The Week in Daily Updates (Week 1)

The content on Stratechery is free for all readers, but I also offer the Daily Update via email and RSS for $10 per month/$100 per year.1 This is a selection of items that were sent out in this week’s Daily Updates. To sign up, visit the Membership page


Twitter Launches Ad Network

(Posted on Monday, April 21)

Speaking of Twitter and ad networks, they actually beat Facebook to the punch, launching, and I quote their terrible headline, “A new way to promote mobile apps to 1 billion devices, both on and off-Twitter”. From the post:

We are excited to announce new ways for marketers and developers to drive app installs and app engagements using our new mobile app promotion suite: both on Twitter and off-Twitter through thousands of mobile apps that use MoPub’s mobile advertising exchange.

This offering gives marketers unparalleled scale across the mobile ecosystem. The MoPub Marketplace reaches more than 1 billion unique devices and handles more than 130 billion ad requests inside Android and iOS applications every 30 days, making it one of the largest mobile ad exchanges in the world. Advertisers can now choose to run simultaneous marketing campaigns to more than 241 million active users on Twitter, and to more than 1 billion mobile devices off-Twitter, through one interface at ads.twitter.com.

While Facebook’s ad network is, I’m guessing, broader than just app installs, the reality is that app installs dominate Facebook’s mobile revenue as well. And, the primary types of apps that advertise for installs are free-to-play games, looking for the specific customer type who will potentially spend hundreds of dollars on in-app purchases.

This, then, raises a frightening specter for both Twitter and Facebook: they are indirectly exposed to any changes Apple or Google may make in their policy with regards to in-app purchases

Google Helping to Pay Samsung’s Legal Costs

(Posted on Wednesday, April 23)

Significant news from the Apple-Samsung patent trial. From Recode:

A Google lawyer testified on Tuesday that the software maker, pursuant to its contractual obligations, agreed to take over defense of some of the claims in Apple’s current patent lawsuit as well as to indemnify Samsung should it lose on those claims.

Apple played deposition testimony from Google lawyer James Maccoun, who verified emails in which Google agreed to provide partial or full indemnity with regard to four patents as well as to take over defense of those claims.

Details of when or why Google agreed to do this are scarce, but I suspect this was part of the series of agreements Google signed with Samsung back in January around sharing IP and agreeing on a common UX. At the time many contended that Google had forced Samsung into a deal; after all, didn’t Google clearly hold all of the cards?

I have never thought this was the case; as Google discovered with Motorola, making and selling phones at scale is very, very difficult. You have to manage a supply chain, maintain carrier and channel agreements, market, and a great deal more. The reality is that Google needs Samsung – by far the leading provider of Android GMS phones – just as much as Samsung needs Google. While I didn’t have any specific knowledge of those January agreements, it only ever made sense that both parties were benefitting in some way. I highly suspect Google’s support in this and other lawsuits was one of the ways Samsung benefitted.

Qualcomm Disappoints

(Posted on Friday, April 25)

Qualcomm also reported results yesterday, but came in low:

Qualcomm Inc on Wednesday posted its smallest quarterly revenue increase since 2010 as it wrestles with a smartphone market that is losing steam and shifting to China, sending its shares lower.

With expansion in the smartphone industry moving away from wealthy markets such as the United States and toward China and other developing countries, where consumers favor less expensive devices, Qualcomm’s once-impressive revenue growth is tapering off and it is focusing on costs to preserve its profitability.

Qualcomm’s story is the same as Samsung’s: the high end, price-insensitive part of the market is owned by Apple, leaving everyone else to compete on price. And, in that competition, one of the best ways to save money is to use MediaTek SoC’s instead of the much higher-priced (albeit better performing) Qualcomm SoC’s.

This is also interesting for the implications it has for Intel, whom Qualcomm recently passed in valuation: I’ve long argued that Intel should give up on designing mobile chips and instead focus on manufacturing them; Qualcomm’s results make me even more sure this is the preferred strategy. As long as Apple owns the high end – and their dominance is only growing – any remaining value in chip design is going to be squeezed out anyways.


The full list of topics covered this week in the Daily Update include:

  • Twitter Acquires Gnip
  • Facebook to Launch Ad Network
  • Twitter Launches Ad Network
  • Microsoft/Nokia Deal to Finally Close
  • How Much Money is in Cloud Services?
  • Amazon Sales Hurt by Sales Tax
  • Google Helping to Pay Samsung’s Legal Costs
  • Tempering Expectations for Ad-Based Chinese Tech Firms
  • Google to Offer Targeted Mobile App Installs in Search and YouTube
  • Apple’s Earnings (750+ words!)
  • Apple Changes Capital Structure
  • Facebook’s Earnings
  • Microsoft’s Earnings
  • Qualcomm’s Earnings
  • Amazon’s Earnings

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  1. There is also an access option for $30 per month/$300 per year which gives you access to me personally to ask about the topic of your choosing, a private message board, and virtual and in-person meetups []