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There is this parable about building a house upon sand versus building upon rock. When the storm comes the house on the sand gets washed away. Facebook didn't

There is this parable about building a house upon sand versus building upon rock. When the storm comes the house on the sand gets washed away. Facebook didn't have to turn into a global ad platform that does tricky shit like spy on users with blue thumbs up buttons or weird hacks into webrtc to fingerprint users. They could have done the work to provide more direct value and charged for it, like Apple did or did something completely different like building something like Shopify that was still open to the internet but had first class support in Facebook. But they didn't and my hope is that their business model will wash away as security and privacy tighten up on our devices and through our democracies. Just imagine if Apple had taken a different approach and basically said "we're going to make phones that we monetize by tracking our users" instead. The institutional focus would have been warped and—eventually—someone would have come out with high quality phones and computers that don't track you and they would have lost in the long run.

boring_twenties 6y ago
> "we're going to make phones that we monetize by tracking our users" Google is doing exactly that and seems to have a market share of 75% vs Apple's 25% [1]. What am I missing? [1] https://gs.statcounter.com/os-market-share/mobile/worldwide https://gs.statcounter.com/os-market-share/mobile/worldwide
- maxcan 6y ago
  Profit share vs market share. As a long term holder of AAPL, I’m grateful for their ability to capture the former.
- ericmay 6y ago
  Market share is just one aspect. If you have 75% market share but you have 1% margins, and your competitor has 25% market share and 80% margins, the 25% is probably going to be the one you want.
  - boring_twenties 6y ago
    I don't see how this is relevant to the GP point that I was addressing? They seemed to be implying that consumers would favor privacy-respecting phones.
    - ericmay 6y ago
      How isn’t it? Market share etc. the point is market share is a useless number in isolation.
      - boring_twenties 6y ago
        Huh? The question is, given a choice between a privacy-respecting smartphone and a privacy-violating one, will consumers choose the former? Market share directly and completely answers that question. Profit share doesn't seem to have anything to do with it whatsoever?
        ericmay 6y ago
        The market share doesn’t matter. I don’t care if you have 99% market share and I have 1% if I still make more money than you. The proliferation of Android’s market share here doesn’t resolve the question you have. We don’t know why people have Android phones. A better question and what’s better to look at is actually installation of Google apps across devices. I see this mistake a lot in Android vs iOS. Google makes money and all the privacy stuff comes into play with their software, not Android OS. To make the OP’s point for them, the metrics are even more in favor of Google when you use the right ones -> look at Gmail installs across iOS and Android to see how they are winning.
        barnabee 6y ago
        Depends. Market share certainly does not completely answer this at all. Some Android phones are dirt cheap. If they’re the same price and functionality and you have no cost of switching due to platform lock in, most everyone probably will take the privacy respecting option. Some people care first and foremost about price (whether by choice or not). Evidence from the growth due to the reintroduction of the iPhone SE seems to corroborate this.
- bamboozled 6y ago
  I'll also say that anecdotally, I know a lot more people with iPhones and people who use something else, always complain about their phones. I was one of those other people, then I just decided I want something that works and bought an iPhone. It was worth it.
  - pb7 6y ago
    Anecdotes aren’t data but I wholeheartedly +1 this anecdote. Whether it’s something with the products or something with the users that buy these types of products but I have seen correlation in my own experience, once myself included.
  - techsupporter 6y ago
    Along with pb7, I'll +1 this anecdote. I know that Google are going for volume while Apple are going for margin, and it shows. I was an ardent Android user until 2014/2015 (can't remember the exact year). Things like "I have to be able to replace my battery" and "a phone without an SD card slot is pointless" and "hah, my regular USB cords just work." But finally, after a year or so of every time my phone spontaneously rebooted (a circumstance that, looking back, I'm surprised I put up with for so long) there was a ~20% chance that it would come back up completely wiped. My employer required that phones accessing work e-mail be encrypted and every so often, a reboot would simply lose the user data volume encryption key. The last time it happened, I permanently lost two pictures that were valuable to me (yes, I know, backups) and it happened while I was sitting in front of a T-Mobile store and around the corner from an Apple store. I went into T-Mobile, got a SIM that would fit an iPhone, then went to the Apple store and loaded up a credit card with a new iPhone 6(?) and all the trimmings and have never looked back. I do still have the screenshot of my first text with my wife after I switched. "So...I did something...expensive." "What did you do? WAIT, this bubble is BLUE"
    - freehunter 6y ago
      For me (as a former Anything But Apple guy), the realization came when I discovered that every problem I’ve ever had with my phone was caused by me screwing something up. I put up with this on my computers, but my phone isn’t something I want to take chances on. It’s got too much data and it’s too critical to my everyday life to have it broken constantly. I just can’t trust myself not to install launchers and root the phone and see if I can get Debian running in a chroot and... whoops bricked it. I switched to iPhone with the 5s and have’t looked back. I like not being able to break my phone because of my poor decision making skills. I do my hacking on my computer where the consequences are lower and its easier to fix.
- machello13 6y ago
  What you're missing is that Apple captures the majority of the profit in the smartphone market.
  - boring_twenties 6y ago
    Relevance?
    - machello13 6y ago
      Are you kidding? Market share doesn't pay salaries. Money does.
- robin_reala 6y ago
  People not realising the extent of the tracking and how pervasive it is in their daily lives.
- legohead 6y ago
  Google is expected to follow suit within the next year.
- coldtea 6y ago
  >Google is doing exactly that and seems to have a market share of 75% vs Apple's 25% [1]. What am I missing? It's easy to have a big market share if you go for market share. Heck, if I start selling dollars for 50 cents I can probably get 100% of the global money market...
- godelski 6y ago
  This is a bit misleading. Using the same website if you look at North America iOS has 50% and if you look at Europe it is 75%. We have to consider this because Apple products cost significantly more. People in America and Europe are more often going to buy flagship phones than people in different countries. So people that have the money to buy new Apple products are doing so at a much higher rate than what you're suggesting.
  - fulafel 6y ago
    Europe number is 26%, not 75.
    - godelski 6y ago
      Thanks. The app sorts and I messed up. So strike my comment with response to Europe. But still the main point is that Androids are cheaper.
- scarface74 6y ago
  You’re missing profits. Marketshare doesn’t make money. It came out in the Oracle trial during discover that Android had only made Google $22 billion in profit from its introduction through 2016. https://www.theverge.com/2016/1/21/10810834/android-generated-31-billion-revenue-google-oracle https://www.theverge.com/2016/1/21/10810834/android-generate... It’s also reported that Google pays Apple $8 billion a year to be the default search engine. In other words, Apple makes more on mobile from Google than Google makes from Android.
  - Symmetry 6y ago
    Think how much Google would be paying out to be the default search engine if Android didn't have so much market share.
    - scarface74 6y ago
      So Google not losing as much money on mobile is a success?
      - Symmetry 6y ago
        Yes, essentially. Google's investment in Android is a moat protecting their core search advertising business.
        scarface74 6y ago
        Yet Apple created the iPhone not to create a moat around music player sales but to kill as product line and create a more profitable one. Apple also didn’t introduce the iPad as a moat around their computer business. The iPad and the Mac are both successful product lines. How long can Google keep playing defense? Apple,Microsoft and Amazon have created new lines of business in the past two decades.
      - MiroF 6y ago
        Yes?
  - 6y ago
- elliekelly 6y ago
  How many of the people in Google’s market would prefer an iPhone but can’t afford one? I suspect some Android users don’t really have a meaningful choice but to allow tracking.
coldtea 6y ago
>There is this parable about building a house upon sand versus building upon rock. When the storm comes the house on the sand gets washed away. Yeah, on the other hand if the house-upon-sound has already made you one of the top-5 billionaires on Earth before it got washed away, I guess that's OK too...
nemothekid 6y ago
1. It's very hard to say, from a valuation POV, FB did the wrong thing. They are the 5th largest company in the world. If they built on sand, then it was sand made from gold nuggets. 2. I think what is lost is that FB was blindsided by the transition to mobile, at first. They didn't (and probably couldn't) have had the foresight to know to build a mobile phone, when they were hardly focusing on mobile in the first place. They made a huge turn around to focus on mobile then FB exploded. 3. There is no way in hell FB could have built their own phone. Apple didn't wake up one day and decide to build the iPhone, it was step 100 in a very long staircase, that started with the original iPhone. 4. Google tried to build their own Phone, and is failing it at it. Again, I can't imagine a world where FB succeeds at making their own phone, better than the iPhone (while also supporting the iPhone), that isn't a money pit, like it is for everyone who isn't named Apple/Samsung.
- voisin 6y ago
  I don’t think the previous poster is suggesting FB build a phone but rather than FB not monetize its users via ads and instead monetize them by providing value they will pay for.
  - calmworm 6y ago
    The "sand" is very clearly the tricky and underhanded tracking and privacy invasion base that FB has built their house on.
- lotsofpulp 6y ago
  They definitely could due to them having so much cash, and it is a money pit, but high risk, high reward. Seems to me like all these companies with huge cash flow and cash piles like MS/FB/Google/Samsung don’t want to invest in creating a high quality device people can trust, they don’t want to create a network of retail stores people can go to get help. They have their easy money collecting rent on software (Microsoft) or advertising. So be it if they don’t want to risk their cash.
ogre_codes 6y ago
Facebook will do just fine here. The advertisers who want/ need targeted advertising will be even more driven towards advertising friendly platforms like Facebook's feed.

boring_twenties 6y ago

> "we're going to make phones that we monetize by tracking our users" Google is doing exactly that and seems to have a market share of 75% vs Apple's 25% [1]. What am I missing? [1] https://gs.statcounter.com/os-market-share/mobile/worldwide https://gs.statcounter.com/os-market-share/mobile/worldwide

maxcan 6y ago
Profit share vs market share. As a long term holder of AAPL, I’m grateful for their ability to capture the former.
ericmay 6y ago
Market share is just one aspect. If you have 75% market share but you have 1% margins, and your competitor has 25% market share and 80% margins, the 25% is probably going to be the one you want.
- boring_twenties 6y ago
  I don't see how this is relevant to the GP point that I was addressing? They seemed to be implying that consumers would favor privacy-respecting phones.
  - ericmay 6y ago
    How isn’t it? Market share etc. the point is market share is a useless number in isolation.
    - boring_twenties 6y ago
      Huh? The question is, given a choice between a privacy-respecting smartphone and a privacy-violating one, will consumers choose the former? Market share directly and completely answers that question. Profit share doesn't seem to have anything to do with it whatsoever?
      - ericmay 6y ago
        The market share doesn’t matter. I don’t care if you have 99% market share and I have 1% if I still make more money than you. The proliferation of Android’s market share here doesn’t resolve the question you have. We don’t know why people have Android phones. A better question and what’s better to look at is actually installation of Google apps across devices. I see this mistake a lot in Android vs iOS. Google makes money and all the privacy stuff comes into play with their software, not Android OS. To make the OP’s point for them, the metrics are even more in favor of Google when you use the right ones -> look at Gmail installs across iOS and Android to see how they are winning.
      - barnabee 6y ago
        Depends. Market share certainly does not completely answer this at all. Some Android phones are dirt cheap. If they’re the same price and functionality and you have no cost of switching due to platform lock in, most everyone probably will take the privacy respecting option. Some people care first and foremost about price (whether by choice or not). Evidence from the growth due to the reintroduction of the iPhone SE seems to corroborate this.
bamboozled 6y ago
I'll also say that anecdotally, I know a lot more people with iPhones and people who use something else, always complain about their phones. I was one of those other people, then I just decided I want something that works and bought an iPhone. It was worth it.
- pb7 6y ago
  Anecdotes aren’t data but I wholeheartedly +1 this anecdote. Whether it’s something with the products or something with the users that buy these types of products but I have seen correlation in my own experience, once myself included.
- techsupporter 6y ago
  Along with pb7, I'll +1 this anecdote. I know that Google are going for volume while Apple are going for margin, and it shows. I was an ardent Android user until 2014/2015 (can't remember the exact year). Things like "I have to be able to replace my battery" and "a phone without an SD card slot is pointless" and "hah, my regular USB cords just work." But finally, after a year or so of every time my phone spontaneously rebooted (a circumstance that, looking back, I'm surprised I put up with for so long) there was a ~20% chance that it would come back up completely wiped. My employer required that phones accessing work e-mail be encrypted and every so often, a reboot would simply lose the user data volume encryption key. The last time it happened, I permanently lost two pictures that were valuable to me (yes, I know, backups) and it happened while I was sitting in front of a T-Mobile store and around the corner from an Apple store. I went into T-Mobile, got a SIM that would fit an iPhone, then went to the Apple store and loaded up a credit card with a new iPhone 6(?) and all the trimmings and have never looked back. I do still have the screenshot of my first text with my wife after I switched. "So...I did something...expensive." "What did you do? WAIT, this bubble is BLUE"
  - freehunter 6y ago
    For me (as a former Anything But Apple guy), the realization came when I discovered that every problem I’ve ever had with my phone was caused by me screwing something up. I put up with this on my computers, but my phone isn’t something I want to take chances on. It’s got too much data and it’s too critical to my everyday life to have it broken constantly. I just can’t trust myself not to install launchers and root the phone and see if I can get Debian running in a chroot and... whoops bricked it. I switched to iPhone with the 5s and have’t looked back. I like not being able to break my phone because of my poor decision making skills. I do my hacking on my computer where the consequences are lower and its easier to fix.
machello13 6y ago
What you're missing is that Apple captures the majority of the profit in the smartphone market.
- boring_twenties 6y ago
  Relevance?
  - machello13 6y ago
    Are you kidding? Market share doesn't pay salaries. Money does.
robin_reala 6y ago
People not realising the extent of the tracking and how pervasive it is in their daily lives.
legohead 6y ago
Google is expected to follow suit within the next year.
coldtea 6y ago
>Google is doing exactly that and seems to have a market share of 75% vs Apple's 25% [1]. What am I missing? It's easy to have a big market share if you go for market share. Heck, if I start selling dollars for 50 cents I can probably get 100% of the global money market...
godelski 6y ago
This is a bit misleading. Using the same website if you look at North America iOS has 50% and if you look at Europe it is 75%. We have to consider this because Apple products cost significantly more. People in America and Europe are more often going to buy flagship phones than people in different countries. So people that have the money to buy new Apple products are doing so at a much higher rate than what you're suggesting.
- fulafel 6y ago
  Europe number is 26%, not 75.
  - godelski 6y ago
    Thanks. The app sorts and I messed up. So strike my comment with response to Europe. But still the main point is that Androids are cheaper.
scarface74 6y ago
You’re missing profits. Marketshare doesn’t make money. It came out in the Oracle trial during discover that Android had only made Google $22 billion in profit from its introduction through 2016. https://www.theverge.com/2016/1/21/10810834/android-generated-31-billion-revenue-google-oracle https://www.theverge.com/2016/1/21/10810834/android-generate... It’s also reported that Google pays Apple $8 billion a year to be the default search engine. In other words, Apple makes more on mobile from Google than Google makes from Android.
- Symmetry 6y ago
  Think how much Google would be paying out to be the default search engine if Android didn't have so much market share.
  - scarface74 6y ago
    So Google not losing as much money on mobile is a success?
    - Symmetry 6y ago
      Yes, essentially. Google's investment in Android is a moat protecting their core search advertising business.
      - scarface74 6y ago
        Yet Apple created the iPhone not to create a moat around music player sales but to kill as product line and create a more profitable one. Apple also didn’t introduce the iPad as a moat around their computer business. The iPad and the Mac are both successful product lines. How long can Google keep playing defense? Apple,Microsoft and Amazon have created new lines of business in the past two decades.
    - MiroF 6y ago
      Yes?
- 6y ago
elliekelly 6y ago
How many of the people in Google’s market would prefer an iPhone but can’t afford one? I suspect some Android users don’t really have a meaningful choice but to allow tracking.

coldtea 6y ago

>There is this parable about building a house upon sand versus building upon rock. When the storm comes the house on the sand gets washed away. Yeah, on the other hand if the house-upon-sound has already made you one of the top-5 billionaires on Earth before it got washed away, I guess that's OK too...

nemothekid 6y ago

1. It's very hard to say, from a valuation POV, FB did the wrong thing. They are the 5th largest company in the world. If they built on sand, then it was sand made from gold nuggets. 2. I think what is lost is that FB was blindsided by the transition to mobile, at first. They didn't (and probably couldn't) have had the foresight to know to build a mobile phone, when they were hardly focusing on mobile in the first place. They made a huge turn around to focus on mobile then FB exploded. 3. There is no way in hell FB could have built their own phone. Apple didn't wake up one day and decide to build the iPhone, it was step 100 in a very long staircase, that started with the original iPhone. 4. Google tried to build their own Phone, and is failing it at it. Again, I can't imagine a world where FB succeeds at making their own phone, better than the iPhone (while also supporting the iPhone), that isn't a money pit, like it is for everyone who isn't named Apple/Samsung.

voisin 6y ago
I don’t think the previous poster is suggesting FB build a phone but rather than FB not monetize its users via ads and instead monetize them by providing value they will pay for.
- calmworm 6y ago
  The "sand" is very clearly the tricky and underhanded tracking and privacy invasion base that FB has built their house on.
lotsofpulp 6y ago
They definitely could due to them having so much cash, and it is a money pit, but high risk, high reward. Seems to me like all these companies with huge cash flow and cash piles like MS/FB/Google/Samsung don’t want to invest in creating a high quality device people can trust, they don’t want to create a network of retail stores people can go to get help. They have their easy money collecting rent on software (Microsoft) or advertising. So be it if they don’t want to risk their cash.

ogre_codes 6y ago

Facebook will do just fine here. The advertisers who want/ need targeted advertising will be even more driven towards advertising friendly platforms like Facebook's feed.