Is Bitcoin going to see a significant positive price breakout over the next 12 months?

May 23, 2016 by Doug MacFaddin Filed Under: Blog, Doug MacFaddin

Bitcoin pricing has witnessed substantial price volatility over the last 6 1/2 years. In July 2013, the price was hovering around $100 USD and within 6 months was trading $1,000+ USD. Bitcoin pricing retreated to below $200 USD by January 2015 and found pricing support for the next 10 – 12 months. Since the beginning of the year, Bitcoin has found a stronger bid with current pricing 100% higher at $400 + USD. Where does pricing go from here?

In theory, and I believe in practice, the outer limit for the number of bitcoins is set at 21 million. Currently there are ~15.6 million or 74% of bitcoins already mined and created. At this point there are 3,600 new coins minted daily, ~100,000/month or $1.3m/year. On a linear basis, full capacity will be reached in 4 to 5 years. Assuming bitcoin and blockchain become common place technology (both are well on their way with over $1B invested by venture capital at this point), price appreciation should (for the most part) come down to supply and demand.

In my next segment, I will look at inflation as an influencer of price correlation to determine whether or not there may be a potential for a significant positive price breakout over the next 12 months.

The Rise of the Infrastructure Age

July 10, 2015 by Doug MacFaddin Filed Under: Blog, Infrastructure Age, Tech Market

We have reached a plateau in consumer technology as far as information devices are concerned. Smartwatches suck, tablets haven’t changed profoundly since their conception, portable music players and digital cameras (at least for the amateur) have become obsolete thanks to the consolidation of media into our phones, and new generations of smartphones and computers no longer offer groundbreaking features but mostly upgrades on existing features (better cameras, faster processors, more storage, higher resolution screens, etc.) We’re left wondering what, if anything, will be the next big thing, but there just aren’t any huge gaps left to fill with these gadgets. A major shift is taking place in tech, and the future isn’t in information devices. The future is in infrastructure.

What Tesla is doing with home battery is far more important than what Apple is doing with watches. Tesla is changing the way we think of owning and providing power in our homes, a utility once run entirely on a grid owned by the county. It’s not that these small iterations and upgrades to our devices are bad or unnecessary, but we’ve gotten to a point where all we need as a consumer is a better version of what we already have. The next real revolution of gadgets isn’t going to to be about your phone, it’s going to be about the world around us and how we live within it.

Technology is constantly transforming and permeating into every part of our lives. It no longer exists in just our phones and computers. It has moved into our homes, our transportation, and our public spaces. You can control and interact with your air conditioner, refrigerator, or security system right from your phone, no matter where you are. Large IT companies like IBM and Cisco are developing new technology to manage and improve public safety, city planning, and government agency administration. NASA is using satellites to measure soil moisture to study weather and climate cycles. Technology is now responsible for connecting us to and informing us more deeply about our physical world.

Google has shown a huge interest in this new age of infrastructure that we are entering. They’ve expanded broadly beyond their internet search and advertising origins, getting involved in self-driving cars, Internet glasses, smart thermostats, and even research on the biology of aging to find ways to extend our lifespans.

Google is now looking to get involved in the smart city space alongside the aforementioned IBM and Cisco, and they’re doing it in the form of their latest start-up: Sidewalk Labs. Sidewalk Labs will be headed by Daniel L. Doctoroff, former deputy mayor of New York City for economic development and former chief executive of Bloomberg L.P. It will be based in New York with a team at Google, of course, and led by its chief executive, Larry Page.

Sidewalk Labs claims that their mission “is to improve life in cities for everyone through the application of technology to solve urban problems.” Some of the problems they aim to tackle include cutting pollution, curbing energy use, streamlining transportation, and reducing the cost of city living. Doctoroff says Sidewalk Labs plans to work in “the huge space between civic hackers and traditional big technology companies.” Bike-sharing programs, like New York City’s Citi Bike, is an early example of the kind of technology-assisted innovation they want to pursue.

Large companies aren’t the only one’s interested in innovating our cities technology. Academia has also had it’s eye on this prize. New York University established the Center for the Urban Science and Progress in 2013 to research and unite The Digital Revolution with Global Urbanization. They’ve recently been analyzing large sets of data around the city including using the city’s 311 data, wireless sensors, noise meters on traffic lights and street corners, and more in order to inform policy choices. By looking at things like noise limits for vehicles and muffler costs, they can create computer simulations that could predict the effectiveness of enforcement steps, charges, or incentives to buy properly working mufflers. Their goal above all is to make urban living less severe.

As the physical and virtual world meld ever more intricately, we’ve seen a new threat arise that becomes increasingly dangerous: hacking. As new devices emerge that hold more data and more power, the risks of hacking rise exponentially. We’ve already seen huge breaches in security with our own government at the hands hackers. Security is going to become increasingly important as more complex developments are made.

The internet has brought us together, but infrastructure is what’s going to make this ever growing connectedness feasible, bearable, and efficient. The globalized world needs innovation if human beings are going to survive. Populations are multiplying, urbanization is on the rise, and the world needs proper infrastructure that is going to support the aggressively growing demands of a physically and virtually connected world. To me, that is far more exciting than anything Apple is going to come out with for your next iPhone release.

How Xiaomi Keeps Prices So Low?

January 20, 2015 by Doug MacFaddin Filed Under: Blog, Gadgets & Devices

If you haven’t heard of Xiaomi in any of the latest tech market reports, you’ll probably hear about them some time soon. Xiaomi has been making cheap smartphones in China for years now, and after several good years, they’re looking to globalize. One of the biggest sticking points to Xiaomi in the market, though, is how do they keep producing such high-end smartphones so cheaply? It’s their strong combination of well spec’d phones and low prices that drove them to over 60 million sales last year, which resulted in Xiaomi replacing Samsung as China’s top-selling smartphone company as well as becoming the world’s third top selling phone maker at the same time.

The Chinese company’s flagship Mi devices typically retail for around $300 – it’s new Mi Note Pro will be $500+, their first phone to break the $500 barrier – while the more affordable Redmi family is sub-$150. These are all insanely cheap phones when you compare them to Apple or Android devices, where Apple’s top-of-the-line iPhone sells for over $1,000 off contract, while the Samsung Galaxy and Note devices are also priced similarly. So why can Xiaomi be so aggressive with its pricing?

Many theories have been put forward, including that Xiaomi prices phones at cost and makes money on other services. Hugo Barra, the company’s VP of international, gave Techcrunch a peak at their special operations in an interview in Beijing last week. Apparently, according to Barra, Xiaomi is able to make price concessions thanks to a smaller portfolio and longer average selling time per device. Additionally, Xiaomi continues to sell older devices (and tweaked versions of them) at reduced prices, even after it releases newer models.

“A product that stays on the shelf for 18-24 months — which is most of our products — goes through three or four price cuts. The Mi2 and Mi2s are essentially the same device, for example,” Barra explained. “The Mi2/Mi2s were on sale for 26 months. The Redmi 1 was first launched in September 2013, and we just announced the Redmi 2 this month, that’s 16 months later.”

That’s a big deal, mainly because the longer runway for devices allows Xiaomi to leverage its suppliers to get better component deals.

“The vast majority of the components [in our devices] are still the same, so in terms of supply chain and component sourcing, we’re on the same supply contracts as Redmi 1, which means we’re still getting the same discounts on components,” he explained. “We can continue to ride the cost curve, so the importance of having a very small portfolio is significant — the fact that we only launch a few products each year, and (the fact that) we only have two product families.”

These dynamics requires a great deal of dedication to devices for two to three years, and it isn’t just about making price cuts. Xiaomi maintains software updates, spare parts and other services that customers require, longer than most companies normally do. There are additionally other factors that go in to the cost structure, including Xiaomi’s lean, online-only marketing focus and it’s close proximity to manufacturing plants in China. But of greatest importance is the management of components and supply chain partnerships.

Xiaomi has big plans for expanding their market share outside of Asia this year, which will make its pricing model and supply chain management more important than ever. The company sells its phones using an online-only model in most markets, though it’s recently been testing operator partnerships outside of China. It is currently running a limited trial in India, and has found partners in Taiwan, Malaysia, and Singapore.

The Privacy App That’s Challenging Google

November 14, 2014 by Doug MacFaddin Filed Under: Blog, iPhone & Android Apps, Privacy

Everyone is concerned about privacy these days. With the Snowden revelations coming out that the NSA had been spying on Americans’ digital behavior and activity, and were allegedly partnering with such internet companies as Google, people have been concerned about privacy solutions to keep themselves protected from prying eyes.

Disconnect, a San Francisco-based startup, specializes in building software that can cut off intrusive advertisers from grabbing user’s data, and protect web activity with encryption. However, the average Android user won’t have heard much about it, not through Google anyway. Google has removed the tool from it’s Google Play application marketplace.

The startup isn’t backing down in it’s fight for protecting people’s privacy, though. The young firm, who’s CTO is ex-NSA engineer Patrick Jackson, has been wrestling with Google over the past year to get it’s app back on the Google Play marketplace, in an effort to get more Android users the ability to protect themselves from government snoops and digital criminals. While it’s pretty much a losing fight, Disconnect won’t let Google slow it down. Yesterday, Disconnect launched a completely refreshed application that does a lot to protect data by encrypting communications, routing traffic through different servers across the globe, filtering out more than 5,000 “invasive” services, and much more.

All things considered, at the end of the day it’s a VPN software – though it has plenty of bells and whistles. It isn’t particularly pricey in the grand scheme of downloadable software prices: the full desktop and phone application that covers up to three devices comes at $5/month, or $50/year. Some pieces will continue to be free of charge, such as the tracking visualization browser add-on.

Disconnect has some significant voices in the security industry on its side. Blackphone – a privacy-specific smartphone based on a forked version of Andriod – has made it a standard install on each of it’s units. And the “next generation” version will come pre-installed on future Blackphones. Disconnect isn’t the only company with this kind of product and service, it’s just the first major one to have an established partnership with a secure phone maker. Disconnect has also announced another significant partnership with German ISP giant Deutsche Telekom, who is offering a special promotion to their customers, allowing them to try Disconnect Premium features free for a year.

The company itself isn’t only in the business of pushing products on the privacy-concerned consumers, as it explains. CEO Casey Oppenheim is of the belief that Google doesn’t want Disconnect in its Google Play store because the app educates consumers about how advertisers collect people’s digital data and that the software allows users to block them. Basically, it’s shining a light on the existence of the option to not be tracked digitally. In September, things came to a crescendo when Google sent a letter directly to Disconnect informing it the app would no longer be available for purchase or download on it’s marketplace. It apparently broke one of Google’s cardinal rules: you cannot interfere with other apps “in an unauthorized manner.” However, Disconnect is in perfectly good standing on other platforms, including Apple’s iOS marketplace.

You could look at this more cynically and make the conclusion that Google’s pulling of Disconnect from it’s marketplace is an effort in self-preservation, in that Google relies on advertisers to make revenue, no matter how intrusive they are. Essentially, in a scenario where privacy and security conflicts with Google’s business model, Google will choose the business model. This isn’t a revelation really; any company would behave exactly the same way. People don’t want to believe that Google is like every other corporation, but in reality it is.

Disconnect is aggressively pursuing being welcomed back into the Google Play store again at some point, though it’s possible to tinker with Android settings to allow downloads from unauthorized developers (warning: do not do this, it could badly harm your device as well as open you up to malicious developers as well as helpful ones). Though, it’s re-introduction to Google’s application marketplace is predicated mainly on Google updating it’s outdated user agreement before that happens.

The only question remaining is why Apple and not Google? It’s hard to say. Maybe Apple considers privacy to be more valuable to it’s success than Google. But, given that the public has ben increasingly upset with Google for it’s alleged collusion with the NSA, it’s probably in the tech giant’s best interest to lift it’s ban and give its users the option of flying under the radar if they choose too.

11 Things the Andriod Phones Can Do That The iPhone Can’t

October 1, 2014 by Doug MacFaddin Filed Under: Android Vs. Apple, Blog

Upon the launch of it’s latest generation of iPhone (the iPhone 6 Series) and it’s latest iOS 8 software update, Apple has introduced a host of new features that once were not available to iPhone users. And though these updates are very substantial in the context of what the iPhone is capable, that being said, they are all features that have been standard for Android platform phones for quite some time. For example, the new iPhone 6 and iPhone 6 Plus will be Apple’s first generation of smartphones that will come standard with NFC (near field communication) – a technology that allows phones to talk to each other via short-range radio. This essentially means that you can share data and make payments simply by tapping your iPhone against a compatible device. This has been something standard on the Android platform for some time – however, it is now something available on the iPhone platform. But there are still plenty of things Android phones can do that iPhones cannot.

11. Battery Swapping

Many Android phones, such as the Droid Razr and the Samsung Galaxy series, allow you to remove the battery from the back of the phone by removing the back cover of the phone. This opens up the availability to swap a low-charge or failing battery with either a new one, or a higher capacity battery. This is an immensely helpful feature for many reasons. Sometimes the battery is well secured with micro screws, but there are plenty that allow you to simply just pop the battery out like a flip phone. The iPhone on the other hand still doesn’t allow you to access the interior of the phone. The iPhone still relies on a single lithium-ion battery pack that can only be removed or replaced by Apple technicians.

10. Opening Multiple Applications

Software layering is an immensely useful feature; many manufacturers will layer their own software over the plain version of Android, which often includes them adding their own features. For example, on Samsung and LG phones you can open more than one application up and run it side-by-side simultaneously as another application. On LG phones, you can even move the apps around and reposition them in such a way to make some applications more transparent or opaque than others, resize them, and do much much more. When you’re doing GoToMeeting on your phone and need to reference a presentation without losing the window, you can open that presentation and view it simultaneously – something that can really come in handy.

9. Unchanged Charging Port

With each major overhaul of the iPhone, from the 3 to the 4 to the 5, and now to the 6, you have had a changed charging port-type, requiring a completely new charging chord. The Lightning port is a great charging mechanism, however, with just about any Droid, regardless of manufacturer, all you really need is a micro-USB port, which has served as the charging mechanism for several years now. There’s no change that’s on the books for the charging mechanism, and every single manufacturer seems content to keep it that way.

8. Micro HDMI Connection

Some Android phones come with micro HDMI ports, which allow you to hook your smartphone directly up to your television. This isn’t all that common in most flagship products, but many Motorola phones come with this capability. The only ports that you have on your iPhone are your headphone jack and your Lightning jack. Not to say that this is a huge deal; when you think about it, in all smart televisions, you can wirelessly impose your screen on to your television through an Airport type of mechanism – which eliminates the need for this type of port in the first place completely. But, if, say, you don’t have a smart television, then maybe having a micro HDMI port to show your favorite Youtube video on a large screen could come in handy.

7. “Touchless Voice Controls”

The Moto X, one of the more superior Android phones in my opinion, is a feature called “Touchless Voice Controls”. In the device’s settings, you can configure them so that Google listens for your voice to perform search queries, set reminders, get directions, and so much more. On most other phones, you would likely need to hold down some kind of button, such as on the iPhone with Siri, or a microphone voice controls application would need to be opened. With the Moto X, you can train your phone to answer to your voice specifically, when it hears some kind of trigger phrase.

6. Additional Storage Capacity

Androids allow you the ability to replace existing SD cards for ones with greater capacity. Generally phones, when they are first issued out with SD cards that don’t have a great deal of capacity – and generally the amount of storage capacity is directly related to the price of the smartphone. So, you can get away with getting a cheaper Android that has limited space, and then bulk it up with a larger SD card separately. Androids will generally come with a separate SD card slot to add a larger card, but with the iPhone, you’re limited to the amount of local storage you have based on the type of iPhone you purchased. You can always store files in iCloud and upgrade once that’s full, but there’s no expandable storage option for the iPhone’s hardware.

5. Shortcuts to Settings

Most Android phones, specifically those made by Samsung and LG come with a ton of “quick settings”, similar to on most Mac-type of devices, that are accessible when you swipe down from the top of the screen. The Galaxy S5 comes with 20 quick settings, including power saving mode, Bluetooth/Wi-Fi Buttons, and controls for proprietary features such as Stay and Smart Pause. By comparison, the iPhone comes with roughly 10 shortcuts when you swipe from the bottom-up, and none of them are customizable.

4. More room for Customization in General

If you’ve ever used both platforms before, then you know that the Android is basically just a much more customizable smartphone on the whole. Essentially, if you’re somebody that likes to customize their phone, then Android is just simply a better option for you. Apps like Aviate and Buzz Launcher, you can actually change your Andriod’s interface entirely. In Aviate, for example, apps are arranged alphabetically in a more list-like format rather than the standard grid layout. With Buzz Launcher, you can decorate your smartphone in such a way so that your design capabilities are boundless.

3. Widgets, Widgets, and Widgets

This is huge. The fact that the iPhone cannot support widgets yet is ridiculous. Embedding widgets directly into your phone’s home screen, and then being able to move them and shape them as you please is a pretty fantastic feature. It allows you to get the information you need, without even having to open an application – which is sort of where everything is going at this point. Embedding a widget in your home screen also allows you to give your phone a little more personality. With iOS 8, there are some widget functionalities, such as with the calendar and notification drawer, but you can’t move them around or put them on your home screen.

2. You Can Use Your Droid as a Remote Control

The HTC One, Galaxy S5, LG G3 and other flagship Android products come with an infrared blaster – which is exactly what your remote control is, essentially. This means that you can set it up as a remote control to control your television, instead of using a regular remote, which are big and not nearly as much fun. But the fun doesn’t stop there, you can also use it to replace the remote for your air conditioner, speaker, and nearly any other household device.

1. Swap Out the Back Cover

Like I said earlier, you can’t remove the back of your iPhone. How are you supposed to put on an awesome back cover for your phone, while also keeping it naked without a case? You can’t. But, if you want a transparent back to your phone, you can do that with your Android product pretty easily.

6 Superior iOS 8 Keyboards To What You Get From Apple

September 17, 2014 by Doug MacFaddin Filed Under: Blog, iPhone & Android Apps

iOS 8 has a host of brand new features that are going to really make the iPhone a much more superior device. However, one of the most important features that comes with the new operating system is finally – finally! – the ability to use custom keyboards. Your liberation from Apple’s terrible keyboard is here everyone; rejoice! Apple’s tepid keyboard is made elementary by some of the more easy to use, and better functioning keyboards listed below. But, first, let’s go over how to add a new keyboard to your device.

In order to add a new keyboard, you’re going to have to download and install the individual keyboard application. Once you’ve done that, navigate to your keyboard preferences inside of your iPhone’s Settings application and add the keyboard to your list of available input methods. It’ll be added right next to the list that shows your keyboard language as English (US) and Emoji. Then, when you’re typing pretty much anything on your iPhone – email, text message, tweet, status update, etc. – you’ll be able to access the new alternative input method by tapping on the little globe icon next to the spacebar on the left.

SwiftKey and Swype

SwiftKey and Swype are adding iOS compatible platforms for the highly popular Android keyboards (free, $1). The two keyboard styles are similar at their core, but frankly their difference is really a matter of taste. They’re both based on a swiping input method; all you have to do is put your finger down on the keyboard and drag from letter to letter until the keyboard’s input algorithm figures out what word you’re trying to spell. As one who uses this keyboard regularly on my Droid, I have to say that I really enjoy it, and it pretty accurately (about 90%) inputs the word that I’m trying to type. Even if you slide sloppily, it generally works with around the same success rate.

The predictive tech is supplemented by a learning algorithm that analyzes your style from your inputs on the keyboard over time, as well as from what you type in to Gmail, Twitter, Facebook, etc. The keyboard also functionally allows you to type your words out as well, if that’s more your thing, and it also records your habits in the same manner.

Fleksy

Fleksy is a keyboard that I don’t have much experience with. However, if you are a terrible speller, Fleksy is apparently a God-send. For any time that you’re in a hurry or typing on the move, the autocorrect feature is incredibly accurate, and can translate even the most haphazardly typed words. The application also responds to gestures, and you can make the application run faster that way. If you don’t like the first autocorrect suggestions Fleksy provides, you can swipe through other suggestions until you find the right one. If you don’t like any of the suggestions provided to you, you can actually swipe from left to right across the screen, which acts essentially as a giant delete button. The application costs $1.

TextExpander

TextExpander will be introducing a keyboard application that makes typing out all of those long and tedious things you type all the time that much easier. TextExpander already exists as a popular desktop utility that is able to turn shortcut phrases into more long-form writing.

TextExpander already exists as an iPhone application, but because of Apple’s sandbox, you couldn’t use it to expand snippets in other apps unless you implemented the SDK. Thanks to iOS 8’s Extensions feature, your snippets can finally be used anywhere on your phone. The keyboard just went live with the latest TextExpander update ($5).

PopKey

Before PopKey, the only way to text a reaction GIF to a friend or a group chat was to hunt for one in your image library. That, or go into your browser and save a GIF image into your library, and then go into your library, and share it into your chat. That takes a lot of time! Luckily, you don’t have to do that anymore…assuming sending reaction GIFs to your friends is one of your more primary concerns. PopKey comes with a library of thousands of GIFs that express just about any type of reaction that you might need. Though PopKey isn’t live yet, it will be in the near future.

Google Announces Android Wear

July 9, 2014 by Doug MacFaddin Filed Under: Blog, Wearable Technology

A Google App is now available for Android Wear. There was already a lot of Android in the Google smartwatch, but now with Wear you have Google notifications come directly to your wrist. Wear also seems like it was made just for Google Now and helping Now live up to all it was cut out to be when it was introduced. Android Wear can now link up with your phone and provide every notification and alert that your phone does. Google allows you to pick and choose what notifications you would like to be pushed from apps on your phone to your watch as well. The same concept of Google Now that gives you the right information at the right time is now applied to your wrist. For example, if you need to drive home, the watch will know where you are and get you directions when you need them. Additionally, it can produce the barcode for your flight at the airport, which is so much more accessible, right on your wrist. Google has added more information to Now and made it more accessible and streamlined for customers. Wear and Now both include many of Google’s services into one product. Wear is the next level of Now in that it uses new information that they have learned from Android and the ecosystem it inhabits to be better for customers. New features on Wear include voice recognition and a better, more efficient design. Essentially, the best thing that Wear does is bring Google Now straight to your wrist with a few improvements. Right now the price is a little high, at $200, but it is really worth the investment for all of the convenient features it provides. The only thing that could come in the way of the new Google Wear experience is if the iWatch turns out to be better. Until then, try Google Wear and see what you think.

The Simple Yo App

June 23, 2014 by Doug MacFaddin Filed Under: Apps, Blog

If you haven’t heard of Yo, you haven’t been following Twitter very closely. It is the next biggest app that everyone is talking about and a little confusing. The idea behind Yo is that users log onto the app to send other users just one word…Yo. The trend has caught on because 50,000 people are already signed up for the app. So far the users have send more than 4 million Yo’s to each other. Really the app has not yet officially launched, but even without that formality, the app already received $1.2 million in funding from unnamed investors. Clearly, people think that the co-founder and CEO Or Arbel is on to something. The app probably started as a joke, but now is wickedly popular, getting more users everyday and has a lot of money coming in. While apps like Snapchat rely on the concept of ephemerality, Whisper and Secret give users anonymity, Yo seems to lean back on context. Although the app has absolutely no content, the context comes from who sends you the “Yo” and what time they send it. The context is your own life.

For example, if your best friend texts you “Hey” at 10:00 AM they are probably just saying hello or starting a conversation. However, if someone you have been crushing on texts you the exact same message “Hey” at 2:00 it probably has a completely different meaning and context, i.e. booty call. So, Yo is relying on context and provides a structure that allows you to only send one message with limitless subtexts.

Again, Yo may have started as a joke, but it really plays into the idea of digital dualism. Just as Snapchat is trying to imitate life by letting the image disappear, just as it would if you glance at something, Yo is imitating life and the fact that we use context to interpret every interaction we have. If you are interested, download Yo and see who you can contextually communicate with.

Apple Will Make Money with Beats

June 16, 2014 by Doug MacFaddin Filed Under: Blog, Tech Market

The tech giant, Apple recently required Beats Electronics for $3 billion and many questioned the move. It wasn’t an interesting choice and it didn’t seem like buying up a headphone company would provide any creative outlets for the future of Apple in developing new products. However, there is more to the acquisition than meets the eye. They may actually turn a huge profit with bringing headphones under their wing.

Remember that with Beats, Apple now has control of a subscription music service as well. They also gain information for 800 million credit cards that they can now leverage. Apple lost a lot of business in iTunes after companies like Spotify popped up. It is much more desirable to pay $9.99 a month for Spotify rather than buying all your music a la carte on iTunes. Now that Apple is in the music subscription service they may be able to win back some of the customers that left them. They also will immediately get the revenue of the 800 million people that already stream music and that’s before they even win new customers back to Apple and iTunes with their new streaming service. KatyHuberty of Morgan Stanley already wrote about how Apple can quickly get back their $3 billion investment, “Spotify, which is generally viewed as the leader in streaming music, has 10M paying subscribers or about 25% of its over 40M active user base. If Apple charges $10 per month, same a Spotify, ever 1% penetration of Apple’s 800M user base, equates to $960M revenue annually, adding 8 point of growth to online services and half a point to total company growth.” Apple has a good chance at winning over customers because they still have the most frequently purchased and used iOS home screen in the mobile market today. They just have to include the beat app on the home screen and the power of suggestion will bring customers to them.

Unicorn Acquisitions

May 14, 2014 by Doug MacFaddin Filed Under: Blog, Tech Market

Apple made a big splash in the news when people started talking about the possibility of the computer giant acquiring Beats Electronics for $3.2 billion. The reason for the big stink is that it would have been the largest acquisition ever for Apple in their 38 years. The other, closest acquisition is the $429 million the company paid out for NeXT in 1996. The larger picture indicates that the real reason the Apple acquisition was such a big deal is that it comes in a string of, almost $1 billion “unicorn” acquisitions by major companies over the last year, more specifically in tech. The most notable of these acquisitions include WhatsApp and Oculus being acquired by Facebook, Waze and Nest Labs being bought up by Google, Microsoft absorbing Nokia, and Yahoo buying Tumblr. The real reason this surge of transactions is so significant is that prior to this year the last eight billion-dollar acquisitions of tech companies occurred over the span of ten years. The media flocked to these unicorn acquisitions covering the amount of money being exchanged, how the financing was going to work, the strategic ideal behind the deals, and the chance for success, the real story is how companies and investors need to adapt to enter and exit the market with this radical shift in who is buying and owning companies.

Enterprise acquisitions traditionally have made up most of the transactions over the past ten years. These, more traditional companies, include EMC, Oracle, IBM, and Cisco and they regularly make these multi-billion dollar transactions. For a more specific example consider that Cisco has made seven of these unicorn acquisitions for $25.2 billion and Oracle has gone through 10 unicorn acquisitions for $42.9 billion. Although these enterprise transactions occur frequently, the density of transaction in the tech/start-up industries in the past year have been unprecedented and it will be interesting to keep an eye out to see where things go from here.