Patrick McGee in San Francisco

Zipline, the world’s largest drone logistics service, announced a short-route delivery system on Wednesday designed to let customers in multiple US cities receive prescriptions, lab tests or even custom-made salads within minutes.

The California-based start-up, which has completed more than a half million deliveries since its founding in 2014, said it has partnered with three US hospitals in three states — plus Sweetgreen, a salad restaurant chain — to launch a home delivery service that can make a 10-mile trip in 10 minutes.

The promise of rapid drone delivery goes back years but has a spotty record. Jeff Bezos predicted a decade ago that the sky would be filled with Amazon drones within five years, but technical challenges have prevented that from happening.

Most other projects are in a beta stage, although Wing, a unit of Google parent Alphabet, recently claimed it can now deliver up to 1,000 packages a day in the select areas where it is operating, and has ambitions of increasing that into the millions over the next 18 months.

Since 2016 Zipline has been delivering packages to destinations more than 100km away, with the bulk of its operations in Ghana, Nigeria and Rwanda, where doctors can order medical supplies via text message and dispatch emergency blood deliveries at 100km per hour.

The private start-up, worth nearly $3bn, launched emergency operations in the US in 2020 to supply medical supplies for healthcare workers. It also worked with Pfizer to deliver Covid-19 vaccines.

Zipline, which is backed by Baillie Gifford, Temasek and Fidelity, among others, plans to do more than 10,000 test flights before deploying the new service early next year for its first partners in Ann Arbor, Michigan; Tacoma, Washington; and Salt Lake City, Utah.

The new service is based on its P2 Zip drone, an autonomous winged aircraft that has the ability to hover in the sky above its destination. It sends the package down in a self-propelled droid capable of pinpointing its landing to an area as small as a patio table.

“This new delivery experience works for a tiny backyard, a small patio, a stoop, or a small courtyard of a building,” said Keenan Wyrobek, Zipline’s technology chief.

The group flies Zips in seven countries, including three US states. It has partnered with Walmart to allow customers in suburban Arkansas to order rotisserie chickens to their backyard.

The new system’s precision is expected to take Zips into “more complex environments and over more highly populated areas”, said Okeoma Moronu, head of regulatory affairs. She added that the drones are nearly inaudible — like “wind-rustling leaves” — and said delivery times will be up to seven times faster than car delivery.

Among the three new hospital partners is Michigan Medicine, an institution at the University of Michigan, which said it expects to at least double the number of prescriptions it fills each year for patients because of the service.

“We estimate that once Zipline launches, most of our patients will be able to have their prescriptions delivered in just a few minutes,” said Marschall Runge, chief executive of Michigan Medicine. “That’s an absolute game changer for people with conditions like diabetes, where going without medicine for even an hour could turn serious.”

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Delivery drone operator Zipline launches short-range service Republished from Source https://www.ft.com/content/f2fc993a-7705-42b6-a2d3-40da654b8f27 via https://www.ft.com/companies/technology?format=rss

Apple has captured Gen Z in the US so thoroughly that younger consumers fear being socially ostracised for not having an iPhone, a trend that will allow the tech giant to gain market share across multiple product categories.

Gen Z users — those born after 1996 — make up 34 per cent of all iPhone owners in the US, versus 10 per cent for Samsung, according to new data from Attain, an adtech data platform.

The figure helps to explain how the iPhone grew its overall market share of actual phone usage from 35 per cent in 2019 to 50 per cent last year, according to Counterpoint, enabling Apple to grow its profits even as the broader market stagnates.

The tech giant’s hold on younger consumers marks a significant change as market research has shown that, for older generations of Americans, there is a relatively even split between owners of devices running Android, Google’s software for mobiles, and iOS.

Shannon Cross, analyst at Credit Suisse, said the ramifications of these shifting tastes extended well beyond smartphones, as iPhone users were more likely to purchase MacBooks, Apple Watches and AirPods.

“The strength of the Apple ecosystem creates a moat that is fairly impenetrable by the competition,” Cross said. “It really makes it hard to change the trajectory. Apple is just going to continue to gain share over time.”

As Gen Z is the most online of any age group — spending up to six hours a day on their smartphones — the iPhone’s dominance is shaping the social circles of young Americans, according to researchers who advise companies on the preference of Gen Z consumers.

One oft-mentioned issue is that Android phones cannot send texts through Apple’s iMessage system, meaning that a single Android user participating in a group chat of iPhone owners turns the outbound messages of all users green, rather than blue.

This is an indication that the chat has defaulted to the SMS standard rather than iMessage. It also means when iPhone users in the group send videos or photos, they are often smaller and more glitchy than would appear through iMessage.

“A green message — anyone with an Android — throws off the entire chat, because now the whole thing has to be SMS,” said Annelise Hillman, the 24-year-old chief executive of Frontman, a men’s grooming business. “So the social pressure to get an iPhone is pretty insane.”

Kahlil Greene, a 22-year-old independent consultant and “Gen Z historian”, said the glitches were annoying enough that it was “very, very common” for Android users to be electronically ostracised from group chats.

Anastasia Pelot, a manager at YPulse, a Gen Z and Millennials researcher, said: “In the back of your mind it’s like, ‘Oh my God, I have to explain to my friends why our group chat is green now.’”

On TikTok, a trend called “He’s a 10 but . . . ” went viral when random women were asked what a perfect guy’s new rating would be once they found out he uses Android. Numerous respondents re-rate the guy at less than 5, or simply call it a deal-breaker. “If that bubble pops up green, I’m not responding,” said one.

Such issues are partly by design. Apple is focused on creating a “closed” system that encourages users to stick with the Cupertino-based company’s creations.

According to court documents in the company’s 2021 trial against Fortnite-maker Epic Games, Craig Federighi, Apple’s head of software engineering, advocated keeping iMessage off Android nearly a decade ago when other executives were considering making it available. He wrote to colleagues that expanding iMessage “would simply serve to remove an obstacle to iPhone families giving their kids Android phones”.

The propensity of Gen Z to purchase iPhones — or convince their parents to — comes even as the average price of an iPhone approaches $1,000, roughly three times the average Android device globally, according to Counterpoint.

The Gen Z preference for iPhone is more pronounced in the US than elsewhere, but when market intelligence group Canalys did research in western Europe it found 83 per cent of Apple users under 25 years of age planned to keep using iPhone. The percentage of Android users of the same age who plan to stick with Android was less than half that.

Android has sought to address the issues created by Apple’s refusal to open up its iMessage system. Last year, it ran a marketing campaign scolding Apple for not adopting Rich Communication Services, or RCS, a superior standard to SMS for rich media and attachments.

But Apple understands the exclusivity of iMessage is a selling point — and one that keeps users locked in to using its devices. At a conference last year, an iPhone user complained to chief executive Tim Cook that exchanging messages with his mother was frustrating because of iOS to Android connectivity issues. “Buy your mom an iPhone,” Cook said with a laugh.

Matt Stratford, a 26-year-old marketing specialist who owns an iPhone, Apple Watch and MacBook Air, said he would not consider an Android phone as he would lose the seamless connection among his devices.

Stratford said he did not want to be branded “the Android guy” among friends. “I know they have all these great features — they are fine phones,” he said of Android, “but when they come into contact with the iPhone or iOS ecosystem, there are glitches between the two.”

The nudge to stay within Apple’s ecosystem of devices has boosted its business. Globally, for every 100 iPhones shipped, Apple sells 26 iPads, 17 Apple Watches and 35 pairs of AirPods, according to Canalys. For Samsung, 100 smartphone shipments leads to fewer than 11 tablets, six smartwatches and six wireless earbuds.

Jakob Ledermann, Gen Z brand strategist for Philoneos, a consultancy in Munich, said he was troubled by digital natives placing such high value on a particular brand, despite them otherwise being “the most inclusive and diverse generation” to date.

“We’re not placing any values on origin, or what you’re identifying as, but we’re placing high values on operating systems,” he said.

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How Apple captured Gen Z in the US — and changed their social circles Republished from Source https://www.ft.com/content/8a2e8442-449e-4dbd-bd6d-2656b4503526 via https://www.ft.com/companies/technology?format=rss

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Apple reports first decline in revenue in three-and-a-half years Republished from Source https://www.ft.com/content/07c6e808-d650-44b1-b059-fa589da036e8 via https://www.ft.com/companies/technology?format=rss

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Apple is taking steps to separate its mobile operating system from features offered by Google parent Alphabet, making advances around maps, search and advertising that has created a collision course between the Big Tech companies.

The two Silicon Valley giants have been rivals in the smartphone market since Google acquired and popularised the Android operating system in the 2000s.

Apple co-founder Steve Jobs called Android “a stolen product” that mimicked Apple’s iOS mobile software, then declared “thermonuclear war” on Google, ousting the search company’s then-chief executive Eric Schmidt from the Apple board of directors in 2009.

While the rivalry has been less noisy since, two former Apple engineers said the iPhone maker has held a “grudge” against Google ever since.

One of these people said Apple is still engaged in a “silent war” against its arch-rival. It is doing so by developing features that could allow the iPhone-maker to further separate its products from services offered by Google. Apple did not respond to requests for comment.

The first front of this battle is mapping, which started in 2012 when Apple released Maps, displacing its Google rival as a pre-downloaded app.

The move was supposed to be a shining moment for Apple’s software prowess but the launch was so buggy — some bridges, for example, appeared deformed and sank into oceans — that chief executive Tim Cook said he was “extremely sorry for the frustration this has caused our customers”.

Apple’s Maps has improved considerably in the past decade, however. Earlier this month it announced Business Connect, a feature that lets companies claim their digital location so they can interact with users, display photos and offer promotions.

This is a direct challenge to Google Maps, which partners with recommendations platform Yelp to offer similar information and makes revenues from advertising and referral fees.

Business Connect goes further by taking advantage of Apple’s operating system to give iOS users unique features, such as seamless integration with Apple Pay or Business Chat, a text-based conversation tool for commerce.

“Apple is very well positioned to decouple from Google more and more, largely under the guise of consumer privacy,” said Cory Munchbach, chief executive of BlueConic, a customer data platform.

The second front in the battle is search. While Apple rarely discusses products while in development, the company has long worked on a feature known internally as “Apple Search”, a tool that facilitates “billions of searches” per day, according to employees on the project.

Apple’s search team dates back to at least 2013, when it acquired Topsy Labs, a start-up that had indexed Twitter to enable searches and analytics. The technology is used every time an iPhone user asks Apple’s voice assistant Siri for information, types queries from the home screen, or uses the Mac’s “Spotlight” search feature.

Apple’s search offering was augmented with the 2019 purchase of Laserlike, an artificial intelligence start-up founded by former Google engineers that had described its mission as delivering “high-quality information and diverse perspectives on any topic from the entire web”.

Josh Koenig, chief strategy officer at Pantheon, a website operations platform, said Apple could quickly take a bite out of Google’s 92 per cent share of the search market by not making Google the default setting for 1.2bn iPhone users.

“If Apple could build something that was essentially as good as ‘Google classic’ — Google circa 2010 when it was a simple search engine less optimised for ads revenue — people might just prefer that,” Koenig said.

That would be expensive, however. Alphabet pays Apple between $8bn and $12bn a year for Google to be the default search engine on iOS, according to the US Department of Justice.

Still, displacing Google on the iPhone, and assuring users their web queries will not leak to third-party data brokers, would align well with Apple’s privacy-centric software changes and marketing campaign — while potentially delivering a huge hit to Google’s business.

Since it launched a privacy policy in April 2021 that deprived companies such as Facebook and Snap from easily building user profiles and tracking their actions from app to app, shares in those companies have collapsed by 58 per cent and 84 per cent, respectively.

“Google could still be a better search engine, but if I want to search for me potentially getting cancer, who would you rather have that information?” said Anshu Sharma, chief executive of data privacy platform Skyflow.

The third front in Apple’s battle could prove the most devastating: its ambitions in online advertising, where Alphabet makes more than 80 per cent of its revenues.

Last summer, Apple posted a position on its job pages for someone to “drive the design of the most privacy-forward, sophisticated demand side platform possible”. A DSP is a digital media-buying tool that lets advertisers purchase ad inventory on multiple exchanges.

The job ad was an indication Apple wants to build a novel ad network, one that would reshape how ads are delivered to iPhone users and keep third-party data brokers out of the loop.

The role was filled in September by Keith Weisburg as group product manager of Ad Platforms. Weisburg, who also spent a decade at Google and YouTube, had been a senior product manager for Amazon’s DSP.

Apple’s move on three fronts has left Alphabet’s position within iOS looking “more vulnerable than it ever has been before”, said Andrew Lipsman, analyst at Insider Intelligence.

“Apple is increasingly incentivised to get into the search business as it builds out its advertising arm. Search is the key to huge troves of first-party data, and that’s the new battleground for the future of digital advertising.”

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Apple beefs up smartphone services in ‘silent war’ against Google Republished from Source https://www.ft.com/content/1146da72-8337-46f4-b59f-c28c8ef617c4 via https://www.ft.com/companies/technology?format=rss