Should cash-strapped Snapchat sell out? To Netflix?

Snapchat needs a sugar daddy. Its cash reserves dwindling from giant quarterly losses. Poor morale from a battered share price and cost-cutting measures sap momentum. And intense competition from Facebook is preventing rapid growth. With just $1.4 billion in assets remaining at the end of a brutal Q3 2018 and analysts estimating it will lose $1.5 billion in 2019 alone, Snapchat could run out of money well before it’s projected to break even in 2020 or 2021.

So what are Snap’s options?

A long and lonely road

Snap’s big hope is to show a business turnaround story like Twitter, which saw its stock jump 14 percent this week despite losing monthly active users by deepening daily user engagement and producing profits. But without some change that massively increases daily time spent while reducing costs, it could take years for Snap to reach profitability. The company has already laid off 120 employees in March, or 7 percent of its workforce. And 40 percent of the remaining 3,000 employees plan to leave — up 11 percentage points from Q1 2018 according to internal survey data attained by Cheddar’s Alex Heath.

Snapchat is relying on the Project Mushroom engineering overhaul of its Android app to speed up performance, and thereby accelerate user growth and retention. Snap neglected the developing world’s Android market for years as it focused on iPhone-toting US teens. Given Snapchat is all about quick videos, slow load times made it nearly unusable, especially in markets with slower network connections and older phones.

Looking at the competitive landscape, WhatsApp’s Snapchat Stories clone Status has grown to 450 million daily users while Instagram Stories has reached 400 million dailies — much of that coming in the developing world, thereby blocking Snap’s growth abroad as I predicted when Insta Stories launched. Snap actually lost 3 million daily users in Q2 2018. Snap Map hasn’t become ubiquitous, Snap’s Original Shows still aren’t premium enough to drag in tons of new users, Discover is a clickbait-overloaded mess, and Instagram has already copied the best parts of its ephemeral messaging.

As BTIG’s Rich Greenfield points out, CEO Evan Spiegel claims Snapchat is the fastest way to communicate, but it’s not for text messaging, and the default that chats disappear makes it unreliable of utilitarian chat. And if WhatsApp were to add an ephemeral messaging feature of its own, growth for Snapchat could get even tougher. Snap will have to hope it can hold on to its existing users and squeeze more cash out of them to keep reducing losses.

SAN FRANCISCO, CA – SEPTEMBER 09: Evan Spiegel of Snapchat attends TechCruch Disrupt SF 2013 at San Francisco Design Center on September 9, 2013 in San Francisco, California. (Photo by Steve Jennings/Getty Images for TechCrunch)

All those product missteps and and market neglect have metastasized into a serious growth problem for Snapchat. It lost another 2 million users this quarter, and expects to sink further in Q4. Even with the Android rebuild, Spiegel’s assurances for renewed user growth in 2019 seem spurious. That means it’s highly unlikely that Snapchat will achieve Speigel’s goal of hitting profitability in 2019. It needs either an investor or acquirer to come to its aid.

A bailout check

Snap could sell more equity to raise money. $500 million to $1 billion would probably give it the runway necessary to get into the black. But from where? With all the scrutiny on Saudi Arabia, Snap might avoid taking money from the kingdom. Saudi’s Prince Al-Waleed Talal already invested $250 million to buy 2.5 percent of Snap on the open market.

Snap’s best bet might be to take more money from Chinese internet giant Tencent. The massive corporation already spent around $2 billion to buy a 12 percent stake in Snap from the open market. The WeChat owner has plenty of synergies with Snapchat, especially since it runs a massive gaming business and Snap is planning to launch a third-party developer gaming platform.

Tencent could still be a potential acquirer for Snap, but given President Trump’s trade war with China, he might push regulators to block a sale. The state of American social networks like Twitter and Facebook that are under siege by foreign election interference, trolls, and hackers might make the US government understandably concerned about a Chinese giant owning one of the top teen apps.

Regardless of who would invest, they’d likely demand real voting rights — something Snap has denied investors through a governance structure. Spiegel and his co-founder Bobby Murphy both get 10 votes per share. That’s estimated to amount to 89 percent of the voting rights. Shares issued in the IPO came with zero voting rights.

Evan Spiegel and Bobby Murphy, developers of Snapchat (Photo by J. Emilio Flores/Corbis via Getty Images)

But that surely wouldn’t sit well with any investor willing to pour hundreds of millions of dollars into the beleaguered company. Spiegel has taken responsibility for pushing the disastrous redesign early this year that coincided with a significant drop in its download rank. It also inspired a tweet from mega-celebrity Kylie Jenner bashing the app that shaved $1.3 billion off the company’s market cap.

Between the redesign flop, stagnant product innovation, and Spiegel laughing off Facebook’s competition only to be crushed by it, the CEO no longer has the sterling reputation that allowed him to secure total voting control for the co-founders. That means investors will want assurance that if they inject a ton of cash, they’ll have some recourse if Spiegel mismanages it. He may need to swallow his pride, issue voting shares, and commit to milestones he’s required to hit to retain his role as chief executive.

A Soft Landing Somewhere Else

Snap could alternatively surrender as an independent company and be acquired by a deep-pocketed tech giant. Without having to worry about finances or short-term goals, Snap could invest in improving its features and app performance for the long-term. Social networks are tough to kill entirely, so despite competition, Snap could become lucrative if aided through this rough spot.

Combine that with the $637 million bonus Spiegel got for taking Snap public, and he has little financial incentive or shareholder pressure compelling him to sell. Even if the company was bleeding out much worse than it is already, Spiegel could ride it into the ground.

Again, the biggest barrier to this path is Spiegel. Combine totalitarian voting control with the $637 million bonus Spiegel got for taking Snap public, and he has little financial incentive or shareholder pressure compelling him to sell. Even if the company was bleeding out much worse than it is already, Spiegel could ride it into the ground. The only way to get a deal done might be to make Spiegel perceive it as a win.

Selling to Disney could be spun as a such. It hasn’t really figured out mobile amidst distraction from super heroes and Star Wars. Its core tween audience are addicted to YouTube and Snap even if they shouldn’t be on them. They’re both LA companies. And Disney already ponied up $350 million to buy kids desktop social networking game Club Penguin. Becoming head of mobile or something like that for the most iconic entertainment company ever could a vaulted-enough position to entice Spiegel. I could see him being a Disney CEO candidate one day.

What about walking in the footsteps of Steve Jobs? Apple isn’t social. It failed so badly with efforts like its Ping music listeners network that it’s basically abdicated the whole market. iMessage and its cutesy Animoji are its only stakes. Meanwhile, it’s getting tougher and tougher to differentiate with mobile hardware. Each new iPhone seems closer to the last. Apple has resorted to questionable decisions like ditching the oft-missed headphone jack and reliable TouchID to keep the industrial design in flux.

Increasingly, Apple must rely on its iOS software to compete for customers with Android headsets. But you know who’s great at making interesting software? Snapchat. You know who has a great relationship with the next generation of phone owners? Snapchat. And do you know whose CEO could probably smile earnestly beside Tim Cook announcing a brighter future for social media unlocked by two privacy-focused companies joining forces? Snapchat. Plus, think of all the fun Snapple jokes?

There’s a chance to take revenge on Facebook if Snapchat wanted to team up with Mark Zuckerberg’s old arch nemesis Google. After Zuck declared “Carthage must be destroyed”, Google+ flopped and its messaging apps became a fragmented mess. Alphabet has since leaned away from social networking. Of course it still has the juggernaut that is YouTube — a perennial teen favorite alongside Snapchat and Instagram. And it’s got the perfect complement to Snap’s ephemerality in the form of Google Photos, the best-in-class permanent photo archiving tool. With the consume side of Google+ shutting down after accidentally exposing user data, Google still lacks a traditional social network where being a friend comes before being a fan.

What Google does have is a reputation for delivering the future. From Waymo’s self-driving cars to Calico’s plan to make you live forever, Google is an inventive place where big ideas come to fruition. Spiegel could frame Google as aligned with its philosophy of creating new ways to organize and consume information that adapt to human behavior. He surely wouldn’t mind being lumped in with Internet visionaries like Larry Page and Sergei Brin. Google’s Android expertise could reinvigorate Snap in emerging markets. And together they could take a stronger swing at Facebook.

But there are problems with all of these options. Buying Snap would be a massive bet for Disney, and Snap’s lingering bad rap as a sexting app might dissuade Mickey Mouse’s overlords. Apple rarely buys such late-stage public companies. CEO Tim Cook has been able to take the moral high ground because Apple makes its money from hardware rather than off of  personal info through ad targeting. If Apple owned Snap, it’d be in the data exploitation business just like everyone else.

And Google’s existing dominance in software might draw the attention of regulators. The prevailing sentiment is that it was a massive mistake to let Facebook acquire Instagram and WhatsApp, as it centralized power and created a social empire. With Google already owning YouTube, the government might see problems with it buying one of the other most popular teen apps.

That’s why I think Netflix could be a great acquirer for Snap. They’re both video entertainment companies at the vanguard of cultural relevance, yet have no overlap in products. Netflix already showed its appreciation for Snapchat’s innovation by adopting a Stories-like vertical video clip format for discovering and previewing what you could watch. The two could partner to promote Netflix Originals and subscriptions inside of Snapchat. Netflix could teach Snap how to win at exclusive content while gaining a place to distribute video that’s under 20 minutes long.

With a $130 billion market cap, Netflix could certainly afford it. Though since Netflix already has $6 billion in debt from financing Originals, it would have to either sell more debt or issue Netflix shares to Snapchat’s owners. But given Netflix’s high-flying performance, massive market share, and cultural primacy, the big question is whether Snap would drag it down.

So how much would it potentially cost? Snap’s market cap is hovering around $8.8 billion with a $6.28 share price. That’s around its all-time low and just over a quarter of its IPO pop share price high. Acquiring Snap would surely require paying a premium above the market cap. Remember, Google already reportedly offered to acquire Snap for $30 billion prior to its final funding round and IPO. But that was before Snap’s growth rate sunk and it started losing the Stories War to Facebook. A much smaller offer could look a lot prettier now.

Social networks are hard to kill. If Snap can cut costs, fix its product, improve revenue per users, and score some outside investment, it could survive and slowly climb. If Twitter is any indication, aging social networks can reflower into lucrative businesses given enough time and product care. But if Snapchat wants to play in the big leagues and continue having a major influence on the mobile future, it may have to snap out of the idea that it can win on its own.

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What to expect from Apple’s iPad event

Thrills? Chills? iPads? Definitely yes on that last one, at least. The invites are out and the rumors have been pouring in, fast and furious. On Tuesday October 30, the company will be wrapping up hardware season with one final event, hitting all of the points that didn’t quite make it into September’s big iPhone event.

As ever, the company’s attempting to keep a tight seal on the news, but we’ve got plenty of clues to work from here. For starters, there’s the fact that the “special event” is being held at the Brooklyn Academy of Music’s Howard Gilman Opera House. It’s a cool space. I saw Jeff Mangum do a bunch of shows there, NBD. 

Also, the company customized dozens (hundreds?) of designs for the event, sending out customized invites to everyone on its list. Thanks Apple! You really know how to make a tech blogger special. The through line, however, was the tag line, “There’s More in the Making.” All of which implies that the company is once again turning the camera back on creative pros.

That certainly comports with the rumors we’ve heard thus far, which largely focus on the iPad Pro and a slew of new MacBooks. So let’s start with the easy one.

A new iPad Pro is all but a given at this point. The device is expected to get a pretty thorough makeover, starting with some key design changes. The biggest news on that front borrows some cues from the last couple of iPhones, dramatically reducing the bezels on all sides (while keeping them present so there’s a place to put your hands).

That’s thanks, in part, to the elimination of the home bottom, a rumored change that would also anticipate the arrival of Face ID to unlock the handset. Inside, the device is expected to get the new A12 chip, which debuted on the iPhone XS. An update to the Pencil also appears to be in the works?

While the entry-level iPad was refreshed at an education event in Chicago this year, rumors of an iPad Mini 5 have been floated by human Apple crystal ball, Ming-Chi Kuo.

Kuo also predicts, get this, the long-awaited arrival of AirPower. Apple’s three-in-one iPhone/Watch/AirPod charging pad has been MIA since the company debuted it at WWDC of LAST YEAR. The mat is reported to finally be hitting later this year or early next, along with new AirPods. Among other things, the update to the popular Bluetooth earbuds will sport a new case with, naturally, wireless charging and a color indicator on the outside.

And then there are the Macs. Rumors have up to four new Apple computers hitting the stage on the 30th. The Mac Mini and iMac are the frontrunners here, along with the even longer-awaited MacBook Air refresh, sporting a Retina Display, priced at below the standard MacBook.

And for good measure, how about an update on the Mac Pro? Last we heard, it’s coming next year. So why not feature it as a “one more thing” at this creative pro-focused event? The event kicks off Tuesday October 30, at 10AM ET.

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WhatsApp is finally adding stickers

WhatsApp is finally adding stickers to its hugely popular messaging app. The company said today that support for stickers will roll out to Android and iOS users over “the coming weeks.”

Initially, the app’s 1.5 billion users will have a seemingly limited selection with the first packs provided by WhatsApp’s own design team and some “other artists” chosen by the company.

However, that’s likely to change in the future since WhatsApp will allow anyone to add stickers that can be used inside the app.

It’s taking an interesting route to enabling that. Would-be sticker artists will need to publish their packs as an app on the Google Play or Apple App Store. From there, users can download the apps and then make use of the stick packs inside WhatsApp. The company has provided a template that it claims requires “minimal development or coding experience.”

A full guide on the sticker submission process can be found here.

Other messaging apps have taken a different approach.

Line — which pioneered the concept of stickers — takes a very curated approach, with sticker packs approved by the company itself. That walled garden approach has helped it curate the best selection of stickers, many of which are paid. That’s nothing to be scoffed as since Line makes hundreds of millions of dollars from sticker purchases every year.

Telegram has the most open sticker platform. Anyone can make and publish stickers in just minutes, but that leads to its own problems such as plagiarism and differing levels of quality.

Either way, WhatsApp’s move into stickers is very much a Facebook-led move.

The service’s founders — Jan Koum and Brian Acton — have both left the social network under controversial terms, at least according to Acton himself.

Prior to the acquisition deal, both men were very vocally opposed to advertising, games and other functions. They deemed them trivial and believed that they detracted from the core focus of WhatsApp: simple and fast messaging.

At this point, their ethical ship has long since sailed with Facebook introducing features like a business service and ad integrations with Facebook, while there are plans to roll out payments and other features that Koum and Acton would no doubt have railed against. It’s enough to make you vomit over the side of your yacht in the Mediterranean.

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Fleksy’s keyboard grabs $800k+ via equity crowdfunding

The dev team that’s now engineering the Fleksy keyboard app has raised more than $800,000 via an equity crowdfunding route.

As we reported a year ago, the development of Fleksy’s keyboard has been taken over by the Barcelona-based startup behind an earlier keyboard app called ThingThing.

The team says their new funding raise — described as a pre-Series A round — will be put towards continued product development of the Fleksy keyboard, including the core AI engine used for next word and content prediction, plus additional features being requested by users — such as swipe to type. 

Support for more languages is also planned. (Fleksy’s Android and iOS apps are currently available in 45+ languages.)

Their other big push will be for growth: Scaling the user-base via a licensing route to market in which the team pitches Android OEMs on the benefits of baking Fleksy in as the default keyboard — offering a high degree of customization, alongside a feature-set that boasts not just speedy typing but apps within apps and extensions. 

The Fleksy keyboard can offer direct access to web search within the keyboard, for example, as well as access to third party apps (in an apps within apps play) — to reduce the need for full app switching.

This was the original concept behind ThingThing’s eponymous keyboard app, though the team has refocused efforts on Fleksy. And bagged their first OEMs as licensing partners.

They’ve just revealed Palm as an early partner. The veteran brand unveiled a dinky palm-sized ‘ultra-mobile’ last week. The tiny extra detail is that the device runs a custom version of the Fleksy keyboard out of the box.

With just 3.3 inches of screen to play with, the keyboard on the Palm risks being a source of stressful friction. Ergo enter Fleksy, with gesture based tricks to speed up cramped typing, plus tried and tested next-word prediction.

ThingThing CEO Olivier Plante says Palm was looking for an “out of the box optimized input method” — and more than that “high customization”.

“We’re excited to team up with ThingThing to design a custom keyboard that delivers a full keyboard typing experience for Palm’s ultra mobile form factor,” adds Dennis Miloseski, co-founder of Palm, in a statement. “Fleksy enables gestures and voice-to-text which makes typing simple and convenient for our users on the go.”

Plante says Fleksy has more OEM partnerships up its sleeve too. “We’re pending to announce new partnerships very soon and grow our user base to more than 25 million users while bringing more revenue to the medium and small OEMs desperately looking to increase their profit margins — software is the cure,” he tells TechCrunch.

ThingThing is pitching itself as an neutral player in the keyboard space, offering OEMs a highly tweakable layer where the Qwerty sits as its strategy to compete with Android’s keyboard giants: Google’s Gboard and Microsoft-owned SwiftKey. 

“We changed a lot of things in Fleksy so it feels native,” says Plante, discussing the Palm integration. “We love when the keyboard feels like the brand and with Palm it’s completely a Palm keyboard to the end-user — and with stellar performance on a small screen.”

“We’ve beaten our competitor to the punch,” he adds. 

That said, the tiny Palm (pictured in the feature image at the top of this post) is unlikely to pack much of a punch in marketshare terms. While Palm is a veteran — and, to nerds, almost cult — brand it’s not even a mobile tiddler in smartphone marketshare terms.

Palm’s cute micro phone is also an experimental attempt to create a new mobile device category — a sort of netbook-esque concept of an extra mobile that’s extra portable — which looks unlikely to be anything other than extremely niche. (Added to its petite size, the Palm is a Verizon exclusive.)

Even so ThingThing is talking bullishly of targeting 550M devices using its keyboard by 2020.

At this stage its user-base from pure downloads is also niche: Just over 1M active users. But Plante says it has already closed “several phone brands partnerships” — saying three are signed, with three more in the works — claiming this will make Fleksy the default input method in more than 20-30 million active users in the coming months. 

He doesn’t name any names but describes these other partners as “other major phone brands”.

The plan to grow Fleksy’s user-base via licensing has attracted wider investor backing now, via the equity crowdfunding route. The team had initially been targeting ($300k). In all they’ve secured $815,119 from 446 investors.

Plante says they went down the equity crowdfunding route to spread their pitch more widely, and get more ambassadors on board — as well as to demonstrate “that we’re a user-centric/people/independent company aiming big”.

“We are keen to work and fully customize the keyboard to the OEM tastes. We know this is key for them so they can better compete against the others on more than simply the hardware,” he says, making the ‘Fleksy for OEMs’ pitch. “Today, the market is saturated with yet another box, better camera and better screen…. the missing piece in Android ecosystem is software differences.”

Given how tight margins remain for Android makers it remains to be seen how many will bite. Though there’s a revenue share arrangement that sweetens the deal.

It is also certainly true that differentiation in the Android space is a big problem. That’s why Palm is trying its hand at a smaller form factor — in a leftfield attempt to stand out by going small.

The European Union’s recent antitrust ruling against Google’s Android OS has also opened up an opportunity for additional software customization, via unbundled Google apps. So there’s at least a chance for some new thinking and ideas to emerge in the regional Android smartphone space. And that could be good for Spain-based ThingThing.

Aside from the licensing fee, the team’s business model relies on generating revenue via affiliate links and its fleksyapps platform. ThingThing then shares revenue with OEM partners, so that’s another carrot for them — offering a services topper on their hardware margin.

Though that piece will need scale to really spin up. Hence ThingThing’s user target for Fleksy being so big and bold.

“We’re working with brands in order to bring them into any apps where you type, which unlocks brand new use cases and enables the user to share conveniently and the brand to drive mobile traffic to their service,” says Plante. “On this note, we monetize via affiliate/deep linking and operating a fleksyapps Store.”

ThingThing has also made privacy by design a major focus — which is a key way it’s hoping to make the keyboard app stand out against data-mining big tech rivals.

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China to Trump: Dump the iPhone for a Huawei

A China foreign ministry spokeswoman Hua Chunying dismissed yesterday’s damning report about spying on Trump’s unsecured iPhone, calling it, “fake news,” according to The South China Morning Post. She had a few other choice words for the president, suggesting he switch to a Huawei handset, or, failing that, just stop communicating.

The shade amounts to a pretty solid bit of trolling from the spokesperson, who added, “Seeing this report, I feel there are those in America who are working all-out to win the Oscar for best screenplay.”

The so-called experts on Trump over at the New York Times wrote a long and boring article on my cellphone usage that is so incorrect I do not have time here to correct it. I only use Government Phones, and have only one seldom used government cell phone. Story is soooo wrong!

— Donald J. Trump (@realDonaldTrump) October 25, 2018

Yesterday’s New York Times report noted that, “American spy agencies, the officials said, had learned that China and Russia were eavesdropping on the president’s cellphone calls from human sources inside foreign governments and intercepting communications between foreign officials.”

Trump shot back on Twitter this morning, attempting to correct the record, while stating that he didn’t have time to do so, adding that it was “soooo wrong.” The president also insisted, contrary to the report, that he only uses “government phones.”

Hua’s statement takes things a few steps further, while wading into various on-going U.S. bans against Huawei handsets and networking equipment over government spying concerns.

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Apple picks Thailand for its second retail store in Southeast Asia

Apple continues to increase its efforts in Southeast Asia’s fast-growing market after it picked Thailand as the location for its second Apple Store in the region.

A post on Apple’s website reveals that it will operate a retail store at the soon-to-open Iconsiam which is set to become Bangkok’s largest mall when it opens next month. The Apple Store is set to open its doors on November 10. An Apple representative confirmed to TechCrunch that the details on the website are indeed accurate.

The new store follows the opening of an Apple Store in Singapore last year, which marked the U.S. firm’s first official brick and mortar presence in Southeast Asia, a region of 650 million consumers that has more internet users than the U.S. population.

Apple doesn’t break out sales figures for Southeast Asia. The region is part of the ‘rest of Asia Pacific’ bracket which excludes Japan and China and accounts for around six percent of Apple’s global revenue.

That is a drop in the proverbial ocean for Apple, but Southeast Asia is one of the few parts of the world where smartphone sales continue to grow at a double-digit percentage. With its devices accounting for a minor share of the region’s markets, primarily due to pricing and a lack of carrier subsidies, it makes sense that Apple is stepping up its retail focus.

The Iconsiam mall which will house Bangkok’s first Apple Store is still under construction but scheduled to open next month

Apple’s official presence in Asia had been limited to China, Hong Kong and Japan until recent times when it opened stores in Korea, Taiwan and Singapore. TechCrunch understands from sources within the real estate industry that Apple is considering Indonesian capital Jakarta and Vietnam as its next store launch markets in Southeast Asia. It intended to open the Thai store as soon as last year but struggled to find a location that it deemed to be fitting for its store, we understand.

Right now, most countries in Southeast Asia are served by ‘licensed’ Apple stores from third-parties, unofficial retailers, Alibaba-owned e-commerce service Lazada and Apple’s own online store. Outside of the region, it has long tried to bring its iconic stores to India, but regulations on operating physical stores have hampered its progress.

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Trump has two ‘secure’ iPhones, but the Chinese are still listening

President Trump has three iPhones — two of them are “secure” and his third is a regular personal device. But whenever the commander-in-chief takes a call, his adversaries are said to be listening.

That’s according to a new report by The New York Times, which put a spotlight on the president’s array of devices — and how he uses them.

Trump reluctantly gave up his old and outdated Android-powered Samsung Galaxy phone when he took office in 2016 and was transitioned to Apple devices. iPhones have historically been seen as more secure than their Android counterparts. Although one of his devices is a regular iPhone that he can use to store his contacts, the two other iPhones for official business have been modified and locked down by the National Security Agency to prevent eavesdropping.

Except — even when you’re in the White House, you can’t escape the aging, ailing and insecure cell network that blankets the capital and the vast majority of the U.S.

A crucial cell network system that helps broker and pass information between networks — known as Signaling System No. 7 (or just SS7) — have made it easier in recent years for hackers to intercept phone calls and text messages. SS7 is the protocol that cell networks use to establish and route calls and texts, but SS7 so broken that codes used for two-factor authentication have been intercepted and used to break into and drain bank accounts.

Those largely unfixed flaws make it far easier for governments — and anyone else — to tap into calls as they’re being made. That includes China, Russia — and any reasonably knowledgable attacker with the resources to pull off a successful intercept.

Trump’s reliance on three iPhones may seem cumbersome, but it’s a step up from what his predecessor got.

President Obama once likened his government-issued iPhone — given to him during his second term — to a “play phone [that] your 3-year-old has.” It was modified so that it could receive email but couldn’t make calls, and didn’t have a camera or microphone that foreign adversaries could use to glean any knowledge that the president was working on. He wasn’t even allowed to text — not necessarily for technical reasons, but to comply with the Presidential Records Act, which requires high-ranking government officials to store their official communications.

As much as Trump has been given more leniency than Obama, the president is still supposed to receive new, clean devices every month to cut off any hidden persistent malware that could be lurking within. But that policy isn’t enforced as closely as it should be, the report says, because of the inconvenience of having to manually port over the old data to the new phone without accidentally transferring any lingering malware — if any.

Although flaws in SS7 remain an issue for the average person, they’re apparently no match for the president’s own terrible “opsec” — or operational security, an awareness of the threats that he faces and the effort to mitigate them. Even if the Chinese or the Russians aren’t listening to his calls, they could always try their luck by hanging around one of his golf courses — where the president sent staff into a scramble after losing one of his phones in a golf cart.

And this is someone we trust with the nuclear codes.

Trump’s new cyber strategy eases rules on use of government cyberweapons

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