Apple Developing Smart Glasses

Apple Inc. is weighing an expansion into digital glasses, a risky but potentially lucrative area of wearable computing, according to people familiar with the matter.

While still in an exploration phase, the device would connect wirelessly to iPhones, show images and other information in the wearer’s field of vision, and may use augmented reality, the people said. They asked not to be identified speaking about a secret project.

// WATCH BLOOMBERG COVERAGE OF APPLE’S LATEST R&D NEWS //

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Apple has talked about its glasses project with potential suppliers, according to people familiar with those discussions. The company has ordered small quantities of near-eye displays from one supplier for testing, the people said. Apple hasn’t ordered enough components so far to indicate imminent mass-production, one of the people added.

Should Apple ultimately decide to proceed with the device, it would be introduced in 2018 at the earliest, another person said. The Cupertino, California-based company tests many different products and is known to pivot, pause, or cancel projects without disclosing them. Apple spokeswoman Trudy Muller declined to comment.

apple-conference-wwdc-2014-ceo-tim-cookChief Executive Officer Tim Cook is under pressure to deliver new products amid slowing sales of the iPhone, which accounts for two-thirds of Apple’s revenue. In July, he expressed enthusiasm for augmented reality after the rise of Pokemon Go, a location-based game that uses the technology. AR, as it’s known, adds images and other digital information to people’s view of the real world, while virtual reality completely surrounds them with a computer-generated environment.

The glasses may be Apple’s first hardware product targeted directly at AR, one of the people said. Cook has beefed up AR capabilities through acquisitions. In 2013, Apple bought PrimeSense, which developed motion-sensing technology in Microsoft Corp.’s Kinect gaming system. Purchases of software startups in the field, Metaio Inc. and Flyby Media Inc., followed in 2015 and 2016.

“AR can be really great, and we have been and continue to invest a lot in this,” Cook said in a July 26 conference call with analysts. “We are high on AR for the long run. We think there are great things for customers and a great commercial opportunity.”

Apple has AR patents for things like street view in mapping apps. It was also awarded patents for smart glasses that make use of full-fledged virtual reality. Apple is unlikely to leverage VR in a mass-consumer product, Cook suggested in October.

“I can’t imagine everyone in here getting in an enclosed VR experience while you’re sitting in here with me, but I could imagine everyone in here in an AR experience right now,” he said during an onstage discussion in Utah.

Apple’s challenge is fitting all the technology needed into a useful pair of internet-connected glasses that are small and sleek enough for regular people to wear.

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Google’s attempt to develop internet-connected eye wear flopped in part because its tiny battery ran out quickly. Google Glass, as it was called, also suffered a privacy backlash and poor public perception of its external design.

After that disappointment, technology companies largely turned their immediate focus to VR and away from AR. Google recently introduced a VR headset alongside its Pixel smartphone, and Facebook Inc.’s Oculus VR unit has teamed up with Samsung Electronics Co. on a similar headset. Microsoft has the most public AR offering. Its HoloLens product shows holographic images in a user’s field of vision.

Apple’s effort may be more difficult because the chips, batteries and other components that will be available in a year or two may still not be small enough and powerful enough to build slim glasses capable of handling compelling AR experiences.

However, given time, technical challenges may play to Apple’s strengths. The company specializes in turning technology that others have struggled with into easy-to-use devices for the masses. For example, Apple simplified fingerprint technology into an unlocking mechanism for the iPhone and took touch screens mainstream with the original iPhone.

Augmented reality “is going to take a while, because there are some really hard technology challenges there, but it will happen in a big way, and we will wonder when it does, how we ever lived without it,” Cook said last month. “Like we wonder how we lived without our phone today.”

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Panama Papers: Leak Exposes Global Web

A massive document leak reveals a global web of corruption & tax avoidance

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Mossack Fonseca is not a household name, but the Panamanian law firm has long been well known to the global financial and political elite, and thanks to a massive 2.6 terabyte leak of its confidential papers to the International Consortium of Investigative Journalists it’s about to become much better known. A huge team of hundreds of journalists is pouring over the documents they are calling the Panama Papers.

The firm’s operations are diverse and international in scope, but they originate in a single specialty — helping foreigners set up Panamanian shell companies to hold financial assets while obscuring the identities of their real owners. Since its founding in 1977, it’s expanded its interests outside of Panama to include over 40 offices worldwide, helping a global client base to work with shell companies not just in Panama but also the Bahamas, the British Virgin Islands, and other notorious tax havens around the world.

The documents provide details on some shocking acts of corruption in Russia, hint at scandalous goings-on in a range of developing nations, and may prompt a political crisis in Iceland.

But they also offer the most granular look ever at a banal reality that’s long been hiding in plain sight. Even as the world’s wealthiest and most powerful nations have engaged in increasingly complex and intensive efforts at international cooperation to smooth the wheels of global commerce, they have willfully chosen to allow the wealthiest members of Western society to shield their financial assets from taxation (and in many cases divorce or bankruptcy settlement) by taking advantage of shell companies and tax havens.

If Panama or the Cayman Islands were acting to undermine the integrity of the global pharmaceutical patent system, the United States would stop them. But political elite of powerful western nations has not acted to stop relatively puny Caribbean nations from undermining the integrity of the global tax system — largely because western economic elites don’t want them to.

What’s a shell company? Why would someone want one?

Sometimes a person or a well-known company or institution wants to buy things or own assets in a way that obscures who the real buyer is.

The typical reason for this is a kind of routine corporate secrecy. Apple, for example, appears to have created a shell company called SixtyEight Research that journalists believe to be a front for its interest in building a car. Since Apple happens to be the most-covered company on the planet this hasn’t been incredible effective and when SixtyEight Research staff showed up at an auto industry conference everybody noticed.

But in general, companies don’t like to tip their hand to what they are doing and the use of shell companies to undertake not-ready-for-public-announcement projects can be a useful tool.

Shell companies are often sometimes used for simple privacy reasons. Real estate transactions, for example, are generally a matter of public record. So an athlete, actor, or other celebrity who wants to buy a house without his name and address ending up in the papers might want to pay a lawyer to set up a shell company to do the purchasing.

Okay, but how about the shady stuff?

As is generally the case in life, secrecy can have illegitimate purposes as well. This is particularly true for shell companies set up in international centers of banking secrecy that offer a level of anonymity and obscurity that goes beyond simply making it hard to look up the real owner’s name online.

Your soon-to-be-ex-wife cannot seize half of the money in an account that she and her lawyers don’t know exists and can’t prove that you own, for example. Nor can your creditors seize such an account in a bankruptcy proceeding. Nor can the government levy estate taxes on it when you die and pass it on to your kids. In all those circumstances, a Panamanian company that you secretly control and that holds stocks, bonds, and other financial assets on your behalf could be the ideal vehicle.

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By the same token, if you have made a bunch of money illegally (taking bribes, trafficking drugs, etc.) you need to do something with the money that won’t attract the attention of the authorities or the media. A secret offshore shell company is perfect. Not only does it help you avoid scrutiny in real time, but if you are found out its assets can’t be taken from you if you have to flee the jurisdiction or even serve jail time.

But even though various criminal money-laundering schemes are the sexiest possible use of shell companies, the day-to-day tax dodging is what really pays the bills. As a manager of offshore bank accounts told me years ago, “people think of banking secrecy as all about terrorists and drug smugglers, but the truth is there are a lot of rich people who don’t want to pay taxes.” And the system persists because there are a lot of politicians in the west who don’t particularly want to make them.

What do the Panama Papers show?

As you would imagine, there is quite a lot in the 2.6 terabytes. Here are a few of the highlights that the team found, with links to the full stories where you can read the details:

The International Consortium of Investigative Journalists has a full profile of political figures and their relatives named in the Panama Papers for your reading pleasure.

But though political corruption is fun and newsy, the document dump also features a leaked memorandum from a Mossack Fonseca partner revealing the more boring truth that “Ninety-five per cent of our work coincidentally consists in selling vehicles to avoid taxes.”

How much money is there in offshore tax havens?

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A big part of the idea, of course, is to make it hard for anyone to know for sure.

But Gabriel Zucman, an economics professor at UC Berkley, studied the estimates that  now total at least $7.6 trillion. That’s upwards of 8 percent of all the world’s financial wealth, and it’s growing fast. Zucman estimates that offshore wealth has surged about 25 percent over the past five years.

Much of that reflects “new money” from China and other developing nations whose citizens to an extent have legitimate fears about political stability and the rule of law.

But some of it is simple avarice. The name of Ian Cameron, the late father of British Prime Minister David Cameron, shows up in the Panama Papers, for example. Mossack Fonseca helped him set up his investment company Blairmore Holdings (named after his family’s ancestral country estate) in the British Virgin Islands where, marketing material assured investors, the company “will not be subject to United Kingdom corporation tax or income tax on its profits.”

This particular kind of move is perfectly legal and doesn’t even involve any secrecy. It is entirely typical for investment companies whose employees all work or reside in New York, London, or Connecticut to be domiciled for tax purposes in someplace like the Cayman Islands. Since these companies don’t own much in the way of physical assets, they can be officially located anywhere in the world and naturally choose to locate in jurisdictions where they won’t need to pay taxes.

Why doesn’t anyone do anything about this?

To an extent, things have been done.

First the war on drugs, and then more recently the war on terror, led to meaningful political pressure on countries around the world to alter their banking practices so as to reduce global money-laundering. More recently, the European Union has successfully pressured Switzerland to change its laws to make it easier for the EU to catch people engaged in criminal tax evasion.

But there’s a big difference between tax evasion — illegally refusing to pay taxes that you owe, and then taking advantage of secret accounts to try to hide the money and get away with it — and tax avoidance, which is hiring clever people to help you find and exploit legal loopholes to minimize your tax bill.

Incorporating your hedge fund in a country with no corporate income tax even though all your fund’s employees and investors live in the United States is perfectly legal. So is, in most cases, setting up a Panamanian shell company to own and manage most of your family’s fortune.

Tax avoidance is an inevitable feature of any tax system, but the reason this particular form of avoidance grows and grows without bounds is that powerful politicians in powerful countries have chosen to let it happen. As the global economy has become more and more deeply integrated, powerful countries have created economic “rules of the road” that foreign countries and multinational corporations must follow in order to gain lucrative market access.

Establishing some kind of minimum global standard of taxation of corporate and investment income hasn’t been done because it hasn’t been a political priority. In the United States, in particular, the Republican Party fights quite hard for the view that high levels of taxation on rich people and investment income are economically ruinous so there isn’t the kind of institutional mobilization that exists around drug trafficking or possible terrorism financing.

The leak of the Panama Papers is significant in part because of the specific information they contain, but more broadly because they draw attention to what “everyone knows” and may put public pressure on the powers that be to do something about it.

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Connected Devices Cry Out – Now

Recently, a friend left his home & his smart-watch beeped to inform him that his phone was out of range. Yep… It’s happening.

Our devices are now warning us not to forget our other devices. What a great idea.

The CES show going on right now in Las Vegas and is more than just the latest smattering of future must-have gadgets… It’s the future of the tech that will be invading every part of how we live and how we manage our connected devices moving forward. Samsung announced that 90% of the products it sells will be Internet-enabled by 2017. That’s shocking. And, essentially, that means you will be too. Are you ready?

Here are some of the more strange & intriguing items you might find if you were in attendance at CES today.

 

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Microsoft Caught In The Act | Constitution Shredded

Shredded Constitution

Trouble is brewing for Microsoft over a controversy  brought to light by the arrest of an ex-Microsoft employee named Alex Kibkalo. According to a criminal complaint sworn in a Seattle federal court, Kibkalo stole proprietary information from Microsoft,  (including the Activation Server Software Development Kit SDK), and passed the code to a French blogger. Allegedly Kibkalo committed criminal trade secret theft.

What’s troubling is the FBI’s basis for the arrest. It was an open-ended, warrantless search of a Hotmail user’s account… not by the FBI, but rather conducted by Microsoft itself!

In September 2012, Microsoft’s internal security team received a tip that an anonymous blogger was in possession of the (SDK) source code. Conveniently for Microsoft, however, the French blogger, who has not been accused of any crime, communicated with Microsoft’s tipster using Hotmail. Since Microsoft runs Hotmail, it simply searched through the contents of that email account for evidence of the data (SDK) leak. Shocked yet? Even worse, the Kibkalo complaint filed in court last week states  Microsoft’s Office of Legal Compliance approved this… “content pull.”

I’m not sure what that is, but I’m confident the language has been carefully crafted to slither past legal consequences. Microsoft’s unilateral decision to rifle through its user’s emails is a violation of the Electronic Communications Privacy Act, ECPA.

An initial statement by Microsoft explained its terms of service give clear permission for this type of “content pull.”  Sorry this doesn’t cut it. Microsoft knows it too… so much so the company’s deputy general counsel subsequently announced a new policy for conducting searches without law enforcement involvement, a warrant or any legal oversight  in the future:

Courts do not issue orders authorizing someone to search themselves, since obviously no such order is needed.  So even when we believe we have probable cause, it’s not feasible to ask a court to order us to search ourselves. However, even we should not conduct a search of our own email and other customer services unless the circumstances would justify a court order, if one were available.  In order to build on our current practices and provide assurances for the future, we will follow the following policies going forward:

To ensure we comply with the standards applicable to obtaining a court order, we will rely in the first instance on a legal team separate from the internal investigating team to assess the evidence. We will move forward only if that team concludes there is evidence of a crime that would be sufficient to justify a court order, if one were applicable. As an additional step, as we go forward, we will then submit this evidence to an outside attorney who is a former federal judge.  We will conduct such a search only if this former judge similarly concludes that there is evidence sufficient for a court order.

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Unfortunately, this new policy just doubles down on the Microsoft’s indefensible and tone-deaf actions. It begins with a false premise that courts do not issue orders in these circumstances because Microsoft was searching “itself,” rather than the contents of its user’s email on servers it controlled. If you use any Microsoft email or service be advised, this behemoth seems to think your data… emails, photos, contacts & calendar data… everything… is their data.

To the contrary, if Microsoft’s independent legal team concluded that there was probable cause, it could & should have passed the initial tipster’s information to the FBI like a law biding participant in our democratic society.  Why didn’t they? If they had… it would have required a warrant signed by a judge to authorize & conduct the search… well within the auspices of the criminal justice system. At least that’s the way the laws are setup in the US. It’s in the constitution.

Again, warrant protections enshrined in the Constitution were shredded.  Microsoft cannot claim a high moral ground, because the legal professional within Microsoft opted for an internal corporate shadow court of their own creation.

The monumental problem remains: the protections provided by our legal system do not extend to users of Microsoft products & services… in practice… as of this very moment. No matter how fairly a process they concoct… approval by an employee paid by Microsoft, no matter how well qualified, is not approval of a “neutral and detached magistrate,” as required by the Fourth Amendment. Similarly, the protections provided to criminal suspects by the Fifth and Sixth Amendments wouldn’t apply to Microsoft’s internal investigation.

Yet another colossal problem with Microsoft’s policy is its potential for abuse. Microsoft’s initial statement explained that the Microsoft Services Agreement (TOS) granted it “permission” to conduct the searches. But a brief check of these terms shows that Microsoft reserves the right to conduct search in far more scenarios than merely “exceptional circumstances.” That’s because Section 5.2 of the TOS states:

Microsoft may access, disclose, or preserve information associated with your use of the services, including (without limitation) your personal information and content . . . when Microsoft forms a good faith belief that doing so is necessary . . . . (b) to enforce this agreement or protect the rights or property of Microsoft or our customers[.]”

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And according to Section 3.5, one of the ways users can violate the agreement and thus give Microsoft “permission” to access their content is to email content that violates the company’s Code of Conduct. Spoiler alert: the Code of Conduct is ridiculously broad.

A few examples of things that would violate the Code of Conduct and allow search and disclosure of Hotmail email content:

  • Emailing “links to external sites that violate this Code of Conduct” such as by “depict[ing] nudity of any sort.” So you’re out of luck if you wanted to send your friend a link to Wikipedia… a link leading to nothing more innocent than chocolate chip cookies, because according to Code of Conduct, since Wikipedia contains a fair number of articles containing nudity… you’d still be in violation even if neither you or your friend viewed any nudity at all.  You couldn’t even link a Peanuts cartoon, because Snoopy is eternally pantsless, and Microsoft specifically prohibits links to “nudity in non-human forms such as cartoons.”
  • In the same way… linking to external content that violates the Code by “incit[ing] [or] express[ing] … profanity.” That means no YouTube, because it has, for example, clips of George Carlin’s Seven Dirty Words routine.
  • “[P]romoting or otherwise facilitate[ing] the purchase and sale of ammunition or firearms.” Best to unsubscribe from that NRA mailing list.

We can safely assume Microsoft is using these sorts of violations as an excuse to help themselves to your data, violating your privacy & essentially stealing your intellectual property. Rifling through users’ emails is wrong. It doesn’t matter how they slice it, especially when it relies on permission from its own legal brigade to do so… Microsoft has engineered a defense that it reserves the right to abuse you & your rights.

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The search in the Kibkalo case may have revealed criminal activity. This situation which is unrelated to any Snowden leak of any kind…  plainly reveals unlawful, criminal conduct by Microsoft, stemming from its own self-interest. This is an exceedingly dangerous precedent. With the kangaroo court potential of the company taking matters into its own hands to act in place of legitmate courts…  Microsoft is playing with fire.

Sadly, we’re all getting burned & we’re just starting to discover just how bad.

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Startups’ Mental Health Trap

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It is a surprising realization… that most ambitious startup ideas are frightening.

Any one of them could make you a billionaire. That might sound like an attractive prospect, and yet when I describe these ideas you may notice you find yourself shrinking away from them.

Don’t worry, it’s not a sign of weakness. Arguably it’s a sign of sanity. The biggest startup ideas are terrifying. And not just because they’d be a lot of work. The biggest ideas seem to threaten your identity: you wonder if you’d have enough ambition to carry them through.

There’s a scene in  where the nerdy hero encounters a very attractive, sophisticated woman. She says to him: Here’s the thing: If you ever got me, you wouldn’t have a clue what to do with me.

That’s what these ideas say to us.

This phenomenon is one of the most important things you can understand about startups. You’d expect big startup ideas to be attractive, but actually they tend to repel you. And that has a bunch of consequences. It means these ideas are invisible to most people who try to think of startup ideas, because their subconscious filters them out. Even the most ambitious people are probably best off approaching them obliquely.

Frighteningly ambitious startup ideas are frightening for a reason. Some (particularly those who aren’t chasing those ideas themselves, but instead just investing in others who are) might feel that it’s a good thing for a founder to be frighteningly ambitious, but for the vast majority of founders, that simply condemns them to failure. That’s why they’re afraid: because they have some common sense.

Of course, it all depends on what you’re trying to achieve. If you want comfort or wealth, those hyper-ambitious ideas will practically guarantee that you never get there unless you basically win the lottery.

On the other hand, if you are an insane, driven, megalomaniac control freak like Steve Jobs or Bill Gates, a modern-day Genghis Khan or Alexander who wants to rule the world by the methods of today rather than bloody battlefields, you don’t care about achieving comfort, and you probably won’t care for this… 

…Go for it, don’t let me stop you (I couldn’t anyway). For the rest of us, though, a focus on less frightening ideas might allow us to make enough money to purchase those world-changing devices that the next Steve Jobs will build, instead of being broke all the time.

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German Security Officials Warn Against Using Windows 8

Federal Office For Information Security | Germany

Supposedly, Microsoft has built fundamental violations of trust into their products. It’s called Trust Platform Module (TPM2.0).

While we all know Windows Update has no straight forward logic behind it because it requires checking 7+ Turn Updates Off check boxes in half a dozen different control panel menus. Why? Because MS wants to keep tabs… only if users say it’s okay. After all you can’t even boot up or launch a Windows OS or native application without an alert testing your resolve. After awhile, don’t we all simply click until we get back to where we were interrupted.

According to reports an updated trust management service built into Windows 8 has a little change… it can’t be turned off… and the moment you boot up, it allows Microsoft complete control over the operating system & renders privacy obsolete. The user is none the wiser since there are no outward signs of activity.

Mind you, this isn’t a vulnerability. As tech-savvy professionals we need no more gaps in security. No really, lets get serious! How on earth can people stand by while privacy & the keys to the castle are handed over to anyone who has the most power, authority & punishing consequence to throw around? Easy. It’s called, ‘Merica. The majority of folks are typically asleep to these types of threats, not for much longer. 

Zeit Online Article

Orson Welles warned us about this. It’s a telling sign of the times when security alerts concerning products made by a US tech giant emerge from German Federal Authorities, not US counterparts. Officials will no doubt release similar warnings & claim their efforts only overshadowed, & actually planned all along.

Read The Full Zeit Online Story | Download Press Release 

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Surface ~ Epic Fail

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You May Want To Sit | Microsoft Surface Sinks

It’s enough to humble even the ordinarily bullish Steve Ballmer. At a recent “rally the troops” event at the Redmond campus, Ballmer reportedly confessed, “We built a few more devices than we could sell,” and “We’re not selling as many Windows devices as we want to.” | Read The Full Register Story

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