"Japan's antitrust watchdog considers action against Apple, carriers"

Reuters: “Exclusive: Japan’s antitrust watchdog considers action against Apple, carriers - sources

Both the headline and the lede are greatly misleading. The second and third paragraphs contradict the promised premise:

In a report published last month, Japan’s Fair Trade Commission (FTC) said that NTT Docomo, KDDI Corp and Softbank Group were refusing to sell older surplus iPhone models to third party retailers, thereby hobbling smaller competitors.

Apple was not named in that report, but two senior government sources told Reuters that regulators were also focusing on Apple’s supply agreements with all three carriers.

The carriers are almost certainly responsible for any shadiness in the deals because this only benefits them, not Apple. We’ll probably never actually find out, but I’m pretty sure the reason iPhones are not still exclusive to SoftBank is probably because Apple finally gave in to carrier demands for special concessions.

KDDI and DoCoMo are late-comers to the party. In 2008, SoftBank was the exclusive carrier for the iPhone, and it benefitted greatly. Three years later, SoftBank was still experiencing incredible growth, which was credited in large part to its still-exclusive deal with Apple. KDDI started offering iPhones in 2012, with DoCoMo finally deigning in 2013 to offer iPhones after years of steadily bleeding away customers, primarily to SoftBank.

SoftBank went from a distant third-place player in the market with about 18% share, to near-parity with second-place major carrier KDDI between 2008 and 2013, when all major players, including DoCoMo, finally offered iPhones on their networks. Without SoftBank’s runaway success, KDDI and DoCoMo might still be resisting Apple’s entry into the Japanese market even now.

The existence of business practices that shut out secondary players are an open secret. There is a very limited secondary market for unlocked phones because the vast majority are sold SIM-locked to a carrier. There are only three major players in the market, all of whom lock their handsets and in practice never unlock iPhones even after the handset is paid for and the typical 2-year contract is up. Discount carriers never even have a chance due both to carrier collusion and Japanese market rules.

The carrier that set the lock is the only entity legally allowed to unlock handsets. SoftBank has never offered SIM-unlocking. There have been persistent rumors of the other carriers offering SIM-free (i.e. unlocked handsets) for years, but reportedly neither KDDI nor DoCoMo will unlock iPhones still. Despite being required as of May 1, 2015 to offer SIM-unlocking, the carriers have been allowed to set their own timeline, and apparently their estimate on when they’ll do that for iPhones is somewhere between “#^¢* you!” and “We’ll get around to it … someday”.

Blaming Apple for customer-hostile business practices on the part of the carriers, and laggardly-enacted toothless laws that do virtually nothing to open the Japanese market is absurd. That the present situation favors Japanese incumbents is no coincidence, and past protectionistic behavior is the only element that lends credence to this report that Apple might be investigated in the future. The chance of Apple being found of wrongdoing in anything resembling a fair hearing is extremely slim, in my opinion.

Cartography Comparison

Justin O’Beirne did a great in-depth comparison of the different ways Google and Apple approach mapping.

From the summary of Part 1:

We looked at 54 pairs of maps across three cities (New York, San Francisco, and London) and found several significant differences:

  • Apple Maps, on average, labels more cities than Google at every zoom.

  • Google Maps, on average, labels more roads than Apple on nearly every zoom.

  • For two-thirds of zooms, both maps generally show the same number of roads. For the remaining third, Apple almost always shows more roads.

  • Both maps, on average, label a similar number of POIs [Points Of Interest] —but have only 10% of their POIs in common on an average zoom.

  • Both maps also prioritize different kinds of POIs: Google Maps heavily prioritizes transit, while Apple prioritizes landmarks. Apple also generally shows a greater number of POI categories on a given zoom—and shows twice as many restaurants and shops as Google.

When Apple Maps launched in iOS 6, I wrote a short post comparing it to Google Maps in Japan. I found that — for my location at least — Apple’s implementation was actually better in some ways at launch than Google’s was after several years.

The main reason I don’t use Apple Maps preferentially is the continuing lack of support for transit. Train scheduling and transfer information is hugely useful in Japan, so I end up using Google Maps much more often for station to station directions, while I usually default to Apple Maps for local guidance when I reach a location. It’s interesting to see that my purely intuition-based switching between them for different roles apparently has some empirical support as well.

Apple Pay in Japan

A month with Apple Watch as my wallet

Tom Warren for the Verge:

It all started when I left my house without my wallet. I had ventured out to grab some lunch with no cash or cards to pay for it, only my iPhone or Apple Watch. I’ve used Apple Pay on my iPhone and Watch before, but this was the first time it was actually useful. I paid for a sandwich at my local store with my Watch, and thought nothing more of it.

via: The Loop

Meanwhile, in Japan:

Apple (日本) - Apple Press Info - Apple Pay、モバイルペイメントの変革に向けて10月20日より運用開始

The line at the top 「米国報道発表資料抄訳※—2014年10月17日」 translates as “Selected translation of report released in the US on Oct. 17, 2014”. Like it says on the tin, it’s basically the same text as the original English-language Apple Pay press release. That’s the first and last official news from Apple about Apple Pay that has been released in Japan.

Despite the lack of stated support for Apple Pay in Japan, Touch Lab, an Apple enthusiast site, tested out Apple Pay in February of 2015 to see if it would work with existing NFC terminals and payment systems. Sometimes features aren’t officially supported in other countries, but work anyway. This wasn’t one of those times.

今回試した中では3件中1件で使用できましたが、そもそもEMVコンタクトレスの端末を置いているところがほとんどなく、結局「現状Apple Payは国内でほぼ使えない」ということを再確認しただけでした。

国内では既にFeliCaが普及していることもあり、国際規格であるEMVコンタクトレスの普及が他国より遅れ、日本だけApple Payが使えない状況にならないか心配になります。


My translation:

At one of the three sites tested at this time it was able to be used, but there are almost no EMV Contactless terminals, so in the end the statement, “Apple Pay can’t be used inside Japan”, has to be reaffirmed.

In Japan, FeliCa has already penetrated. The international standard EMV Contactless is penetrating much more slowly than in other countries, so it is worrying that possibly only in Japan, Apple Pay may not be able to be used.

At the Olympics to be held in five years, it is expected that there will be an increase in visitors from overseas. In order to prepare, hopefully terminals [that can process foreign payments] will be increased.

In other words, while elsewhere Apple Pay has been hailed as possibly the best thing about the Apple Watch, a game-changing implementation that might actually bring NFC payments into the mainstream, in Japan it’s a nearly-useless non-feature. Apple has not been able to either work out deals with market incumbents, or push the adoption of systems that integrate with Apple Pay in the year and a half since its US launch and worldwide announcement.

This is not surprising. Despite Japan’s image overseas as a country that is at the forefront of technological progress, it is an often hostile market for foreign products, particularly those that compete with any incumbent technology, and is bewilderingly behind the times in some ways. There are still many places even in Tokyo where you must pay cash; no credit or debit cards are accepted.

The apparent head start Japan had by implementing contactless payment systems, starting with train passes over a decade ago, has stultified, as all too many products developed for the Japanese market do. Japan has a tendency to be first and best with a technology that is quickly superseded, and then are unable to change course due to massive investment, or create an overspecialized version suited only for the peculiarities of the domestic market.

Desiging for the the Japanese market first and foremost has even led to the coining of a phrase, gara-kei (ガラケー) or Galapagos handset, which I mentioned in Why Apple isn’t Japanese nearly four years ago, and explained in more detail in Mobile Internet in Japan a couple of years before that.

While the phrase was first applied to Japan’s overloaded “feature” phones that quickly seemed inferior to “smart” phones, the idea has been applied to other technology. FeliCa is, in my opinion, one of these technological cul-de-sacs that is well-suited to the domestic market, but unlikely to be adopted overseas, and actively interferes with any adoption of international standards. Technology Nazi[1] says, NO APPLE PAY FOR YOU!

  1. Soup Nazi reference provided because I’m old and can’t trust that whippersnappers will get an allusion to a comedy that went off the air around the time they were being conceived.  ↩

Apple, FBI, and the Burden of Forensic Methodology

The best overview of the technical aspects of what the FBI is asking Apple to do is at Zdziarski’s blog starting on his February 18 post “Apple, FBI, and the Burden of Forensic Methodology” (linked above) and subsequent follow-up posts. The most frightening section there was:

FBI has asked to do this wirelessly (possibly remotely), which also means transit encryption, validation, certificate revocation, and so on.

I have seen virtually no commentary about this point, which I think is a big, big issue. With previous data extraction cases, Apple took extensive precautions, including requiring investigators to physically transport the iPhone to the Apple facility, and isolating the unit within a faraday cage. In other words, law enforcement had to have physical possession of the device. As many security researchers have pointed out in the past, with physical access it is almost guaranteed that the attacker will find some way to read some or all of the data stored on a device.

With an over-the-air attack tool, anyone who finds a way to bypass the supposed safeguards of the tool could target anyone at any time; they would not need physical access to the device. That makes it significantly easier for an attacker to bypass the security features and unlock the targeted iPhone. And once that happens they can do just about anything they want, including load malware, wipe the device, or do a data dump. With a sufficiently sophisticated tool paired with an over-the-air attack, the person might not even know that their iPhone has been hacked.

We Could Not Look the Survivors in the Eye if We Did Not Follow this Lead

FBI Director James Comey’s post on the oddly-named Lawfare blog:

The San Bernardino litigation isn’t about trying to set a precedent or send any kind of message.

This is disingenuous at best. Given that Tim Cook directly addressed the issue in his open letter, “Rather than asking for legislative action through Congress, the FBI is proposing an unprecedented use of the All Writs Act of 1789 to justify an expansion of its authority,” and the New York Times reported that Apple had initially requested that the request be kept under seal, it seems pretty clear that FBI Director Comey is deliberately picking a public fight.

The whole piece is an appeal to emotion, starting from the second sentence:

It is about the victims and justice. Fourteen people were slaughtered and many more had their lives and bodies ruined.

And nothing in the remainder is more honest or less manipulative than the opening lines.

You could see this coming years ago. He and other authorities have just been looking for an excuse, choosing the time and battleground for the confrontation.

Everything Old is New Again

No one seems to have learned anything from history, even recent history. Back in 1993 (a.k.a: The Dark Ages in internet years) the NSA’s baby, the Clipper chip, was meant to provide a back door to any system it was installed on. At the same time, the US government classified strong encryption as a munition, and investigated the creator of PGP, Phil Zimmermann, for violating the export ban.

The Clipper chip program died in just a couple of years, and restrictions on encryption were relaxed in a similarly short time span. Why? Back doors are inherently insecure and technically untenable. The restriction of a technology, like encryption, only works if you can actually keep it from being disseminated. The only reliable way to do that is to cut yourself off from the outside world and impose draconian central-authoritarian rules on your citizens.

Japan kept weapons under the exclusive control of the military by shutting its borders, confiscating weapons, and keeping those with the knowledge to create weapons under central authority. In the early days of firearms, the Japanese were actually more heavily armed than anywhere else, and with the improvements Japanese smiths wrought on the samples traded from the Dutch and Portuguese, their weapons were probably the most technically advanced as well.

In Europe, those measures wouldn’t work because any one nation that tried to hunker down and disarm its populace would place itself at a strategic disadvantage to its neighbors. The end result of isolation and technical control was that Japan was at a severe disadvantage when on the receiving end of some “friendly” gunboat diplomacy from the good ol’ US of A back in the 1800s.

In more modern times, North Korea has done pretty much the same thing over the last 60 years with regard to communications and commerce, with the result that much of its post-industrial technology, particularly its computer technology, is laughably outdated.

If FBI Director Comey gets his way, and Apple is forced to either create a tool for the government to use to unlock devices or compromise its security to provide a back door into the system software, Americans are facing not just the loss of privacy, but a loss of competitiveness in the world market. Communication and device encryption is the backbone of internet commerce.

While it may start with Apple, it won’t end there. Any technology created by American companies will be regarded with suspicion because of the precedent set. Other countries where multinational corporations do business, knowing that a US-based company will be compelled to create skeleton keys for its devices, will make providing them with the same tools a prerequisite for doing business there.

Congratulations, you’ve just given every repressive regime in the world tools to break into anyone’s phones, and not just their citizens’ either. It’s actually worse if the US tries to keep the key to itself because its very existence makes it much more likely that a foreign power or even criminal elements will find a way to steal or co-opt it and use it to break into the phones of US citizens exclusively if it is only installed American versions of the phones. If that happens, the responsible parties would have made the entire US into every nefarious agent’s online ass-bitch.

As we’ve seen with “secret” backdoor technology before, like the TSA keys, it will leak eventually. And when it does, someone will eventually exploit that security weakness to commit a serious crime or act of terrorism. The best way to protect people is to make security better to make it harder for anyone to break in — be it the FBI, terrorists, or criminals. Deliberately weakening security does not benefit either the public or, in the long run, the government.

NSA could crack the San Bernadino shooter’s phone

Clarke added that if he was still at the White House, he would have told FBI Director James Comey to "call Ft. Meade, and the NSA would have solved this problem…Every expert I know believes that NSA can crack this phone." But the FBI wasn't seeking that help, he said, because "they just want the precedent."

Yep, it's pretty obvious that what FBI Director Comey is really going for is the legal precedent, not the information.

Tech giants don’t want Obama to give police access to encrypted phone data

In a Washington Post article from last year:

Tech behemoths including Apple and Google and leading cryptologists are urging President Obama to reject any government proposal that alters the security of smartphones and other communications devices so that law enforcement can view decrypted data…

The letter is signed by three of the five members of a presidential review group appointed by Obama in 2013 to assess technology policies in the wake of leaks by former intelligence contractor Edward Snowden. The signatories urge Obama to follow the group’s unanimous recommendation that the government should “fully support and not undermine efforts to create encryption standards” and not “in any way subvert, undermine, weaken or make vulnerable” commercial software.

I've said before that it's a bad idea to weaken encryption for the sake of law enforcement. This current confrontation between the FBI and Apple has been years in the making.

Why I'm Not Interested in Owning an  Watch

I’ve been thinking about this at least since it was first announced[1], but the capabilities of the Apple Watch as of right now do not present a good use-model or value proposition. It’s a more interesting product than the alternatives like Pebble, because of better integration with iOS which will give it more capabilities than any third-party device will ever have. The design is beautiful, and the aspirational engineer in me drools over the details of how Apple makes the watch. But that’s not enough to make me want to actually buy one.

I wear a watch for two reasons:

  1. I want a consistently reliable alternative to my phone for telling the time.
  2. (Distant second) I want a fashion accessory.

A smart-watch would add this benefit:

  1. A more accessible and portable alternative to my phone, particularly when in motion.

The Apple Watch will, at least for now, work only as adjunct to an iPhone. That means it’s not as useful as a pure wearable in most situations since it negates the portability. If I have to carry my iPhone to use the Watch, I’d rather just carry the iPhone. The lack of GPS and need for tethering basically eliminates the main use I’d have for it — as a device for tracking workouts or runs.

The interactions do not generally look useful to me. I do more production than reception on my phone. I have almost all notifications turned off, and only use messaging or email occasionally since I often can’t respond during work hours unless on an explicit break. I had to change my notification settings for messages and email because even vibration-only is noticeable in some situations at work.

All models of the Apple Watch are aesthetically pleasing, which makes them very desirable objects, but the fashion aspect and object-lust is not enough to make its appeal irresistible. I have two nice, moderately expensive watches. Only one — the old dumb mechanical watch — actually gets worn because it’s rock-solid reliable. The other looks good, but proved to be useless as a timepiece.

I’ve found that the most important aspect of a watch is reliability. I could easily do without one, and in fact didn’t wear a watch at all for a few years after I started carrying a cell phone regularly. I started wearing one again after my wife insisted on buying a watch as a wedding present. (For the record, I was a cheap bastard, so I told her not to spend too much on me, otherwise she probably would have bought a lower-end Rolex or something similar.)

The user-hostile design of that Citizen watch quickly made me very leery of using it at all. If you’re going to break a user interaction model, you’d damn well better do it for a good reason. They didn’t have one.

In addition to being rendered useless when I went overseas, within the next 2 years (right after the warranty expired, in fact) it had stopped working reliably at all. It would sometimes completely stop, as if it had run out of power, even after I left it in a place with direct access to sunlight for a whole day to charge. I got it serviced, which mostly fixed that problem, but soon after it started to reset itself to the wrong time even after I manually reset it using the ridiculously complicated procedure Citizen’s engineers implemented. I got it serviced again, but the problem randomly re-occurred. I never wear it anymore because it was not just unreliable, it was unpredictably unreliable.

For nearly 20 years, I’ve had an Omega[2] that I also got as a gift. I have had only routine service performed on it twice. It has an all-mechanical self-winding movement. It’s not ridiculously accurate — it will drift several seconds[3] over a week or so — and you have to wear it for at least a few hours every day to keep it running without manual winding, but it’s a workhorse. If it doesn’t work, it’s inevitably because I have not worn it recently and the power reserve has run out. It has run consistently for years without stopping. With some care, it will probably be keeping reasonably accurate time for one of my grandkids, and will probably still be worth as much as a comparable contemporary watch.

I love tech stuff. I am nearly as susceptible as other geeks to the sparkly lure of new shiny gadgets. I lust after the sheer technical meticulousness of the construction of it. But I don’t think I’ll be buying an Apple Watch … at least, not yet. Maybe when it becomes more of a stand-alone device, or auto-syncs with an iPhone when it gets back within tethering range. Or, if over the next few months after it comes out I see uses that I hadn’t imagined that are compelling enough, then maybe I’ll consider buying one.

For right now, it seems to be an interesting beautiful toy that I kind of want, but can’t really justify buying. (If I could justify it, I’d get the 42mm version of this bad-boy, though).

  1. Or a couple of years farther back if you count from when the iPod Nano straps came out and the success of the original Pebble project pushed tech-watches back into the forefront of public consciousness, including my own.  ↩

  2. A Seamaster model 2532.80.00, which probably retailed for half of what that model goes for in near-mint condition now. Mine is nowhere near mint; it would probably be categorized as “well-abused”.  ↩

  3. According to an watch-enthusiast site, Omega Seamaster automatic models have an accuracy of –4 to +6 seconds per day  ↩

Design Is about Intent

The Three Design Evasions The opposite of design, then, is the failure to develop and employ intent in making creative decisions. This doesn’t sound hard, but, astonishingly, no other leading tech company makes intentional design choices like Apple. Instead, they all commit at least one of what I term the Three Design Evasions:

He goes on to explain in detail about Preserving, Copying, and Delegating. This is one of the most cogent and precise explanations I’ve seen of what makes a good design process, and what cripples one.