This Ancient Greek Saying Can Supercharge Your Business Decisions

You’re probably familiar with the Serenity Prayer, whether or not you know it by name. It goes something like this: “Grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.”

This is powerful advice when facing challenges in life, and it forms the cornerstone of many therapeutic approaches for addiction and other disorders. But it also has important — and overlooked — applications in the business context.

Behind the serenity prayer, which was first published in a 1951 magazine column by an American theologian, is a much older Greek phrase. The 2,000-year-old Stoic expression translates roughly as, “what is up to us, what is not up to us.” In business, as in life, it’s easy to lose track of this key distinction. And that’s where endless stress, frustration and distraction arise, as explored by Ryan Holiday in the bestseller The Obstacle is the Way.

The heart of this Stoic credo, and what makes it so effective as a decision-making tool, is that it radically simplifies our options. Any decision involves taking into account multiple variables, weighing pros and cons, and forecasting the likely future impact. The more variables, the harder — and more paralyzing — a decision becomes.

In my own entrepreneurial journey, I’ve come back to this principle time and time again. Early on, for example, Hootsuite was up against much larger and better financed competitors in the social media management space. I had bootstrapped the platform with credit cards and love money, while the other guys were sitting on millions in venture capital.

But there really wasn’t much we could do about that. Worrying about what competitors were doing at that stage, or letting that overwhelm our decision-making process, wasn’t helpful. (I’m not saying that these factors would never matter, just that they were beyond our control at that juncture.)

What we could do, in contrast, was control how well we executed on our own vision. Were we building the best platform with the resources we had — the one that was easiest to use and had features people really needed? Were we being creative in our viral marketing efforts? Were we hustling to sign larger clients? Were we responding promptly to customer support requests? All those things were “up to us.”  

The worst-case scenario is getting paralyzed into inaction by circumstances that you don’t have control over. So what can we control? In The Obstacle Is The Way, Holiday identifies a string of factors that each of us can influence: our emotions, our judgements, our creativity, our attitude, our perspective, our desires, our decisions and our determination. I’d summarize all that as our outlook — the frame of mind that we bring to any situation.

Admittedly, it’s not always easy to control this. In the heat of the moment, emotions get the best of us; false judgements creep in. Determination falters; poor decisions are made. But it’s important to remember that we can control these things, with patience, time and planning. And that’s where our efforts should be expended — not in worrying about factors beyond our control.

Suppose, for example, you own an auto repair shop and are thinking about opening up a new location across town. Yay or nay? You might ask whether timing is bad, considering that a recession seems on the horizon. Or you might get hung up on whether a big-name repair franchise is going to move in and eat up your business. 

The power of the Stoic ethos is that it lets us take all this off the table. We’re left with what we can actually control — the stuff that’s actually “up to us.” In the repair shop example, that could mean turning your energies to weighing potential market size and revenue, asking if you have the personal time and resources needed to double your footprint, and calculating the hard costs of opening a new garage.

My point is this: By limiting your decision process to considering what’s really “up to you,” you’re left with a smaller pie of variables and, ultimately, a more manageable decision. More of your energy and intellectual horsepower is freed up to focus on the stuff that matters. Instead of being lost in indecision or acting on impulse or desperation, you can actually make an informed decision with the relevant information.

Apple Music's U.S. subscriber count overtakes Spotify: source

FILE PHOTO: An Apple logo hangs above the entrance to the Apple store on 5th Avenue in the Manhattan borough of New York City, July 21, 2015. REUTERS/Mike Segar

(Reuters) – Apple Inc’s streaming music service overtook rival Spotify Technology SA in terms of paid subscribers in the United States, a person familiar with the matter told Reuters on Tuesday.

Apple’s service had 28 million subscribers as of the end of February compared with Spotify’s 26 million paid subscribers, the person said.

Both companies charge $9.99 a month for subscriptions, though Spotify still has more total U.S. listeners than an Apple thanks to an ad-supported free tier of its service with fewer features. Analysts also believe Spotify has a stronger subscriber position than Apple outside the United States.

Neither Apple nor Spotify disclose country-level listener data, and both firms declined to comment. The Wall Street Journal earlier reported that Apple has overtaken Spotify on the metric.

Apple’s streaming service is part of a broader push at the company to make money off subscriptions and services as iPhone sales slow. Last month the company announced a news, television and gaming subscriptions, as well as a credit card partnership with Goldman Sachs Group Inc.

Spotify likely still has more paying users than Apple Music, with 96 million premium subscribers and 207 million month active users as of its most recent earnings report in February. The company said in its report that it has 28.8 million premium subscribers and 62.1 million monthly active listeners in its North American region, which includes Canada but not Mexico.

Apple does not regularly disclose how many subscribers it has, and the last official count – 50 million – came almost a year ago in May of 2018.

About 67 million of Spotify’s premium subscribers are outside of North America, the company said in its most recent quarterly report.

Reporting by Stephen Nellis; Editing by David Gregorio

Ethiopia to issue first Boeing investigation report

ADDIS ABABA/SEATTLE/PARIS (Reuters) – Investigators will release a keenly awaited report on the deadly crash of an Ethiopian Airlines jet on Thursday, Ethiopia’s transport ministry said, giving the first official clues to the second crash of a new Boeing 737 MAX in five months.

Some 35 nationalities were among the 157 passengers and crew who died when the nearly full plane crashed six minutes after take-off from the capital Addis Ababa in clear conditions.

The March 10 disaster prompted the worldwide grounding of Boeing’s best-selling plane and scrutiny of its certification process.

“The 10:30 a.m. (0730 GMT) press conference is to present the preliminary report,” Ethiopian transport ministry spokesman Musie Yehyies said.

The report may shed light on how a piece of cockpit software came back to life after pilots initially switched it off as they tried to save the doomed jet, people familiar with the matter said, placing both technology and crew in the spotlight.

The Ethiopian-led investigation has begun piecing together details of flight 302, starting with faulty sensor data on take-off from Addis Ababa, questions over the Boeing 737 MAX’s high speed and a nosedive coinciding with the software re-activation.

The aircraft’s high speed and initial climb suggests the engines were running at a higher than usual thrust, experts say.

The so-called MCAS anti-stall software is at the center of accident probes in both the Ethiopian crash and October’s Lion Air accident in Indonesia that have together killed 346 people.

MCAS was designed to help prevent an aerodynamic stall by issuing commands to push the plane’s nose lower. However, in both cases it is suspected of firing up in response to faulty airflow data from a single sensor designed to measure the ‘angle of attack,’ a parameter needed to avoid stalling or losing lift.

SENSOR PROBLEMS

Echoing the fate of the Lion Air jet, initial evidence suggests the Ethiopian Airlines jet experienced sensor problems shortly after take-off, causing the MCAS software to begin lowering the nose to grab air under the wings.

Unlike the Lion Air crew, who were flying at a time when pilots had been told little about the MCAS software, the Ethiopian crew used switches to turn the automatic system off but it later re-engaged, people familiar with the matter said.

Although aircraft experts say MCAS cannot turn back on by itself, the report is expected to shed light on whether and why the crew chose to restore electrical power to the system at the risk of setting off more automated nose-down movements.

Aerospace analyst Bjorn Fehrm said in a blog post for Leeham News that pilots may have deliberately re-activated the system in order to make it easier to trim or control the aircraft only to be overwhelmed by rapid counter-moves from MCAS.

Investigators will also look at whether the crew carried out all necessary procedures, including a recommendation to stabilize the plane using the trim system before turning the crucial software off.

The pilots maneuvered the plane upwards at least two times before hitting the stabilizer cut-out switches to disable the system, one person familiar with the matter said.

However, initial flight data indicates the aircraft was flying nose-heavy and not in a “neutral” attitude when pilots hit the cut-out switches, the person added, making the situation harder to manage.

Cockpit procedures call for pilots to leave the MCAS system off for the rest of the flight once it has been disengaged.

GLOBAL GROUNDING

Safety experts stress the investigation is far from complete and most aviation disasters are caused by a unique combination of human and technical factors.

In a statement, Boeing said: “We urge caution against speculating and drawing conclusions on the findings prior to the release of the flight data and the preliminary report.”

The 737 MAX is Boeing’s top-selling jet with almost 5,000 on order. Ethiopian Airlines is also in the midst of an expansion drive, while other 737 MAX customers and victims’ families want answers, and potentially compensation.

Boeing shares were down 1.5 percent at 1800 GMT. They have lost more than 8.5 percent since the Ethiopian crash.

Getting the planes flying again depends partly on the role that Boeing design features are found to have played in the crash, though investigators are also paying attention to airline operations, crew actions and regulatory measures.

FILE PHOTO: Airplane engine parts are seen at the scene of the Ethiopian Airlines Flight ET 302 plane crash, near the town of Bishoftu, southeast of Addis Ababa, Ethiopia March 11, 2019. REUTERS/Tiksa Negeri/File Photo

Boeing is upgrading the MCAS software and training while stressing that existing cockpit procedures enable safe flight. It however faces mounting lawsuits alleging poor system design.

The Wall Street Journal reported earlier that the pilots had initially followed Boeing’s emergency procedures but later deviated from them as they tried to regain control of the plane.

Reporting by Eric M. Johnson, Tim Hepher, Jamie Freed, Jason Neely, David Shepardson; Editing by Georgina Prodhan, Mark Potter and Kirsten Donovan

Apple Card vs. American Express Platinum: A High-End Credit Card Face-Off

Apple Card is coming this summer. And when it’s released, don’t be surprised if some industry watchers compare it to a variety of high-end credit cards including the American Express Platinum.

The tech giant unveiled the credit card during its otherwise star-studded Hollywood upfront-like event last week. While the Apple Card will allow users to make purchases anywhere MasterCard is accepted, it’s also quite unlike many other cards available today.

Apple Card doesn’t have late fees, annual fees, international fees, or over-limit fees. And although users will be encouraged to pay their monthly statements, technically, if you want to skip a month, you can. Just be ready to pay extra interest.

For its part, Apple has called its credit card revolutionary and suggested it could upend the industry. But it’s also entering a market that’s dominated by companies including Visa, Chase, American Express, and others, that have the credit card game down to a science.

“Apple is starting from the bottom of base camp in what looks to be a climb of Mt. Everest to gain 5% to 7% market share over the next few years,” Wedbush analyst Dan Ives told Fortune in an interview. “The stage is set, now it’s about will consumers sign onto the platform and use the Apple Card over the coming years.”

Ives went on to say that Apple’s clear opportunity is “tapping into its 1.4 billion active iOS devices and monetizing the financial vertical.” He believes the company could attract 20 million Apple Card customers in its first three years.

But before it can get there, Apple Card needs to intrigue users. As a metal card with plenty of incentives for using it, I can’t help but compare it to the American Express Platinum—a similarly high-end metal card with its own slate of perks that some may find compelling.

So, to shed some light on where Apple Card might fit in the market, I’ve compared the Apple Card and American Express Platinum below.

From design to interest, here’s a look at how the two cards compare:

Design

Apple Card and American Express Platinum are clearly vying for metal credit card dominance.

Apple Card has a titanium design and laser-etched Apple logo and cardholder name. There’s a security chip in the card, but no credit card number, CVV, or any other information.

The American Express Platinum is a metal card that features American Express’ logo and border and uses the same security chip in the Apple Card. Unlike the Apple Card, the American Express Platinum displays credit card number, expiration date, and CVV numbers in addition to the cardholder’s name.

Fees

Apple created some buzz when it said that cardholders won’t be subject to annual fees, international usage fees, over-limit charges, and even late fees.

American Express Platinum, on the other hand, is quite different. Cardholders are charged a $550 annual fee for having the card and up to $38 for both late payments and returned payments. And if cardholders want to add cards to their account for family members, American Express charges $175. There’s no charge for foreign transactions.

Interest

American Express Platinum cardholders pay off their balances each month to avoid interest on purchases. However, the company has launched a program for customers to carry a balance on the American Express Platinum and pay over time.

That program, aptly named Pay Over Time, will charge interest on the card’s outstanding balance. American Express doesn’t say on its dedicated Pay Over Time page how much interest it charges.

Apple Card balances come with an interest charge on the outstanding balance. As of this writing, Apple is predicting a variable annual percentage rate (APR) on Apple Card balances of 13.24% to 24.24%.

Perks

The iPhone maker’s Apple Card perks are based on a simple, 3-2-1 system.

Whenever cardholders buy products at any Apple marketplace, including its brick-and-mortar stores, its App Store, or iTunes, Apple will automatically give them 3% of the purchase price back.

Apple Card can be linked to Apple’s mobile payment service Apple Pay, which lets users hold their iPhones to purchase terminals and buy goods. When they use Apple Pay linked to the Apple Card at any store, they will get 2% of the purchase price back.

Using the actual Apple Card at a store will earn cardholders 1% cash back.

American Express has no shortage of perks and offers available to Platinum cardholders.

The card comes with up to $200 in free Uber rides each year. American Express also uses a membership points system that adds points to cardholder accounts based on their purchase. Those points can be redeemed for cash, travel, or retail gift cards.

American Express Platinum cardholders can also get up to $200 in airline fee credit to cover extra baggage costs, in-flight refreshments, and more. And with American Express’ partnership with hotels around the world, Platinum cardholders can get discounted rates when using their cards to book a room.

Add that to access to lounges at airports around the world and other cashback offers, American Express Platinum is a clear leader in perks.

Business

So far, Apple has not said whether the Apple Card will be available to businesses. On the company’s website promoting Apple Card, the focus is on the consumer.

Meanwhile, American Express offers its Platinum card to both consumers and businesses.

5 Soft Reasons To Reconsider A Tesla Position

Tesla (NASDAQ:TSLA) is one of the most divisive companies on the market. It seems to have only fanatical supporters pitted against foaming-at-the-mouth shorties. For good measure, I’m in the latter camp. But I’m willing to give up my short position if Tesla raises a decent chunk of capital.

The reason I’m short is pretty much because Elon Musk told Axios late last year Tesla came “within single-digit weeks” of death. I sort of get that this is perhaps a dramatization by this charismatic CEO. However, it was probably not entirely untrue. There are some signs the company is strapped for cash like the recent store closing plan.

That’s all fine with me. I don’t expect Tesla to build out a completely new car brand and manufacturing operation while generating positive cash flow. Equity markets are there for a reason. They are specifically useful to raise enormous amounts of cash if your operations require them. But if you are close to going under, raise equity already. You are not going to get a better deal if you’ve backed your company completely in a corner. Not raising money appears entirely irrational and has introduced immense amounts of risks for no reason… As long as Tesla doesn’t do a big raise, I’m short.

In a previous article, I’ve talked about the numbers (3 Key Things On The Tesla Numbers), and this time around, I wanted to highlight some of the “soft” indicators that don’t feel good to me.

Continuous insider selling

I looked at the insider buying/selling, and there’s just an overwhelming amount of selling. The only person that is buying once in a while is Elon Musk. Props for that. It is almost disheartening how Musk is trying to put on a brave face painting the tape with a nice buy here and there, and his board members and execs are just selling stock as fast as they get it; sometimes, selling pitiful amounts of stock even. I’ve rarely seen an insider selling dynamic like this:

Board comp

I couldn’t make the entire table visible at once, but this is board compensation over the past few years. It doesn’t matter too much who is who; it is about the general picture. There are 11 people. I think that’s a lot. Elon Musk is not taking board compensation, which is great! Props there. I don’t like he put his brother on the board obviously. What I really don’t like is how much these board members get paid. Mostly in stock options. Over the past 5 years, it adds up to like $1 million per board member. That’s with Elon not taking any board comp. That is a lot of money to be on a board.

Source: Morningstar data

Executive profiles and comp

If we look at the make-up and compensation of executives, I have some gripes as well. The CEO, CFO, CTO, and CAO are all between mid-30s to mid-40s (Elon himself), and Kirkhorn and Taneja have been at their post for a year or less. I think it is fair to characterize them as an inexperienced team.

Source: Morningstar data

CEO Elon Musk is not taking a lot of salary. Again, props to him. However, he is the potential beneficiary of a 10-year performance award plan that incentivizes him to “go big or go home”. Targets are really lofty. Tesla needs to hit revenue and EBITDA targets far out of reach. Again, I respect that to some degree. So many execs are just raking in the dough while hitting easy comps. That’s not the case here. Musk can significantly increase his fortune, but it requires great success. One could argue if Tesla hits these milestones, shareholders will be more than happy to grant Musk up to another 12% of all shares. I think they would be happy to be diluted in order to see those gains. However, this scheme incentivizes Musk to “bet the company”. Coincidentally, that aligns with my view Musk, or Tesla, is taking irrational risks by not raising equity.

Finally, this less-than-optimal compensation scheme grants vesting eligibility when Musk is CEO or executive chairman AND chief product officer. Musk already gave up the chair in a settlement with the SEC. If for some reason Musk can’t be CEO anymore, he would lose all of his potential enormous compensation package. That’s not motivating.

Glassdoor reviews

On Glassdoor, you can read employee reviews of the company’s they work at. Both former employees and current employees. From time to time, I do so for companies I invest in to get a feel for how things are on the inside. It’s a soft signal like insider selling, but occasionally, you find a very interesting nugget of information. You can find the Tesla Reviews here.

I’ve cherrypicked two recent negative reviews for you, because these kinds of things that make me uneasy about the company.

Title: Technician

Location: Phoenix, AZ

Decisions that roll downhill from management are often laughably inept yet there is zero discourse between the people who actually work (technicians, equipment installers, warehouse employees) and the people above them. The energy division has been forcibly and continually eroded since 2017. In AZ, one of the best solar markets in the US, the energy presence is now down to a handful of people statewide who are processing warranty claims and maintaining what is left of the existing fleet of solar. Things are not good behind the curtain.

Title: Maintenance Technician

Location: Fremont, CA

This is by far the worst company i have worked maintenance for, Their maintenance program is a complete joke. We don’t have the proper tools to do our job, we don’t have the proper hazmat to do the proper inspections, and no one is held responsible. Corners are cut and eventually someone is going to get hurt. Their engineering team is extremely under-experience and it shows. Millions of dollars thrown away everyday on equipment that has to be decommissioned and on top of all that, NO ONE IS SAFE FROM LAYOFFS! AVOID THIS PLACE NO MATTER HOW MUCH MONEY THEY THROW AT YOU

Just peruse the reviews yourself. These are bad but not the worst thing you will read. They are certainly not exceptional. Here are some of the Glassdoor stats. Note the surprisingly high CEO approval and the “Business Outlook” which is trending downwards.

April 4 Court date

Next week, Elon Musk and the SEC face off in a New York courtroom to determine whether he is in contempt of court. Legal experts’ estimates range from saying that a contempt finding could lead to:

– fine in excess of $20 million

– further Twitter restrictions

– removal from the board or as CEO

The first option would be hands down the best outcome, but it isn’t great, of course. Tesla doesn’t seem to be rolling in the money.

A Twitter restriction seems great, because “problem solved” right? At least Musk can’t get himself in any more trouble. But Tesla spends very little money on marketing. By constantly being in the news, Musk keeps the spotlights on himself and Tesla. That keeps the headlines going, and ultimately, headlines sell cars. No headlines, no cars.

I don’t think the penalty would ever be removal from the board in isolation. This can happen, but in combination with other measures, I’d guess. Removal as CEO would be disastrous because Elon Musk is THE face of Tesla. Even as a short, this seems somewhat egregious. Second, it would invalidate most of the compensation package even if he is demoted to COO (or nothing of Tesla) or something.

Conclusion

In summary, there are a lot of soft reasons to be careful around Tesla: insider selling, board compensation, executive compensation, and the Business Outlook is trending down based on employee reviews. I’m primarily short because the company refuses to raise equity. If Elon raises tomorrow, I’ll reconsider, but until then, I think the risks far outweigh the potential rewards here.

Disclosure: I am/we are short TSLA. 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.

Apple Has A New iPad Problem

With the amount of press surrounding Apple’s (NASDAQ: AAPL) services business, some analysts seem to be forgetting that today, right now, the company gets 87% of its revenue from products. In the future, services may outstrip products, but products will still be a gateway. One product that doesn’t seem to get much press is the company’s iPad business. With the iPhone business on shaky ground, Apple really can’t afford for its iPad or Mac business to struggle as well. Last quarter, iPad and Mac made up just over 19% of Apple’s total revenue. Unfortunately, Apple’s most recent iPad announcements could spell trouble for both businesses.

The tablet market is shrinking… wait its growing… actually we don’t know

The tablet business seems to have reached a point where analysts can’t figure out if customers want these devices or not. A study from Statista suggests the following bleak picture:

Year

2018

2019

2022

2023

Tablets Sold

150.3m

136.8m*

134.1m*

122.1m*

(Source: Statista tablet market *projections)

Users are being told that tablet demand will decline as users choose to buy laptops, Chromebooks, and hybrid devices. On the one hand, Apple has a stranglehold on tablet operating systems. On the other hand, it doesn’t do much good to own a market that is falling apart.

There is just one problem… the market may not be falling apart after all. As quickly as you can find a study that says tablet sales will decline, you can find another that suggests tablets will return to growth. According to Frost & Sullivan, the tablet market will grow at a compound annual growth rate of 1.6% through the year 2024. Though this doesn’t sound like fast growth, by 2024, it would mean 187 million units worldwide.

iOS worldwide tablet market share

(Source: iOS Worldwide Tablet market share)

This second study suggests tablets will gain new capabilities and cannibalize laptop sales. Assuming that iOS continues to hold its 74% worldwide market share, by 2024, the company would sell about 138 million of these devices. To give investors an idea of what this growth would look like, during 2018, the company sold roughly 43 million tablets.

In the last four quarters, the average revenue per iPad has hovered around $430. At 138 million devices, this would generate about $15 billion in quarterly revenue. Last quarter, Apple generated $6.7 billion from the sale of iPads. More than doubling its iPad revenue in the next five years, is something investors would be more than happy to accept.

If this were the end of the story

It seems like every time Apple begins to solve a problem it ends up creating another. The first example is the iPhone X. It seems obvious in hindsight, that users who bought the iPhone X were those who waited through the iPhone 6, 7, and 8, for a different form factor. Priced at $999, this premium device seemed to answer a question of demand for something different. Apple mistakenly assumed that everyone would pay $1,000 for a phone, and rolled out the iPhone XS, and iPhone XS Max. The company eventually made the iPhone XR available at $749. In the meantime, Apple witnessed slower iPhone demand than expected and is still trying to make up lost ground.

A second mistake was the timing of the introduction of the iPad Mini. The original iPad was released in April of 2010. Over the next two plus years, others introduced smaller tablets while Apple introduced the iPad 2 and even the iPad 3. With users salivating over the Retina display on the iPad 3, in November 2012, Apple introduced the iPad Mini… without the Retina display. In fact, it took until a year later when the Mini finally gained a Retina display of its own.

Unfortunately, Apple seems to have again created a problem just as it began to solve another. Over the course of 2018, Apple’s iPad sales momentum deteriorated significantly.

Quarter

Q1 2018

Q2 2018

Q3 2018

Q4 2018

iPad Revenue Growth

+7.3%

+5.1%

-6%

-14.6%

(Source: AAPL quarterly results Q1 ’18Q2 ’18Q3 ’18Q4 ’18)

It’s really no surprise this slowdown occurred, given Apple’s iPad release schedule. The iPad from March of 2017, was a step up in performance, but not transformative. June 2017’s introduction of slightly different iPad Pro devices didn’t give users a reason to rush out and upgrade. Users had to wait for the iPad Pro 3rd generation, and the elimination of the home button, to get a change worth noticing. Since the devices weren’t released until the fourth quarter was already one-third over, it’s not surprising that results suffered.

Buyers seemed impressed by the advance of the iPad Pro lineup, because iPad revenue jumped more than 13% in the first quarter of 2019. If Apple left its lineup alone for another quarter or two, iPad results might have continued to improve, but unfortunately that’s not the end of the story.

Letting the Air out of iPad results

The introduction of the newest iPad Air and the revised iPad Mini is a confusing choice on multiple fronts. First, the iPad Mini hasn’t seen a refresh since 2015. Second, the iPad Air hasn’t been a name used since 2014. It’s almost like Apple forgot it sold these devices in the first place.

Device

Price

Screen

Weight

Storage

Processor

Other

iPad Air 2019

$499

10.5”

1 lbs

64 GB

A12 Bionic – M12 coprocessor

Touch ID – Lightning connector

iPad Mini 2019

$399

7.9”

0.66 lbs

64 GB

A12 Bionic – M12 coprocessor

Tough ID – Lightning connector

(Source: Apple iPad Air and iPad Mini pages)

If these devices were standalone products, the company’s results would likely be amazing. The problem is Apple now gives users a lower-priced choice, that may cut into the average selling price that just started to recover.

Quarter

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Q1 2019

iPad Average Selling Price

$446.97

$450.55

$405.17

$422.68

*$507.57 to $511.45

(Source: AAPL quarterly earnings – *ARPU for Q1 is derived from Apple selling 13.1 to 13.2 million iPads in the first quarter the last two years. Taking the $6.7 billion in iPad sales and dividing by 13.1 or 13.2 million yields the range of $507.57 to $511.45)

iPad Air 2019

(Source: iPad Air page)

On the iPad Air side of things, buyers who are faced with either the iPad Air or one of the iPad Pro models have a relatively simple choice. For $300 to $500 more, they can get a Pro device with a faster processor and a somewhat better screen to form factor, or they can just get the iPad Air. In short, the iPad Air is such a good device, with such impressive specs, that it will likely make buyers wonder why they would waste $300 or more on an iPad Pro.

In addition, if users are considering a MacBook 12”, the pricing between the iPad Air becomes astoundingly challenging. The MacBook is $1,299 to start and has a screen with 226 pixels per inch (PPI). The device weighs 2 pounds and comes with 256 GB of storage. Instead of spending $1,299, a buyer could opt for an iPad Air with the Smart Keyboard. A 256 GB iPad Air costs $649, the Smart Keyboard runs $159 for a total cost of $808.

Though the iPad Air runs a different operating system, the Files app moves the device a little closer to the Mac. What’s more, the iPad Air is half the weight without the keyboard, supports Apple Pencil, and has a higher ppi at 264. This is a case where spending almost $500 less gives the user a little less screen, but is that enough to justify the huge cost difference? Probably not.

Where the iPad Mini is concerned, it’s possible that some users will opt for the Mini at $399 instead of the slower processor and bigger screen iPad at $329. However, it’s equally possible that some buyers who would have bought the Air at $499, will decide to save the $100 and cut weight by going with the Mini. The bottom line is Apple revived two products from multiple years ago, just in time to potentially cut the gains in iPad ARPU that just started.

Today versus tomorrow

A significant number of articles are being written about what Apple will look like tomorrow. The company’s services business is being talked about as though its growth is guaranteed. It’s possible services will overtake products, but that is a long road indeed. To be clear, I own Apple stock, I plan on holding onto my shares. I do think that services will be a growth driver for a long time.

However, Apple has shown it’s not infallible in releasing major products. The iPhone XR was released after the XS, yet based on demand, the situation should have been reversed. Apple made a strong move redesigning the iPad Pro lineup with their beautifully stretched screens, USB-C charging, and keyboard and pencil support. Users had a choice between spending $329 on the cheaper iPad or $799 or more for an iPad Pro. The ARPU seems to have moved up significantly on the strength of Pro sales.

Though the iPad Air and iPad Mini are designed to drive demand for iPad sales, the pricing may put a squeeze on ARPU again. In addition, Apple made the new iPad Air so capable, that some buyers may choose to opt for the Air over certain MacBook models. The company has been successfully pushing the price point for the MacBook up to drive higher revenue usually on relatively tepid unit growth. If the redesigned Air with its keyboard support steals MacBook sales, Apple’s overall revenue could suffer significantly from the massive difference in pricing.

Apple is constantly attempting to improve its hardware options to appeal to many users. At the present time, the lineup between the iPad Mini, iPad Air, iPad Pro, and MacBook has gotten a bit convoluted. Apple is hoping that users will stay in their lane and buy what it wants them to. Unfortunately, Apple may have just caused its own iPad problem.

Disclosure: I am/we are long AAPL. 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.

National Enquirer: Bezos' girlfriend's brother 'single source' for reports

FILE PHOTO: Jeff Bezos, president and CEO of Amazon and owner of The Washington Post, speaks at the Economic Club of Washington DC’s “Milestone Celebration Dinner” in Washington, U.S., September 13, 2018. REUTERS/Joshua Roberts/File Photo

WASHINGTON (Reuters) – The publisher of the National Enquirer on Sunday said its reports on Amazon Chief Executive Jeff Bezos’ private life were based on information from a single source, the brother of Bezos’ girlfriend, Lauren Sanchez.

The statement from American Media Inc. followed publication by Bezos security chief Gavin De Becker of an article in the Daily Beast in which he said the government of Saudi Arabia had accessed private information from Bezos’ phone.

While De Becker said in the article that there was “high confidence that the Saudis had access to Bezos’ phone,” it was “unclear to what degree, if any, AMI was aware of the details.”

Nevertheless, AMI released a statement saying its reports on Bezos’ affair with Sanchez were based solely on information provided by Michael Sanchez, “who tipped the National Enquirer off to the affair on Sept. 10, 2018, and over the course of four months provided all of the materials for our investigation.

“There was no involvement by any third party whatsoever,” it added.

Gavin de Becker & Associates did not immediately respond to a request for comment. A representative for the Saudi embassy in Washington did not immediately respond to a request for comment.

Reporting by Howard Schneider; additional reporting by Humeyra Pamuk; Editing by Dan Grebler

Leaky Databases Are a Scourge. MongoDB Is Doing Something About It

MongoDB, a database software provider whose stock has been on a tear recently, just hired its first-ever chief information security officer. The appointment, which came Friday, signals that the company plans to take security more seriously even as it faces stiffened competition from the likes of Amazon and other tech giants.

The new boss is Lena Smart, a Glaswegian cybersecurity professional. Smart formerly held the same title at IPO-bound Tradeweb, a financial services firm that supplies the technology behind certain electronic trading markets. Prior to Tradeweb, she headed security at the New York Power Authority, where she worked for more than a decade. A cellist in her spare time, Smart told me in her Scottish brogue that her priority in the new job will be “knowing what the crown jewels are—that’s our customer data—and making sure that’s always protected.”

People leaving MongoDB and other databases unsecured on the web has been a persistent source of data-leaks over the years. Just this month, a security researcher discovered one such sieve that exposed to public view a trove of sensitive information, including location data, on millions of people in China. The misconfigured repository appears to have originated from SenseNets, a Shenzhen-based company that is likely providing the Chinese government with crowd-surveilling, facial recognition technology to track the country’s muslim Uyghur population. This is just the latest leak example; there are innumerable others.

Despite the frequency of these leaks, the situation seems to be improving. Most of these inadvertent leaks have sprung, in fairness, from people using outdated instances of the company’s so-called community edition software, a free, barer-bones version of the database product. Mark Wheeler, a MongoDB spokesperson, conceded that the 12-year-old company “struggled in its early years to find the right balance with security.” But he avers that updates to the default settings of MongoDB’s software over the past few years, plus key security team hires—including guardians Davi Ottenheimer, Kenn White, and now Smart—are changing the equation.

As Smart’s scope involves securing the totality of MongoDB’s business, the data-spillage issue ultimately falls to her. She says she’ll continue educating customers in best practices when it comes to security. She says she will also aim to imbue the company’s product development process with security, quality assurance, and testing from the earliest stages. “If we can get in at the very start” of the software development lifecycle, Smart says, it will “save us time and money and make our products more reliable and secure.”

The leaky database issue is one that extends well beyond MongoDB. It’s also a problem for rivals such as Amazon, particularly its S3 buckets, Elastic, and others. Like so many companies, these database-makers are looking now to shore up their software in the hopes of turning a historical weakness—cybersecurity—into a competitive strength. As Dev Ittycheria, MongoDB’s president and CEO, tells Fortune: making the company’s products as secure as possible “is critical to our business.”

Indeed, it’s critical to MongoDB and, increasingly, every business.

A version of this article first appeared in Cyber Saturday, the weekend edition of Fortune’s tech newsletter Data Sheet. Sign up here.

Will Robots Take Over Your Job? Take This 1-Question Quiz to Find Out

The robots are coming! What once seemed like a dystopian novel is seeming more like reality by the day.

A quarter of jobs in the U.S. stand to be disrupted by artificial intelligence, a recent report from the Brookings Institution found. Kai-Fu Lee, a leading A.I. researcher, investor, and computer scientist estimates that in the next 15 years, up to 40 percent of jobs could be replaced by algorithms, robots, and other types of artificial intelligence.

Lee offers a multi-question quiz on his website to determine if your job might be at risk. But really, it can all be boiled down into one simple question.

How repetitive is your day-to-day work?

In A.I. in 60 Seconds, Lee explains that A.I. is limited to doing the same things over and over again. “Within a single domain, A.I. is able to take tasks from our everyday jobs that are routine and repetitive and do them in a better way than we humans can do.”

The more repetitive and routine your work, the more likely it will be taken over by A.I. Here’s another way to look at it, from a New Yorker piece titled Are Robots Competing For Your Job?: “If your job can be easily explained, it can be automated,” Anders Sandberg, of Oxford’s Future of Humanity Institute, tells Oppenheimer. “If it can’t, it won’t.”

What can you do that A.I. can’t?

While A.I. can do many things well, Lee reminds us that there are many things it can’t do so well. Your human brain give you a competitive advantage.

A.I. isn’t creative. It can’t think strategically. It doesn’t plan. And above all, it can’t have compassion or emotional intelligence. If you’re worried about your job being taken over by robots, Lee encourages you to zero in on how you can enhance and improve the skills that A.I. will never be able to gain. Try to figure out how to stop doing low value work or automate that work yourself.

Economist Richard Baldwin agrees. He advises that instead of trying to compete with A.I., let the robots do their thing. Focus your attention on building your in-person human skills, such as improving communication, developing insights, and effectively collaborating with other people at work. “Realize that humanity is an edge not a handicap,” he told the New Yorker.

Creativity is one of the most in-demand soft skills.

LinkedIn recently analyzed 50,000 professional skills that appear in its job postings. It used the data to determine the most in-demand job skills employers are looking for.

Creativity was the top soft skill that appeared again and again in job postings. Across hard skills and soft skills, it was still number two overall.

“It’s no stretch to say creativity is the single-most important skill in the world for all business professionals today to master,” LinkedIn concluded.

My Company Asked More Than 1,200 CEOs About the Most Important Decision They'll Make in 2019. Here's What They Said

Talent issues are top-of-mind for business leaders in 2019. In fact, according to a new report from my organization, CEOs of small and midsize businesses rank decisions about talent higher in importance than decisions about customers and financials.

Despite concerns for the economy, 65 percent of the 1,257 CEOs included in the Q4 2018 Vistage CEO Confidence Index report said they planned to increase hiring this year. This was a shade lower than the recent 15-year peak of 71 percent, but current recruitment intentions are still greater than at any other time recorded by our survey since 2003.

With the United States almost at full employment and wages rising, hiring won’t be easy during the next 12 months. CEOs are employing a variety of strategies to cope with this challenge, such as boosting wages (64.6 percent), adding employee benefits (36.1 percent), investing in equipment to automate tasks (35.2 percent) and allowing employees to work remotely (25.1 percent).

However, there are other strategies to consider. Here are two that I recommend.

1. Work smarter, not harder, on talent sourcing  

One of the most effective ways to source new talent is through employee referrals. Engage your existing workforce in the recruitment process by starting a referral program that provides incentives to employees to help bring the best people on board. Start an open conversation with all employees about how you reward effort to address any questions about compensation.  

Professional networks can also be a valuable source of top talent. Use them to target both people who are actively seeking new roles and those who are happy working elsewhere, even if that’s with your competitors. 

2. Get creative with professional development

Nearly three-quarters (71 percent) of the CEOs we surveyed recognized employee development will be key to their talent-management strategy in 2019. People are a business’s number-one asset. Giving them room to grow in the organization is one of the most effective ways of making them feel more valued, which can increase their productivity and make them stick around longer.

But don’t stop at training workers to be better in their current roles. Give them opportunities to develop communication, collaboration and leadership skills, and recognize their achievements with managed career progression. Connect senior leaders to junior team members through a mentorship scheme, too, and you’ll soon have a strong talent pipeline. 

Russia threatens to block popular VPN services to prevent website access

MOSCOW (Reuters) – Russia’s communications watchdog threatened on Thursday to block access to popular VPN-services which allow users to gain access to websites which have been outlawed by Moscow.

Russia has introduced tougher internet laws, requiring search engines to delete some results, messaging services to share encryption keys with security services and social networks to store users’ personal data on servers within the country.

But VPN (virtual private network) services can allow users to establish secure internet connections and reach websites which have been banned or blocked.

Russia’s communications regulator Roskomnadzor said it had asked the owners of 10 VPN services to join a state IT system that contains a registry of banned websites.

If the VPN services link to the system, their users would not be able to reach websites which had been blocked or be able to use the banned Telegram messenger service.

The internet censor said that it had sent notifications to NordVPN, Hide My Ass!, Hola VPN, Openvpn, VyprVPN, ExpressVPN, TorGuard, IPVanish, Kaspersky Secure Connection and VPN Unlimited, giving them a month to reply.

“In the cases of non-compliance with the obligations stipulated by the law, Roskomnadzor may decide to restrict access to a VPN service,” the watchdog said in a statement.

Reporting by Anton Zverev. Writing by Andrey Kuzmin; Editing by Alexander Smith

Auto1 may consider IPO in future but no need for cash now: CEO

BERLIN (Reuters) – German used-car dealing platform Auto1 said it could seek a public offering in future but a 2018 cash infusion from Japan’s Softbank means it has no immediate need for extra funding of its European growth plans.

FILE PHOTO: A worker loads a second hand car on a car transporter truck at the Auto1.com company grounds in Zoerbig, Germany January 28, 2017.REUTERS/Fabrizio Bensch /File Photo

Last year’s Softbank’s deal valued Berlin-based Auto1 at 2.9 billion euros ($3.27 billion), making it one of Germany’s top so-called tech unicorns.

It is virtually unknown to consumers except through its used car buying arm Wir Kaufen dein Auto (We Buy Your Car) in Germany and similar names elsewhere. It operates from Finland to Romania to Portugal, 30 countries in all.

Revenues rose by 32 percent to 2.9 billion euros last year, and although it is profitable in Germany, investments in other markets have led to a loss on group level.

“Currently, an initial public offering is not a topic for us,” Auto1 co-founder Christian Bertermann told Reuters, adding this could change in future.

Auto1 buys cars using its vehicle pricing database to calculate an offer within minutes and then sells the vehicles on to one of its roughly 35,000 dealerships for a commission.

Its platforms helped 540,000 vehicles change hands in 2018.

The company will now also start a retail platform to compete with Scout24’s Autoscout unit or Ebay’s Mobile.de offering, Bertermann said.

He confirmed a Reuters report about Auto1’s talks with Scout24 about an acquisition of Autoscout, adding that these would not lead to a takeover.

Scout24 in February agreed to be acquired by buyout groups Hellman & Friedman and Blackstone.

Auto1 was set up in Berlin by entrepreneur Christian Bertermann after having trouble selling two old cars owned by his grandmother, along with Koc, who previously worked at Rocket Internet-backed firms Zalando and Home24.

Reporting by Nadine Schimroszik,; Writing by Arno Schuetze; Editing by Alexandra Hudson

Netflix pilots $4 mobile plan in India to woo users

MUMBAI (Reuters) – Netflix Inc is testing a 250 rupee ($3.63) monthly subscription for mobile devices in India, the video streaming giant said, aiming to boost its presence in a price-sensitive market where data consumption on smartphones is surging.

FILE PHOTO: The Netflix logo is seen on their office in Hollywood, Los Angeles, California, U.S. July 16, 2018. REUTERS/Lucy Nicholson/File Photo

California-based Netflix currently offers three monthly plans in India, ranging from 500 rupees to 800 rupees, but those are still expensive compared with similar offerings from rivals.

Amazon’s Prime service, which offers video streaming, music and faster shipping of purchases, is priced at 999 rupees a year while local rival Hotstar has a free service as well paid plans starting at 365 rupees a year.

Netflix’s test plan at 250 rupees a month gives users access to standard definition video on smartphones and tablets, a company spokesman said.

“We will be testing different options in select countries where members can, for example, watch Netflix on their mobile device for a lower price and subscribe in shorter increments of time,” he added.

Netflix’s Indian roster includes blockbuster originals such as “Sacred Games”, global superhits such as “Narcos” as well as Indian cinema. However, its premium pricing is seen by critics as a stumbling block to bulking up its Indian user base.

Chief Executive Reed Hastings told Reuters late last year that Netflix had no plans for cheaper prices in India, where it aims to win its next 100 million subscribers.

The company emphasized on Tuesday that the new plan is a test and the company might not roll out these specific plans beyond the tests.

Netflix’s strategy to launch the test for mobile devices in India comes against the backdrop of rising demand for smartphones in the world’s second-biggest mobile phone market with more than 1.1 billion wireless connections.

Aspirational buyers looking for bigger screens and better user experience are likely to spend more on their second or third smartphones, pushing up the average selling price by 18 percent from last year to $190, said Tarun Pathak of technology researcher Counterpoint.

Reporting by Sankalp Phartiyal; Editing by David Goodman

Bahrain to use Huawei in 5G rollout despite U.S. warnings

DUBAI (Reuters) – Bahrain, headquarters of the U.S. Navy’s Fifth Fleet, plans to roll out a commercial 5G mobile network by June, partly using Huawei technology despite the United States’ concerns the Chinese telecom giant’s equipment could be used for spying.

FILE PHOTO: Logos of Huawei are pictured outside its shop in Beijing, China, February 28, 2019. REUTERS/Jason Lee/File Photo

Washington has warned countries against using Chinese technology, saying Huawei could be used by Beijing to spy on the West. China has rejected the accusations.

VIVA Bahrain, a subsidiary of Saudi Arabian state-controlled telecom STC, last month signed an agreement to use Huawei products in its 5G network, one of several Gulf telecoms firms working with the Chinese company.

“We have no concern at this stage as long as this technology is meeting our standards,” Bahrain’s Telecommunications Minister Kamal bin Ahmed Mohammed told Reuters on Tuesday when asked about U.S. concerns over Huawei technology.

The U.S. embassy in Bahrain did not immediately respond to a request for comment.

The U.S. Fifth Fleet uses its base in Bahrain, a Western-allied island state off the Saudi coast, to patrol several important shipping lanes, including near Iran.

Bahrain expects to be one of the first countries to make 5G available nationwide, Mohammed said, although he cautioned it would depend on handset and equipment availability.

Early movers like the United States, China, Japan and South Korea are just starting to roll out their 5G networks, but other regions, such as Europe, still years away and the first 5G phones are only likely to be released in the second half of this year.

Bahrain’s state controlled operator Batelco is working with Sweden’s Ericsson on its 5G network, while the country’s third telecom Zain Bahrain is yet to announce a technology provider.

No foreign company is restricted by the government from providing equipment for Bahrain’s 5G network, Mohammed said, adding that the mobile operators chose who they worked with.

Australia and New Zealand have stopped operators using Huawei equipment in their networks but the European Union is expected to ignore U.S. calls to ban the Chinese company, instead urging countries to share more data to tackle cybersecurity risks related to 5G networks.

Mohammed said the rollout of the 5G network was an “important milestone” for Bahrain, which is hoping investments in technology will help spur the economy which was hit hard by the drop in oil prices.

“It is something we are proud to have,” he said.

Reporting by Alexander Cornwell; Editing by Kirsten Donovan

Micron sees memory chip recovery coming later in year, shares rise

(Reuters) – U.S. chipmaker Micron Technology Inc on Wednesday said it sees a recovery in the memory chip market coming and reported a quarterly profit that beat estimates as cost controls helped offset falling demand and prices, sending its shares up nearly 5 percent.

The logo of U.S. memory chip maker MicronTechnology is pictured at their booth at an industrial fair in Frankfurt, Germany, July 14, 2015. REUTERS/Kai Pfaffenbach

Micron makes NAND storage chips that are used in phones and internet servers as well as DRAM chips that help computer processors communicate with those storage chips.

The company beat revenue expectations for the fiscal second quarter ended Feb. 28. Although it gave a forecast for its fiscal third quarter that was below Wall Street’s expectations, Micron said demand is likely to begin growing again by its fourth quarter.

The results come against the backdrop of a glut in the global semiconductor industry triggered by waning demand for smartphones and spotty purchasing patterns by cloud-computing vendors, which hurt chipmakers such as Intel Corp earlier this year.

Meantime, Micron trimmed its spending plans and said it had idled some factory lines to bring its chip output in line with lower demand, helping keep profits flowing and a share buyback plan on track.

For its fiscal second quarter, Micron generated nearly $1 billion in free cash flow and a profit of $1.71 per share, excluding items. That was down from $2.82 a year earlier but above Wall Street expectations of $1.67, according to IBES data from Refinitiv.

“Certainly Micron has not been in a situation before where it’s been able to deliver such healthy profitability and cash flow in an adverse industry environment,” Chief Executive Sanjay Mehrotra said in an interview with Reuters.

Kinngai Chan, an analyst with Summit Insights Group, said investors were focusing on the outlook for a recovery in the second half of the calendar year, with the fiscal third quarter forecast representing “the bottom for Micron’s near-term sales and gross margin.”

The Boise, Idaho-based company said on Wednesday it expects revenue between $4.6 billion and $5 billion for its fiscal third quarter, falling short of analyst expectations of $5.3 billion according to IBES data from Refinitiv. The company cut planned capital expenditures for the 2019 fiscal year to $9 billion, Micron executives said, down from a previous forecast of between $9 billion and $9.5 billion.

Revenue fell to $5.84 billion from $7.35 billion, beating expectations of $5.3 billion.

The company said it bought back 21 million shares of its common stock for $702 million during the quarter as part of its $10 billion share buyback program, leaving a net cash position of $2.99 billion.

Reporting by Sayanti Chakraborty in Bengaluru and Stephen Nellis in San Francisco; editing by Sriraj Kalluvila and Leslie Adler

A Cab’s-Eye View of How Peloton’s Trucks ‘Talk’ to Each Other

Techno-optimist prognosticators will tell you that driverless trucks are just around the corner. They will also gently tell you—always gently—that yes, truck driving, a job that nearly 3.7 million Americans perform today is perhaps on the brink of extinction. At the very least, on the brink of uncomfortable change.

A startup called Peloton Technology sees the future a bit differently. Based in Mountain View, California, the eight-year-old company has a plan to broadly commercialize a partially automated truck technology called platooning. It would still depend on drivers sitting in front of a steering wheel but it would be more fuel efficient and, hopefully, safer than truck-based transportation today.

The company employs ten professional truck drivers to help refine its tech, and I’m about to meet two of them out on Peloton’s test track in California’s Central Valley. Michael Perkins is tall, thin, and has been driving very big trucks for about 20 years. Jake Gregory is shorter and picked up truck driving in college, before taking a detour to the FBI.

We hit the highway first, because the rain has suddenly cleared. (Here’s an unfortunate reality about Peloton’s driver assistance tech: It doesn’t work great in the rain. Or snow. It’s a safety issue. More on that later.) Out on Interstate-5, Perkins’ long, white semitrailer cruises along in front of me. I’m on board the second, identical truck behind it, with Gregory behind the wheel. A small screen mounted on Gregory’s dashboard shows a camera view of what’s happening in front of Perkins’ rig. It’s like their trucks are connected. Which, in fact, they are about to be.

Peloton

Perkins radios in that he’s ready to go; Gregory says he is too. Inside the two truck cabs, each driver hits a button. Three ascending tones—la, la, la—means Peloton’s automated system has authorized the trucks to platoon on this stretch of highway. A dedicated short range communications (DSRC) connection is now established between the two vehicles. It’s like WiFi but faster and easier to secure. Now, whatever the front truck does, the back truck in will near-simultaneously “know”—and react accordingly.

Then Gregory speeds up, pulling his truck up so it’s tailgating about 70 feet from the leader. Sounds risky! But right now, the two trucks are platooning. Ours is on a kind of hopped-up cruise control, which means Gregory’s feet aren’t actually controlling the brakes or accelerator. At the same time, Gregory maintains control of his steering wheel. If Perkins were to brake, hard, Gregory’s truck would, too, faster than a human could. The robots have taken over. Kind of? Not really? More like, they’re collaborating, with some human oversight.

Peloton’s name, a reference to bicycle racing, helps explain how this platooning works. Just as the riders in the peloton, or main group of racing cyclists, preserve energy by drafting off of those around them, the following trucks in the truck platoon reduce their aerodynamic drag by drafting off the ones in front of it. The lead truck, meanwhile, get a little push. This saves fuel, according to Pelton—up to 10 percent for the following car and 4.5 percent for the first one, depending on the road and weather conditions and the following distance. It might also prevent crashes, since this tech has much faster reaction times (about 30 milliseconds) than puny humans (about 1 to 1.5 seconds).

Other companies in Europe, China, Japan, and Singapore are seriously experimenting with truck platooning. The American military has hosted platooning demonstrations. Just this week, the US Department of Transportation gave out $1.5 million in grants to universities studying the tech. And Peloton has tested in a bunch of US states: Arizona, California, Michigan, Florida, and Texas, where Peloton has immediate plans to run the majority of its routes.

Right now, the company says it does have paying customers, though it won’t reveal their names until later this year. According to Josh Switkes, the company’s CEO, some pair of US truck drivers are running a route while platooning on a Peloton-enabled truck every day.

And testing continues, on the software in its office, on its test track, and on actual highways, where it confirms the technology’s reliability. “The highway or field is not for testing,” Switkes says. “The goal of testing is to find failures, and you don’t want those failures to be on public roads.” In a report released today, the company lays out this approach to safety for regulators and interested industry parties alike. It borrow from automotive processes more than Silicon Valley-style software ones, amounting to something like, easy does it.

It turns out, the linking-up move Perkins and Gregory just performed on I-5 is one of the most safety-critical parts of truck platooning, says Switkes. The moment when the following truck has to move faster than the one in front of it is the most dangerous part.

To make sure drivers like Perkins and Gregory don’t crash into each other, or anyone else, Peloton needs to make sure that the platooning drivers know how the tech works. (Right now, the company’s driver training process takes about a half a day.) It also needs to understand exactly how heavy the trucks are when they start platooning, how their brakes are working, and how their tires function. For this reason, the company says, it has carved out partnerships with its suppliers, which means its trucks are built from the ground up with platooning in mind.

This is also why Peloton doesn’t platoon in the rain right now, or in the snow: The company can’t yet gauge exactly how tires deteriorate over time, which means it can’t quite predict how they’ll react in a hard-braking situation. Worn tires might slide in the moisture, leading to a domino chain of truck crashes. So no platooning in the Midwest in the winter, or anywhere during a rainy spring. “On certain routes, it’s a significant limitation,” says Switkes. “But we’re erring on the side of safety.”

And if that seems a little dull, Switkes would tell you that’s the point. His favorite word is “pragmatic,” and he doesn’t believe driverless trucks will prowl the highways any time soon. The technology is too complicated, he argues, and developers will have to go through years of safety testing before they’re ready for the roads—and before the public feels safe riding in their own bitty cars around 50,000-pound robot trucks. So Peloton is going all in on making human-based driving both safer and more efficient. With a bit of tech boost.

Not all manufacturers agree: In January, Daimler announced it would stop its platooning development to focus on autonomous trucking. Tests showed that “fuel savings, even in perfect platooning conditions, are less than expected,” the German company wrote in a press release. “At least for U.S. long-distance applications, analysis currently shows no business case for customers driving platoons with new, highly aerodynamic trucks.”

Platooning advocates disagree, but even the most supportive believe finding a market for this trucker assistance isn’t simple. Steven Shladover is researcher with the California Partners for Advanced Transportation Technology program at UC Berkeley. He has studied platooning for two decades, and points out that the truck industry would need to execute a fair bit of choreography to pull off platooning. Fleet operators would have to coordinate deliveries, matching up trucks heading in the same direction at the same time. “Does the truck industry see enough of a benefit in platooning to fit it into their operational strategies?” he says.

While everyone in trucking waits to find out, Perkins and Gregory head back to Peloton’s test track and proceed to show off a few, freakier moves: some hard braking, some driving side-by-side to prove that the trucks can still “talk” to each other in that position. At one point, another company employee in a white Toyota Tundra cuts into the 55-foot space between the two trucks, and they smoothly part to make room for him. Maybe platooning will improve life for truckers—too bad it can’t fix the problem of everyday reckless drivers, too.


More Great WIRED Stories

PagerDuty Joins A Flurry Of Silicon Valley Companies Planning To Go Public This Year

POWERFUL WOMEN

<figcaption><fbs-accordion><p class="color-body light-text">Jennifer Tejada, chief executive officer of PagerDuty Inc., speaks during the Fortune’s Most Powerful Women conference in Dana Point, California, U.S., on Wednesday, Oct. 3, 2018. The conference brings together leading women in business, government,<small>© 2017 Bloomberg Finance LP</small></p></fbs-accordion></figcaption></figure><p>PagerDuty took the next step forward to a planned IPO, joining a windfall of startups expected to go public this year. But the cloud-based software company’s debut will be an exception among the tech IPO wave—it’s one of the few enterprise companies run by a woman, CEO Jennifer Tejada.</p><p>Founded in 2009, San Francisco-based PagerDuty acts as a watchdog for technical issues. The operations management software identifies problems in real time and directs engineers to the root of the problem, an alert system that’s attracted 10,800 customers in 90 countries. </p><p>In 2018, PagerDuty scored <a href="https://www.forbes.com/sites/alexkonrad/2018/09/06/pagerduty-funding-billion-dollar-valuation/#75d370a3411d" target="_blank" class="color-accent">unicorn status</a> after a $90 million round led by T. Rowe Price Associates and Wellington Management. Its first nine months of revenue last year rose 48% from the period to $84 million. However, the company took a $34.5 million loss during that time,up $4.7 million from 2017. It didn’t reveal data on the full year. </p><p>The company’s institutional investors own more than half of its shares, including early investor, Andreessen Horowitz, which owns the largest share of the company at 18.4%, followed by Accel and Bessemer Venture Partners. PagerDuty’s cofounders, Baskar Puvanathasan, Andrew Miklas and Alex Solomon, each hold 7.1%. </p><p>PagerDuty landed a spot in the top 50 on the <a href="https://www.forbes.com/companies/pagerduty/?list=cloud100/#1bbb3f5d361d" target="_blank" class="color-accent">Forbes Cloud 100</a> list in 2017, just a year after Tejada took over as CEO. "It was a neat brand, even though it’s a small company," Tejada <a href="https://www.forbes.com/sites/alexkonrad/2016/07/21/pagerduty-names-jennifer-tejada-as-ceo/#1727d02363ee" target="_blank" class="color-accent">told Forbes back in July 2016</a>. Tejada owns over four million shares of the company. </p>

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POWERFUL WOMEN

Jennifer Tejada, chief executive officer of PagerDuty Inc., speaks during the Fortune’s Most Powerful Women conference in Dana Point, California, U.S., on Wednesday, Oct. 3, 2018. The conference brings together leading women in business, government,© 2017 Bloomberg Finance LP

PagerDuty took the next step forward to a planned IPO, joining a windfall of startups expected to go public this year. But the cloud-based software company’s debut will be an exception among the tech IPO wave—it’s one of the few enterprise companies run by a woman, CEO Jennifer Tejada.

Founded in 2009, San Francisco-based PagerDuty acts as a watchdog for technical issues. The operations management software identifies problems in real time and directs engineers to the root of the problem, an alert system that’s attracted 10,800 customers in 90 countries.

In 2018, PagerDuty scored unicorn status after a $90 million round led by T. Rowe Price Associates and Wellington Management. Its first nine months of revenue last year rose 48% from the period to $84 million. However, the company took a $34.5 million loss during that time,up $4.7 million from 2017. It didn’t reveal data on the full year.

The company’s institutional investors own more than half of its shares, including early investor, Andreessen Horowitz, which owns the largest share of the company at 18.4%, followed by Accel and Bessemer Venture Partners. PagerDuty’s cofounders, Baskar Puvanathasan, Andrew Miklas and Alex Solomon, each hold 7.1%.

PagerDuty landed a spot in the top 50 on the Forbes Cloud 100 list in 2017, just a year after Tejada took over as CEO. “It was a neat brand, even though it’s a small company,” Tejada told Forbes back in July 2016. Tejada owns over four million shares of the company.