Apple's Tim Cook: Innovation 'alive and well' at company

Tim Cook's Apple is a more collaborative place. CNET

For his first three years as Apple's CEO, Tim Cook has had to fend off barbs that the tech giant has lost its edge as an innovator. Cook last week offered plenty of reasons to reconsider those accusations.

After unveiling the new iPhone 6 and 6 Plus, the Apple Pay mobile-payment system and Apple Watch wearable, Cook enjoyed a victory lap in a new Bloomberg Businessweek cover story, which published Thursday.

"Anybody coming out of there yesterday knows that innovation is alive and well in Cupertino," he told the magazine a day after he introduced the new smartphones at the city's Flint Center for Performing Arts. "If there were any doubts, I think that they should be put to bed."

The new iPhones, which officially go on sale Friday, have already brought in record preorders and positive reviews. The digital watch doesn't go on sale until next year, but will mark Apple's first new product offering since Cook took over from former co-founder Steve Jobs.

Under Cook, Apple is now much more collaborative, a necessary change now that the blueprints for the company are no longer housed solely in Jobs' head, the Businessweek story reports. That new structure is also needed since "the lines between hardware, software, and services are blurred or are disappearing," Cook said.

"The only way you can pull this off is when everyone is working together well," he said. "And not just working together well but almost blending together."

For example, a new feature called Continuity is available on the new iOS 8 and Mac OS X Yosemite operating systems, which allow users to start a task on one Apple device but finish on another. "We would never have gotten there in the old model," Cook said.

For the Apple Watch, Apple product design chief Jony Ive told the magazine the project was conceived in his lab three years ago, and Apple brought a handful of watch historians to its Cupertino, Calif., headquarters to help in its research. Ive said his team first tried using the pinch-and-zoom technology used in the iPhone and iPad for the watch, but quickly realized the screen was too small for those hand gestures and users' fingers would get in the way of the screen. The team switched to a "digital crown" on the side of the watch that can be pressed and rotated to allow someone to zoom in and out, get back to the home screen and scroll.

Nearly all of the company's rivals have targeted the wearables market in an effort to establish a strong foothold ahead of Apple. Mobile device makers including Samsung, LG, and Motorola and Taiwanese PC maker Asus have unveiled smartwatches and fitness bands. Traditional watchmakers, such as Fossil, are jumping into the market. And even Intel, the world's largest maker of computer chips, this month announced a new bejeweled luxury smart bracelet called the MICA that will sell for less than $1,000 later this year.

Jeff Williams, Apple's senior vice president of operations, didn't seem bothered that his company would miss this year's holiday season with its own wearable, and took a shot at rival Samsung."We want to make the best product in the world," he told Businessweek. "One of our competitors is on their fourth or fifth attempt, but nobody is wearing them."

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With Alibaba windfall, all eyes on Yahoo's Mayer

Yahoo CEO Marissa Mayer has said the company will be "good stewards" of the Alibaba proceeds. Getty Images

As Chinese e-commerce company on Thursday priced what promises to be a record-breaking initial public offering, the announcement starts the clock on Marissa Mayer's biggest test as Yahoo CEO.

Alibaba priced its shares at $68, according to the Wall Street Journal, which would bring in $21.8 billion when the offering takes place on Friday. That means Yahoo stands to make $8.27 billion before taxes thanks to the company's 22.6 percent ownership position in Alibaba. After the IPO, Yahoo will retain a 16.3 percent stake.

But the windfall also raises expectations for Mayer. Will she use the cash to revive the company's fortunes in a sustained fashion?

"There will be mixed emotions," said Sameet Sinha, an analyst at the investment firm B. Riley and Co. "Marissa will be happy, but there will be a lot of pressure."

It's been a tough slog so far. Since taking the company's helm more than two years ago, Mayer's burnished the brand with new excitement -- a not insignificant achievement given Yahoo's mediocre financial performance over the past decade. Under Mayer's regime, Yahoo's also bought more than 40 Internet-based companies -- including the $1 billion acquisition of the popular blogging platform Tumblr. Even though the acquisitions have yet to add materially to the company's revenues, the fact that high-profile young companies are now willing to consider calling Yahoo home constitutes a sea change in sentiment compared with the pre-Mayer era.

But the other side of the ledger tells another story. The company's revenues remain flat. What's more, Yahoo's clout in the digital advertising world continues to dwindle. For instance, last quarter, the company's display ad revenue -- an important financial metric -- slumped 7 percent.

During the company's last call with Wall Street analysts, Mayer acknowledged the disappointing performance and said management was dissatisfied with the results. She also attempted to set expectations as Yahoo courted new marketers to revitalize its ailing advertising business. "It will take a little longer than we originally forecasted," she said.

Yahoo declined comment for this story but the company's statements to date suggest that it's taking the increased attention stemming from the Alibaba IPO in stride.

"I don't think it's any different than what we've been feeling all along," Adam Cahan, Yahoo's senior vice president of mobile and emerging products told CNET in May, a few weeks after Alibaba filed for its IPO. "At the end of the day, the journey for Yahoo is the proof in growth. What we want to show the world is that we can return this company to growth."

After Yahoo sells 121.7 million of its shares in the IPO, the company plans to give at least half of the Alibaba proceeds back to stockholders. That still leaves more than enough for Mayer to make more acquisitions of smaller companies, picking up new talent and technology.

"I don't think it's any different than what we've been feeling all along." Yahoo Mobile Chief Adam Cahan, May 2014, on pressure from Alibaba IPO

The company could also choose to make another splashy buy, in the same vein as Tumblr, though analysts and investors are divided on that approach. "We think that it's better for them to go bigger and bolder," said Scott Kessler, an equity analyst at S&P Capital IQ. Some shareholders, though, are worried about another big buy. "One of the fears investors have is that the money might burn a hole in her pocket," said Sinha. "And she might make some investments that have longer-term returns than they'd like."

Unsurprisingly, Yahoo has remained mum on the topic, with Mayer only telling analysts on a conference call in April that the company will be "good stewards" of the Alibaba capital.

As Alibaba strikes out on its own in the public market, its diminished role at Yahoo will shed more light on the health of the Yahoo's core products and advertising business.

For the past few years, Yahoo's stock has been propped up by excitement in Alibaba. Earlier this week, the stock spiked to $44. But that spike was more a reaction to Alibaba's decision to increase the size of its IPO than anything Mayer has done on the job. "Marissa will no longer have Alibaba as a shield to help her stock price," said Sinha. Yahoo's stock was at $42.34 in after hours trading on Thursday.

Yahoo mobile chief Adam Cahan said the company isn't fazed by the increased scrutiny over Alibaba. Getty Images

While the IPO will certainly bring a large sum to Yahoo, the company has downplayed its affect on how Yahoo is going about its business. "Alibaba -- I can't operate around it," Cahan said in May. "So it's not something I really spend a lot of time on, to be honest."

What he does spend his time on is trying to make Yahoo's suite of mobile apps an attractive destination for users -- and advertisers. Cahan entered his role when Mayer put him in charge of a dedicated mobile product team in October 2012 -- one of the first major moves she made as CEO. Since then, she has grown the mobile engineer headcount from three dozen to more than 500. The company has also refreshed all of its mobile apps, including Weather, Sports and Finance, and introduced Yahoo News digest, a news reader that summarizes articles via algorithm.

Mayer has also been investing in several other areas where she hopes the company can gain some sort of traction. She's homed in on search, going back to the company's roots and developing core search algorithms. She's also made a big media push, hiring big name journalists like Katie Couric and former New York Times columnist David Pogue. The company has also ventured further into entertainment, ordering up premium TV content like the NBC cult favorite "Community" to compete with the programming of Netflix and Amazon.

With the Alibaba proceeds, she'll have more resources to tinker with finding the right strategy. And while Mayer is approaching a moment of truth, there's no doubting that the money is a welcome gift. "It's a pretty good position to be in," Kessler said. "It puts some pressure on here and her team, but most CEOs want flexibility."

Mayer summed it up in during an earnings call in July with a message to Yahoo's co-founder Yang, who orchestrated the Alibaba investment, as well as Alibaba co-founders Jack Ma and Joseph Tsai: "Thanks."

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This is how die-hard 'Star Wars' fans do parenting

This is how you tell your kids about the prequels. You don't! Fowl Language Comics

When it comes to teaching kids about "Star Wars," cartoonist Brian Gordon knows exactly what to do. Gordon runs the online comic strip Fowl Language, which is largely inspired by his love of all things geek and his experiences as a parent.

In Monday's comic, Gordon perfectly demonstrates how to introduce any child to "Star Wars," and of course it involves starting with the original trilogy. After the second Death Star is destroyed at the end of "Return of the Jedi," your child will likely ask you if there are more awesome "Star Wars" movies you can watch together. The only correct answer to this question is, of course, an emphatic "no!"

And, in case that lesson in "Star Wars" parenting isn't enough, Gordon added a bonus panel that tells you what to do if your child ever asks you about Jar Jar Binks.

Jar Jar is a dirty word in this house, mister. Go put a quarter in the swear jar. Fowl Language Comics

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Anki Drive racing game outgrows iOS with Android support

Anki Drive's real-life racing game, once available only on iOS devices, is expanding to Android. James Martin/CNET

After its surprise debut onstage at Apple's annual World Wide Developers Conference in June, Anki spent all of 2013 driving inside the tracks of the iPhone's iOS mobile operating system.

On Thursday, the startup -- spawned from the Robotics Institute of Carnegie Mellon University -- is shifting gears. Anki has announced that it will be bringing support for its artificial intelligence-driven real-life racing game, called Anki Drive, to Google's Android OS, alongside a slew of new features and updates to its platform.

Anki's starter kit, which includes two race cars and the company's sensor-filled race mat, will now be sold for $150 in the US and Canada (£150 in the UK), down from $200. Cars and tracks will still sell for $70 and $100 respectively.

Android support is slated to arrive in October starting with Samsung devices, including the Galaxy S4/S5 and Note 3 smartphones, as well as the Galaxy 10.1 tablet, all running KitKat 4.3 or later. Other device makers are expected to sign on with Anki's platform in the coming months.

A new car, dubbed Spektrix, will also join Anki's lineup, which totals seven vehicles that each have unique abilities users can tap into when monitoring the cars movement around the track. The cars are not driven by the players as one might expect in a traditional, racing sim.

Anki's new car, Spektrix, allows users to scramble other cars' steering and weapons systems and was designed by Harald Belkar, who envisioned futuristic concepts for "Tron Legacy" and "Minority Report." Anki

Instead, AI algorithms help power the vehicles through thousands of scenarios, be they crashes or tail-spins or pile-ups, while players control speed, movement around the track and try to sabotage one another with special skills reminiscent of Nintendo's Mario Kart series. All the while, players also earn experience to upgrade their cars, just like in a video game.

The jump to Android marks a big move for Anki, which launched last year with a $50 million round of funding led by venture capitalist and board member Marc Andreessen.

Anki was exclusively sold through Apple's retail stores and online at Anki.com throughout 2013. Beginning in 2014, Anki expanded its availability to other retailers like Amazon and Best Buy, but kept itself within Apple's ecosystem. The iOS exclusivity was not part of its deal with Apple, but a reality of the wireless technology that the company's smartphone app employs behind the scenes to control the cars.

"Android has only just introduced Bluetooth 4.0 capability about a year ago," said Mark Palatucci, a co-founder and Anki's chief product officer, in an interview. The protocol is what enables smartphones to wirelessly communicate with other electronics and is a cornerstone of the modern mobile accessory market. However, only Apple has historically supported the functionality.

Anki's track is a flexible mat filled with sensors that help direct the vehicles automatically as they receive directions from your smartphone. Anki

With Android smartphone makers outfitting their latest handsets with the most up-to-date wireless protocol technology, Anki was able to shift priorities and include Android support for the fall. However, one minor setback at the moment is that Android drivers cannot duke it out with iOS drivers, but the company is working on solving the wireless hurdles keeping the two platforms from riding the same track.

"Because of the significant differences in the wireless platforms, it's something that's proved to be a unique challenge. The wireless tech for Android is different than iOS," Palatucci explained. That does not mean that the cars or tracks or platform-specific, which may have added confusion in the Anki buying process.

"The cars don't care, the tracks don't care. You can trade the vehicles," Palatucci added.

The company is also adding new team and balance modes are will arrive in an iOS app update out Thursday, and on Android with its arrival in October. That will take the typically free-for-all nature of Anki racing into new territory, allowing you to play and to level the playing field by removing experience upgrades that make more seasoned Anki users faster and fiercer.

These efforts, coupled with the jump to include Android, show that as Anki grows, it continues to tap into its robotics and AI roots to deliver an experience that feels as much like a virtual game as you can get without having to stare at a screen to see all the action.

Update at 2:30 p.m. PT: Clarified that players, and not solely artificial intelligence algorithms, do in fact control aspects of Anki cars' movements around the track, including speed and other factors.

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Apple transparency reports allude to Patriot Act demands

Apple may be attempting to hint at something it cannot disclose publicly, for fear of government retribution. CNET

Apple removed text from its latest transparency reports, which suggests that the company has received a top secret data demand.

These so-called "warrant canaries" can be issued ahead of a Patriot Act demand, because technology companies are not allowed to disclose whether or not they have received such an order.

Apple, however, preemptively asserted it "never received an order under Section 215 of the USA Patriot Act," in its debut transparency report in November 2013.

That text has now been removed from its latest two reports, suggesting Apple has, in the second-half of 2013 onwards, received such an order.

Apple does add in its report covering the first half of 2014 that, "To date, Apple has not received any orders for bulk data," suggesting a broad-ranging warrant was not served.

Patriot Act requests are highly controversial. Section 215 particularly raises eyebrows, as it allows the US National Security Agency to hand over "all tangible things," including customer data and business records.

By going to the secretive Washington D.C.-based Foreign Intelligence Surveillance Court, the government's go-to court for surveillance requests, a Section 215 order can be filed in secret and force a company, like Apple, to hand over data.

The "bulk metadata" program, which forced phone giant Verizon to hand over on an ongoing basis its entire store of phone call data, was authorized under Section 215. The program was first disclosed by whistleblower Edward Snowden last year.

The removal of the warrant canary, first reported by Gigaom, in conjunction with a major push by Apple over the past day to inform its customers about data requests, and a lengthy interview with PBS' Charlie Rose (you can read part one and part two here) suggests that Apple may be silently screaming about something it cannot disclose publicly, for fear of government retribution.

We've put questions in to Apple and will update once we know more.

This story originally appeared as "Apple omits 'warrant canary' from latest transparency reports; Patriot Act data demands likely made" on ZDNet.

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