JPMorgan has its own blockchain project

According to a recent report by the Financial Times, JPMorgan Chase recently started working on a trial blockchain project with the help of tech start-up company Digital Asset Holdings. The pilot programme aims to develop the technology, which underpins the digital currency bitcoin, in order to reduce the bank’s overheads and reduce the complexity of day-to-day trading.

The launch of this project and others like it represents sea change in attitudes towards the technology within the financial services sector, with more and more banks realising its potential to save them money and streamline processes.

On top of improving overall efficiency, the technology could help address “liquidity mismatches”

On top of improving overall efficiency, the technology could help address “liquidity mismatches” within JPMorgan’s loan funds, according to the the Financial Times report. “To sell a loan is a very cumbersome, time-consuming process; settlement can take weeks”, Daniel Pinto, head of JPMorgan’s investment bank, told the paper. He said it “makes all the sense in the world” to explore blockchain’s potential to improve that process.

Earlier in January, another start-up, R3CEV, carried out a test involving 11 of its members (Barclays, BMO Financial Group, Credit Suisse, Commonwealth Bank of Australia, HSBC, Natixis, Royal Bank of Scotland, TD Bank, UBS, UniCredit and Wells Fargo) on a distributed ledger based on the public Ethereum network. The test was designed to allow the members to explore the potential of blockchain technology and give them the opportunity to execute financial transactions instantaneously across the global private network.

“The transition from vision and hypothesis to application and execution signifies the next major step towards using this technology to transform how institutions interact, report and trade with each other in financial markets”, David Rutter, CEO of R3, said in a statement. “This is a very exciting development, both for R3 and our member banks, as well as the global financial services industry as a whole.”

The simulation also provided the banks with the ability to simulate exchanging value, represented by tokenised assets on blockchain without the need for a centralised third party being involved.

“Blockchain technology represents a fundamental shift for financial services, and we think it is important to be close to the technology being developed”, said Olivier Perquel, Head of Financing and Global Markets for the Corporate and Investment Bank of Natixis. “Natixis is glad to cooperate with R3CEV and consortium member banks to enable and accelerate this transformation with a collaborative approach.

“This experiment is a significant milestone to bring this technology to market and it underscores our long-standing commitment to explore technology that has the potential to greatly enhance our customers’ experience.”

Russia and OPEC to hold talks on oil production cuts

Russia is set to hold talks with Saudi Arabia and other OPEC member states in order to discuss coordinated oil production cuts. The prospect of oil producers finally reducing output raises the potential for the price of oil to pick up after two years of depressed prices.

According to Nikolai Tokarev, the head of the Russian oil pipeline monopoly Transneft, Russian oil executives and government officials had agreed talks with OPEC were needed in order to discuss production cuts aimed at raising prices.

If one producer holds out, they have the potential to gain market share while also benefiting from the raised price

“At the meeting there was discussion in particular about the oil price and what steps we should take collectively to change the situation for the better, including negotiations within the framework of OPEC as a whole, and bilaterally”, said Tokarev, according to Russian news outlets. The news was welcomed by markets, which saw a rally on the price of oil, pushing Brent crude up to around $33.

While this could be good news for oil prices, whether or not any agreements will be reached is uncertain. Russia would like to see the oil price once again rise, but it is wary of cutting production in case it loses market share. In late 2014, talks between OPEC and non-OPEC producers failed to reach a consensus on cutting production. The Saudis and other OPEC members are also fearful of cutting production without other producers following suit – again, out of fear for their market share.

The Russians have hoped the Saudis would lead the production cut without them. If all, or most, major producers cut market share, all will see a price increase. However, if one producer – or group of producers – holds out while others cut, they have the potential to gain market share while also benefiting from the raised price.

The Saudis are already operating near full production capacity, meaning they have no ability to gain further market share, putting them solely in the position of defending what they already have. In this defensive position, the Saudis are likely to agree to an oil production cut only if they are certain other major producers will follow suit. While the Saudis would hope to see prices increase – as they face a growing, albeit manageable, fiscal gap – depressed oil prices are, for now, a better option than losing significant market share.

iPhone sales growth slowest since launch

Apple has posted its slowest iPhone sales growth since the smartphone’s launch in 2007. A barely over one percent increase in sales for the holiday quarter and an almost imperceptible rise in year-on-year sales has led some analysts to speculate the iPhone’s rip-roaring success may be coming to an end.

Apple sold 74.8m iPhones in its first quarter, up – albeit barely – from 74.5m the year before. Revenue for the next quarter, according to company expectations, will be between $50bn and $53bn, down from $58bn the year before, which would mark the first fall in revenue since the iPhone’s launch.

Apple sold 74.8m iPhones in its first quarter, up – albeit barely – from 74.5m the year before

Figures posted by the company in October showed smartphone sales made up 63 percent of its total revenue. Figures for this quarter show the percentage has crept up to 68 percent. Apple iMacs, meanwhile, accounted for 13 percent and iPads eight percent, with any remaining products – including the Apple Watch – lumped into the “other” category.

Last year was an all-round positive one for Apple, but this one started off on a bad footing when the company’s stock slipped below $100 for the first time since 2014. A Chinese slowdown has weighed on the company’s performance in Asia, and many expect Apple will have to wait until the iPhone 7’s launch later this year before it returns to its winning ways.

Speaking to Reuters, Daniel Ives, an analyst at FBR Capital Markets said: “Apple has become a victim of their own success as the blockbuster iPhone 6 product cycle was hard to replicate, as many customers are either buying an older, cheaper iPhone 6 or waiting for the iPhone 7.”

Sorry VW, Toyota is still the world’s biggest carmaker

Toyota has reclaimed its title as the world’s top-selling carmaker for a fourth consecutive year, with Volkswagen in at second. VW made headlines last summer with the announcement it had pipped Toyota to the top spot, although the subsequent emissions scandal has set the company back a few paces.

Car sales, 2015

10.15m

Toyota

9.3m

Volkswagen

9.8m

GM

Tokyo-based Toyota sold 10.15m cars in total, slightly ahead of analyst expectations and some way in front of VW’s 9.93m. GM placed third, with a respectable 9.8m vehicles sold in 2015, up 0.2 percent on 2014 in what is the company’s third consecutive year of record sales.

Toyota brought an end to GM’s decades-long reign as the world’s number one automaker in 2008, though three years later suffered at the hands of Japan’s earthquake-tsunami and rook until 2012 to reclaim the top spot. VW’s troubles are similarly seismic and the German automaker has this year suffered its first slump in annual sales in over a decade.

The news in September that VW had fitted ‘defeat devices’ in 11m cars to cheat emissions tests has inflicted pains on Germany’s number one private employer. The US Government is looking to sue VW for $20bn and the carmaker’s fate in Europe remains uncertain. Global domination is one of VW’s strategic priorities, but the emissions scandal has made that feat all the more unlikely.

Although this fixation on global domination may seem like vanity, the importance of scale can hardly be understated in what remains a capital intensive, low margin business.

Pharmaceutical giants launch consortium with top universities

The world’s biggest pharmaceutical companies, AstraZeneca, GlaxoSmithKline and Johnson & Johnson, have announced a £40m partnership with three leading universities. Called the Apollo Therapeutics Fund, the consortium will provide both finance and expertise to Imperial College, the University of Cambridge and University College London for the academic pursuit of medical treatments.

The three companies will contribute £10m each over the course of the next six or so years, while the Technology Transfer Office of each university will pay a further £3.3m towards the fund.

The partnership will potentially improve the UK’s track record of commercialising medicines

“Apollo provides an additional source of early stage funding that will allow more therapeutics projects within the three universities to realise their full potential”, said Apollo Chairman Dr Ian Tomlinson, according to Business Wire. “The active participation of the industry partners will also mean that projects will be shaped at a very early stage to optimise their suitability for further development.”

Apollo aims to develop preclinical research to the point where a project can be advanced further by either one of the three companies – which will be decided through a bidding process – or will be licensed to an external party. Apollo will receive half of the royalty revenue earned from any medicines successfully commercialised, while the remaining 50 percent will be paid to the university that created the drug.

The partnership will potentially improve the UK’s track record of commercialising medicines, which has been largely unsuccessful, as shown by the failure of Cambridge University to commercialise the world’s biggest selling arthritis treatment, Humira.

With the three academic partners on board being among the top five in the world for medical research, the industry giants hope to increase the chance of success for potential new products in a variety of diseases.

Four executives to leave troubled Twitter

Jack Dorsey, CEO of struggling social media giant Twitter, confirmed in a tweet that four key executives have chosen to leave the company for some “well-deserved time off”. Head of Product Kevin Weil, Head of Media Katie Jacobs Stanton, Head of Engineering Alex Roetter and Human Resources Manager Skip Schipper will all step down.

Writing on blogging platform Medium, Stanton expanded on her reasons for leaving (mostly family related) and said: “The world needs Twitter and while I will turn in my badge in a few weeks, I will keep rooting (and tweeting) for Twitter’s continued success.”

Since Dorsey’s return, Twitter’s stock has suffered a 50 percent decline

Dorsey said in a tweet he was “personally grateful to each of them for everything they’ve contributed to Twitter and our purpose in the world”, though the changes fall in line with his pledge on his return last year to make wide-reaching changes. The executive exodus comes hot on the heels of cuts to Twitter’s workforce (by around eight percent), as Dorsey looks to kick-start the ailing company’s fortunes.

Since Dorsey’s return, Twitter’s stock has suffered a 50 percent decline and is today trading below its IPO price as the company struggles to boost its user base by any significant degree. Speaking in a conference call last year, Dorsey stressed the need for “bold rethinking” – although investors haven’t taken kindly to the man who helped co-found the social media giant.

COO Adam Bain and CTO Adam Messinger will take on additional responsibilities in place of the four outgoing executives, while those who remain at the company will be hoping new features and a beefed up ad campaign will help drum up additional support.

Amazon executive sheds light on drone delivery programme

Amazon has flirted with the prospect of drones shipping orders directly to customers for some time, but while excitement about the proposal has been high, details about the programme have been in short supply – until now.

In a recent interview with Yahoo Tech, Amazon’s Vice President of Global Public Policy, Paul Misener, explained how the company has finally set some goals for its drone delivery programme: “The goals we’ve set for ourselves are: the range has to be over 10 miles. These things will weigh about 55 pounds each, but they’ll be able to deliver parcels that weigh up to five pounds. It turns out that the vast majority of the things we sell at Amazon weigh less than five pounds.”

Amazon’s drones are much more sophisticated than standard store-bought ones

The future delivery service will be called Prime Air and Misener confirmed Amazon is aiming for the packages to reach their final destination within 30 minutes or less of the item being ordered on online. He was unable to provide any details about how much the service will cost customers, explaining it is still in the early stages of development and pricing is yet to be figured out.

Amazon’s drones are much more sophisticated than standard store-bought ones; they will be fitted with ‘sense-and-avoid technology’ in order to ensure packages arrive at customers’ doors in one piece.

“These drones are more like horses than cars”, said Misener. “If you have a small tree in your front yard, and you want to bang your car into it for some reason, you can do that. But try riding a horse into the tree. It won’t do it. The horse will see the tree and go around it. Same way our drones will not run into trees, because they will know not to run into it.”

There are still a lot of regulatory hurdles to overcome before Amazon Prime Air can get off the ground, but the interview affirmed the company’s commitment to a drone delivery system.

DARPA’s neural implant will make brain-computer interfacing a practical reality

The Defence Advanced Research Projects Agency (DARPA) has launched a new programme that aims to create an implantable neural device that will allow unparalleled connectivity between the human brain and the digital realm.

The device will act as a sort of digital translator, capable of transforming electrochemical signals originating in the brain into binary code, which computing technology is able to understand.

The wider aim is to enhance the research capabilities of neurotechnology

“Today’s best brain-computer interface systems are like two supercomputers trying to talk to each other using an old 300-baud modem”, said Phillip Alvelda, the Neural Engineering System Design (NESD) programme manager. “Imagine what will become possible when we upgrade our tools to really open the channel between the human brain and modern electronics.”

The agency is aiming to create a biocompatible device that is no larger than one cubic centimetre, making it as minimally invasive as possible.

The neural implant is just one of the projects DARPA and the NESD programme are working on. The wider aim is to enhance the research capabilities of neurotechnology in order to better understand the brain and how it functions, and discover new therapies. Among the programme’s potential applications are devices that could compensate for deficits in sight or hearing by feeding digital auditory or visual information into the brain at a resolution and experiential quality far higher than is possible with current technology.

The NESD programme is one part of a much larger project within DARPA that aims to support President Barack Obama’s BRAIN initiative, launched in April 2013.

Self-driving cars will divide the world

The standout models at the North American International Auto Show in Detroit this year were retro, bold and big: even more so than you would usually expect. The sleek 2017 Ford GT impressed, while the Lincoln Continental and the Buick Avista concept emphasised luxury, with gleaming front grilles and finely finished interiors.

But a very different style of car had been on display at the Consumer Electronics Show in Las Vegas a week earlier. The Volkswagen Budd-e Microbus was a boxy, chunky people-mover driven by an electric motor on each axel; with its battery under the floor, the car was shaped to maximise cabin size. Less practical but far faster was the Faraday Future FFZERO1, a concept from a firm looking to popularise the electric car. “We want to be a technology company rather than an automotive company”, Faraday Senior Vice-President Nick Sampson told his audience as the machine was unveiled.

Motoring apathy
The automotive industry is at its biggest turning point since its inception, as physically driving a car goes from a necessity to a choice. In an interview with the Design Council, Marek Reichman, Chief Creative Officer of Aston Martin, said autonomous driving is now just a matter of time. General Motors clearly agrees, as it recently invested $500m in ridesharing app Lyft, another company working on self-driving cars. But this is a demographic change as much as it is a technology one.

Autonomous driving is now just a matter of time

The number of people who don’t care about driving is increasing. A 2013 survey by the University of Michigan’s Transport Research Institute found 15.3 percent of the US population between the ages of 18 and 39 don’t have a driver’s licence. While still a minority, this number is only increasing and not limited to the US; similar findings are coming from Australia, the UK and Germany. With fewer people able to afford or be bothered to maintain a car, design is going in two distinct directions.

On show in Detroit were cars targeted at the drivers who will refuse to let go of the steering wheel: these cars were reminiscent of classic designs, perhaps reminding people of the cars that got them interested in driving in the first place. The earliest example of a driverless car design from Google could not have been more different: looking more like a computer accessory, it appeared to be an attempt to appeal to people by looking as little like a car as possible.

Choosing to drive
The privately owned and human operated car will still be around for the time being, but the line between cars and technology is getting blurrier. The recent launches of Android Auto and Apple CarPlay marked a gradual shift towards a connected car more dependent on software, and a technology industry as much interested in moving people as keeping them entertained. During The Wall Street Journal’s WSJDLive conference in October, Apple CEO Tim Cook said:”When I look at the automobile, what I see is that software becomes an increasingly important part of the car of the future. You see that autonomous driving becomes much more important.”

With so many human-controlled cars on the roads, it’s difficult to imagine them disappearing quickly. Cars will always be there for people who enjoy, and can still afford, to drive themselves. But when buying a new car in 10 years time, you may have to decide if you can be bothered; choosing to drive a car is feeling more retro by the day.

The cases for and against artificial meat

In support of artificial meatJust when environmentally concerned citizens thought they had done everything within their power to offset global warming, two filmmakers came along and spoilt the party. In 2014, Kip Anderson and Keegan Kuhn released Cowspiracy: The Sustainability Secret, a documentary that shone light on the devastating impact of animal agriculture on the environment.

The film asserted that animal agriculture, not fossil fuels, was responsible for the vast majority of greenhouse gas emissions. In fact, according to a 2006 report by the Food and Agriculture Organisation, livestock produces 18 percent of all greenhouse gas emissions, which is more than all transportation combined (13 percent). Not only that, but the film drew attention to just how water intensive agriculture is, with 2,500 gallons of water needed on average to produce one pound of beef.

Livestock produces 18 percent of all greenhouse gas emissions, which is more than all transportation combined

To make things worse, new evidence suggests meat lovers only have a limited time to change their ways. According to researchers from the universities of Cambridge and Aberdeen, greenhouse gases from food production will increase by as much as 80 percent by 2050 if something isn’t done to curb mankind’s love of meat.

The obvious solution to this is to give up eating beef and pork altogether. But, as everyone knows, old habits die hard, and considering the world’s love affair with meat, cutting its consumption so drastically is nigh on impossible. Luckily, the world doesn’t need to go completely cold turkey. It just needs to reduce its red meat intake to two portions a week – but what about the other five?

Alternatives to meat have been around for years. The only trouble is that, while they may do a good job of looking like the real thing, when it comes to tasting like it they often fall short of the mark and are therefore not an attractive enough substitute for many meat eaters.

However, a number of companies are working to change that. One that has garnered a lot of media attention of late is Beyond Meat, which takes protein directly from peas and then uses a combination of heating, cooling and pressure to produce a product that not only looks like meat, but hopefully tastes like it too. Reviews of the company’s various products have been mixed, but, as its CEO, Ethan Brown, explained in an interview with The Atlantic, the hardest thing is getting consumers to look at meat from a different angle.

“There’s two ways to look at meat”, he said. “One is, meat has to come from a chicken, a cow or a pig. But you can also think about meat in a different way, which is what is meat made of?”

As Brown explained, meat is really just a combination of amino acids, lipids, carbohydrates, minerals and water, all of which are present in plants. “What we are doing is building a piece of meat directly from those plants, and so the compositions are basically the same, and in that case we are actually delivering meat”, he said.

At the end of the day, however, it really comes down to whether people are willing to embrace this new definition of meat. Considering how far so many have gone already, and how much is at stake if they don’t change their habits, perhaps it’s worth going just a little further to protect the planet we call home.

Against artificial meatDeveloping artificial meat is not a bad thing per se, but the panic and anxiety around the need to is misplaced. The concerns generally stem from a belief that humans are outstripping their ability to produce adequate food and meat to meet rising demands. Yet such concerns are mistaken.

A lot of people worry that rising populations and affluence will place too big a burden on our ability to produce meat. Livestock requires large amounts of grain to feed and fatten up cows, pigs and sheep; it takes two to 10 calories of wheat to produce a calorie of meat, for example. This is one of the major drivers behind meat consumption concerns.

Producing any given quantity of a certain crop requires 65 percent less land than in the 1960s

However, we are able to produce more grain to feed livestock – and ourselves – than ever before. According to the UN’s Food and Agriculture Organisation, world cereal production in 2014 was higher than it had ever been in world history, with 2.54 billion tonnes being produced. This is a 20 percent rise from just 10 years ago. Never before have we produced so much staple food. That’s a lot of grain to fatten up animals for us to feast on.

Of course, the Malthusian would say that must mean more and more of the environment is being used to feed humanity meat. But we are becoming ever more efficient at the production of cereal: between 1940 and 2010, corn production in the US increased fourfold, while land use for farming fell slightly. Similarly, while India has seen its wheat production increase by five times since 1970, the number of acres dedicated to wheat production only increased by a measly 1.5. Across the globe, producing any given quantity of a certain crop requires 65 percent less land than in the 1960s. As farm productivity continues to skyrocket, more and more land will actually be given back to nature. According to a study by Jesse Ausubel and Iddo Wernick of Rockefeller University, and Paul Waggoner of the Connecticut Agricultural Experiment Station, “an area equal to one and a half times the size of Egypt, two and a half times France, or 10 times Iowa” could be restored to nature by 2060.

As the world becomes richer, people will most likely opt for more meat. We have the productive capacity to meet that demand, with grain production rocketing and crop yields allowing us to do more with less. This will only continue as agriculture becomes mechanised across the world. In the face of this impressive ability to produce more – a testament to human progress – the capacity of scientists to cook up fake meat in a lab to sell to rich western foodies pales in comparison. Perhaps one day we will decide it is more economically viable to produce such fake meat, but for now, the world is seeing cereal yields grow and grow, with less land sacrificed, allowing us to dedicate more and more to livestock – meeting the demand of a growing and affluent population.

And that is something to celebrate. Yet we don’t. Society has developed an eating disorder. Despite living in an age of abundance, we constantly fret and fear about food more than any previous generation ever has. And now, as world production becomes cheaper, more and more people around the world can use their newfound prosperity to enjoy meat. We should step back, and put this panic on a plate and into perspective.

Airbnb crowdsources its lobbying

San Francisco is a city with multiple identities. On the one hand it is supposedly on the cutting edge of capitalism. It is often seen as a place where the best minds of Harvard or Stanford or nowhere at all flock to set up new and innovative companies centred on technology. The city is filled with young entrepreneurs and techies with an eye on providing more efficient products than older market players. They’re the sort of people who might well book a room – or let one out – through Airbnb.

On the other hand, San Francisco is also a city mired in poverty and crime. Despite the rosy image of it as a trendy, rapidly gentrifying hub of innovation, the many residents of the Bay Area still suffer from high rates of poverty, low wages and unemployment. According to the city’s public defender, Jeff Adachi (said the Los Angeles Times), “in San Francisco, you definitely have this tale of two cities. You have a lot of very rich people. The top five percent have a median income of $350,000. And then you have 23 percent of the population at poverty levels”. Those people certainly won’t be using Airbnb.

Firms such as Uber and Airbnb aggressively enter cities and build up a customer and client base

The city is suffering from a crisis in affordable housing. The exact cause of the crisis – beyond the obvious reason of demand outstripping supply – is disputed, but the implication is clear: an increasing number of San Franciscans’ are unable to keep up with rapidly rising rental and property costs.

Priced out
In April last year, the average cost of rents in the city reached $3,458 per month, while the cost of renting a single room apartment recently soared to over $2,500 a month.

According to Quartz, “eviction rates have steadily increased over the past five years, and San Francisco’s chief economist Ted Egan recently estimated that the city would have to add around 100,000 new units to see a meaningful increase in affordability. Just 3,454 new units were added in 2014. And only 757 were for affordable housing”.

Some say the sharing economy website Airbnb is to blame for this housing crisis. By allowing the city’s scarce property to be used as an outlet for short-term rent, it is argued, the site has contributed to a lack of adequate housing supply for long-term residents and boosted renting costs. Other’s dispute these claims, pointing towards the large revenues San Franciscans have been able to accrue thanks to Airbnb – often allowing them to pay off their mortgages, or contribute to their own crippling rent costs.

The issue was put to a ballot in early November, with a law proposed that would have severely curtailed short-term rents in the city. According to Ballotpedia, the proposed law (Proposition F), would “have restricted all such private rentals to 75 nights per year and imposed provisions designed to ensure such private rentals were paying hotel taxes and following city code. It would also have required guest and revenue reports from rental hosts and ‘hosting platforms’ every three months”.

All of this would have severely curtailed the ability of anyone in the city to make use of Airbnb’s services. The law, however, was defeated, with 55 percent of voters rejecting Proposition F. Airbnb survived in San Francisco.

The clash between the two sides of the city’s identity shed light on the manner in which many tech firms operate. Rather than asking city regulators for permission to operate and how best to work within the guidelines of city bureaucracy, firms that view themselves as part of the “sharing economy” tend to work along the lines of what Mike Isaac from The New York Times referred to as “ask forgiveness, not permission”.

Firms such as Uber and Airbnb aggressively enter cities (or districts or towns) and build up a customer and client base. As Isaac explained: “Airbnb starts up widely in an area — San Francisco, for instance — and gets to a large enough scale that renting out one’s home starts to become a normal thing. Perhaps people even support it publicly, or at least rave about it to their friends.

“Years, or in some cases months, later, regulators pick up on the fact that hey, a lot of folks are doing this. And there’s no tax structure or really zoning rules around any of it. We should probably do something.”

Mobilising the base
In many cases it is too late for disgruntled city or government officials to do much as the sharing economy firms have become embedded in the local economy. By exploiting the gap in time between market entry and interest from regulators, firms such as Uber and Airbnb are able to build up a loyal army of customers – who come to see themselves as dependent upon the service – and employees, or contractors or others who rely on income generated from the service.

Whenever regulations attempt to restrict or curtail these activities, the firms can draw on their base for support, especially as they have their contact details, allowing them to directly alert them of proposed new laws. For instance, when the UK’s Transport for London agency proposed a series of rules to make life harder for Uber users and drivers, the taxi-sharing app was able to directly alert all its existing customers of the changes.

Airbnb in San Francisco directly contacted users of the site in the area in a (successful) attempt to mobilise support from those who had come to use the service in the Proposition F ballot (some went so far as door-to-door campaigning). Similarly, a law proposed to stymie the growth of Uber in New York was abandoned partly as a result of it becoming clear that the move would mean retroactively axing the jobs of about 700 drivers. Even the most reactionary and zealous regulator would have to think twice about causing such a large number of layoffs.

Sharing economy apps are increasingly coming under fire from regulators, but their model of entering a market and apologising later seems able to ensure their continued existence. By building up brand loyalty and making their services indispensable to citizens – through employment, supplementary income and/or convenient services – they are able to draw upon a pool of support when the regulators come knocking. While tech firms often spend large amounts of money lobbying regulators, their power to survive also lies in their ability to lobby their users – a sort of crowd-sourced lobbying (or just political campaigning) – which has become integral to their business models.

Games on Apple TV? Reminds me of the Pippin

For years, Apple has labelled its media-streaming box, Apple TV, a mere “hobby”. The company has resisted the temptation to jump head-first into trying to revolutionise the television industry, instead tentatively offering an easy-to-use, yet somewhat limited, streaming box that connects to its other services.

However, in September, the company unveiled a long-overdue update to the product that it hoped would be its first step in transforming the way people watch television, in much the same way that it radically overhauled the mobile phone and digital music markets. But while television was the centrepiece of the new platform, it is the software capabilities of the service that offer the greatest potential for an entrance into a whole new market: gaming.

Apple Pippin

1995

Year launched

$600

Cost of a Pippin

$200

Cost of an N64

100,000

Pippins made

42,000

Pippins sold

1997

Year discontinued

A revolutionary Apple television set has long been rumoured, with Steve Jobs claiming to have “cracked” the concept before he passed away in 2011. However, the company has failed to release anything remarkable, instead offering minor updates to the software the Apple TV uses.

While the latest iteration of the box is not a fully-fledged television set, it is a significant upgrade on previous models as it opens up the platform to third parties. The inclusion of the App Store seems like a logical progression for the platform, but it is the sort of apps that can now be used on the Apple TV that has got analysts most excited.

Announcing the new Apple TV, the company’s Senior Vice President of Internet Software and Services, Eddy Cue, said: “There has been so much innovation in entertainment and programming through iOS apps, we want to bring that same excitement to the television. Apps make the TV experience even more compelling for viewers and we think apps represent the future of TV.”

The ability to download games onto the Apple TV transforms the box into a gaming console, opening up a whole new revenue stream for Apple. It also places the company in a market that is hugely lucrative, and one it hasn’t ventured into for almost two decades.

Pippin long story
This isn’t the first time Apple has attempted to crack this extremely competitive market. In 1995, spurred on by the huge revenues and customer numbers the likes of Nintendo and Sega had secured from game consoles, Apple unveiled its Pippin gaming box. The Pippin was designed as an open-source gaming platform, with toy manufacturer Bandai constructing the box.

While it looked very similar to the sort of game consoles Nintendo, Sega and Sony were producing, the Pippin was actually designed to be a simplified version of the company’s desktop computers that could be used for “general purposes”. However, the Pippin failed to capture the imagination of the gaming community; it was priced considerably higher than its competitors – it cost around $600, whereas Nintendo’s popular N64 was a mere $200 – and failed to offer the breadth of gaming content others had built up over years.

Bandai manufactured 100,000 Pippins, but only managed to sell 42,000 before discontinuing the console. Eventually Steve Jobs, upon his return to Apple in 1997, scrapped all work on the Pippin. Many saw the console as the nadir of Apple’s troubled years, representing the biggest example of the company trying to spread itself far too thinly across a number of different markets it wasn’t familiar with.

The Pippin ultimately joined the ranks of other Apple products that failed to make a dent in their target markets. Others included the Newton PDA (which some see as precursor to the iPad) and the 20th Anniversary Mac that debuted in 1997 at a cost of nearly $10,000. When Jobs returned, he brought with him a focus and purpose that had left the company in the years since his departure.

Gap in the market
While Apple has failed in the past to make a success of the home gaming market, conditions now appear to be considerably more favourable. Sony’s latest console, the PS4, has stormed ahead of Microsoft’s Xbox One in the hearts of the most dedicated, hardcore gamers, but there remains a space for less intensive games that was once occupied by Nintendo. Its Wii platform proved popular with families and people who previously wouldn’t normally play video games, but, in recent years, Nintendo has struggled to release a compelling new console: its 2012 Wii U failed to get the same sort of reception its predecessor, 2006’s Wii, had enjoyed.

Nintendo has even announced plans to offer its highly coveted – and exclusive – games to other platforms for the first time in its history. Many of these popular titles will be available on platforms such as Apple’s iOS, but could even make it to rival consoles. This signifies a potential retreat from the console market by Nintendo – a market it rescued from the dead in the 1980s – similar to that executed by one-time rival Sega in the early 2000s. This could pave the way for Apple to dominate the lower-end of the console market.

The explosion in the number of people playing simple games on their mobile devices – many of which are made by Apple – is what the company is looking to transfer to its new television platform. Many of those popular iOS games will be easily transferable to the new tvOS platform.

Think different
Apple’s move into the gaming market with the new Apple TV could shake up an industry currently dominated by Sony and Microsoft, attracting casual gamers scared off by complex console gaming. By combining the company’s existing iOS App Store – and the many games on it – with a much larger screen and motion control, Apple could dominate the living room in a way that it hasn’t quite managed so far.

If it is to achieve this, the company needs to ensure games aren’t simply scaled up versions of their iOS counterparts, but distinct and compelling ones that are designed specifically for the bigger screen.

Avoiding the pitfalls of its failed Pippin experiment from 20 years ago shouldn’t be too difficult; the company is a very different one to the panicked, unfocused firm that seemed desperate to enter markets it wasn’t suited to. However, it must still be cautious; Apple is entering a market that is already well stocked with dominant players that will be determined not to lose any market share.