The Decrypted Gift Guide

So first up, we're going to be taking a look at one of the newest gadgets on the market, the Facebook Video Portal. So Sarah Fryer, Hello, Hi, thanks for joining us and telling us about this. So let's just quickly run over the basics. How much is the portal and who's it for? So the portal you can buy a small version for a hundred dollars and a lar

version for three forty nine. It's basically these beautiful big screens that you can put in your home, in your living room or kitchen, and they have these cameras attached that can follow you around as you're talking so that you don't have to move your your phone. Um, so it. Actually it's you know, it's a it's a pretty cool technology, But the question is do people really need this? And

even more, do people really need this from Facebook? A company that they're all very concerned about the privacy implications of giving data to. So this is a company Facebook, who is as their first hardware device, is coming out with a product that really is representative the company's problems and privacy combined with the product that basically nobody is asking for. So I think we'll see pretty soon that

this thing was a dud. I'm sure they haven't sold many of them, and I don't really think people want a dedicated video chat device in their homes, especially one made by Facebook, when you can get the exact same funk reality in a more mobile setting with more features through a phone, whether that's an iPhone or an Android phone, or just your computer itself. Sarah, what's the business case for Facebook coming out with a product like this? Facebook needs to come up with some sort of way to

get more integrated into your more intimate relationships. Right, They have your your Facebook friends, and for a lot of us, are Facebook friends are just all the people we've met over the course of our entire life for as long as Facebook has existed, so at that point they become less friends and more just a phone book or acquaintances,

and in that case, people don't share is intimately. So Facebook has been trying to diversify the kinds of messaging that people want to do with Facebook products, so they've been investing more in messaging products. This portal device is a spinoff of Facebook Messenger, and I think they just want to become essential in that way. At the same time they're seeing Alexa and Google Home and all these

other devices entering your home. And remember Facebook missed the move to mobile phones back in They didn't have a mobile phone when all their competitors did. So they've been playing in other companies ecosystems for a long time, and the Google ecosystem or the Apple ecosystem. Now everyone's moving to these home products, or at least in terms of marketing, I haven't seen a huge catch on. Mark probably knows more about that, but they don't want to miss the

boat on this next trend, right. But in a couple of key ways, the portal is is different from some of the voice activated devices or systems that are already on the market for example, Alexa is basically dormant until it hears the wake word, which is alexa UM. But if I understand correctly, the portal is always listening and always watching, right, Mark yes. So the interesting thing about

the portal is that it has two voice assistance. Right, it has Alexa, which could be triggered by the Alexa weake word or if you set another weight word, if that's an option on this device. But then there's a separate one for controlling basic functions like beginning a video

conference or controlling your volume or basic settings here. And instead of going all the way and creating its own voice assistant, or instead of leveraging Alexa all the way to control everything, they split it off into two, which I think raises even bagger privacy concerns because you have two different voice assistance and what if you're wanting to speak to one, but instead it sends that data to the other. Right, So there's a lot at stake here

already with one voice assistant. Now they have two different companies potentially listening into and recording your data. Right, And to make matters worse, Facebook has sort of flip flopped a little bit on exactly what UM it's plans are for using the data that comes from the portal and how that would feed into its advertising model. Right there. The company has been extremely insistent about how privacy safe

the poor it will be. They'll store the data on the device, they won't communicate with the cloud unless you're trying to make a call over a messenger. Um. There are not any ways to actually record video uh from the device. The only way that they would send something back is if there was some bug and they had to take a snippet of what kind of software problem

there was to fix it. Um. So all of those things come into play, and then you know, we've also talked about what Mark said, and then there are the questions about whether they'll use the data for advertising. Honestly, I think the bigger problem is not the portal device. It is the current climate in how people think about Facebook and how much trust they've lost with the company

over this year or two of privacy scandals. Actually should say, over the course of fourteen years of privacy scandals, because this company has always perennially had to apologize for for taking too much of someone's data or not being clear about how they were going to use it. And so I think that that you despite despite the steps they've taken with the portal, it'll still be extremely difficult to

convince users to use it. And you know, add that on top of the fact that they're late entrance into this relatively crowded market. Now, all right, so what we're going to talk about next is the Echo Show and the Echo spots. So these are pretty mainstream gifts by now, good for parents, spouses, and Nico Grant is here to talk with us about that. These days, prices have really dropped, right, Yeah, the Echo doll is now thirty dollars. That's one without

its display. They have two with screens now, the spot in the show that's a hundred and thirty dollars and two and thirty dollars. But for these types of devices, that's not a lot of money. That's pretty much at the bottom of the range for you know, the latest and greatest consumer products, especially from a major player like Amazon. And what's also dropped is our concerns as consumers about

what it means to have a listening device in our homes. Yeah, I mean, it's remarkable the extent to which people are willing to adopt this a completely different product category than they're used to. When we've seen at least anecdotally instances in which there were, you know, creepy events that happened

involving Amazon Echo devices. There was one in particular, in which a police department requested the audio and the transcript of an echo conversation over the course of a night to see whether a man had killed h an acquaintance of his who came over to his house. Now, we did a whole episode on Decrypted about that about a year and a half ago, and you can check that out if you want to hear, you know, some of the darker sides of home recording. Nice plug for your

old episode, Nico. But you know, since that came out eighteen months ago or so, there have been other instances of Alexa getting involved in some rather all quid mix ups. Like there was one person who had a private conversation that was taped at home sent to of his employees. Yes, there was one instance back in May. Its surfaced and basically there was a couple, this married couple. They were

at home, they were having a conversation. I don't think they've ever fully confirmed what they were talking about, but um, the end result was that their echo device thought that it heard them prompt by saying Alexa, and then thought that one of them said to start recording, and then thought that they said to send the recording, and thought that they heard a contact name, and then thought that there was a confirmation to send when one of the

spouses said the word right in conversation. I mean, it was truly a series of unfortunate events, and the end result was that this private conversation between a couple became public with one of their contacts. And frankly, if you talk about someone in your life, you know, with your spouse in your home, where can you Pia? That's quite right, Niko, I mean, Mark, I don't know how you think about this, that this is a sort of the sort of nightmare

scenario that people like. Early on, we're worried about when Alexa you know devices hit the market, But as the number of skills um on the device has grown and now it's you know, in the tens of thousands of skills that come with these Alexa devices, do you think the risk of something like this happening is going up? Here's my opinion, Amazon, Apple, Google, they all have to do better. In terms of safeguarding data. A lot of them are making really big strides. Apple has been really

vocal about this. Both Google and Amazon have protections in place, had to prevent the circumstances that do occasionally happen. As Nico was explaining, but I think this just comes as part of new waves of major, new modern technologies. But to your point about skills. Now, with tens and thousands of skills, I believe about fifty skills on the marketplace right now for Alexa devices across so many different products.

As they add you features like Apple Music was coming this month, more and more people are going to buy these devices, raising those concerns even further. And Nico, you've actually been looking around at what some of the more interesting skills are. Yeah, you can really play some Russian roulette um with a hypnotherapist on the Alexa. So I'm going to lull you to sleep and and perhaps share some secrets with And there's also a fun truth or

dare game, UM, So imagine that. Imagine Alexa recording your secrets. That's going to be really interesting when your employee finds out. Okay, well, thanks very much, Nico, thank you. Okay, So Next up, we're going to talk about the Amazon microwave, and we have Garrett dvinc here to tell us about that. Garrett,

who in your family is getting a microwave for Christmas? Well, I think I'm going to get myself microwave for Christmas and Amazon Alexa one, because you know, I have a regular microwave, the technology of which has not changed noticeably in the last fifty years as far as I know, but I don't really know how to use it. It's a bunch of random numbers and I essentially just keep pressing one more minute, one more minute, one more minute into whatever I'm trying to cook is invariably burned on

the outside and still cold on the inside. And I mean, you know, I'm I'm I'm kind of making fun of myself here, but I do think microwave tech hasn't changed much and it might be something that's actually useful for voice where you can just say to your microwave what you have inside of it, and the microwave computer itself will know exactly how to cook that perfectly. Okay, So Garrett tell us about the microwave. It's a microwave like any other, except you can control it with voice just

like any other Alexa product. It goes for you know, the pretty decent price of sixty bucks. So my assumption here is that Amazon has price is pretty low just to get one more device into your home that is within the Amazon ecosystem. Now you do need to have another co device to make this work. Now that's a pretty big drawback, right. You're paying sixty bucks for the microwave itself, and I think that's standard pricing for a pretty you know, low end, rudimentary microwave. This is an

Amazon Basics. This is not some high end microwave that you'll get Best Buy or something like that. So you're paying the sixty dollars plus thirty dollars for an Echo Dot or something like that. You would think that Amazon would have built in the microphone and the speaker into the Alexa microwave itself to get it going. I think that would have been a better value and more interesting to some people now. But the idea here is that Amazon wants you to be connecting multiple devices together, and

it has something called a Connection kit to enable that. Yeah, that's absolutely right. So this is part of their strategy of getting as many Alexa devices all talking to each other. So, Garrett, that gives us a glimpse of where Amazon is going with its ambitions in this space. Right. It wants to have Alexa all over your home exactly. I mean, when it comes to Apple in their ecosystem. Many people, especially

in North America, have iPhones and Apple Music. That's they might have Max they you know, that's their connection to the Apple ecosystem. On Google, we use Google Gmail and Google Drive, maybe Google Music. Amazon is also trying to find other reasons to you know, get you to buy more of their products and down the road digital services as well. And if a microwave is one tiny part

of it, that's what they're gonna do. So this microwave is made by Amazon, but the idea is that eventually Alexa will be embedded in products that are made by lots of other manufacturers as well. Exactly. I mean, if they can say, look, we already have these devices in people's homes, they're used to speaking to Alexa. They don't necessarily want to speak to some kind of Samsung assistant or LG assistant or any of the other you know,

major manufacturers of home products. They can kind of slide right, in there and sort of say, you know, you can see other companies making products that would just have Alexa Voice instead of their own home assistant. You know, we just heard Nico talking about the sort of unintended consequences

of privacy slip ups with Alexa. But once you combine Alexa with a generic manufacturer that may or may not have top of the line security settings, I mean, are we looking into a future with some unintended privacy consequences.

I think as Amazon expands the reach of what can be done via Alexa, now setting how much time you're going to cook your popcorn for or maybe starting your car, is they add more skills, a wider range of categories, is this thing could be used for, and of course a wider range of devices that this could be integrated with.

The stakes are just going to increase. And what about data sharing, Garrett, is that something you've looked at that presumably once Alexa starts plugging in with third party manufacturers, um, you know, other companies are going to be interested in finding a way to advertise to us through these voice platforms. And that's a whole world that we haven't really you know, explored yet. Well, the data is of course extremely valuable, and I think it's something that Amazon wants to lock

down for themselves. So definitely an issue about data sharing, although I do think Amazon won't really want to share. They'll want to do partnerships so that there's more devices that use its systems, but they want to keep all that data so that they can advertise to you, so that they can know, you know, when you need a toilet paper refill, or when you need a new microwave that kind of thing, Oh, when you need some more popcorn for your microwave exactly. Mark anything to add on

on the point about data sharing. It's going to be incredible to see how they tie in this microwave system with their Whole Foods purchase. I could imagine a day where it will recognize, you know, you bought you know, eight of a certain you know, microwavable freezer item. Mic Wave will know, hey, we've this person purchased eight of them. Right, they microwate eight of them, it's time to automatically order through Whole Food to refill of another eight or ten

or twelve. So it'll be really fascinating to see how these services through Amazon all injury together in the future. Okay, thanks Garrett, thank you. Okay, So, Mark, we've looked across the spectrum of gifts, um, you know, everything from the

microwave to the Facebook portal. There seems to be a common denominator here, which is that a lot of the concerns with new gadgets that would be fun to give as gifts, they all have some lingering privacy concerns and that wasn't something that we were worried about even a year or two ago. I completely agree, and it's all

about striking the right balance. If you compare the Amazon Echo to the Facebook portal, for example, they both at the foundation of the products have the same privacy concerns about the always on recording potential, the potential recording things you don't want it to hear it, misunderstanding you, and sending your recordings in information to other people. But you really have to outweigh the positives versus the potential negatives. The percentage of cases where these things happen overall are

not that high. The privacy landscape is evolving, though, now that companies realize it's a major public concern, chances are that we'll see companies working really hard to make us comfortable with their approach to handling our data. I agree. So I think we're going to see two things, I think simultaneously to your point, We're going to see companies doing more and more to educate consumers and make their

devices safer. But at the same time, I think we're also going to see people become more used to it, and this concept of always on devices and listening products becoming more part of people's dailyable lives. People getting used to it, people understanding it, and people wanting it. And so I guess as people get more and more used to having these devices in their homes and in the

homes of people they know. Um. If there is a takeaway to today's gift guide, it's not necessarily that you shouldn't be buying and enjoying these these cutting edge and new gadgets. Um. It's more that you should learn about them and be informed when you're making a purchasing decision. And that's it for this week's Decrypted. Thanks for listening. What other tech gadgets of unintended consequences we want to

hear from you? You can email us at decrypted at Bloomberg dot net or I'm on Twitter at Mark German and I'm at pa gad Cary. If you're a fan of the show, please take a moment to rate and review us. It really helps us find new listeners. This episode was produced by piagricry enlist Smith. Our story editor was Aki Ito. Thanks also to brad Stone and Van Remain, Emily Busso and Magnus Henrickson. Francesco Levy is the head of Bloomberg Podcasts. We'll see you next week.