?Mark Shuttleworth dishes on where Canonical and Ubuntu Linux are going next

Mark Shuttleworth looked good at OpenStack Summit in Vancouver. Not only were his company Canonical and operating system Ubuntu Linux doing well, but thanks to his microfasting diet, he’s lost 40 pounds. Energized and feeling good, he’s looking forward to taking Canonical to its initial public offering (IPO) in 2019 and making the company more powerful than ever.

It’s taken him longer than expected to IPO Canonical. Shuttleworth explained, “We will do the right thing at the right time. That’s not this year, though. There’s a process that you have to go through and that takes time. We know what we need to hit in terms of revenue and growth and we’re on track.”

In the meantime, besides his own wealth — according to the BBC, his personal wealth jumped by £340 million last year — he’s turned to private equity to help fuel Canonical’s growth.

And, where is that growth coming from? Well, it’s not the desktop. Found as users — and Shuttleworth himself — of the Linux desktop, Canonical’s real money comes in from the cloud.

Ubuntu remains the dominant cloud operating system. According to the May 8, 2018 Cloud Market statistics, on the Amazon Web Services (AWS) cloud, Ubuntu dominates the cloud with 209,000 instances, well ahead of its competitors Amazon Linux AMI, 88,500; Red Hat Enterprise Linux (RHEL) and CentOS‘s 31,400, and Windows Server‘s 29,200. As another data point, the executives at the OpenStack cloud company Rackspace told me that although their company had started with RHEL, today it’s 60/40 Ubuntu.

OpenStack has been very, very good for Canonical, which is more than you can say for many companies that tried to make it as OpenStack providers or distributors. “With OpenStack it’s important to deliver on the underlying promise of more cost-effective infrastructure,” Shuttleworth said. Sure, “You can love technology and you can have new projects and it can all be kumbaya and open source, but what really matters is computers, virtual machines, virtual disks, virtual networks. So we ruthlessly focus on delivering that and then also solving all the problems around that.”

So it is, Shuttleworth claims, that “Canonical can deliver an OpenStack platform to an enterprise in two weeks with everything in place.”

What’s driving Canonical growth on both the public and OpenStack-based cloud is “machine learning and container operations. The economics of automating the data center brings people to Ubuntu.”

That said, “The Internet of Things (IoT) is still an area of investment for us. We have the right set of primitives [Ubuntu Core, Ubuntu for IoT and Snap contanizeried applications] to bring IoT all over the planet.” But, it’s “not profitable yet”.

Shuttleworth thinks Ubuntu will end up leading IoT, as it has the cloud, “because a developer can transfer their programs from a workstation to the cloud to a gateway to the IoT. I want to make sure we build the right set of technologies so you can operate a billion things with Ubuntu on it.” To make this happen, Shuttleworth said Canonical currently has just short of 600 full-time developers.

As for the desktop, Shuttleworth finds it a “fascinating study of human nature that Unity [Ubuntu’s former desktop] became a complete exercise in torches and pitchforks. I’m now convinced a lot of the people who demanded its demise never used it.” That’s because, while “I think GNOME is a nicely done desktop,” many Ubuntu users are now objecting to GNOME. Shuttleworth also had kind words about the KDE Neon, MATE, and LXDE desktops. Still, “I do miss Unity, but I use GNOME.”

Shuttleworth would like to see the open-source community become “safer to put new ideas out into it.” Too often, “it’s obnoxious to someone else’s labor of love.”

That said, in business competition, Shuttleworth said, after people criticized him for calling out Red Hat and VMware by name in his OpenStack keynote speech, “I don’t think it was offsides to talk about money and competition. OpenStack has to be in the room where public clouds are discussed and Ubuntu has to be in the conversation when it comes to cloud operating systems. No one has questioned the facts.”

In a way, though, having given up on innovating on the desktop and on the smartphone market has been a blessing. “I can work with more focus on cloud and the edge and IoT. We’re moving faster. Our security and performance story can be tighter because we can put more time on both them.”

One thing that Shuttleworth believes Canonical does better than his competition is delivering the best from upstream to its customers. “Take OpenStack, we didn’t invent a bunch of pieces. We take care of stuff people need by trusting the upstream community. People find this refreshing.”

Canonical also succeeds, he thinks, because they eat their own dog food. “We learn stuff by operating it ourselves and not just developing it. We experience what it’s like to operate many OpenStack and Kubernetes stacks. We then offer these complex solutions as a managed service, and that reduces the cost for users.”

The result is a company that Shuttleworth is sure will lead the way in the cloud and container-driven world of IT.

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'Onrush' Review: The Hero Shooter Of Driving Games

Credit: Deep Silver

Onrush is a very different kind of driving game.

When I first booted up Onrush on my Xbox One X, I was fully expecting some kind of neon-infused, amped-up, spiritual continuation of the developer’s previous Motorstorm games. Something improved but safe, modernized yet familiar. What I got instead was a genre-shattering wrecking ball, a giant middle finger to standard driving game conventions. Onrush isn’t about racing at all, it turns out. It’s about reflexes, pure adrenaline and possibly most importantly, the kind of cooperative strategy usually reserved for hero shooters and tag team fighters.

I won’t lie—the early hours of Onrush were admittedly overwhelming and unexpectedly confusing for this seasoned gamer. Yes, the basic mechanics of commandeering the game’s virtual two- and four-wheelers won’t trip up most experienced players, especially if you’ve mastered a fair share of off-road rally games. But it’s just beyond these fundamentals that instinctual play goes flying out the mud-caked window. See, there’s no finish line and no placing in Onrush’s races, a complete lack of traditional first, second and third rankings to strive for. There’s only a massive, shifting, battling pack of vehicles chasing down specific objectives, and if you fall far enough behind, the game warps you back into the action. It’s Mad Max with less sand and guns, and minus that guitar-riffing marionette weirdo.

Credit: Deep Silver

If can manage it, play Onrush on a 4K display.

The modes available are relatively diverse and interesting, if a little lacking in sheer number. Overdrive, for example, has contestants accumulating points for their team by linking boosts and Burnout-style takedowns. Lockdown sees the relentless pursuit and tenuous claim of fast-moving, highlighted sections of track, while Countdown requires driving through green gates that add precious seconds to your team’s constantly diminishing timer. Then there’s Switch, which is an elimination mode of sorts which forces downed players to swap out for the next available steed. Regardless of the flavor, it’s all team-based, and in this way, the overarching effect is strangely reminiscent of Overwatch. Individual accomplishments are encouraged but ultimately trumped by the squad’s aims and the push-pull of group competition. It’s incredibly different for a driving game and takes some getting used to.

Speaking of Overwatch, the game’s vehicle roster bears striking resemblance to Blizzard’s varied battler lineup. Not in art direction or character design, per se, but in class distribution and special abilities. You’ve got your tanks, your attackers, your defense personas and also your lightweight speed demons. Each car or motorbike has its own strengths, weaknesses and Rush abilities. Think of the latter as an analog to Overwatch’s ‘Ultimates’, special moves unique to each character that give you a temporary leg up on the competition. You fill up your Rush gauge as you boost, take down adversaries, do tricks and obliterate AI fodder vehicles throughout each event. Once that tank is full, you can unleash a turbo boost combined with some kind of oppositional impediment or ally accouterment. These are always satisfying to activate, though they can be incredibly hard to control.

Credit: Deep Silver

The tracks in Onrush are pretty phenomenal.

The action here is, without a doubt, extremely intense. At any given moment, you’re one tiny error away from wiping out, one wrong turn from bending your metal frame around the nearest pine tree. This, it feels, is simultaneously the best and worst thing about Onrush. The excitement of so much chaos can be exhilarating, but it can also seriously impede your basic sense of control. I can’t even count how many times I crashed just because I literally couldn’t see what was coming up in front of me. On that note, there’s a seemingly random nature to some of Onrush’s difficulty, and a sort of learned helplessness that can overtake various stretches of repeated failure, especially online against grizzled veterans. Every so often I’ll get thrown into an event during which I never can survive for more than a few seconds, getting wrecked from all angles the moment I spawn in. This issue has alleviated somewhat as I’ve naturally become more proficient at the game, incorporating new strategies and better utilizing certain abilities.

It helps that from a technical standpoint, Onrush is a mechanical marvel. The game’s engine was built from the ground up to support dynamic weather, constantly shifting lighting and up to 24 cars on-screen at once. It looks gorgeous on Xbox One X, which can run the software at either 30 fps/4K or an unwavering 60 fps/1080p. I usually stick to the latter, though early on I was running it in 4K just to slow things down as I got my bearings. I will say that sometimes the dynamic weather, especially the snow blizzard effects, can really get in the way of gameplay. That’s probably intended, but I often felt it to be too detrimental to my field of view.

Credit: Deep Silver

Be prepared for a rather steep learning curve.

When everything is clicking, Onrush feels amazing, but until your skill can catch up with the insanity that’s happening on-screen, I can see this being a frustrating experience for less patient gamers. The career mode offers plenty of single player challenges to take on, while the online multiplayer runs smoothly and is definitely where the game shines, if you can get enough live players to jump in, that is. There’s also tons of neat unlockables—vehicle skins, driver outfits, tombstones (customized markers you leave behind after wrecking)—to earn via in-game currency and gear crates, which don’t integrate microtransactions, at least not yet. I can see myself playing this for a long time to come, as long as the online community stays active.

Even after hours of play, Onrush remains wonderfully difficult to classify. The stomach-churning drops of Hydro Thunder. The insane crashes of Burnout. The combo system and radical attitude of SSX. The nail-biting cooperative multiplayer mayhem of Overwatch. It’s a recipe that probably shouldn’t work as well as it does, and despite a steep learning curve, it creates what feels like the next evolutionary step in driving games. Or, at the very least, the initial iterative lurch toward a completely new genre.

Developer: Codemasters Evo

Publisher: Deep Silver

Platforms: PS4, Xbox One (version tested), PC

Release Date: June 5, 2018

Price: $59.99

Score: 8/10

Disclaimer: Free review code was provided for coverage purposes

Thursday's Google Doodle Celebrates Anesthesiologist Virginia Apgar

Google

Virginia Apgar was the first woman to become a full professor at Columbia University College of Physicians and Surgeons.

Today’s Google Doodle celebrates the 109th birthday of physician Virginia Apgar, who developed the scale doctors still use to quickly gauge the health of newborn babies: the Apgar score.

The Apgar score a 0-10 scale with five criteria: Appearance (skin color, ranging from blue or pale to a healthy flesh color), Pulse, Grimace (response to stimulation, ranging from no response to an unhappy expression to full-fledged crying), Activity (arm and leg movement), and Respiration. (Conveniently, those words spell out APGAR.) Most healthy babies score a 7 or above, and anything below a 3 requires immediate medical care.

Apgar graduated from medical school in 1933. During her residency, the chairman of surgery at Columbia-Presbyterian medical center steered her toward anesthesiology, partially because surgery was an especially difficult field for women to find career opportunities in at the time, but also reportedly because he believed she had what it took to advance the field in important ways. Anesthesiology had, until recently, been the domain of nurses, but by the late 1930s had become complex enough to require physicians, and the medical field was working hard to catch up.

By 1938, Apgar was the director of a brand-new division of anesthesia at Columbia-Presbyterian Medical Center and Columbia University College of Physicians and Surgeons, where she spent the next decade running the department, developing a residency program to train new anesthesiologists, and treating patients.

Apgar was a faculty member at Columbia University College of Physicians and Surgeons in the early 1950s when she noticed that although the infant mortality rate was improving, that was mostly due to interventions after the first 24 hours. Within that crucial window of time 24 hours after birth, there had been no change in infant mortality since 1930. Apgar wanted to know why the medical field hadn’t gotten better at saving newborns – and how to fix it. The result was the Apgar score.

Later in her career, Apgar advocated for universal vaccination against rubella to help prevent mother-to-child transmission of the disease, which causes miscarriages or severe birth defects. She also worked to promote testing for birth defects.

She died in 1974 at the hospital where she attended medical school and spent two decades of her career.

Elon Musk Calms Down, and More From Tesla's Shareholder Meeting

When Elon Musk was a kid, he had so much trouble managing his time, that his younger brother Kimbal would lie to him about the bus schedule. Elon would show up a few minutes after the supposed arrival—and have just enough time to hop aboard. A few decades on, the whole world knows about Elon’s habit of blowing deadlines. And he admits it can be a problem.

“This is something I’m trying to get better at,” he said from the stage of Silicon Valley’s Computer History Museum on Tuesday afternoon, at Tesla’s annual shareholders meeting. “I’m trying to recalibrate these estimates.”

A few days after a Twitter rage fest aimed at the media, a month after refusing to answer questions about Tesla’s financial state during an investors’ call, and two months after getting in a public spat with the feds investigating a deadly crash in one of his cars, Musk’s attitude when he appeared before his fellow shareholders was conciliatory. He even seemed emotional at times. “We build our cares with love,” he said, with a slight quaver in his voice. And he noted how brutal the auto industry can be, especially to newcomers. “It’s insanely hard just staying alive.”

For an hour and a half, Musk patiently fielded questions on just about every part of Tesla’s sprawling business. He said the Model 3 production rate will hit the long-promised 5,000 cars a week rate later this month, predicted an enormous increase in battery production, announced upgrades to the Autopilot semi-autonomous system, and even appeased PETA. If you missed the meeting, here are the key takeaways.

Elon Retains the Reins

The official business of the meeting included voting on the reelection of venture capitalist Antonio Gracias, Elon’s bus-catching brother Kimbal, and 21st Century Fox CEO James Murdoch to Tesla’s board of directors. (Only a third of the nine board members come up for election at a time—it’s like the US Senate that way.) Last month, activist investor the CtW Group urged Tesla shareholders to replace the trio with people who had automotive and manufacturing expertise. Another investor, Jing Zhao, filed a proposal to strip Musk of his position as Tesla’s chairman, which he has held since 2004 (he took the CEO job in 2008). But the shareholders stuck with Musk, reelecting the board members and nixing the leadership change by an overwhelming majority. (Tesla will file the exact vote count with the SEC in the next few days.)

The loss didn’t surprise CtW executive director Dieter Waizenegger, who argues control of Tesla is too concentrated in people tied to Musk. “This opinion is shared by a significant number of shareholders of Tesla,” he says. “We expect the final vote tally to reveal that.” Even if he’s right, Musk remains fully in charge.

More Model 3

Musk’s acknowledgement of his timeline trouble didn’t stop him from announcing that, by the end of the month, Tesla will be building 5,000 Model 3 sedans every week, which should be enough to start turning a profit on the car. The uptick is thanks to Tesla’s rebalancing of the workload between humans and robots in its factory in Fremont, California, where the company is adding a third Model 3 production line. It is also planning to open a factory in China, to go with its plants in Fremont and the Netherlands.

Meanwhile, Tesla is gradually expanding options for Model 3 owners, who so far have been limited to the version with an upgraded battery and premium interior, which starts at $56,000. By the end of this year, Musk hopes to start production of the version closer to the car’s $35,000 base price, with the smaller battery pack. Also coming soon: right hand drive.

New Products

Even as it struggles to build the Model 3, Tesla is planning on three new vehicles: the Semi truck, the revived Roadster, and the still mysterious Model Y. Musk told shareholders he’s hoping to start production of all three in the first half of 2020, though he has yet to specify where he’ll do that, or how. He’ll unveil the Model Y in March (it will be “something super special”), and expects the truck and the sports car to deliver better specs than the already very impressive numbers he announced last fall. Oh, and he’ll never build an electric motorcycle.

Autopilot Advances

Without getting into details, Musk said Tesla is making steady progress to improve its Autopilot feature, and is now working on adding the ability to change lanes and handle highway on- and off-ramps (Musk noted he was testing new software around 1 am this morning). For drivers who aren’t sure they want to spend $5,000 on the feature, Tesla will soon start offering free trials. Musk also reaffirmed his distaste for lidar, the laser shooting sensor most autonomous vehicle developers say is key to building a safe, capable robo-car.

SuperChargers

Tesla now runs nearly 10,000 Supercharger stations around the world, the stations where its drivers (and no one else) can plug in and charge a depleted battery to about 80 percent in 30 minutes. And Musk is working to keep improving charge times, saying a three- or four-fold improvement is possible. (That’s only true for relatively new cars, he added, disappointing the 2012 Model S owner who asked him about it.)

Going Vegan

Unlike many automakers, Tesla has been offering leather-free versions of its cars for years, appealing to its vegan and vegetarian fans. But it’s still using some leather in its steering wheels, and a People for the Ethical Treatment of Animals (PETA) rep took the mic to press Musk on it. He explained Tesla can make leather-free steering wheels, but the work has to be done it its design studio, making it something of a pain. But he promised it’ll be easier once the Model Y comes around. Now he’s just gotta hit that 2020 goal.


More Great WIRED Stories

Toshimichi Mori On How 'RWBY' Ended Up In 'BlazBlue: Cross Tag Battle' And His Love For 'Nier'

Credit: Arc System Works

‘BlazBlue’ series producer and game designer Toshimichi Mori.

Back in 2016, I went to Arc System Works and interviewed them about their games. In that interview, Toshimichi Mori professed his love for RWBY and now the new BlazBlue: Cross Tag Battle features characters from that series. So it felt like a good time to speak to Mori again.

In case you haven’t been keeping up with the BlazBlue games, the latest is BlazBlue: Cross Tag Battle and features playable characters from BlazBlue, Persona 4 Arena, Under Night In-Birth and RWBY. As Mori is the producer for the BlazBlue series, I asked him what he had been up to since I spoke with him last in 2016.

“Was it 2016? Wait… we made BlazBlue: Cross Tag Battle in a year and a little? That’s too fast. Wait, wait…It’s been about 3 years. Anyway, I mean this in the most endearing way possible but personally, I had no idea what kind of power and influence Forbes had. So, I just did a normal interview, like I usually do. I didn’t realize what a big deal it was until after the interview.

“I think the first wake-up call was when Rooster Teeth reached out to us “Mori mentioned RWBY on Forbes!” and then all of a sudden, Gray and his team said they were coming to Japan to promote RWBY. I wished we had a little more advance notice, to show them around.

“We’re going to have a revenge-match, though. I’d like to have them over again when this game’s complete so that we can come full circle. And show them around properly this time. But, I’m very thankful to Forbes for helping create this opportunity. It was a crazy ride.”

While it’s nice to know that the previous interview had helped Mori and his team to include RWBY in a new BlazBlue game, I was also curious as to how the studio shift from UE3 to UE4 had worked out.

“I think UE3 was designed from a programmer’s standpoint, where UE4 is more geared towards people who work with graphics. I think there’s always going to be certain members of the team who aren’t satisfied. I’m sure there were some difficulties in the transition, but like most things, you get on with it and adapt.

“As a creator, I’m definitely on the visual design side, so I think it’s great, but as a programmer, it’s apparently a little harder to do what they want to do. Especially in the beginning, I think it was very limited, the space in which they could operate. So, I heard some complaints from them. Going back to personal experience, though, UE4 was a lot easier for me to find my way around. Easier to see. Easier to navigate.

“Talking of UE4, I also think Dragon Ball FighterZ is a wonderful game, but I think we over-committed all of our company resources into it. Like… really over-committed. But, it’s a great game. That’s all I can say right now.”

Credit: Arc System Works

‘BlazBlue: Cross Tag Battle’ features characters from ‘RWBY’.

Going back to RWBY, I wanted to know if Mori had any other ideas for that series.

“Oh yeah, I love RWBY. I think it’s a great property and has a great story. So my love for RWBY hasn’t changed at all. That’s a really difficult question. I mean, I’d love to see Penny in the game. Penny and Adam. Definitely.

“Naturally, everything had to go through me, everything. I had a lot of suggestions, especially for Ruby and Weiss. However, once we got to Blake and Yang, I think my team really started to understand what I was looking for. So it didn’t require as much feedback.”

“I’m sure there might be a strong voice from fans overseas to see more RWBY characters, but if I focus too much on what the fans want, then it will take me away from developing what I want to develop. Do you create what people want? Or what you, as a developer, want to create? And, I like to think that there is a “want” from fans of whatever it is I develop next. There’s a lot to think about… I can’t say what my next step is. I have my own content and I want to put it into action one day too.

“Personally, I just make whatever it is I want to make at the time. When we first started making BlazBlue: Cross Tag Battle, I wanted to make a tag-team game. But will I make tag-team games forever? That’s a different conversation.

“I’m a fan of the genre, so I’ll probably continue to make it in some form or another. But I know the fans want to pull me in a certain direction, and not to mention the company. They dictate a lot of what I can do. So, if what I want to make and what the fans want are in line, that’s really the best case scenario. But, let’s talk about other IPs. That’s a whole different story. It’s nice, but not the end-game.”

Apart from working on BlazBlue: Cross Tag Battle, I wondered what Mori had been playing recently and it seems there might even by another crossover on the way.

“As far as playing games go… recently, right? I’ve been playing Nier: Automata again. Of course, I beat it a while ago on PS4, but I saw it on Steam. On sale. That game is really well done. I’ve still got a lot to learn from it.

“Hey, we should release 2B and 9S on BlazBlue: Cross Tag Battle. Yeah, that would be good. I would want to play that. Should I ask them? Haha.”

Credit: Arc System Works

‘BlazBlue: Cross Tag Battle’ is now available on PlayStation 4, Switch and PC.

If you remember, I also interviewed Taro Yoko about Nier: Automata last year, so feel free to check that out if you are at all interested.

Closing up, it felt only natural to talk about the runaway success of the Switch and like many developers in Japan, Mori really understands its impact and what that means for gaming in general.

“It’s hard to say what the future of the Nintendo Switch is, but I think its current role is pretty clear; it’s bringing back gamers who forgot what it meant to game. It’s putting gaming back on the radar of those who didn’t consider it.

“How can I put this… game morals? The Switch is obviously a console for younger audiences, and you hear about it in the news sometimes because of what it does to the young generation, but I still think it has a place. I think it’s good to have these dialogues, as long as the content on the Switch isn’t too extreme.

“However, I think it’s a good opportunity for the younger generation to experience what a “game” is and the industry needs more young people interested in games. Our demo had a lot of downloads… a lot. And, we looked at some of the demographics. People who we thought wouldn’t even play a fighting game were downloading it and trying it out. We saw a lot of that.

“It would be great if we had more fans like that and of course I have a Switch myself.”

As for the future, Mori definitely has plans and Nier is something he is clearly keen on.

“I mentioned it a little earlier, too, but Nier. That would be an amazing project to work on. 2B and 9S would be amazing additions. Why didn’t I think of that sooner? I should try asking him though, really.

“But, having said all of that, and having created BlazBlue: Cross Tag Battle, if you go down the path of collaborations, it’s endless really. So, I still want to be very mindful of creating my own content. I hope you all stay tuned and look forward to what we make next.”

BlazBlue: Cross Tag Battle is now available on PlayStation 4, Switch and PC.

Follow me on Twitter, Facebook and YouTube. I also manage Mecha Damashii and do toy reviews over at hobbylink.tv.

Read my Forbes blog here.

Can Apple Stay Apple?

, I write about strategy, leadership and red teaming Opinions expressed by Forbes Contributors are their own.

A sad face emoticon is seen on an iPhone in this photo illustration on May 25, 2018. (Photo by Jaap Arriens/NurPhoto via Getty Images)

</div> </div> <p>On June 1, the <em>Wall Street Journal&nbsp;</em><a href="https://www.wsj.com/articles/apple-looks-to-expand-advertising-business-with-new-network-for-apps-1527869990" target="_blank" data-ga-track="ExternalLink:https://www.wsj.com/articles/apple-looks-to-expand-advertising-business-with-new-network-for-apps-1527869990" rel="nofollow">reported</a>&nbsp;Apple was looking to expand its advertising business with a new network for app-makers such as Pinterest Inc. and Snap Inc.</p> <p>“The digital ad effort, if it proceeds, would push Apple into territory dominated by Alphabet Inc.’s Google, which claims 35% of the mobile ad market, and Facebook Inc., which has 25%,” the <em>Journal </em>reported.</p> <p> </p> <p>It could also take Apple farther away from its original vision, which has in many ways been the secret to the company’s success.</p> <p>Steve Jobs decided long ago that Apple would make its money selling great products and services. He believed people would be willing to pay a premium for such products and services, and if they did, then Apple would not have to make its money off their personal information the way that competitors such as Google (now Alphabet Inc.) and Facebook Inc. increasingly were.</p> <p>In recent months, Apple CEO Tim Cook seemed like he was doubling-down on that original vision, emphatically declaring that Apple’s customers are not its product.</p> <p>“If our customer was our product, we could make a ton of money. We’ve elected not to do that,” he <a href="https://www.recode.net/2018/4/6/17197754/watch-apple-ceo-tim-cook-msnbc" target="_blank" data-ga-track="ExternalLink:https://www.recode.net/2018/4/6/17197754/watch-apple-ceo-tim-cook-msnbc" rel="nofollow">told Recode</a> in March. “We’re not going to traffic in your personal life.”</p>

” readability=”44.4777031155″>

I am struggling to understand how Apple Inc.’s purported plan to dramatically expand its digital-advertising business makes sense for a company that has successfully differentiated itself by selling products and services, rather than information about its customers.

A sad face emoticon is seen on an iPhone in this photo illustration on May 25, 2018. (Photo by Jaap Arriens/NurPhoto via Getty Images)

On June 1, the Wall Street Journal reported Apple was looking to expand its advertising business with a new network for app-makers such as Pinterest Inc. and Snap Inc.

“The digital ad effort, if it proceeds, would push Apple into territory dominated by Alphabet Inc.’s Google, which claims 35% of the mobile ad market, and Facebook Inc., which has 25%,” the Journal reported.

It could also take Apple farther away from its original vision, which has in many ways been the secret to the company’s success.

Steve Jobs decided long ago that Apple would make its money selling great products and services. He believed people would be willing to pay a premium for such products and services, and if they did, then Apple would not have to make its money off their personal information the way that competitors such as Google (now Alphabet Inc.) and Facebook Inc. increasingly were.

In recent months, Apple CEO Tim Cook seemed like he was doubling-down on that original vision, emphatically declaring that Apple’s customers are not its product.

“If our customer was our product, we could make a ton of money. We’ve elected not to do that,” he told Recode in March. “We’re not going to traffic in your personal life.”

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How Microsoft, Nabisco, and GM Make Customers Happier by Raising Prices

Business owners often worry that if they raise their prices, they’ll lose customers and understandably so, since customers are likely to feel gouged when told they must pay more money for the exact same product.

This puts business owners in a dilemma. If you can’t raise prices, your profit goes down ever time your costs-of-goods goes up. And even if cost-of-goods is the same, you’re losing profit if you’re not getting the highest price possible for whatever you’re selling.

Most companies are really bad at raising prices. Typically, they attempt to explain the rise in price as that’s regrettably necessary but outside their control. Like this:

“Due to economic conditions, we are forced to raise our prices. We are sorry for any inconvenience that this might cause.”

Such excuses don’t just sound hangdog, they’re also only effective if the customer trusts you when you imply that raising prices is the only possible way for your firm to adapt to “economic conditions” (or whatever excuse you’re using).

Smart companies never apologize for raising prices. Instead, they reposition the increase as a customer benefit. Their goal isn’t to get the customer to say “I forgive you for raising prices” but instead to say “Wow! Thanks for raising your price!”

Sound impossible? Well, here are five way that the big guys pull off this neat trick:

1. Replace outright purchase with a subscription.

A very old sales trick is to make a large price sound smaller by stating much it costs per day. For example: “Yes, $700 sounds like a lot of money but that’s less $2 a day for a year… about the price of a cup of coffee. And you’ll be using this product for a decade!”

Subscription pricing builds that basic idea.  The customer sees “$9.95 a month” for a product that used to cost $250. The customer thinks: “Wow! That’s a real bargain. Thanks for dropping your price!” In fact, the customer  ends up paying more in the long run.

Take Microsoft Office, for instance. It once cost as much $800 for a single license. Today, you can get a license (for use on multiple machines) for a seemingly measly $10 a month…with free updates. Great deal, eh?

Well, maybe not. Office hasn’t really changed for the past 10 years, except for becoming more confusing through feature-creep. If you pay $10 a month for 10 years, you’ve just paid $1,200 for an $800 product. Few customers do the math, evidently.

2. Lower your base price but raise the price of a common option.

This is the general case of the specific method Burger King uses to get people to pay $.50 for a slice of cheese that costs less than $.15. 

To recap, Burger King charges $.50 extra for a piece of cheese–a price that’s not listed anywhere. The charge is added after the customers says “Yes” to what seems like helpful customer service: “Do you want cheese with that?”

This works for other types of products as well. For example, a software company might lower the price of a user license but increase the price of the service contract. Ideally, they’d make the price increase less visible changing subscription window, like from “$1,000 a year” to “$25 a week.” 

The trick to this strategy is to publicize the drop in price not the increased charge. The airlines bungled this when they added baggage fees. They positioned it as an add-on fee, with an apology about “gas prices going up.” Dumb.

A better approach would have been to announce a discount for people who don’t check baggage. That way, flyers might have felt grateful to the airlines for giving them a better deal if they pack light and haul their own overhead bags.

3. Bundle multiple options into a single price.

The idea here is that you reduce the customer’s burden of decision-making (a good thing) by bundling options into packages, which are priced with a higher profit margin than would be possible if you charged for them separately.

The automobile industry uses this method to increase the margins on car sales. Customers can order a base model but with upgrade packages that have a couple features most customer want along with some “meh” options they end up paying for anyway.

As with all of these methods, the trick is publicizing the lower price and positioning the packaged options as a convenience and benefit (e.g. “the ultra sport package”) rather than a way to sell some high margin options that most people don’t really want.

4. Offer to finance the purchase.

In this case, a large chunk of extra profit comes from the finance fees and loan interest rather than from the sale of the product itself. You position the ability to get on-the-spot financing as a convenience rather than a profitability bump. 

Again, automobile dealerships do this all the time. For example, when I bought a Honda recently, the dealership gave me a very competitive price on the car, but then handed me over to a very senior salesperson when it came to the financing, clearing hoping to sell me the loan as an add-on. (I self-financed, so she was disappointed.)

I’ve also seen this kind of financing offered for large computer hardware purchases or indeed for any big ticket B2B product. Of course, such sales usually involve buyers who are more sophisticated than your average consumer and probably understand that the financing is an “add-on” rather than a service.

But consumers, not so much.

5. Reframe smaller packaging as a larger value.

This is the go-to “please the customer” price increase for the food industry. They decrease both the price and the amount of product so that you get even less product for a lower price. They then advertise the new size as superior to the old packaging, even though the consumer is paying more.

For example, a company might reduce the amount of product in a standard package from 16 oz to 14 oz and change the labeling to claim it’s “healthier” (because it has less calories), “extra-portable” (because the package is smaller), or “more eco-friendly” (because it uses 2% less paper.

Products cited in the New York Times as executing this strategy include Chicken of the Sea, Doritos, Tostitos, Fritos, Nabisco Premium saltines, and Honey Maid graham crackers. 

As with the other price-increase strategies, the emphasis is always upon creating the perception of a better value so that the customer embraces the price increase, usually without even realizing that they’re paying more.

It need hardly be said that ALL of these strategies are excellent illustrations (as if we needed them, given the state of the country) that “nobody ever lost money underestimating the intelligence of the American people.”

General Electric: Strong Buy

The drop in General Electric‘s (GE) share price is yet another buying opportunity in my opinion. The industrial company has seen a considerable rebound in investor sentiment after the release of better-than-expected first quarter results, and the recent sale of General Electric’s rail business to Wabtec puts the company on the right track. GE will likely continue to shred more assets in the next several years and apply a laser-sharp focus on the restructuring of its power business. I see General Electric as an appealing contrarian rebound play with up to 40 percent upside potential over the next twelve months.

Rebounding Investor Sentiment…Until The Last Week Of May

General Electric’s shares started to rebound in April and May, after falling rather consistently throughout the first three months of 2018. Concerns over weak cash flow, a struggling power unit, and uncertainty after the dividend cut in Q4-2017 have weighed on investor sentiment at the beginning of the year.

That being said, though, investor sentiment is improving after the industrial company reported better-than-expected results for Q1-2018. Most recently, however, GE’s share price has dipped again on concerns that the power restructuring will take longer than expected.

Year-to-date, General Electric’s share price has dropped ~19 percent.

Source: StockCharts

The recovery in General Electric’s share price looked fine, until May 23, 2018 when John Flannery, Chief Executive Officer and Chairman of General Electric, said that he expects GE’s power division to continue to struggle in the near future. Further, the CEO cast some doubt on its dividend, which made investors ditch the stock yet again. GE’s stock, meanwhile, tumbled more than seven percent.

Investors were quickly rattled by the CEO’s remarks about the restructuring of its power division, but there were few things that were actually new. The power division, as all investors know, has been a drag on GE’s earnings and margins, including the first quarter of 2018.

Source: General Electric Q1-18 Earnings Release

General Electric is running a hard restructuring, laying off people and reducing overhead costs. The company has guided for $1 billion in segment cost reductions in 2018, and has put a set of measures in place aimed at boosting performance, including driving better execution, taking margin actions, and selling non-core assets.

Source: General Electric Investor Presentation

I think General Electric is doing the right things as far as the power restructuring is concerned, and investors should give the industrial company some time to turn the ship around.

Are There Risks To The Dividend?

General Electric slashed its quarterly dividend payout 50 percent from $0.24/share to $0.12/share in November 2017, which was the second time since the financial crisis that the company slashed its dividend.

Is the dividend sustainable?

Frankly, that depends to a large degree on whether General Electric can engineer a cash flow turnaround.

Here’s GE’s industrial cash flow from 2012-2017.

Source: Achilles Research

Asset sales, however, could play a major role in boosting GE’s cash flow, at least over the short haul. General Electric recently sold its 111-year old rail transportation unit to Wabtec in an $11.1 billion deal. The industrial company will receive a $2.9 billion cash payment associated with the deal.

What To Expect Over The Next 12 Months

Obviously, General Electric will be tempted to sell more assets and raise its cash levels. I don’t think that management will want to cut the dividend again unless cash flow unexpectedly and significantly deteriorates.

Further, General Electric is strongly focused on driving the power restructuring home, but it may take a couple of quarters for investors to see meaningful results. That being said, GE’s laser focus on improving margins in the power business through cost controls and asset sales will likely lead to an incremental improvement in cash flow throughout the year. GE certainly deserves the benefit of the doubt.

Valuation

General Electric’s shares are cheap, selling for less than 14x next year’s estimated profits while investor sentiment is probably still near multi-year lows.

I am still positive on General Electric’s ability to turn things around in the power business in 2018/9. Hence, I reaffirm my $20 price target on GE, implying ~40 percent upside.

Chart

GE data by YCharts

Your Takeaway

General Electric’s share price slumped after Flannery’s comments at an industry conference last month, and the drop is a promising opportunity to consider a speculative long position in my opinion. General Electric will likely sell more non-core assets in 2018 and drive a hard, cost-centered restructuring in the power business. GE’s shares are relatively cheap on a forward P/E-basis, and there is room for improvement in investor sentiment, especially if the restructuring yields cash flow gains. Strong speculative Buy.

If you like to read more of my articles, and like to be kept up to date with the companies I cover, I kindly ask you that you scroll to the top of this page and click ‘follow‘. I am largely investing in dividend paying stocks, but also venture out occasionally and cover special situations that offer appealing reward-to-risk ratios and have potential for significant capital appreciation. Above all, my immediate investment goal is to achieve financial independence.

Disclosure: I am/we are long GE.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Hulu Exec Joel Stillerman Departs in Management Shakeup

A year ago, Hulu announced that it had hired Joel Stillerman away from AMC to expand the streaming platform’s slate of original programming.

On Friday, Hulu announced that the chief content officer was leaving the company.

The departure of Stillerman, who worked on The Walking Dead and Better Call Saul while at AMC, was part of a broader reorganization at the Santa Monica company. There has been some tumult in the upper ranks at Hulu, which saw its chief executive, Mike Hopkins, depart in October to become the head of Sony’s television division. Randy Freer, the former COO of Fox Networks Group, replaced Hopkins—who had hired Stillerman—and recent reports suggest that Freer and Stillerman didn’t get along.

Following Stillerman’s departure from Hulu, the company’s chief content officer role will disappear. Craig Erwich, Hulu’s senior vice president of content, will oversee original programming. Tim Connolly, Hulu’s SVP of partnerships and distribution, and Ben Smith, SVP of experience, will also depart the company. Additionally, CMO Kelly Campbell will assume more responsibility, Jaya Kolhatkar will become Chief Data Officer, and Dan Phillips will become CTO.

Hulu is co-owned by Comcast, Time Warner, Disney, and 21st Century Fox, which itself agreed to be acquired by Disney earlier this year. (If Disney prevails, it would become Hulu’s majority owner.) That complicated ownership structure, rather unlike rival Netflix, has been characterized as a drag on the company’s ability to make decisions.

Hulu now reaches more than 20 million subscribers, and its service has expanded to include live television, more original programming (e.g. The Handmaid’s Tale), and deeper reserves of popular TV shows including 30 Rock and E.R. But Hulu remains unprofitable—almost $1 billion in the red last year—as it battles Netflix, Amazon, Google, and Time Warner-owned HBO for market share.

“Hulu has an enormous opportunity to lead the media and advertising industries into the future,” Freer said in a statement.

Metastable Helium Is Changing The Way Scientists Look At Exoplanets [Infographic]

, Opinions expressed by Forbes Contributors are their own.
Knader10 Designs

Metastable Helium formation

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<p><strong>To learn more please visit the WASP planets <a href="https://wasp-planets.net/" target="_blank" data-ga-track="ExternalLink:https://wasp-planets.net/" rel="nofollow">website.</a></strong></p> <p><strong>Go <a href="https://www.forbes.com/sites/kevinanderton/2018/05/29/exoplanets-helium-has-been-detected-for-the-first-time-infographic/#63b79b379ca0" target="_self">here</a> to learn more about WASP-107b and helium detection.</strong></p>” readability=”35.8242473556″>

Recently, a team of scientists was able to detect metastable helium in the upper atmosphere of an exoplanet. This was quite an accomplishment considering it had never been done before. The formation of metastable helium in large amounts on exoplanets was theorized a long time ago but up until now, it had never actually been detected. This discovery marks a milestone in the study of exoplanet atmospheres as it will enable scientists to study planets that are much further away than the ones we are currently looking at.

Metastable helium was detected on a planet called WASP-107b. This planet has a large amount of helium in its atmosphere. So much in fact that it has been estimated that it stretches out tens of thousands of miles into space. The helium in the upper atmosphere is being bombarded with high-energy radiation from the host star’s chromosphere. That radiation ionizes the helium by knocking out one of the two electrons in each atom. These helium ions then combine with free electrons in the planet’s atmosphere and often the new electron gets stuck in a high energy state. Having an electron stuck in this state is what makes a helium atom a metastable helium atom.

Getting an electron stuck in this state is related to a property that electrons have that is known as spin. If two electrons have their spin aligned then they cannot be at the same energy level. So when these helium ions pick up new electrons from the atmosphere they get stuck at a high energy level because the old electron is at a low level and the atoms will often pick up electrons with the same spin.

This creates the longest-lived excited state of any atom as the electron stays excited for about 2.2 hours on average. That is a long time considering that normally electrons de-excite in nanoseconds.

While in this excited state the electron can absorb a photon of infrared light and when it does it jumps to a slightly higher energy level. Afterward, it falls back down to the metastable state after a few nanoseconds. Once it does it can absorb another photon. This process goes on and on for the 2.2 hours that the atom is in the metastable state and then the atom falls back down to the regular ground helium state. Scientists are able to study this phenomenon by observing infrared light absorption.

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Metastable Helium formation

To learn more please visit the WASP planets website.

Go here to learn more about WASP-107b and helium detection.