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Four trends to watch for at the South by Southwest Interactive Festival

National Post Tech Desk - Wed, 03/11/2015 - 09:04

NEW YORK — Flying cars and a robot petting zoo. Mobile wallets and net neutrality. The most outlandish ideas of the future and tech trends shaping the world today will be in focus as the freewheeling South by Southwest Interactive Festival kicks off Thursday.

The annual Austin, Texas gathering has a looser reputation than bigger tech conferences like the Consumer Electronics Show in Las Vegas and the Mobile World Congress in Barcelona, even as it has become more corporate in recent years. It’s a place where a Grumpy Cat appearance can generate as much excitement as the latest tech gizmo. It brought Twitter prominence in 2007 and location-sharing app Foursquare in 2009, but has since moved beyond the latest “killer app.” Last year, cybersecurity took centre stage as NSA leaker Edward Snowden and WikiLeaks founder Julian Assange headlined the lineup of panels and speakers.

This year top speakers will tackle how to bring ideas that might seem like science fiction to the real world. Google’s Astro Teller, who heads the tech giant’s X division, will discuss making some of Google’s most ambitious projects, like self-driving cars or balloon-powered Internet, a reality. United Therapeutics CEO Martine Rothblatt will talk about tech innovations intersecting with artificial intelligence, immorality and the future of self. The Winklevoss twins, Tyler and Cameron, will be on hand to discuss what Bitcoin needs to do to succeed as a mainstream currency. And former vice-president Al Gore will make his third appearance at the annual festival to plug for new global climate legislation that is up for a vote in December.

David Paul Morris/BloombergAbout 33,000-plus attendees from 82 countries are expected to flood into Austin to attend panels, network and party.

But aside from the big-name keynotes, festival director Hugh Forrest says the heart of the conference is the smaller panels and competitions.

“We’re excited about the very strong speakers we have, but the heart of the event is really the up-and -coming people we haven’t heard of yet, people we’ll hear of in the next few years,” Forrest says. “South by Southwest is always about up-and-coming talent, be it a band or filmmaker or technology developer, and that holds true in 2015.”

About 33,000-plus attendees from 82 countries are expected to flood into Austin to attend panels, network and party. Jack Krawczyk, director of product management for music streaming site Pandora, said the festival is an ideal place to connect with Pandora clients and others in the tech sphere, particularly because of its focus on both music and technology. The company has had a presence at SXSW since it launched in 2005 and hosts a “Discovery Den” with performances by 35 artists during the festival.

“It’s a great place to get a lot of like-minded folks in the industry together to think about how interactive media is evolving and shifting,” Krawczyk says.

Related

Here are a few trends to watch.

WIRED CELEBRITIES

Actress Jessica Alba on Monday will discuss how she has grown The Honest Co., which makes and sells environmentally friendly household and baby products online, into a $1 billion company. Actor Russell Brand, whose documentary “Brand: A Second Coming” opens the film section of SXSW, will talk Tuesday about his new daily YouTube show Trews and the power of online media. Also Tuesday, retired news anchor Dan Rather address breaking news in the era of Snapchat.

TECH MEETS THE REAL WORLD

The non-profit Field Innovation Team is hosting a “Robot Petting Zoo” Sunday through Tuesday to showcase new robots that have helped or are being developed to aid in disaster and humanitarian crisis spots, such as a drone that can 3D print in midair. Attendees will be able to interact with the robots and learn about what they do. Meanwhile, government agency USAID is debuting a prototype of a new Ebola-fighting suit for healthcare workers that is faster and more efficient than the current suit.

The Internet of things will be a hot topic as well. The Connected Car Council is hosting a pavilion on Saturday where automakers including Ford, Chrysler and Hyundai will showcase new technology. And Slovakian company Aeromobil, will detail its mission to create a flying car.

ON SCREEN

The film festival at SXSW has several tech-related movies debuting, including Alex Gibney’s documentary “Steve Jobs: The Man in the Machine” which examines the Apple co-founder’s legacy, and the documentary “Deep Web,” which chronicles the arrest of Ross William Ulbricht, the founder of online black market Silk Road.

CARPOOL WARS

With limited public transportation and spread out hotels and venues, pedicabs have often been the easiest way to get around in prior years. Ride-hailing companies hope to change that. The festival’s official ride-hailing company is Lyft, which will have designated pickup and dropoff zones around Austin’s convention centre. Lyft will also be offering Lyft Line, its carpooling service, in Austin. But it will have competition. Uber will be offering its uberPool car-sharing service in the city as well, plus a promotion where some drivers may have VIP tickets to some SXSW events.

Apple Inc iTunes, App Stores shut down in unusually long outage

National Post Tech Desk - Wed, 03/11/2015 - 08:29

Customers of Apple Inc.’s iTunes and App stores haven’t been able to buy or download items worldwide during an unusually extensive outage lasting more than eight hours on Wednesday.

The iTunes, App and Mac App stores were unavailable for all users, according to a message on the company’s system-status Web page at 1:10 p.m. New York time. Service for the iBooks Store also was interrupted.

A timeline on the page said the outage started before 5 a.m. Access issues for users of iCloud Mail and other cloud services lasted about four hours, according to the timeline. The interruptions came two days after the company released details of its Apple Watch, a new device that could fuel further demand for apps when it goes on sale next month.

“I can’t recall an outage this long before,” Daniel Ernst, an analyst at Hudson Square Research, said in a telephone interview. “I think that we’ll see more and more of this across the industry as we become more dependent on the cloud, but I don’t think it’s going to have a material impact.”

Related

September Interruption

While service interruptions aren’t unusual for online services, they generally aren’t as widespread as Wednesday’s. An Apple outage in September affected some users of the iTunes Store for less than six hours.

Apple, based in Cupertino, California, didn’t return calls and e-mails seeking comment about Wednesday’s interruption.

“If it’s a data-center breach, it could be meaningful, but it’s very hard to say what the impact will be without knowing what the cause is,” said Stuart Jeffrey, an analyst at Nomura Securities International.

Users in countries including the U.S., Switzerland, Hong Kong and the U.K. reported getting error messages or having difficulty when trying to install or update apps or log in to their accounts.

“The iTunes Store is temporarily unable to process purchases. You may continue to browse the store, but please try your purchase again later,” an Apple message said.

Users in several countries posted on Apple’s online support bulletin board getting the message “STATUS—CODE—ERROR” on the App Store’s login window. On Twitter, people aired grievances using the hash tags #appstoredown and #itunesdown.

It was possible to make a purchase from the Apple Store website.

Apple on Monday unveiled details of its smartwatch and a new MacBook at an event in San Francisco. The Apple Watch will be priced from $449 in Canada to more than $13,000 and go on sale April 24.

The company’s shares were down less than 1% at US$123.69 at 1:10 p.m. Wednesday.

Bloomberg.com

Apple Watch will usher in ‘Ice Age’ for Swiss watch brands, says Swatch co-inventor

National Post Tech Desk - Wed, 03/11/2015 - 07:11

Apple Inc. may soon sell as many timepieces as all of Switzerland, threatening the country’s four-century-old industry, the co-inventor of the Swatch predicted.

The Apple Watch may reach sales of 20 million to 30 million units annually in the first few years, Elmar Mock said by phone on Tuesday. Switzerland exported 28.6 million watches in 2014. The Apple Watch will be available next month starting at US$349 for a Sport model, US$549 for a midrange version, and US$10,000 for the high-end Apple Watch Edition.

“Apple will succeed quickly,” said the 61-year-old, who helped create the low-price Swatch in the 1980s. “It will put a lot of pressure on the traditional watch industry and jobs in Switzerland.”

Apple is set to challenge Switzerland’s US$38 billion watch industry after the Cupertino, California-based company shook up markets such as music by driving consumers from CDs to iTunes and eroded Nokia Oyj’s dominance by redefining the mobile phone. While some Swiss brands such as Tissot, TAG Heuer and Montblanc are dipping their toes in the smartwatch market, the industry as a whole has been underestimating the threat, Mock said.

“Anything in the price range of 500 francs to 1,000 francs is really in danger,” said Mock, speaking by phone from Biel, Switzerland. “I do expect an Ice Age coming toward us.”

Apple will succeed quickly

Switzerland produces more than half of the world’s watches in value even though it only makes a fraction of the timepieces in quantity, according to Rene Weber, an analyst at Bank Vontobel AG. Apple probably aims to achieve a similar position, according to Mock, who works at Creaholic, a consultancy he formed in 1986.

While “Swiss Made” has become a gauge of quality, the country’s watch industry isn’t impervious to threats — 60,000 jobs disappeared in the 1970s and 1980s when Swiss watchmakers underestimated demand for more exact battery-powered quartz watches from Japanese producers such as Seiko. The success of the Swatch, a mass-market plastic watch that kept factories running, helped the industry revive.

“Unfortunately, I’m reminded too strongly of the quartz crisis,” Mock said. “So far I see watchmakers in this country making the same mistakes as back then. We’ve seen a lot of arrogance in the Swiss watch industry in the past few years, calling the smartwatch a gadget and not taking it seriously.”

Related

To be sure, Mock said the competition will affect lower-end and mid-range watches the most. High-end brands will suffer in the short term, but only in entry-level offerings, he forecast.

Similar to a luxury car, high-end watches are purchased as a visible reflection of wealth

“Similar to a luxury car, high-end watches are purchased as a visible reflection of wealth,” said Deborah Aitken, an analyst at Bloomberg Intelligence. “The digital revolution has done little thus far to muffle mechanical luxury demand.”

In the worst-case scenario, the Apple Watch’s introduction would reduce annual revenue of Swatch Group AG, the largest Swiss watchmaker, by 6%, analysts at Barclays said in a note to investors Tuesday. The company’s 18 brands run the gamut of price levels, including Breguet and Blancpain, which sell watches for more than US$100,000.

“There is no question that there could be risk of some degree of cannibalization of the high-end traditional watch- making industry, but there is probably equal opportunity for these players to both replicate and more likely partner with the smartwatch players,” Sebastian DiGrande, who heads the West Coast technology, media and telecom practice for The Boston Consulting Group, wrote in an e-mail.

While top producers such as Rolex and Patek Philippe haven’t announced any smartwatch plans, three publicly traded companies that make Swiss watches are preparing such devices.

Swatch Group, which also makes Omega and Tissot, has said it will unveil a smartwatch this year. The device will communicate via a form of technology known as NFC and be enabled to make mobile payments, Chief Executive Officer Nick Hayek said in a Feb. 5 interview.

TAG Heuer, a Swiss brand owned by French luxury-goods maker LVMH Moet Hennessy Louis Vuitton SA, is set to come out with a smartwatch featuring GPS and health monitoring functions before the end of the year. However, it won’t have the Swiss-made label on it because the timepiece maker needs partners outside of Switzerland to help produce the technology, according to Jean- Claude Biver, head of LVMH’s watch unit.

Simon Dawson/BloombergA selection of concept TAG wristwatches, produced by TAG Heuer.

“I wouldn’t call the Apple Watch a threat for the industry,” he said Tuesday by e-mail. The Apple Watch may lead more young people to wear watches, and eventually they’ll be more likely to buy mechanical ones, he said. “Considering that Switzerland does not own the same industrial technology and facilities as Silicon Valley or giants like Samsung, Sony and LG, I believe that the Swiss reaction shows huge dynamism and speed.”

Montblanc, owned by Cie. Financiere Richemont SA, has said it will begin selling an interchangeable watchband called the e- Strap in June. The device will track the wearer’s activities and can help find the user’s mobile phone via Bluetooth technology.

“We do have the technology, and the Swiss watch industry hasn’t lost the competition,” Mock said. “I just hope the top managements of the companies will react accordingly. Apple won’t die if the smartwatch isn’t a success. But in the next two to three years, a part of the Swiss watch market will suffer strongly.”

Bloomberg.com

Quebecor Inc’s adjusted profit rises 3.5% on stronger demand in telecom and media businesses

National Post Tech Desk - Wed, 03/11/2015 - 04:31

MONTREAL — Quebecor Inc. ( TSE:QBR.B ) said Wednesday its continuing media and telecom operations had $50.3 million of adjusted income in the fourth quarter, up 3.5% from a year earlier.

The profit amounted to 41 cents per basic share, up from 39 cents in the fourth quarter of 2013.

Overall revenue for the Montreal-based media and telecom company was up 2.9% to $989.4 million.

Quebecor said the quarter’s growth was underpinned by the Videotron telecom segment, which had its strongest quarter in terms of subscriber additions since 2011.

However, Quebecor’s overall profit and revenue were below analyst estimates of 52 cents per share of earnings and $1.09 billion of revenue.

The company is in the process of selling its English-language daily newspapers and other businesses, mostly outside Quebec. It has also sold 74 Quebec weeklies and abandoned door-to-door distribution of community newspapers and flyers in Quebec.

Related

The operational gains at Quebecor’s continuing operations were more than offset by the reduced value of its goodwill, intangible assets and financial derivatives, which dragged the company to a net loss of $59.5 million or 48 cents per share.

Quebecor’s discontinued operations had $19.4 million of net income, up from $14.3 million. Including discontinued operations, Quebecor’s total net loss in the fourth quarter was $50.3 million, compared with $19.4 million of net income in 2013.

Montreal-born Google Inc CFO Patrick Pichette to retire amid string of senior management changes

National Post Tech Desk - Tue, 03/10/2015 - 14:38

SAN FRANCISCO – Montreal-born Patrick Pichette, Google Inc. Chief Financial Officer and one of the top Canadians working in Silicon Valley, is retiring and will remain at the operator of the world’s biggest search engine through the transition period.

Mr. Pichette, 51, who joined in 2008, informed the Web company of his intent to leave on March 4, it said in a statement Tuesday. Google said it plans to find a new CFO within six months.

Google made some of its biggest acquisitions during Mr. Pichette’s tenure, including Nest Labs Inc. for US$3.2 billion and Motorola’s wireless business, which it bought for US$9.8 billion and later sold off in parts. Google’s share price more than doubled during his tenure. The departure of Mr. Pichette, who previously had worked at Bell Canada, was unexpected and leaves some uncertainty about cost controls at Google, said Ben Schachter, an analyst at Macquarie Securities USA Inc.

“People were viewing him quite positively,” Mr. Schachter said. “He’s done a fantastic job. In general, I think he was as open as Google can be.”

Related

Mr. Pichette wrote in a Web post that he’s leaving to travel after “25-30 years of nearly non-stop work.” The departing CFO said he’s finally making a choice between the trade-offs between work and his personal life and family.

“I’m at a point in my life where I no longer have to make such tough choices anymore,” Mr. Pichette wrote. “I wish to transition over the coming months but only after we have found a new Googley CFO and help him/her through an orderly transition, which will take some time.”

Educated at the Université du Québec à Montréal and Oxford University, which he attended as a Rhodes Scholar, Mr. Pichette came to Google from Bell Canada where he had been for seven years, holding several executive positions including president of operations. Before Bell he was a partner at McKinsey & Co., where he was a lead member of McKinsey’s North American Telecom Practice. Between 1994 and 1996, he was with telecom company Call-Net Enterprises as vice-president and CFO.

Mr. Pichette is stepping down amid other management changes since last year. Alan Eustace, who joined Google in 2002 and holds the title of senior vice president of knowledge, was set to leave the company this month. Andy Rubin, who oversaw the development of Android software for smartphones and had been working on robotics, also left Google last year to form an incubator.

The shares of Mountain View, Calif.-based Google fell as much as 1% in extended trading. The stock fell 2.5% to US$559.85 at the close in New York.

Bloomberg News with files from the Financial Post

Apple Inc’s CEO Tim Cook sidesteps shareholder enthusiasm for potential Tesla deal

National Post Tech Desk - Tue, 03/10/2015 - 13:36

Apple Inc. Chief Executive Officer Tim Cook, fresh from unveiling new details about the company’s first new device in five years, found himself facing shareholders eager for a marriage with Tesla Motors Inc.

“Quite frankly, I’d like to see you guys buy Tesla,” an investor told Cook on Tuesday at an annual meeting at Apple’s headquarters in Cupertino, California. The comment was followed by laughter in the audience and some applause.

Ever the diplomat, Cook sought to sidestep the question. “We don’t really have a relationship with Tesla,” he said, quickly pivoting to the subject of Apple’s in-car information and entertainment system, which he had also discussed a day earlier at an event to show off the new Apple Watch. “I’d love Tesla to pick up CarPlay. We now have every major auto brand committing to use CarPlay.” Cook paused. “Was that a good way to avoid the question?” he asked. “Hey, there are some perks to being CEO.”

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Still, investors weren’t done with the subject of Tesla, the electric-car maker run by Elon Musk. Another shareholder rose to talk about how he’s been a fan of Apple since putting a deposit down on its first computer in 1984.

“There’s something else I’m in love with that’s not Apple — that every time I see it just blows my mind — and that’s when I open my garage and see my Model S,” said the investor. “Am I insane to imagine something might happen here?’’

The audience laughed.

“We’re very focused on CarPlay,” Cook said.

Apple Car

While Apple hasn’t discussed plans to build a car, the company has been putting together a team to develop an electric vehicle, including hiring automotive-battery experts, for production as soon as 2020, according to people familiar with the matter.

If Apple does decide to proceed with the idea and enters the car business, the company would be competing against efforts by Tesla and General Motors Co., both of which are aiming for 2017 to release electric vehicles that can go more than 200 miles on a single charge and cost less than $40,000.

A Tesla spokesperson didn’t immediately respond to a request for comment on Tuesday.

The idea of an Apple-Tesla partnership has excited investors before. Tesla soared above $200 a share for the first time in early 2014 on speculation about the nature of a 2013 meeting between Tesla co-founder Musk and Apple’s head of mergers and acquisitions.

Recruiting Efforts

The two companies have also been in competition for talent. Tesla has more former Apple employees than from any other company, even carmakers, and Musk said that recruiting effort also goes the other way.

“Apple tries very hard to recruit from Tesla,” Musk recently told Bloomberg Businessweek in an interview. “But so far they’ve actually recruited very few people.”

The meeting followed an event Monday in San Francisco to showcase Apple Watch, the company’s smartwatch, first introduced last year and heading to stores next month.

Optimism about the gadget, which can monitor health and fitness data, control music and display notifications when paired with an iPhone, has helped propel Apple shares to near-record prices in recent weeks. That was a change from last year’s meeting, when the stock was slipping and Cook was under pressure to jump-start sales growth and bring out innovative products.

Board Re-Elected

At the meeting, Apple investors re-elected directors to another one-year term on the board, which includes Cook; Chairman Arthur Levinson, who is also chief executive officer at Calico; Bob Iger, CEO of Walt Disney Co.; Andrea Jung, former CEO of Avon Products Inc.; former U.S. Vice President Al Gore; Ronald Sugar, former chairman and CEO of Northrop Grumman Corp; and Susan Wagner, a co-founder of BlackRock Inc. Mickey Drexler, CEO of J. Crew Group Inc., who had been on the Apple board since 1999, retired and his replacement hasn’t been named yet.

Cook also reiterated that the company is seeking to increase diversity on its board, and said it’s improving at the company. In August, Apple released employee-demographic data showing it’s slightly more diverse than some of its Silicon Valley peers.

In the U.S., 70 percent of Apple’s workers are white or Asian, 11 percent are Hispanic, and 7 percent are black, the company said at the time. About 30 percent of its employees are female.

Apple Inc’s new MacBook isn’t as amazing as it seems

National Post Tech Desk - Tue, 03/10/2015 - 13:02

This is what Apple Inc. doesn’t want you to know about its fancy new MacBook, which was revealed yesterday during the company’s Apple Watch event.

At first glance Apple’s revamped MacBook seems incredible. It’s ridiculously thin, measuring in at just 13.1 mm and weighs only two pounds. It also comes in two stylish new colours – slate gray and gold – marking a shift from the gray brushed aluminum design of older MacBook models (although that colour is also still available).

But what Apple didn’t mention during its event on Monday are details about the internal hardware included in the new laptop. Unfortunately, at least in terms of power, the new MacBook is a significant downgrade from the older MacBook Pro and even the sleek MacBook Air.

The new MacBook might look sleeker, but it definitely isn’t a powerful laptop.

Stephen Lam/Getty ImagesApple Senior Vice President of Worldwide Marketing Phil Schiller introduces the new Macbook.

The new MacBook utilizes a slower CPU more commonly found in Windows tablets and hybrid tablet/laptop devices – the Intel Core M. While this processor is far from horrible, it’s less powerful than the Intel Haswell generation CPUs currently inside the MacBook Pro and the MacBook Air. New upgraded versions of both the MacBook Pro and the MacBook Air are also set to be released with higher-end Intel Broadwell generation processor.

Essentially, while the new MacBook might look impressive, it isn’t very powerful and has internal power that’s more comparable to a tablet than a traditional laptop and what most Apple MacBook users are familiar with. The entry level version of the new MacBook only comes equipped with a 1.1 GHz dual-core Intel Core M CPU, 8 GBs or ram and a 256 GB of internal flash storage. The laptop’s internal camera has also been downgraded from 720p to a resolution of just 480p.

However, the new MacBook’s design upgrades are rather significant. It comes equipped with a higher resolution “Retina” 12-inch screen that’s 2304 x 1440 pixels, weighs just 0.91 kg, and both the laptop’s keyboard and track pad have been upgraded with new functionality.

AP Photo/Eric RisbergApple CEO Tim Cook introduces the new Apple MacBook during an Apple event on Monday, March 9, 2015, in San Francisco.

Typing on the new MacBook will reportedly feel much smoother thanks to a new “butterfly mechanism” key system, and the laptop’s trackpad no longer requires the user to click it, instead opting for haptic pressure sensitive feedback Apple is calling  “click feel.” The new MacBook also doesn’t even include a traditional fan to cool the device.

But all of these fancy upgrades have also come at a cost, particularly when it comes to the MacBook’s USB ports.

In order to make the new MacBook smaller, Apple was forced to remove traditional USB ports from the laptop, instead opting for a USB Type-C plug. This means in order to plug a VGA, HDMI or even a traditional USB 2.0 or 3.0 cable into the new MacBook, people will be forced to purchase an additional accessory to turn its USB Type-C port into a HDMI, VGA, or even just a regular USB plug.

So while the new MacBook is lighter, slimmer and sleeker than almost any laptop ever created, its internal hardware is hardly worth the device’s hefty $1,549 starting price tag (the higher-end version will cost $1,899).

Related

Apple’s new Macbook is the least powerful laptop in the company’s lineup, with some technology experts claiming the device’s hardware is similar to the 2011 Macbook’s. Most people will be better off purchasing the older Macbook Pro or the Macbook Air, especially since upcoming upgraded versions of both laptops are set to feature Intel’s faster Broadwell generation processor.

The more powerful 11-inch MacBook Air is going to have its starting price cut from $999 down to $949, with the 13-inch version beginning at US$1,129, down from $1,199 – all prices well under the entry-level new MacBook’s $1,549 price tag.

The new MacBook’s features are likely an indication of what is set to eventually be included in the Macbook Pro and the MacBook Air, but unless you’re fond of spending a significant amount of money for an under-powered laptop, or are looking for an ultra-portable but also extremely expensive device, a better option is to wait until the new MacBook’s features are included with the MacBook Air and the MacBook Pro – or you could purchase a significantly more powerful Windows-based laptop for an even cheaper price tag.

CIA tried to hack Apple Inc iPhones and iPads from the earliest days, report says

National Post Tech Desk - Tue, 03/10/2015 - 12:36

FRANKFURT — CIA researchers have worked for nearly a decade to break the security protecting Apple phones and tablets, investigative news site The Intercept reported on Tuesday, citing documents obtained from NSA whistleblower Edward Snowden.

The report cites top-secret U.S. documents that suggest U.S. government researchers had created a version of XCode, Apple’s software application development tool, to create surveillance backdoors into programs distributed on Apple’s App Store.

Tomohiro Ohsumi/BloombergBreaching Apple security was part of a top-secret program by the U.S. government, The Intercept says.

The Intercept has in the past published a number of reports from documents released by whistleblower Snowden. The site’s editors include Glenn Greenwald, who won a Pulitzer Prize for his work in reporting on Snowden’s revelations, and by Oscar-winning documentary maker Laura Poitras.

It said the latest documents, which covered a period from 2006 to 2013, stop short of proving whether U.S. intelligence researchers had succeeded in breaking Apple’s encryption coding, which secures user data and communications.

Efforts to break into Apple products by government security researchers started as early as 2006, a year before Apple introduced its first iPhone and continued through the launch of the iPad in 2010 and beyond, The Intercept said.

Breaching Apple security was part of a top-secret program by the U.S. government, aided by British intelligence researchers, to hack “secure communications products, both foreign and domestic” including Google Android phones, it said.

Silicon Valley technology companies have in recent months sought to restore trust among consumers around the world that their products have not become tools for widespread government surveillance of citizens.

Last September, Apple strengthened encryption methods for data stored on iPhones, saying the changes meant the company no longer had any way to extract customer data on the devices, even if a government ordered it to with a search warrant. Silicon Valley rival Google Inc said shortly afterward that it also planned to increase the use of stronger encryption tools.

Related

Both companies said the moves were aimed at protecting the privacy of users of their products and that this was partly a response to widescale U.S. government spying on Internet users revealed by Snowden in 2013.

An Apple spokesman pointed to public statements by Chief Executive Tim Cook on privacy, but declined to comment further.

“I want to be absolutely clear that we have never worked with any government agency from any country to create a backdoor in any of our products or services,” Cook wrote in a statement on privacy and security published last year. “We have also never allowed access to our servers. And we never will.”

Leaders including U.S. President Barack Obama and British Prime Minister David Cameron have expressed concern that turning such privacy-enhancing tools into mass market features could prevent governments from tracking militants planning attacks.

The CIA did not immediately reply to a request for comment.

Editing by Jeremy Gaunt

RBC CEO warns bank is on ‘collision course’ with Apple and Google as mobile banking takes off

National Post Tech Desk - Tue, 03/10/2015 - 11:35

Dave McKay, the chief executive of Royal Bank of Canada, says the bank is on a “collision course” with the likes of Apple Inc. and Google Inc. as customers begin to fully embrace mobile banking.

Apple Pay, the smartphone giant’s mobile payment platform, is taking off in the United States, but such systems threaten to get in between banks and their customers, Mr. McKay told RBC investors and clients at a conference in New York on Tuesday.

Though RBC would still be paid for transactions if it were to embrace the platform, the bank would lose an important connection to the customer that exists with other payment methods such as credit cards.

“So we’re on a collision course,” Mr. McKay said, acknowledging that taking on the technology behemoths is not something even Canada’s largest bank would choose to do unless it was necessary.

RBC is seeking an alternative where the bank can be at the top of the ecosystem, Mr. McKay said, adding that banks have an edge right now through customers’ trust and a reputation for security with their money.

“Trust and security are key assets. They buy us time,” he said.

Mr. McKay described the outlook for the rest of the bank’s operations in far less confrontational terms. He pledged to expand in the United States on the heels of January’s US$5.4-billion purchase of City National Corp., a private and business bank specializing in high-net-worth clients and lending to the entertainment industry.

He declined to give specific targets, but said the contributions from both the U.S. operations and wealth management are expected to grow. In 2014, Canada accounted for 63% of the bank’s overall revenue and 76% of net income.

“We certainly want to make the U.S. bigger,” Mr. McKay said.

One segment where RBC may shrink is its property and casualty insurance line, where the bank is undersized relative to peers. Like other banks, RBC is barred from selling insurance through its branches.

“We’re not sure we’re going to be in that business for the long term,” Mr. McKay said.

On the wealth management, capital markets, and private banking front, he identified the United Kingdom and Europe as target markets for the Canadian bank, though he said he expects it to take RBC five to 10 years to reach the same point in the U.K. it has attained in North America.

In 2010, RBC purchased BlueBay Asset Management PLC, and the Canadian bank has private banking and corporate clients through its U.K. wealth management operation.

Mr. McKay told the New York crowd of more than 400 that he is comfortable with the Canadian housing market, much of which, he stressed, benefits from government-backed mortgage default insurance.

“Everyone expects something bad to happen,” he said, adding that the expectation isn’t backed up by troubling developments of a real estate bubble such as a supply-demand imbalance or speculation in multi-family residential units.

Mr. McKay said he believes the outlook for the Canadian economy remains stable despite recent volatility in the oil price, though there is likely to be a “shift in where that growth is happening.”

During the luncheon address, he was asked questions by Gerard Cassidy, managing director of equity research at RBC Capital Markets, who was described as having followed the banks since Mr. McKay was a “long-haired computer programmer.”

Mr. McKay climbed the ranks at RBC and became CEO in August. A management proxy circular published Tuesday shows he was paid total direct compensation of $7.5-million for the roles he held in 2014, including president and CEO. His predecessor, Gord Nixon, was paid total direct compensation of nearly $9.2-million for his nine months as CEO last year.

Financial Post

bshecter@nationalpost.com

Twitter.com/BatPost

Twitter Inc opens Hong Kong office in bid to tap China ad revenue

National Post Tech Desk - Tue, 03/10/2015 - 10:53

BEIJING — Twitter Inc has opened a Hong Kong office, its first in the Greater China region, the company whose microblogging services are blocked on the mainland said on Tuesday.

The office, to be headed by Twitter executive Peter Greenberger, will allow the San Francisco-based company to tap China for advertising revenue, the company said, even if Internet users on the mainland cannot see those ads.

Twitter collected US$479 million in fourth-quarter revenue from advertisers who paid to inject their ads, known as “promoted tweets,” into Twitter users’ timelines. The company has 288 million users worldwide.

China’s censors have blocked Twitter’s microblog since 2009 along with U.S. social media platform Facebook Inc and Google Inc’s YouTube.

Beijing officials say this censorship is necessary to maintain social order. Twitter was credited with helping fuel the popular uprisings in the Middle East and has maintained a stridently pro-free speech stance to the extent that it has attracted international criticism for failing to police sexist and racist abuse.

Despite the ban, Chinese companies including Huawei Technologies Co Ltd and the state-owned Xinhua news agency use Twitter’s microblogging service to reach a global audience.

Last year, the company downplayed suggestions it would seek to enter China, citing political hurdles.

© Thomson Reuters 2015

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