Ask Paul: October 30 (Premium)

Happy Friday, and Happy Halloween! Here’s a great set of reader questions to get the weekend and the holiday started a little early.

You have $500 to spend on a phone. What. Do. You. Do.

rambone05 asks:

If you have $500 what android phone would you buy? This is for my father to upgrade his OnePlus 5T that he is holding onto. He likes having a good camera and a fingerprint sensor in the back. He also prefers the OnePlus UI vs Samsung UI. This doesn’t need to be the newest phone, I would go back a year if necessary to get him a good phone that will last him several years before we upgrade to 5G (when it is widely and readily available). Thoughts? Appreciate the help.

If you literally have $500—including whatever you might get on trade—the Google Pixel 4a (5G) seems like the right choice on paper, but with the understanding that I’ve not yet tested it: It has a good camera and a rear-mounted fingerprint reader, and of course a clean software image and unique Pixel features, and at least three years of Android version upgrades. Plus, it even has 5G support.

I can’t test this myself since it asks for an IMEI number, but I suspect OnePlus offers pretty good trade-in values on its own phones, so you might want to look at ordering a OnePlus 8T or OnePlus 8 directly and see if that gets either closer to $500. Both handsets have an in-screen fingerprint reader, but they’re excellent.

I would also look at the Samsung A-series, which I’ve also not tested personally. A Galaxy A71 is just about $400, it looks like.

Sun Valley/21H2

will asks:

I wanted to know what your thoughts are on rumored UI update that Windows might get next year, “Sun Valley”. Curious what, if anything, you might have heard about this and if it is as big as some people are hoping for or if it will be a lot less ambitious as is rumored? Is there anything you would like to see done?

I’ve not heard anything specifically about this codename, but you may recall that a trusted source told me earlier this year to expect big changes to Windows in the next year, and this must be what he was talking about. I’m not sure whether a UX overhaul, while overdue, can be truly ambitious, but if Microsoft could just give Windows 10 a modern and consistent UI, similar to what Apple did with macOS Big Sur, I’d be very happy. Let’s just hope it’s not as dull and bland as Windows 10X.

By the way, Microsoft CEO Satya Nadella may have obliquely referred to this refresh in Microsoft’s post-earnings conference call the other night. When asked about Windows 10, he noted that Microsoft was “doubling down on it.” He didn’t provide any details, but it’s pretty clear that COVID-19 has triggered a rethinking about Windows’ role within Microsoft and that it will regain at least some of the attention that it had previously lost internally.

Dell, iPhone, and Your Phone

SRRLX1986 asks:

Why does Dell offer a much better phone companion app than Microsoft? Is it because of marketing, patents, or did Dell make a deal with Apple?

I don’t know why Microsoft can’t duplicate this functionality in Your Phone, but I suspect Dell bought a small company that created this utility. I will just say that Microsoft has a higher quality and compatibility bar than does Dell. And that this kind of thing is reminiscent of Stardock utilities like Groupy, which is what Microsoft tried to do with Sets, but failed. But that doesn’t excuse Microsoft ignoring iPhone users in Your Phone: That’s a huge chunk of the user base, and this is embarrassing.

The return of Touch ID?

txag asks:

Do you think there is a chance that Apple (or any other phone manufacturer) will bring back Touch ID? Nobody knows how long mask mandates will go on. I ask because even before Covid I had zero interest in Face ID, so most of the newer phones are not on my purchase list.

Yes, and they actually did do this already on the new iPad Air, which has a Touch ID sensor on its power button. So, I could imagine Apple doing the same for the iPhone 13 family next year. But I don’t see it adding a front-facing button again, no.

Spotify and profits

helix2301 asks:

Paul I read your post on Spotify and while your company and mine are both small businesses. I don’t understand how Spotify can keep operating at a loss. Imagine your company or my small company going years with losses I don’t get what the end game is for them how do they keep operating if they are losing money.

I’m not an accountant, but Spotify holds €1.182 billion in cash and cash equivalent assets, and it has no debt. And despite posting a loss for accounting purposes, Spotify generated a free cash flow of €103 million in the quarter, which I take to mean that the amount of cash it has on hand has gone up in the quarter by that amount.

In its earnings press release, Spotify noted that “Free Cash Flow was €103 million in Q3, a €55 million increase Y/Y principally related to favorable working capital movements and reduced cash outflow for PP&E related to office build-outs, partially offset by increased net loss adjusted for non-cash items. We maintain positive working capital dynamics overall and continue to expect that we will deliver positive Free Cash Flow for the year. In addition to the positive Free Cash Flow dynamics, we maintain a strong liquidity position and are confident in the financial position of the business as we look at the current and future uncertainty surrounding the global health crisis. At the end of Q3, we had €2.0 billion in cash and cash equivalents, restricted cash, and short-term investments and no indebtedness.”

Profit vs. revenues

WP7Mango asks:

What’s your thoughts on the “big four” in terms of actual profit vs revenue? It seems to me that Microsoft significantly outperformed Apple, Google and Amazon not just on net income, but on the return on revenue ratio, with Amazon coming last by a long way. I find it rather interesting.

So, again, I’m not an accountant, but I sort of view profits as less important, if that makes sense, than revenues, since revenues are the measure by which the size and thus value of the company is calculated, and revenue growth over time determines its long-term viability/success. Profits also sort of trail revenues in the sense that they’re impacted by “cost of business” conditions that could be temporary, seasonal, or whatever. And of course, different companies have very different businesses, and different strategies, so a company like Amazon will have huge revenues during the pandemic because it’s a retailer that delivers to homes, but small profits because of the costs of its logistics and delivery systems.

Here’s how the big four tech firms break down by revenues (from Short Takes):

Amazon: Net income of $6.3 billion on revenues of $96.15 billion(!).
Apple: Net income of $12.7 billion on revenues of $64.7 billion.
Google: Net income of $7 billion on revenues of $40.5 billion.
Microsoft: Net income of $13.9 billion on revenues of $37.2 billion.

Microsoft is actually the smallest of these firms by revenue, which is a little surprising. But there are other metrics to examine, and not just net income. And Apple’s revenues are particularly impressive because the iPhone 12s are launching much later than usual and they would normally have made its figure much higher.

Cloud outages

OldITPro2000 asks:

As mentioned on Windows Weekly over the past month, there have been several high-profile outages with both Azure and 365. I’ve been keeping a closer eye on the Service Health Dashboard for 365 the past few weeks and realized that there is almost always an issue with something somewhere in the service.

Granted, the service is expansive, but Microsoft seems to continue to make all kinds of changes that cause disruption, despite having so many outages recently. Often these issues appear to cause impact in minutes but can take them days to resolve. I was expecting them to slow up a bit with changes but that doesn’t seem to have happened. Do you have any behind the scene insight as to what Microsoft’s thought process is here? I suppose I’m just venting; I realize all cloud services have outages, but lately it feels more heavily weighted towards Microsoft.

I don’t have any particular insight here, but Microsoft is at least pretty transparent about what happens after the fact, and to be fair, this is a crazy year in which cloud utilization has exploded, triggering a race for capacity. And I know there have been several outages recently, but I feel like it was worse at the beginning of the pandemic, when Microsoft essentially ran out of capacity in certain regions, in particular in Europe.

Also, while we’re all a little Microsoft-centric here, Microsoft isn’t the only company suffering occasional outages. I was mildly inconvenienced by one of the Microsoft 365 outages last month, when I couldn’t access Teams for a few hours. But a similarly-timed G Suite/Workspace outage was more problematic to me at the time.