Acquired - HTC, Google and the Future of Mobile

0:00Well, this is nuts. It's like leaking out as we speak. Yeah, coming at you live. Welcome back to episode 45 of Acquired, the podcast about technology acquisitions and IPOs. I'm Ben Gilbert. I'm David Rosenthal. And we are your hosts. Today we are live covering the leaks as they come out. Well, Google is apparently about to acquire HTC or at least a part of HTC.

0:39and David and I are hitting refresh on our browsers while recording this on the evening of Wednesday, September 20th around 8 p.m. Pacific time. And even since we decided a few hours ago to shift course and dive into this episode instead of one that we will do next week that is less time sensitive, there's been new information. Yeah, we're...

1:05coming at you live here on acquired. So we decided that there's the way we want to structurally do this is we'll sort of state our assumptions about what we know because Dave and I were talking about it and we're pretty sure that we know the majority of the information that will be announced tomorrow. And so we'll sort of state what we know and then you know if we need to pop in and revise at the beginning of the episode or something which you will have already heard if you're listening to this, then we will. So everything everything that you'll hear is based off of some assumptions that will introduce. Yeah, there's like, there's some serious time travel going on in this episode because you guys will be listening to this in the future. Obviously, we're here in the evening Pacific time on September 20th. It's already morning in Asia. And so the official news is starting to come out over in Taiwan. And of course, the leaks were coming out.

2:01Yesterday in Taiwan, which is still today, here in Pacific time. The most obvious one that's not a leak, that's a public announcement, is that HTC will not be trading tomorrow because of a large announcement that is likely to significantly impact shareholders. All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired.

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4:22Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at logora.com slash acquired, and just tell them that Ben and David sent you. Now, David, before diving into these acquisition history and facts of HTC, Let's throw out for the audience what we know and what we believe now. Right. So tomorrow, September 21st, it's looking like it will be announced that Google is going to acquire

5:07a large portion of the engineering team at HTC. So they are not acquiring the whole company is the best information we have thus far, but they are paying just over a billion dollars to acquire about half of the employees and specifically the group of hardware employees.

5:28And I believe that's also along with the manufacturing plants and supply chain assets that worked on the Google Pixel phones that they released last fall that HTC made for them. So that is that is current state of play. They're acquiring about half of the people in the company, but the HTC has a company itself and all of its brands and its own operations are still remaining independent.

5:56Fascinating and other products, right? So the, you know, the virus. Yeah, not just the vibe of other products, but HTC's own non-Google smartphone efforts. So very confusing. They are going to continue to be a smartphone handset manufacturer on their own. But sort of the A team.

6:21that was working directly with Google on the Pixel phones and other devices is now coming over to be directly part of Google. Yeah, and we say the A-Team, you know, there can be furious debate about HTC and who's prioritizing what and who they put on which projects. But one thing that you cannot deny is it was very, very widely publicized and covered that, you know, the Google Pixel was the best Android phone ever made and set the new standard. And it's that team that worked on an amazing product. And obviously Google did lots and lots of the design there.

6:58but we are getting ahead of ourselves. So, David, tell us a little about HTC. Yeah, let's dive into history and facts and rewind the clock. And HTC is not, you know, it's a household name in the US, but only recently, however has been involved in many products over the years that our listeners will probably recognize.

7:26So the company was founded in 1997 in Taiwan, it's a Taiwanese company, and they began life, and for most of their initial life were just an OEM, so an original equipment manufacturer. They were essentially contract manufacturer for other tech companies. They didn't have their own brand, and then over time they built their own brand, but obviously just like the Google Pixel and other devices, they continued to build products for other brands. And when they first started in 1997, they right out of the gate worked on on laptop computers, but then pretty quickly transitioned to cell phones, and this was before, you know, smartphones as we know them today, but back then, smartphones and smart mobile devices were PDAs, personal digital assistants. So HTC, actually, this is a blast from the past, was the manufacturer. And I believe also involved in elements of the design for the HP and Compact I-PAC windows.

8:38You know, personal assistant, do you remember that one? And then also a pretty popular device, the Palm Trio 650, which I think I found remembering right was one of the first Palm, you know, slash handspring Trio devices that was also a cell phone. Huh.

8:58Huh, yeah, that's crazy. In thinking about this, you know, I always think about there are the few manufacturers that actually made their own stuff. And Palm always occupied that space in my head, you know, as did Nokia and, you know, apparently Palm didn't make all their own stuff. And I don't know, I'm not actually sure if, did they manufacture other products? Do you know?

9:23Yeah, I don't know and Palm itself that'll be an episode a fun episode someday It was you know a darling kind of startup tech company in in the Valley in the 90s and then ended up getting acquired by three calm, right? Is that right Palm which it's yeah, it wasn't Palm part of three calm at one point Well eventually they ended up going to HP And getting bought by HP after the party pre which was, that was a shame, like WebOS was an absolute pioneering product and the palm tree was a controversial, well-designed device and I think, you know, to absolutely languish at HP. But yeah, that's for another day. Let's definitely do an episode on that. Another day. Okay, okay, I just looked it up quickly. Yeah, palm was acquired by US Robotics Corp in 1995 and then US Robotics was acquired by three comms. So it was part of... Did it like spin out?

10:22Yeah, so then the founders left three comm because they were, you know, unhappy and started handspring and that's why handspring and palm. It was always that confusion. Anyway, back to the topic at hand. So HTC is in the middle of all of this. I mean, they are like the OG players in the smartphone game here.

10:49And even going back to the founding of the modern smartphone game, obviously they weren't involved with Apple and the iPhone, although they did own beats at one point in time, which we'll get into. We also covered this in our Android episode, episode 20, which is very relevant here. This should really be like the the Coda to that episode. But HTC was one of the founding members of the Open Handset Alliance, which if you might recall from that episode was Google's initial smartphone efforts that turned into Android. And so HTC, when it became Android, the artist that would become Android finally launched in 2008, the very first and only for a long time.

11:41quote-unquote Google phone was the HTC Dream, which in the US was the T-Mobile G1. And that was made by HTC. And that was the very first and again, only Android phone for quite a long time. Yeah. I mean, I were playing with prototype hardware of that in like 2007-ish. And I think that's right. And that was, that maybe it was just very early hardware. But that was like, It was hard to believe that that was the future. I mean, I know everyone was all excited about it. And it's in a lot of ways the same way now that people are showing off like an extremely crummy experience in IoT and being like, IoT is the future. And you're just like, yeah.

12:26Okay, yeah. I mean, I don't think I've ever actually used one in person. I've certainly seen them. But this thing, we'll try and link to it. Remember to link to it in the show notes, but so it had like a track ball on it, right? It had a track ball and then it also had a slide up physical keyboard. This was like, you know, the sort of unholy marriage of like a blackberry and iPhone and like, one of those super old school 80s trackball you know mouse mice for a computer well yeah i mean this was like when when android was still basically kind of an open source copy or perhaps inspired by BlackBerry before they spent the better part of a decade doing you know becoming that that of iOS and it was you know at that point in time like it seemed like that that BlackBerry physical keyboard you know have a little cursor on screen seemed like that was the form factor right like that if you're gonna that's what a smartphone looks like if you're gonna go make a smartphone

13:34Yep. Yep. And of course, there was danger and the sidekick at the time too that was also inspiring all this and I think back on the Android episode, we give a shout out to that that entourage episode where Turtle gets a get the sidekick and all this is like so dated now. Absolutely. Always fun.

14:01So HTC again, right in the middle of all this, the very first Google phone, very first Android phone. And then they really stay at the cutting edge for quite a while in the early sort of modern smartphone period. They built and launched one of, if not the first 4G phone that was available in the US, I think it was on sprint.

14:29I'm forgetting right now what it was called, but it was like, they marketed the hell out of this thing. I think it had probably like an hour and a half long battery life, but it was the first mobile phone and network in the US that you could really...

14:49using it felt like broadband. I mean, before that, there was 3G of course, but like, it was sort of not that much faster than the old dial-up days. So, they really were pioneers of a lot of firsts. They were. And, you know, still, you know, pilot.

15:09You could argue that the vibe is really valves innovation and in a lot of ways it is. And a lot of the control rests with valve. We can talk about that. Just like Android was Google and Andy and Android and Andy Rubin's innovation. Yeah. Yeah. But the factor remains like absolutely a pioneering device and HTC, you know, largely responsible. Yep. Yep.

15:33So that was kind of the the high point and I think that was right around Trying to remember like 2010-ish I think when when that phone came out and in 2010 2011 like HTC was really on the rise and people thought You know that they were gonna be a really credible competitor to Samsung and a dominant device maker in the smartphone era. Unfortunately, since 2011, at its high point, that has not happened over the last five to six years, and the stock is down 90% since then. So HTC now, well, as of yesterday, before they halted trading, had a market cap of just under $2 billion in US dollars, which is down significantly from where they were at that peak. I think they were around somewhere between $20 and $30 billion at their peak. Yeah. And I'll embarrass myself a little bit here. I was texting David earlier.

16:46And I looked up their market cap just on Google Finance and I was like, whoa, David, I mean, this is going to be a really splash day with $58 billion market cap. And then like a few hours later, as you're doing your research, you texted me back, you were like, uh, That market cap is in Taiwanese dollars and it's only it's only about 1.9 billion in US dollars. And like thinking about, you know, what what HTC was and in my head, they still occupied a brand. Yeah. A large brand. You're like, oh, yeah, HTC is a $60 billion company for sure. No, unfortunately for that. And AOL was a $150 billion company.

17:24Yeah. And again, you know, we like I mentioned this earlier a minute ago, and we talked about it back on the on the Android episode, but just like you can't make this stuff up. So in 2011, right at its peak, HTC acquired, I believe a 51% stake in Beats. So this was back when Beats was was just the headphones was Dr. Dre and Jimmy Iovine and and they were going to buy this brand and this great audio technology integrated into their design and manufacturing and supply chain expertise. And basically what happened was for about a year to 18 months.

18:12every HTC product across their whole line, which wasn't just smartphones, but mostly smartphones had beats branding plastered all over it. So you can still go on Amazon and eBay and get HTC beats Android phones. I mean, they're HTC. Yeah. Totally. So.

18:35You know, what did Steve Jobs take at the time? Well, I mean, if this co-branding stuff, like Apple is not immune from this. If you remember, the first, the original iPod had second version come out. It was HP. Oh, I'm sorry. So they had the motor rocker also, but there was an iPod that came out that was an iPod HP edition. And it had like an HT brand on the back above the Apple brand. It was the weirdest thing.

19:04Oh, yeah. Apple, you know, for all that they really, we're going to talk much more about Apple in this episode, but as we have always on this show, for all that they really are so often at the top of their game, sometimes they just do things that you look back on them and you're like, what were you thinking?

19:27So HTC in 2013, divested their stake in Beats, sold it back to the company. I believe I want to say Carlisle came in and did a big private equity infusion into Beats and they bought back the stake. And then of course it was...

19:44just about a year, year and a half later, I think that Apple acquired the company. So that was, that's our sidebar. HTC, of course, also, as we've talked about in 2016, in partnership with Valve, created the Vive, which still I think is probably arguably the best virtual reality experience out there, better than, better than Oculus still, I believe. I think so.

20:13Certainly fanboys will argue that you can argue in the comments or in the slack, but Again, really, you know, they It's really interesting the approach that HTC has taken to innovation they've sort of been at the forefront of every tech wave that's come over the last 15 years 15 to 20 years really But they don't do it themselves. They always do it in partnership with with other companies Yeah, and they can't seem to strategically position themselves to hold onto the most valuable asset as it grows. Over and over and over failing as a company to do that. All right, listeners. Now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year on audit or a static PDF, then everyone would not and you're done.

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22:43Let's bring Google into the story here and we'll pick back up again right around 2011 when HTC is sort of at its height and Google at that point Samsung was really Google sort of had a problem that Samsung had taken Android. They were by far the most successful powerful OEM out there and they did that basically by taking Android.

23:10as an operating system but then in every other aspect from hardware design and all the skins and modifications that they made to the Android operating system and software they just copied the iPhone and so Samsung phones were if either you didn't you were on a carrier that didn't have the iPhone which was still a thing at that time or for whatever reason you weren't part of the Apple ecosystem but you wanted something that felt like an iPhone you went with Samsung And Google of course was threatened by this for many reasons. They decided to acquire Motorola. Now this was for two reasons. The primary reason and what they said at the time and in retrospect probably continued to justify was for patent reasons. There was a lot of litigation happening in the smartphone world.

23:59And in particular, in the smartphone operating system world at this point, and Android of course was open source. So they needed patent protection. Motorola had a large patent portfolio. But they did actually acquire all of their smartphone manufacturing business as well. And they spent a lot of money for it. They operated Motorola for about two and a half years.

24:28the released, you know, a number of devices, smartphones, kind of at all ranges from low end to high end, weren't particularly successful. And then they sold it to the Chinese company Lenovo in 2014 for about $3 billion. So they paid $12.5 billion for it. They kept the patents. They also sold another piece of Motorola's business, which makes the cable boxes for your house, so for a comcast or a time-water or whatever. They sold that off for, I believe about $2.5 billion right after they did the transaction. So let's say they paid $10 billion net for Motorola.

25:07and then two and a half years later, they sell it for $3 billion under $3 billion. So not a good, not an auspicious beginning to Google's efforts in the smartphone business. No. No. So I mean, if you're a shareholder right now, like you need a little bit of an explanation. Like, I mean, I mean, today, like if you at first glance just here, and I know that details are a little bit different than this, but like Google's buying HTC, or Google's buying the arm that manufactures the phones of HTC, or even, you know, whatever it is, like, Okay, like we tried this once, so how is it going to be different this time? Yep. Well, and we'll see how it's different. Ben and I will speculate on how it's different, but there's one thing that is the same history repeating itself, and that's that there was an executive within Google Motorola named Rick Osterlo.

26:02And he ended up by the end of Google's ownership, stewardship, if you will, of Motorola, becoming the head of that unit. And then when they sold it to Lenovo, he continued running that unit under Lenovo. Last year in 2016, he left and came back to Google. And so he is now running Google's quote-unquote hardware business, reporting to Sundar.

26:29And so he, that division is responsible for everything that they launched last year, the Google Home, the Google Pixel, which we've referenced and we'll talk more about. The Daydream, their VR headset adapter for smartphones, all of that. So it's really, they are in many ways with the same people executing the Playbook all over again. Yeah.

26:58But, you know, we'll get to this, but times are different now. And I want to pause real quick. So times are, well, a few things. Times are different now. The mechanics of this deal are completely different. And on top of it.

27:13It's probably worth talking about the patent portfolio Motorola had. There's a lot of speculation and you can read plenty of think pieces about this, about the real value of that acquisition being the IP, and Google retained a lot of that IP, I believe, when they sold Motorola off, and so then it's highly protective for Android. There's more to this than meets the eye.

27:41And, you know, it's just worth calling out how big of a player or how big of a deal IP was as part of that Motorola transaction. It absolutely was, but what's super interesting is like, again, that was the story and then when they sold Motorola, that was the real emphasis that they said on the story, hey, this was really an IP thing and we dabbled in hardware. We decided it didn't make sense. I'm sure in tech themes, we will get into the vertical versus horizontal approach to a company, didn't make sense as a horizontal provider of Android to also be a vertical provider and compete with our partners. But now they're doing the same thing all over again. Yeah. Yeah. And it's worth pausing here for a second. So listeners, I think this came out right before we started recording. Google has confirmed the news. Google signs agreement with HTC continuing our big bet on hardware. And

28:40written by none other than Rick Osterlow, who David just mentioned, and the key sentence in this blog post is, let's see here, with this agreement, a team of HTC talent will join Google as a part of the hardware organization. These fellow Googlers are amazing folks we've already been working with closely on the Pixel smartphone line, and we're excited to see what we can do together as one team. The deal also includes a non-exclusive license for HTC intellectual property.

29:10And they're calling this an agreement. So it's not no one saying acquisition, no one saying purchases, it's an agreement. And of course, it's 4.1 billion dollars of cash that goes over to HTC. But okay, so we have definitive news that it's basically exactly as all the speculation was about that, specifically that hardware engineering team.

29:35And the other interesting thing here is they have a non-exclusive license to HTC's IP. So does that mean like all of HTC's patents are available for Google right now? And obviously HTC can do other things with them and license them as well, but that's kind of interesting too. I mean that definitely bolsters the value of the deal. Yeah, and it's interesting. I mean, like we were talking about earlier, how much of the innovation that was happening in these products, you know, even going back to the G1 and the HTC Dream, the first Android phone, like how much that IP was HTC's, how much was Google's, impossible to know right now. I'll be curious if this comes out in the filings when they happen. Yeah, yeah, me too. And I think, I can't.

30:27You know, I'll say this now. I'll probably talk about it later. Google, you can definitely sense the, we've been burned once and now we're going to be very methodical about this approach here. Like it's a smaller price tag, 1.1 billion. It's just the headroom team. Yeah. And I mean, if you look at it, it's really only exactly what they needed and they spent you know, years first engaging with this team, doing a try before you buy. I mean, this is a highly calculated, highly risk mitigated transaction by Google. Yep. And yet at the same time, well, we'll get here and tech themes, but they're still again, deciding to be both a horizontal and a vertical.

31:17player in this space. So, David, just plug your ears and la la la la la. Yeah, right, right, right. All right, let's go there. Okay. Acquisition category. Yeah. Yeah. Well, go ahead. It's quite literally a people, like a talent acquisition. I mean, it's a team. Well, let's not call it an acquisition, Ben. It's an agreement. It's an agreement. Yeah. An agreement to make 2000 of HTC's 4,000 people.

31:47Google employees yes, I'm actually quite curious how the mechanics of this work like I hope there's kind of filings about this and David you might actually have a good insight but like Do those people all go into a sub entity temporarily along with the license to the IP and then Google buys that sub entity for 1.1 billion or can they actually just give a bunch of cash and then say, all right, you know, these employees all work for us now. Well, I mean, I got to assume that most if not all of that cash is going to HTC because HTC had had huge losses as we've talked about for the last few years and, you know, their market cap before today was less than

32:41less than twice that $1.1 billion figure. So that amount of cash is in the bank is going to be was desperately needed by the HTC folks. Yeah, totally. And this is actually the great segue. So instead of what would have happened otherwise this time, we're going to do what will happen now that hasn't happened before or what will what will happen in the future that isn't happening now because of this transaction and We'll talk a lot about the Google side, but it's an interesting thing on the HTC side, like they've had mounting losses. This gives them at $1.1 billion of a capital infusion to do something with their business. They're still making handsets. They're the hardware partner for manufacturing the Vive. Like if you're HTC and you're trying to sort of like steer the ship and trim down and I mean, I guess maybe you look at it like, well, whatever revenues we were making from Google,

33:39isn't going to be the long-term strategy so let's just jettison this team get all the cash flows from that up front now and do something else with it but what is that something else yeah what is that I mean that is the 64 thousand dollar question here right like or a lot more a lot more money than that given their history of as we've talked about thus far on this episode how they operate the type of innovation they do. I mean, they really are like, they are at their best when they're a contract shop. And again, that's what they were doing with Google and the Pixel, and that worked well, right? Like Google ended up buying that whole team. You know, they, they did that for a long time. And then they tried to build a brand on their own on top of that.

34:33They had some success, but it wasn't sustainable. I'm part of that, I think, was probably because they were still writing on Google's platform. I think it's very hard as an Android manufacturer to build a real brand. Even Samsung is very vulnerable, as we've seen in the last couple of years. But so now, what are they going to do? Did they go back to Square one and say, you know, there really is an opportunity be it in smartphones or other emerging devices and categories to be a great contract manufacturer. Do they use the resources to go back and do that and build up that team again? Do they create their own real IP? I don't know. It'll be very interesting to see what happens. So maybe this is one place where I'm a little out of my element, but if you're a contract manufacturer,

35:25how much different is that than being Foxconn, or is that the same thing as being Foxconn? Like could HTC pivot purely into a B2B company, shed their brand and just start making, doing manufacturing to spec? And when you think about it, is that effectively what the team was doing, that was doing the pixel manufacturing, or was it actually like, engineers there on the HTC side doing design work. I don't know, I'm not totally clear on how much different the HTC contract sort of manufacturing was than what Foxconn does for Apple. Yeah, I don't know the delineation either. But certainly Foxconn has built a very, very large business on just that strategy of we are a B2B company. Yeah.

36:24And what I was going to suggest is maybe go for it. I was going to say in other adjacent industries, in particular the semiconductor industry, this is also a very sound strategy. If you're TSMC, which is Taiwan's semiconductor company, it's interesting that these businesses, of course, tend to be...

36:48particularly thrive in Taiwan and in Hong Kong where Foxconn is because of the proximity to China and the ability to do business there. You can build a great business and being a foundry for semiconductors where you don't do the design. There are lots of fabulous semiconductor companies that are either independent companies doing their design or folks like Apple, which again we'll get into later in this show.

37:16It can be a very sound strategy. Yeah. And I was going to work myself into a corner a little and say, well, maybe what HTC should do is start shedding their consumer brands and really just be this contract manufacturing shop. But if they do that, then companies like Google will come along and just buy them so they don't have to contract them. But clearly, that's a model that works. Apple hasn't tried to buy Foxconn or bring any of that in-house. The fabulous semiconductor companies. I mean, granted, maybe if they took a huge hunk of capital, then it would actually make sense to fab them themselves. But sort of being a horizontal manufacturer seems to work, an HTC could sort of move into that. Yeah, and I wonder if I think the key is we just don't.

38:04No enough right now and haven't been able to do the research in a few hours since this announcement happened or since the rumors swirled To know for for HTC like where where did they play in that value chain? Like it was it was the quite this is the question you asked like how much were they the conscious just the manufacturer? How much were they involved in the design? How did that change over time and?

38:29And it's interesting that like sort of counterintuitively I think in the world we're in right now in tech when you're competing against Apple in really every category but also companies like Samsung and increasingly Google themselves design is really not valued. It's sort of, you know, back to Ben Thompson smiling curve. You know, either you're at one end of the spectrum where you're just the contract manufacturer, you are the semiconductor foundry, or you are, you know, really controlling the user experience, like Apple does and like Google is clearly trying to do now with Android and with this acquisition. But if you're in the middle there, like that's a bad place to be.

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40:59So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely at scale, go check out servicenow.com slash acquired and tell them that Ben and David sent you. Well, switching over to the Google side, what does this allow Google to do that they're not currently doing? So there's a couple that, let's presume they were just going to go forward with the pixel line no matter what and really start doubling down on that and then tech themes we can talk about why.

41:28So this presumably makes it so the teams can work more efficiently together Being under one roof, so you don't have sort of that weird contractor arms length thing that has to happen not to mention sort of If you're an engineer over there who's collaborating with Google you sort of have two bosses your your the business interests of of HTC and then shipping the best product you can with Google So that gets eliminated a little bit for Google, you know, they're they can there's those inefficiencies where they can move faster But what is it by them? Yeah, I'm sure I'm sure they had some kind of agreement where they had access to HTC's IP before and they were going to keep working with this team anyway And they were basically just going to defer the payments to some kind of like, you know contract that that was that paid HTC over time like what else do you think this buys Google?

42:25Well, I think one thing, if I'm trying to imagine myself in Google executive shoes and in Rick Hustler's shoes, I think it's a little easy from the outside looking into dismiss supply chain as like, oh yeah, Fox Con, I'll take care of that or whatever, but I think this buys them a meaningful amount of supply chain expertise and assets. I mean, I think about I think about Apple and how much they have invested, you know, both monetarily, you know, billions and billions and billions of dollars, but also human capital-wise and expertise and know-how in their supply chains. And part of that is internally at Apple and their people, but part of it also is their relationships with Foxconn and other manufacturers.

43:17Right like this is Tim Cook right like Tim Cook is the CEO of Apple and this was his job like this is so important in Apple and has been for the last you know decade plus that that's why Tim Cook is the CEO you know not Johnny I've And that's the DNA that the Google really had zero of you know They maybe thought they were getting it with Motorola, but Motorola was headquartered in Chicago. You can't make iPhones or Pixel phones in Chicago for a lot of reasons. But you can in Taiwan and China. Great, great point. I remember even when a few years before Tim transitioned into the CEO, people sort of realizing that

44:03One of Apple's major competitive advantages is, and this is before they were making our own silicon too, they had bought up like a year or two of the entire world's supply of many of the components in iPhones because they knew they could justify the demand for it. And so no one else could get that generation of whatever the thing was, even processors to some extent for like many months after Apple shipped something. It's a huge competitive advantage.

44:33Yeah, I mean, I'm thinking about was it right after the Apple event last week where they announced the iPhone 10 not X The iPhone 10. Wait, will there ever be an iPhone 9? I mean that is the question, right? Like I don't understand like let me take a quick aside here. So I think Apple blew it Like to me it's it's like you should have this iPhone X or whatever iPhone it's an iPhone 10 but like have it be this thing that's like not part of your numerical line That's like a sidestep to a new thing so when you want to start building your generations like how when Adobe decided that they were gonna go from like Photoshop 7 to Photoshop CS and now you're in like this creative sweet world like they the opportunity to sidestep and start a new thing now and like they didn't But they have did right because it's like an X not a 10 so

45:20Okay. So it's totally weird because with iPad, they to my mind, like they did what made sense with the iPad, they went just got ditched the numbers and were like, there's iPad, there's iPad pro. You know, why isn't there just like iPhone, iPhone pro? And if it's going to be a 10 and it's going to continue, just do a 10. Like it's real. Yeah.

45:39So confusing and here's the funniest thing is I was listening to everyone should go listen to dairy fireball if you're like an apple and I'm sorry the talk show Yeah, okay, so this is what I was gonna reference so we'll bring it back to topic in a minute, but go ahead. So John bumps into Phil Schiller at you know after the event because they get these press briefings and stuff and Phil the first thing Phil Phil looks at him and he just says hi John we spent a lot of time on the name Sorry about that. Sorry about the 10 thing, which is crazy. The sorry about the 10 thing was crazy because like Gruber wrote this piece like two hours before Phil Schiller stepped on stage to announce it. So like he knew he had read Gruber's piece or been alerted to it and Gruber called that it was going to be an iPhone X and of course it was an iPhone X, which you know he ate some crow on but like.

46:27I don't understand why. I believe you that everyone spent a bunch of time on this. I just killed another rationale because it doesn't make sense to me. It does not make sense. Why would you release an eight and a 10 at the same point? Anyway, we've gotten way off topic. But Groover also, of course, had Craig Federigi on a special episode of the talk show. If I'm remembering this right, Craig was saying, you know, John was asking about Face ID and like everything that went into creating that. And I remember Craig saying in response, like, oh, you know, it was, it was of course the engineering team and hardware team and software team working together. But it was more than that. It's more than that. Apple was the security team working with them. And I remember him saying it was also the ops team and our supply chain was a big part of that. Like you can't make

47:20The iPhone and you can't have all the stuff that Apple can do with the iPhone by integrating everything That leads to features like like face ID You did ops and supply chain is a critical part of that yeah Totally true and man after after seeing that episode I'm sorry after seeing that that Apple Keynote like to think that's such a great lens to think about doing this episode because the amount of things that were launched that only work as well as they do because of the integration of like not only hardware software in the way that we used to think of it like cool you like assemble all your own components into a PC and you own the and you build the hardware I'm sorry and you build the operating system like the notion that they

48:11control to the finest grain all of the power management and core switching in the CPU and how that works with the secure enclave to the security stuff and how like they can do the swipe up from the bottom of the iPhone while the face ID thing is still reading your face and then get the signal at the last second to unlock the like all the timing and all the user experience stuff it's really starting to become so much more than just being the component integrator and the software maker. It's really like the component make that you have to create the components in order to get some of these really incredible sort of micro optimizations that in aggregate create a whole new class of product as possible today. Yep. And that is, you know, supply chain is critical to that. And, you know, before, before this partnership that

49:08agreement that Google just reached with HTC. They were really hugely behind. I mean, they're still hugely behind on that, on that dimension. But I think it, you're absolutely right. And I think as, as the, Smart phone slash whatever the smartphone evolves into be it you know AR glasses or or wearables and watches I think it'll be probably all of these things as that technology platform matures the table stakes for that level of Supply chain and ops integration to be able to do these things just gets higher and higher and higher You know, and I think like the Apple keynote again is the perfect lens to see that through where

49:54Of course, there was face ID and all the things happening there between the sensors and the software and security working together. And then, of course, apps to have all of that sourced and available in, you know, hundreds of millions of units. But also in the processor, again, through, you know.

50:15throwing back to our P.A.S.M.I. and an authentic episode. That was not one of our more popular episodes, but I think it's a really critical one to also understanding this. The A11 chip, you know, bionic quote-unquote.

50:30It's crazy. I mean, Apple's new. I don't know what's going on with the people who name stuff at Apple right now. Like keep it simple. It's like you can readably throw biotic on something. They threw bionic on something else, too. There was like some some part of I forget if there was something else later in the keynote that was also arbitrarily bionic.

50:50I think you had to do a face ID. Error is part of the iPhone 10 announcement. I'm like, what is biotic and what is not? What is biotic? Seriously, seriously. But like that chip is a beast, right? Like it is like it's benchmarking at the same...

51:05Level or higher as Macbook chips that are in MacBook pros not like old MacBook pros like MacBook pros that you go and you spend two thousand dollars in an Apple store today for yeah, and and that's in a phone on your pocket that is not connected to power that's running on a battery like That is what when you make these types of investments and that's controlling the whole stack from the chip design, you know through the p.a. semi acquisition You know All the way down through the supply chain and the software coupled with that like that enables you to do this kind of stuff And so I got to imagine like your Google and your your your your Sundar and and looking at this and you're like, okay, we've got the software like Google is our core competency is software That's what we do is like Android has gotten great and great and great services. Yep. Yep We're your software and services, but like hardware supply chain

52:03like we have none of that. And I think as the world moves more towards all of these things that really are about making the devices themselves to disappear into the background. If you don't have that expertise, you're just going to lose. Yeah, the best way I can summarize this is, of course, as with many other episodes, what we're talking about is one of Apple's competitors. We drift into talking about Apple and then just like, Laughing about how far ahead they are but it really is like Like apples playing a very different game than everybody else And so you know in making their own silicon and having done this for years now And controlling the operations and supply chain in this way that no one else is doing because because nobody else is Yeah, that's what's really interesting about it though the people say apple makes their own silicon that that's not true

52:58they designed their own. That's right. TSMC and then they control all of the supply chain, but TSMC and Samsung and others, you know, they're the ones who actually fab the silicon. That's a great point. That's a really great point. And so then at what point did you have to go deeper and integrate that? I mean, is that the next step? Like, is there some optimization that happens between design and manufacturing where it's beneficial to actually start owning the manufacturing?

53:25Yeah, well, it's interesting. I don't know. I mean, they haven't, you know, with Foxconn, they haven't with TSMC and Samsung on the foundries. I wonder if it's just like, you know, those services are pure commodities. They're very, very capital intensive commodities. Apple certainly could make those investments if they wanted to. But there's not a lot of differentiation within them. Yeah. Yeah, that's a great point.

53:55Okay, so it would be good. It would be, you know, we'd be kidding ourselves to say we're not already in tech themes, but it is interesting to think about like, you know, the features that are now expected in phones, an AR kit is a really great example of, you know, new stuff that's going to be available on iOS 11 that takes advantage of AR kit, especially on all the new Apple hardware that's kind of purpose built for AR kit. It's all of these new phone experiences.

54:23require a new level of design and integration with the hardware that really wasn't necessary before and so the way that I am viewing this acquisition is like acquisition agreement is Google is still a horizontal company and they need to you know they make money 80 plus percent of their money from or maybe it's even 90 plus percent of the money from ads and specifically from search ads and so you know that going back to our Android episode the reason that create they create Android is to reduce the amount of licensing fees that they need to pay iOS or need to pay Apple to make Google the default search in iOS like that's as when it really comes down to it, you know I think what did we determine that number was like a billion dollars a year that it saves them a billion dollars a year a billion dollars a year a billion dollars a year that they're paying to Apple That's right. That's right Well, but it's interesting and when they started Android that was the strategy, but you know

55:29You replace Apple with Microsoft. They thought Microsoft was going to dominate mobile operating systems like they did on desktop. They didn't want to be beholden. It turned out they were right strategically, but they just had the wrong competitor. Yeah, interesting. Yeah. So, yeah, so for listeners who didn't listen the Android episode, you know, the core play with Android is.

55:51own the front door to the user so control the browser that they're on control the operating system that they're on so that they don't have to pay pay basically affiliate fees for every search that's conducted and every ad that's clicked on Google to the the browser creator and so when you start putting that lens on then you then you start have to think like okay so Google needs to sort of be Switzerland because they need to be ubiquitous and have everybody use them But if this Android strategy is to make sure that for some significant number of people, they're controlling the whole experience. Android has to be incredibly...

56:32on par with iOS. And if the table stakes have now risen to the level where you need to do like ridiculous hardware integration and potentially even like manufacture your own stuff to enable the types of features that people expect from their phone experiences now, or will expect in a few years when some of the stuff, you know, Face ID, AR Kit, a lot of the performance and Power management stuff like when that becomes completely commodity like Google's gonna be hosed on this whole Android strategy if they You know they don't have that and so this thing that they've been doing forever of like hey guys like we're not gonna you can all Samsung you can make money on Android phones by making them and we'll just produce the operating system like that Could be falling apart because that's no longer competitive with Apple

57:25in this new world could be falling apart and could be falling apart quickly and it's interesting also to think about you know go back to our our episode on the snap IPO and the narratives around snap and it's I think it's still too early to make a call on on them as a company but but what we decided was their fate is gonna lie with do they you know, can they essentially paddle over to this wave that is what we're talking about, call it AR, call it wearable? You know, whatever it is, but it's essentially devices receding into the background and technology just being part of your ambient life. You know, what is Snap Invest again? What are they doing? Like spectacles, you know? What room is there for Google and Android in that world? Not a lot. Basically,

58:18in a spectacle's world, whether it's spectacles that win or don't win or whatever. There is no room for Google anymore. Both either at a hardware level or a platform level or at an advertising level. Yeah. I look at that differently. Like for Google's core businesses, making money off of people who are looking for information. And I just don't think Snapchat. I mean, Snapchat is more...

58:49I don't think it's Apple's enough. I mean, I agree with you where it's clear that Snapchat is making an investment and trying to become a little bit more of a hardware company. And now Google's following in suit. Oh, yeah. I didn't necessarily mean that as like Snapchat itself is going to dethrone Google, but like think about this, right? Like take the iPhone event last week or the Apple event last week. You've got the iPhone 10, which Clearly, whether it's this year or next year or two years, they are laying the groundwork for an AR slash ambient future that the iPhone is part of or a hub of. You've got the Apple Watch Series 3, which I'm super excited about, by the way, which is like there is no phone. There is no phone.

59:47Device really it's a thing that sits on your wrist and like all the computing is just around you You know then you've got you've got snap and where you've got spectacles and not to mention the snapchat experience then you've got Facebook And you've got everything they're doing with Oculus and then and the core Facebook platform itself like you can start to see a world where like all of those devices and services all work together really nicely And like where's Google in that world?

1:00:17Yeah, I see we are going there. This actually, this deltale is nicely with, I don't know if I've talked about this on the show before, but I think, so Google is in many ways their own existential threat. And I think, so follow my logic on this for a minute. So Google, their core competency as a business is making money off of showing you a list of things and then charging somebody to be in that list.

1:00:47And their core competency from an engineering perspective is you know recently machine learning but you know dating back to their beginning sort of distributed computing distributed storage All these things are sort of stepping stones to the to becoming like the best company at machine learning and There that that leads in many ways to them being the best company in this voice world where The Google Home and Google Assistant is a really, really pioneering, fantastic voice service, relatively as others. And so Google's engineering, the things that they make them good in engineering are pushing them toward a future where they don't really show you a list of things anymore because voices, when it's an output, is not a really good way to ever list off stuff. It's a good way to like

1:01:41Just do one thing so you tell to do a thing and it does a thing and like imagine if you're no longer searching getting a bunch of blue links and getting one blue link that's paid for and it's more like You just yell something at it and then it gives you the answer and like where where do they start charging for things in that world like do they start blending? Paid an organic results where sometimes you're getting a sponsored one or do they?

1:02:07start shifting their business model where they're realizing that well actually, you know, we're about to be best in class at this new form of hardware and new form of experience that people want. Maybe we just double down on that and actually own the full, you know, user experience at the hardware level. Yeah. All right, listeners. Now is a great time to talk about one of our.

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1:03:25Maybe we should officially move into tech themes here and and this is this is where right like I think Google's in a challenging spot because they're sort of being forced to compete on this playing field that we've been describing for the last you know 40 minutes here But 40 45 minutes But they are fundamentally a horizontal company and the playing field we just described as a Vertical vertically integrated playing field I guess I guess what I'm saying is I think the horizontal company may be at risk And that business may not be something they can keep riding for the next decade and They made they mean that It's hard to say this yet because they're so dominant, but like you could imagine a world in a few years where like search revenues start declining

1:04:24Because they're getting the best user experience that wins and searches providing you one answer and like they need to do something dramatic, and this really sets them up to try and shift to a vertical company. Yep, yep. But again, they're really far behind. I mean, they have to do it. Like this is for all the money and resources Google has and all of the threats that we've been talking about. And again, we're probably being dramatic.

1:04:52Given where we stand here in September 2017 But you know like if there's one constant in the tech world it's that it changes and it changes fast I mean even as we've been talking through this episode and the timelines Thinking back on some of these devices like it was not that long ago, you know like 2011 though six years ago HTC was on top of the world and like coming out with the first true broadband, you know, smartphone. That feels like ancient history now. So anyway. Yeah. I mean, I guess I guess the interesting thing is like how fast will we get to a post search world? And is there anybody who can beat Google to that punch? Yep. And if so, then they got to verticalize quickly and try and beat whoever that is.

1:05:44I don't know. I mean, the counter argument to that is search is an incredibly hard problem. They have so many years of doing it. They have so much data. They've built all these incredibly, you know, really well-oiled systems that give them, you know, many, many, many year history against anybody. But search is also... Yeah, that's true, but I think it's also getting attacked on all sides, right? It's getting chipped away.

1:06:10bit by bit vertical by vertical as well. We, you know, in there are booking episode, right? Like booking.com. Try to remember, what was the figure that we talked about that they spend, is it three, three and a half billion a year in ad words? Like an insane amount, right? But then Airbnb spends like, I'm sure they spend a little bit of money in ad words, but like, Uh, a tenth of that at most, you know, at most because they've actually established that they are the place to go because when you're looking for a place to stay, you go to Airbnb.com, you don't go to Google.com. Right. Um, or you go to Airbnb's, you know, experience, whether that's Airbnb.com or their app or whatever, or, you know, you're looking for, uh, transportation, you don't go to Google and search for, you know, a, uh, a car rental in, in whatever city you're visiting, you just go there and you open your Uber app.

1:07:03Yep. And that's happening. Will and Will more Zillow's get started, right? Where like that was Google's business to lose. They should have just had an amazing search for home's thing. And they could have integrated it nicely with like Google Maps or Google Earth. And then the ads next to that could have been for real estate agents, but they didn't. And then the whole rise of Zillow. So like what other companies will get started? Well, at the same time, like where, you know, where is Google's biggest bread and butter? It's like, you know, it's.

1:07:31buying stuff, right? And like, you know, you search on Google for something and there's something you want to buy and you buy that, right? But now there's Amazon. I mean, there's been Amazon for a long time. But like, there's, there's those, I don't know what any of the figures are, but I've seen crazy graphs where it's like the shift of people starting their search on Amazon, instead of starting their search on Google for products. That's very real. Yeah. Yeah. I think it's super real.

1:07:58The question is and this gets back to the culture question is can you actually change the DNA of a company and shift it to a vertical products focus company? And they need to be good at so many things because like just being good like Apple needs to get better at services right because what you actually need to be good at now and in this if we're postulating that Google needs to be sort of in a vertical good good in a vertical sense It's it's good at all the things right it's like all the way down to Silicon and hardware manufacturing and design and software and services like all the things that they're good at now also. Yep. Well, I'll tell you, I mean, this is just purely based on surface level reading into what's going on here. But I think if I, if I

1:08:48saw this and I felt that these threats were real. What I wouldn't do is go in one fell sleep swoop by 2000 engineers who I sort of know but don't really know and didn't hire and aren't part of my culture and go graft them onto my company right? I would go find a Tim Cook and give him 10 years to build this.

1:09:12capability. We don't have time for that. We don't have time. The world's on fire. It's about. It is. It is, right? But like culture, it's a thing. Yeah. Yeah. Okay. This is kind of an interesting. Before we go into grading, even though you're hinting at it, has any company ever successfully done this? Is there like a high profile example of someone that shifted from from being horizontal to being vertical in a big way, like a bet the company way. I mean, you get like that your best transitions and your best save the company things ever tend to be like knowing that one market is drying up and entering another market. Like when you have Intel leaving memory and going into CPUs or you have Apple betting with the big with the iPhone, but does anyone actually Disney's sort of doing it or Disney's about to sort of be doing it?

1:10:10Right like the this announcement of a Disney only streaming service and starting to pull their content off Netflix like they're saying or we need to be the best content creators and we need to be the best user experience for viewing it It's gonna be hard. Yeah, maybe IBM So IBM made and sold Devices and products and then they shifted to purely services But is that really vertical in a horizontal in the same way? I think people usually go the other way right like they get it's like To me IBM made like a you know, they they were a vertical company that made and sold these main frame and they made and sold PCs and now they're like horizontally selling consulting services to anybody that you know cares to hear about Watson well like

1:10:58Yeah, I mean as you know, right like we all know, but you you lived it right like Microsoft tried to go from horizontal to vertical and then was like, oh, you know, fortunately kind of in time realized and went back hardcore to horizontal, which was totally the right move. Yeah. Yeah, that's interesting. Listeners, if you've got ideas acquired.fm, we'd love to talk to you in the Slack.

1:11:24because I think that's an interesting topic and I think it actually could be a whole new podcast that someone should start is like companies that manage to make that shift and like individual case studies on on how that happened yep well man all this discussion and I haven't normally I like form a little bit of a thesis on what to grade and I'm uh I don't have one. So if you want to start, I'll probably just... I mean, I was hitting it this earlier. When we started recording this episode, I didn't have a grade in mind going through it, but going into it. But through the discussion, I don't think this is going to work out well for Google. Again, we're being dramatic on this episode, but this particular... This is their second bite at the Apple.

1:12:17And so what they chose to do was to buy 2000 engineers. Does the nest count in Taiwan? Can we close the third right at the apple? Well, yeah, maybe. Literally bite at the apple here. I mean, that's what's going on. But yeah, I don't think this is going to work, right? Like buying 2000 engineers from HTC.

1:12:39halfway around the world that aren't part of your culture, even though you've been working together with them on the Pixel for a year, you know, whatever, but that's better than nothing. But having that go up against like the Apple, you know, what they've built in everything we've been talking about on this show for the last, what really the whole life of the company, the last 40 years, I don't think that's going to work. Well, wait, let me, let me play Devils advocate real quick here. So.

1:13:06The pixel product is going quite well. I mean, I don't know, the unit sold, but it's a great product that's getting lots of love. Do you think, yeah, okay, how many pixels have you seen in the wild? Yeah, I don't, I don't actually know, and figures seem hazy. It's in the low single digit millions, I believe, of number that they sold. But my question is, do you think it could get any worse? Like, do you think this team in house, like, it could get worse?

1:13:37Well, I mean, presumably if they just kept doing the same thing, each of these prizes would get better. More people would start to buy this phone over time and it has to do at least that by bringing them in house, right? Well, but at the end of the day, it's a culture problem, right? Like this is, you've talked about it on the show before. Like this, when you were in Microsoft, right? Like, and Microsoft was trying to be a go to being a vertical company and you were like, but we should just ship.

1:14:06office for iPad because that's what we do. That's the problem that Google is going to face here. They're bringing in these 2000 people who are... Is it 2000? Yeah, 2000 people. Wow. Who are hardware and supply chain and device people and they're coming into a Google culture where...

1:14:32The crown jewel of Google's mobile strategy is Android. And Android is predicated on being horizontal. And so eventually there's going to be a fight of are we going to prioritize our new hardware and vertically integrated team? And then what are the people running Android who probably have a lot more juice within the company going to say about that? You should say you're great. So I can then disagree.

1:15:02Okay, I'm going with a D. Oh, wow. All right. Well, I don't know what I'm going with yet, but I'm going to start talking and see where I land. The counterpoint I want to make to that is, I think they're deciding. I think if you're an Android OEM right now, you better figure out what your strategy is because I don't think it's putting Android on your phones anymore. To me, I don't think they are...

1:15:29conflicted internally anymore like I think they've decided and I think so they're willing to go to war with Samson. That's that's what I'm looking at here. I mean I think they're bet is we're going to start creating experiences that like you just have to be in house to you gotta be bundled to be able to make. Like I think they they that they're seeing what Apple is doing and saying yep we're bought in on that. Will.

1:15:58Okay, interesting. I mean, maybe they can do that because like Samsung doesn't really have any leverage and they can't go anywhere else like what are they going to do make their own operating system? They can't do that. They tried that and it didn't work. Yeah. Yep. Yep. It didn't work. So okay, like yeah, Google could play hardball with Samsung and say like, you're just coming along or you're dead.

1:16:20Can Google make enough phones? Like that's another interesting question. Well, but yeah, that's yeah. Right. They can't know it. I say I'm sung phones. Do Samsung make their own phones? Are they their own manufacturer? I believe so. I believe so. Yeah. So like, or even if they're not, they have enough deep enough relationship with the Foxcons of the world that like, I mean, that's the thing, right? Like pixels are great phone, but I've never seen one in public and I've seen millions and millions of iPhones and galaxies.

1:16:51I think two years from now, we'll revisit this and go, wow, Google's ecosystem of OEM partners dried up fast. Yeah. That's a heck of a transition. But you're just going to make your phones then. I mean, well, there's going to be all this capacity, right? If Google starts to shift this way, there's a lot of people that need to make a lot of phones that are suddenly going to be available. Yep. You know, I mean, maybe Maybe Samsung does and Google just commoditized the Samsung even further or maybe maybe Apple just like Really continues to dominate in this world like they have capacity like Their supply chain is the best in the world Yeah, well, so here's kind of a funny thing is this is the same price that of Instagram, right? So it's it's funny to like make this little Apple's apples comparison of like which would you have rather bought?

1:17:54But, and one other lens that I want to look through it as is if you are HTC, there's two other lenses. One is, I think it's about 500k per head. So that's kind of an interesting stat to look at. Lots of talent acquisitions are a million dollars in engineer, and obviously these aren't our knowledge engineers, but that's kind of an interesting. If it's 2,000 people, then it's 500k per head, and it comes with this access to the patent portfolio. So that's interesting. It's not that expensive.

1:18:22The other thing is we have no idea what the deal looked like between HTC and Google going forward, but you have to assume that if you're HTC or what the terms of their contracting agreement was to make the phones, but you have to assume if you're HTC then basically you're doing some kind of some of future cash flows here.

1:18:44And saying like, well, you know, over the next four years you're going to make this much revenue from this thing. So yeah, we're fine with it being worth 1.1 billion. And impossible for us to know what the cash flows, what it looks like, but, you know, something tells me this actually isn't that expensive for Google.

1:19:07One point one billion to Google is nothing. Oh, and I mean from the perspective of like what the alternative was in terms of paying HTC out over time. Like I think HTC has so little leverage and needs cash that they're very willing to do a deal here. And I don't think they looked at the work they were doing for Google as their core competency anyway. And I'm speculating here, but I think Google, if they can do this integration will got a pretty good deal on hiring 2,000 people that are strategically perfectly trained to do the thing that Google needs to do. And I really do think Google needs to do this. And Android needs to become much more like the iPhone. So Android and Pixel phones need to become one.

1:20:04You know, if that's the plan and if Google's going to actually execute that, I think this is a great move. And, you know, hard to grade because I think there's lots and lots of variance on where the question is. So I don't think we're saying anything that different. I'm just super skeptical to this is going to work. But do you think do you think they're actually going to go the direction of dehorizonalizing?

1:20:32um, Android to all the OEMs. Yeah, I don't know. I mean, they kind of have to, right? Like you can't compete with what Apple's doing if you in the current Android ecosystem. Yeah. Unless you believe that doesn't none of the things that they're doing to optimize matter. But I think that's the death by that. Yeah. But I think also like Google has clearly shown that they do believe that like AR and ambient computing is the future and if you believe that then that doesn't work in the Android ecosystem. Yeah. Yeah. And I mean, the fact that Google is doubling down with Google home and they're doing daydream and they're releasing their own phones like they're becoming a hardware company and this is going to dramatically help them. Yeah. So I'm going. It's going to be somewhere between a B and a C, but I'm trending closer to a B. I'm at this point. All right. Disagreement.

1:21:33Yeah, I'm a huge Odessa fan if you're if you're into sort of like ambient trap like powerful Sit in a concert and Bob your head It's it's awesome awesome band really great to listen to while you're working while you're running and they're actually from from Bainbridge Island which is pretty cool from from Seattle area cool they are they are and they just came out with a new album and it is it is awesome and I think there's this great pitch for quote from the review that I want to read real quick that describes the album very well and you can choose this may or may not appeal to you but they nail it by saying

1:22:25It derives its power from its supersized subtlety, exaggerated gestures, a kind of weaponized softness. And the album is called a moment apart. So if that sounds like your jam, go check it out. It's great. Listen. Wow. Weaponized softness. I know. That in itself is like an album name. Yeah. Well, that's great. Well, you've inspired me. I'm going to call an audible, not what I wanted to, but music, this is by me.

1:22:55Listen to recently this was actually, I think this was replaced in the feed on fresh air with Terry Gross on MPR on their podcast was they just re-released an interview that she did about a year ago with Bruce Springsteen and it's great. Done in his studio in his home studio in New Jersey. Just talking about, you know, He'd written an autobiography that'd come out and he's now doing a one-man show on Broadway. And that'll be premiering soon, which I think is why they re-released this interview. And it's just really cool. He talks about his persona of Bruce Springsteen and that I always just assume that...

1:23:52Bruce Springsteen is Bruce Springsteen but like the real Bruce Springsteen is not that much like, you know, the Bruce Springsteen that you see on stage. And he talks about like where that persona came from and how it's shaped his life. So really, really great interview. He's a very, very smart guy and has lived an amazing life. So highly recommend. Very cool. Well listeners, that's it.

1:24:21If you aren't subscribed and you want to hear more, you can subscribe from your favorite podcast client. And if you feel so inclined, we would love a review on iTunes. Feel free to join us in the Slack at acquire.fm. And that's all we've got. So thanks for listening and enjoy your own speculation. Drop us a link in the Slack if we miss anything. We'll see you next time. Later.