Benner on Tech: Apple Is the Sun King

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
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People are Talking About…

Apple glows with a nearly holy light these days. The vibes coming out of Cupertino are so good that it seems like Abbey Road is playing on a constant loop down at headquarters while executives stand bathed in sunshine, holding puppies.

Weeks after the company’s blockbuster financial results basically saved earnings season for corporate America, a report shows that iPhone sales accounted for 93% of all smartphone profits last quarter. (Samsung managed to eke out some profits, but the rest of the field broke even or lost money.) A Canaccord analyst says that only 15 percent of Apple's installed-base of 404 million has upgraded, so there’s still lots of room for future sales.

Yes, things could blow up. The Apple watch could be a flop. The streaming music service could be a software disappointment. Apple Pay could not catch on (even though it just announced a partnership with Jet Blue).

But for now let's give Apple its victory lap. The company’s lock on smartphone margins proves that there’s no substitute for sleek hardware and a decent proprietary operating system. Right now there's no other tech company that's even close to nailing this formula.

** Cultural Studies Part I: Have Thiel's fellows fallen into shadow?

Remember the Thiel Fellowship, the much ballyhooed scholarship program that encouraged the brightest minds to skip the stultifying confines of college in order to thrive as entrepreneurs?

Its current claim to fame is a winking reference in the HBO series Silicon Valley. The spotlight dimmed in part because the Thiel program has yet to spawn a runaway startup hit.

The Chronicle of Higher Education dug into the fellowship and discovered so-so numbers: The program’s 83 fellows have raised a total of $72 million in funding and generated $29 million in revenue. Two fellows who sold their start-ups got a total of $17 million.

Unsurprisingly, the overachiever types who want into the fellowship are not-so-different from the overachiever types who want into Harvard and Stanford. (Some of these bright young things end up at university in the end anyway.) These aspirants always have colleges and jobs at huge tech companies as possible back-ups and the Thiel Fellowship offers another way for them to gild the application lily.

If Thiel-funded fellows are the best of the best, does that mean there might be more interesting ways to fund social experiments? Maybe tap kids who – thanks to their lack of wealth or upbringing or neighborhood – have no real hope of going to college anyway? Ask them to hang out in an idea lab and make valuable connections and maybe get jobs that they’d never get with their high school diplomas? The failure rate might be high, but success could be life changing. That’s more interesting to me than giving some kids who would probably already be successful the tools to be successful in a new way.

** Cultural Studies Part II: The San Francisco anti-tech movement has seemingly fizzled out, defeated by isolation, the industry’s wealth and techno-solutionism, according to the San Francisco Chronicle.

Ventureland

Palantir bought the startup retail data management platform Fancy That, TechCrunch reports.

Snapchat may yet prove that not all press is good press. A teenager was arrested after allegedly killing someone and Snapchatting a selfie with the corpse, reports New York Magazine.

Sidecar is expanding from rides on demand into to package delivery, and food delivery company Eat24 is part of the pilot program, GeekWire reports.

Voltage, a cybersecurity startup, was acquired by Hewlett-Packard, reports VentureBeat. (Attacks on companies like Anthem and Sony have got to be fueling interest in venture funding and M&A in the security space.)

The New York startup scene has been helpfully parsed by research firm Mattermark, which ranks the top 100 companies by growth, funding and so-called mindshare.

People and Personnel Moves

Mark Zuckerberg is doing battle with the real estate developer who agreed to sell property to the Facebook CEO in exchange for access to his gold-plated Rolodex, according to Bloomberg’s Joel Rosenblatt.

Sheryl Sandberg is doing battle with gender roles and glass ceilings. The Facebook COO tells Mashable’s JP Mangalindan her plan to get more women to code.

Companies

Facebook…

Lots of users don’t realize that when they use the social network they’re also using the Internet, according to Quartz.

Netflix…

The company is launching in Cuba even though Bloomberg’s Joshua Brustein points out that the country doesn’t have the infrastructure to support the service.

Qualcomm…

Chinese antitrust regulators fined the chipmaker $975 million after an investigation found that the company violated anti-monopoly laws. Bloomberg’s Ian King says that the probe hurt Qualcomm’s ability to collect licensing revenue in China.

Samsung…

Samsung Electronics now has a dedicated innovation team that focuses on virtual reality, robotics, drones, 3D printing and driverless cars, reports the Korea Times.

Twitter…

** Angel investor Jason Calacanis argues that Twitter’s getting into the content partnership game that’s currently dominated by video sites such as YouTube.

Media Files

Sony Pictures will work with Disney-owned Marvel Studios to revamp the Spider-Man franchise, according to the Hollywood Reporter. Amy Pascal will be a producer on the upcoming new movie, along with Marvel’s Kevin Feige.

News and Notes

Meet Memex, the search engine that DARPA created to mine the deep web and uncover illegal human trafficking operations that target women and girls, GigaOm reports.

France introduced legislation that lets government agencies block websites that support terrorism or contain images of child abuse, reports the Guardian.

The Senate is investigating whether the Obama administration cajoled the FCC into proposing new broadband rules, the Wall Street Journal reports.

To contact the author on this story:
Katie Benner at kbenner2@bloomberg.net

To contact the editor on this story:
Timothy L O'Brien at tobrien46@bloomberg.net