbles, it feels like Samsung is gearing up for a major redemption thanks to the Galaxy S8. (As long as the battery doesn’t explode again, of course.)

Still, there are a few concerns ahead of the launch. Samsung was forced to admit Tuesday that its new voice assistant Bixby won’t be ready when the phone launches. That’s probably a good thing, given that Bixby struggled to work properly in an early demo I saw a few weeks ago. But it’s an embarrassing admission by Samsung that it can’t keep pace with the growing voice-control category dominated by Amazon, Apple, and Google.

Samsung’s decision to create Bixby didn’t make much sense in the first place, since the phone will also ship with Google Assistant, Android’s excellent digital helper. That threatens to confuse users with two different assistants on the same device. Good luck with that.

And until Bixby does launch with a software update later this spring, the dedicated Bixby button on the side of the phone won’t serve a purpose at all. That’s another bad look at a time Samsung needs to really wow users again to make up for last year’s embarrassments.

All that said, the Galaxy S8 will likely live up to most of its expectations. Samsung hasn’t commented specifically on demand, but did say the phone saw growth in pre-orders in the US over last year’s Galaxy S7, which was also well received.

If I had to bet, most people will look beyond the relatively minor software flubs Samsung is making with the Galaxy S8 and instead focus on the innovative hardware and design. Frankly, the iPhone has never looked so far behind in those categories.

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19 things in tech we’re thankful for this year

TurkeyGobble! Gobble!REUTERS/Brian Snyder

Ah, Thanksgiving.

Turkey. Stuffing. Arguing over fake news stories with your crazy uncle.

What’s not to love?

Thanksgiving is a time for reflection, so the Business Insider tech reporting team likes to look back at all the products, services, and other tech gizmos we’re thankful for each year.

Keep reading to see our picks.

View As: One Page Slides

Steve Kovach, senior correspondent: Hey Siri, OK Google, and Alexa have changed the way I interact with a lot of my gadgets. These “wake commands” make it easy for me to get information or perform simple tasks on my phone or Amazon Echo.

Steve Kovach, senior correspondent: Hey Siri, OK Google, and Alexa have changed the way I interact with a lot of my gadgets. These "wake commands" make it easy for me to get information or perform simple tasks on my phone or Amazon Echo.

Amazon

Kovach: I’m also thankful for Amazon Prime. It’s tough to find time to shop, and I buy everything on Amazon from cat food to toilet paper. It more than pays for itself every year.

Kovach: I'm also thankful for Amazon Prime. It's tough to find time to shop, and I buy everything on Amazon from cat food to toilet paper. It more than pays for itself every year.

Rafi Letzter/Tech Insider

Rob Price, reporter: My Amazon Kindle. While I love reading physical books, the Kindle is an incredibly useful tool, and I’ve got more use from it than any other gadget. After six years, hundreds of books, and thousands of miles, mine finally gave up this year and I can’t wait to get another.

Rob Price, reporter: My Amazon Kindle. While I love reading physical books, the Kindle is an incredibly useful tool, and I've got more use from it than any other gadget. After six years, hundreds of books, and thousands of miles, mine finally gave up this year and I can't wait to get another.

Amazon

Kif Leswing, reporter: I’m thankful for iMessage and the fact that you can send them from your Mac. It’s pretty much the main way I keep in touch with friends and family, which are what I’m REALLY thankful for.

Kif Leswing, reporter: I'm thankful for iMessage and the fact that you can send them from your Mac. It's pretty much the main way I keep in touch with friends and family, which are what I'm REALLY thankful for.

Screenshot/Tech Insider

Jim Edwards, editor in chief of Business Insider UK: I’m thankful for Nuzzel, an app that gets rid of all the garbage on Twitter and saves only the best bits in the form of a constantly updated, super-relevant news source.

Jim Edwards, editor in chief of Business Insider UK: I'm thankful for Nuzzel, an app that gets rid of all the garbage on Twitter and saves only the best bits in the form of a constantly updated, super-relevant news source.

iTunes

Jim Edwards: I’m also thankful for the Reddit mobile app. You’re never bored if you have access to Reddit.

Jim Edwards: I'm also thankful for the Reddit mobile app. You're never bored if you have access to Reddit.

Reuters

Antonio Villas-Boas, reporter: I’m thankful for the devices that turned my old house into a smart house. I have a smart security system so I don’t have to wonder if I locked up after I leave, a smart thermostat, and a video doorbell.

Antonio Villas-Boas, reporter: I'm thankful for the devices that turned my old house into a smart house. I have a smart security system so I don't have to wonder if I locked up after I leave, a smart thermostat, and a video doorbell.

A shot from Antonio’s video doorbell.Screenshot from Vivint app

Julie Bort, editor: I’m thankful for Google Maps. I’m one of those people without a sense of direction and from traveling internationally to finding a new restaurant in my town, I couldn’t do it without this app.

Julie Bort, editor: I'm thankful for Google Maps. I'm one of those people without a sense of direction and from traveling internationally to finding a new restaurant in my town, I couldn't do it without this app.

Justin Sullivan/Getty Images

Julie Bort: I’m also thankful for MyFitnessPal. It’s not a perfect app, but it has made calorie counting and exercise tracking so much easier. I’m now using it with my friends to stay motivated during the dark of winter, when all we want to do is sleep and eat sweets.

Julie Bort: I'm also thankful for MyFitnessPal. It's not a perfect app, but it has made calorie counting and exercise tracking so much easier. I'm now using it with my friends to stay motivated during the dark of winter, when all we want to do is sleep and eat sweets.

Business Insider’s Julie Bort is an avid cyclist. Here she is with Lance Armstrong.Julie Bort

Avery Hartmans, reporter: I’m thankful for the VSCO app, which lets me quickly and easily make sophisticated edits to photos on my phone.

Avery Hartmans, reporter: I'm thankful for the VSCO app, which lets me quickly and easily make sophisticated edits to photos on my phone.

App Store

Avery Hartmans: I’m also thankful for the integration of Google services like Maps, Gmail, Photos, and Calendar. I love being able to pull up directions to my next meeting by clicking the address in my calendar, or quickly back up all my pictures so I can access them anywhere.

Avery Hartmans: I'm also thankful for the integration of Google services like Maps, Gmail, Photos, and Calendar. I love being able to pull up directions to my next meeting by clicking the address in my calendar, or quickly back up all my pictures so I can access them anywhere.

Google

Matt Rosoff, executive editor: I’m thankful for the Eero wireless router, which is the first WiFi system that was as easy to set up as promised and has blanketed my house in fast, reliable WiFi. It’s the best tech purchase I’ve made in a long time.

Matt Rosoff, executive editor: I'm thankful for the Eero wireless router, which is the first WiFi system that was as easy to set up as promised and has blanketed my house in fast, reliable WiFi. It's the best tech purchase I've made in a long time.

Antonio Villas-Boas/Business Insider

Matt Rosoff: I’m thankful for Slack. It lets our tech reporting team collaborate, gossip, and even joke around, which is super important since we’re collaborating across the country. I love the freewheeling nature of our Slack chats.

Matt Rosoff: I'm thankful for Slack. It lets our tech reporting team collaborate, gossip, and even joke around, which is super important since we're collaborating across the country. I love the freewheeling nature of our Slack chats.

Slack

Steven Tweedie, deputy editor: I’m thankful for my Hue lighting system at home, which lets me customize the warmth and color of all my lights (I hate the sterile glow of most bulbs). I can also set things up so everything turns on when I walk in the door, and it also plugs into my iPhone’s widgets and Siri so I don’t have to worry about light switches. If you’re a fan of uplighting, go with the Hue Lightstrips (pictured below) instead of the traditional bulbs.

Steven Tweedie, deputy editor: I'm thankful for my Hue lighting system at home, which lets me customize the warmth and color of all my lights (I hate the sterile glow of most bulbs). I can also set things up so everything turns on when I walk in the door, and it also plugs into my iPhone's widgets and Siri so I don't have to worry about light switches. If you're a fan of uplighting, go with the Hue Lightstrips (pictured below) instead of the traditional bulbs.

Steven Tweedie

Alexei Oreskovic, deputy editor: LinkedIn! It makes our jobs as reporters so much easier when we need to find sources.

Alexei Oreskovic: I’m also thankful for the algorithm-based elevator at our WeWork office in San Francisco. It doesn’t let you push a button for your floor and forces you to wait for whichever elevator its mysterious brain deems to be in your interest.

Alexei Oreskovic: I'm also thankful for the algorithm-based elevator at our WeWork office in San Francisco. It doesn't let you push a button for your floor and forces you to wait for whichever elevator its mysterious brain deems to be in your interest.

Melia Robinson/Business Insider

Lori Janjigian, intern: I’m thankful for the Kindle app on my iPad and Amazon’s selection of ebooks. It makes my commute to work so much easier to have a whole book at my fingertips.

Lori Janjigian, intern: I'm thankful for the Kindle app on my iPad and Amazon's selection of ebooks. It makes my commute to work so much easier to have a whole book at my fingertips.

iTunes

Matt Weinberger, reporter: I’m thankful for Twitter. Despite its many, many flaws it’s still been a fabulous tool for discussion, learning, and different perspectives. Boy howdy, do they have a lot of work to do though.

Matt Weinberger, reporter: I'm thankful for Twitter. Despite its many, many flaws it's still been a fabulous tool for discussion, learning, and different perspectives. Boy howdy, do they have a lot of work to do though.

Thomson Reuters

Nathan McAlone, editor: I’m thankful for the travel app Hopper, which tells me the optimal economic time to book my flights so I can see my family across the country in California without going bankrupt.

Nathan McAlone, editor: I'm thankful for the travel app Hopper, which tells me the optimal economic time to book my flights so I can see my family across the country in California without going bankrupt.

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