Author: azeeadmin

Confirming rumors that have been circulating all summer, Verizon Communications confirmed today that Guru Gowrappan will be replacing Tim Armstrong as the CEO of Oath (owner of TechCrunch).

This is a huge change: Armstrong has been the CEO of Oath, and before that the CEO of AOL (which had been the predecessor to Oath, before it was merged with Yahoo), for no less than 10 years, managing the company through downs and ups that included a sale to Verizon for $4.4 billion, the (somewhat drawn out and messy) acquisition of Yahoo for another $4.8 billion, and merging the two together.

Through that time, he also helped an ailing, ageing dial-up internet has-been reposition itself as a media company complete with an ad-tech engine underneath it.

In an internal memo today, Armstrong didn’t shy away from the rumors that had been circulating but also tried to draw a parallel between Oath and AOL itself in terms of the arc that he sees the company taking.

“While there has been and will be speculation about these changes, there are a few important signals that should not get lost in the noise,” he wrote. “The first is that the world has gone digital and few companies have both mobile and digital assets at our scale. Add to that the backing of the best mobile company in the world – Verizon – and Oath has all of the right pieces to succeed.  The second point is that things take time. It took more than two and a half years to turn AOL around; Oath is just over a year old and the first year was spent integrating the post-Yahoo auction assets and working through the data breach related issues. It is going to take time for Oath to reach its full potential.” 

Gowrappan will assume all management responsibilities as chief executive at Oath and report to Verizon chief executive Hans Vestberg. Armstrong will remain at the company to guide management transition efforts and will report to Verizon chairman Lowell McAdam.

“I’m exceedingly grateful to Tim for his many contributions to the business, and I believe his support over the next few months will continue to strengthen Oath’s market potential,” Vestberg said in an internal memo. Both Vestberg’s and Armstrong’s memos are below.

It’s hard to know how to read Armstrong’s parting memo. Earlier this year, I (that is, Ingrid) asked Armstrong flat-out if the reports about him leaving were true. He flat-out responded that there were no plans for him to leave Oath.

But given the developments over the last couple of weeks — reports intimated that he’d been trying to convince Verizon to let him hive off Oath completely and run it as a spun-out entity — imply that maybe he wasn’t lying: perhaps he hadn’t planned to leave Oath; but instead, he had been trying to lay plans to leave Verizon, and take Oath with him.

Now Armstrong is gone and Oath remains. And ironically, it’s also hard to guess where Oath stands at Verizon, longer term. The larger telco is now being led by Hans Vestberg, who joined from Ericsson, and is very much a network man at his core — which is, of course, the heart also of Verizon’s wider business. In that regard, Oath and this wider media/OTT play that was envisioned when Verizon acquired AOL, and then Yahoo, seems less clear now without the mastermind of that strategy leading it.

It’s notable also that Armstrong will be reporting not to Vestberg, but McAdam, while he remains at the company.

So far, the news doesn’t appear to be upsetting investors: the stock is trading slightly up, after a general incline over the last several months.

Gowrappan joined oath from Alibaba Group and will assume management of operations now that the integration of Aol and Yahoo operations following the merger of those two companies by Verizon is nearing completion.

More to come. Memos below.

Builders –

After almost 10 years as CEO – a journey of teamwork that has included turning around AOL while outperforming the market, strategically combining AOL with Verizon, and creating one of the largest digital assets in the world with the acquisition of Yahoo to create Oath – I am handing off the CEO torch for the next stage of the race to Guru.

After joining us from Alibaba at the start of Q2, Guru has been leading global consumer and revenue operations and has worked tirelessly to execute Oath’s strategic mission and operating plan.  With our closer alignment with Verizon, Oath and Guru will be able to unlock a series of continued growth opportunities similar to the investments that Verizon has put into the Oath Super Channels and Apps.

While there has been and will be speculation about these changes, there are a few important signals that should not get lost in the noise.  The first is that the world has gone digital and few companies have both mobile and digital assets at our scale. Add to that the backing of the best mobile company in the world – Verizon – and Oath has all of the right pieces to succeed.  The second point is that things take time. It took more than two and a half years to turn AOL around; Oath is just over a year old and the first year was spent integrating the post-Yahoo auction assets and working through the data breach related issues.  It is going to take time for Oath to reach its full potential.

Lastly, and most importantly, our brands and our talent matter in real ways and make a positive impact on hundreds of millions of lives around the world.  Yahoo Finance is one of the largest financial news and data platforms in the world, TechCrunch and Crunchbase are two of the largest providers of tech information in the world, Yahoo Fantasy Sports provides millions of sports fans a deep community for their most passionate interests, Yahoo and AOL Mail & Search products serve our most valuable audiences, and our newly launched and unified Oath Ad Platforms provides the world’s most important brands and publishers a growth engine for their businesses.  

What has been most memorable and impressive over the last 10 years is the work done by our people and our leaders.  There are no words to describe how I feel about the people I have worked with and the leadership they have shown. Many times the only path forward was to blaze a new path.  One of the more meaningful trails we blazed has been around women – with the founding of two companies, MAKERS and #BUILTBYGIRLS. Both companies have made significant contributions in telling groundbreaking women’s stories and supporting female founders.  

Over the years, we have not only built brands people love, but also bonds with each other and communities around the world through Oath for Good and your volunteering efforts.  Across the globe we have touched millions of lives and have made a lasting impact on hundreds of non-profit organizations.

Thank you to my executive team at Oath, a super special group of people, as well as my amazing support staff Enrique, Katherine and Corinne. And thank you to all of the support teams across the company – the food service teams, building security teams, and janitorial teams – your work allows everyone else to do theirs and it is greatly appreciated.   

From Taipei to Tel Aviv, Dublin to Chicago, Tokyo to Bangalore, São Paulo to Los Angeles, and all of the places in between – and of course NYC, Dulles, and Sunnyvale – the torch is passed and the next leg of the journey begins.  As a strategic advisor to Verizon, I will work closely with Guru to continue the strategic moves we have been making and fully leverage the power of Verizon and Oath for our global consumer base and customer base.

Build Brands Members Love & Live Your Oath – TA

V Team,
As we move our business forward and position it for the future, I’d like to update you on leadership changes within the Oath business that will soon take place.

Guru Gowrappan will become Oath’s leader October 1, and will drive the next phase of Oath’s global growth strategy. Guru is a proven leader in building brands, leading teams and driving results. Since he joined Oath earlier this year as chief operating officer, Guru’s been leading the products, technology, engineering and sales operations. I’m thrilled Guru will lead Oath into the future as we continue to deliver brands our customers love.

Oath founder and CEO Tim Armstrong will become a strategic advisor reporting to our Chairman Lowell McAdam and help in the management transition efforts before leaving the business at the end of 2018. I’m exceedingly grateful to Tim for his many contributions to the business, and I believe his support over the next few months will continue to strengthen Oath’s market potential.

Please join me in congratulating Guru and thanking Tim.

Hans V.

Unsurprisingly, Apple today announced its newest generation of iPhones. And with that, it also announced its new chips: the A12 Bionic.

What makes the A12 Bionic stand out is that it’s built using a 7nm process. While it’s hard to compare these numbers given that every chip manufacturer seems to have its own way of measuring them, 7nm is very much the state of the art. Indeed, Apple claims this is the industry’s first 7nm chip. It features a total of 6.96 billion transistors.

“What the team has done is truly, truly a breakthrough,” Phil Schiller, Apple’s SVP of Worldwide Marketing, said in today’s keynote. “The A12 bionic is the industry’s first 7nm chip.”

The A12 Bionic, which was designed by Apple, features a 6-core CPU and a 4-Core GPU, as well as Apple’s Neural Engine for running machine learning workloads. What’s interesting here is that the chip has two high-performance cores and four efficiency cores. The high-performance cores are up to 15 percent faster and use 40 percent less power than before, while the efficiency cores use up to 50 percent less power.

The GPU, too, got a speed boost and is now almost 50 percent faster. Rejoice, mobile gamers.

The Neural Engine is now an eight-core system that has gotten a speed boost as well as new smarts. Schiller noted that the chip can now figure out what the machine learning workload looks like and then decide whether to run it on the GPU, CPU or the Neural Engine.

In total, the A12 Bionic’s Neural Engine can process 5 trillion operations per seconds. That’s up from 600 billion for the A11. I would take those numbers with a grain of salt, though, since Apple didn’t quite detail what operations we are talking about here. Either way, though, it’s a pretty fast chip.

Another year, another set of brand spankin’ new iPhones. But this year, little has been left to the imagination as leaks have continued to spring up over the course of the past few months.

Today, however, the new iPhone becomes official. Apple has introduced a new models of the premium iPhone, the iPhone XS, which comes in three finishes, gold, silver and space grey.

So let’s take a look at the details.

Design

The new iPhone doesn’t look all that different from the iPhone X, but that is always the case with the “S” years. The phones come in gold, silver and space grey and are made with surgical grade steel, as well as a new glass formulation for durability.

The Apple team has also upgraded the dust and water resistance of the iPhone, bumping it to IP68 rated, with water resistance up to 2 meters deep for several minutes. Schiller added that the phone was tested in many liquids, including orange juice, tea, wine and beer.

Display

The new display on the iPhone XS is a Super Retina OLED display, but it has 60 percent greater dynamic range than the previous generation. Displays come in two sizes — 5.8-inch and 6.5-inch — with 458 pixels per inch.

The bigger phone is called the iPhone XS Max.

Unfortunately, on both models, that notch is still hanging out at the top of the phone, but not without good reason. Housed in that sliver of bezel is an infrared camera, flood illuminator, ambient light sensor, proximity sensor, speaker, microphone, front camera, and dot projector.

Much of this, of course, allows for FaceID to continue on this next gen of the iPhones. It has a faster secure enclave and faster algorithms have improved FaceID in the iPhone Xs, with Phil Schiller saying it’s the most secure facial authentication in a smartphone ever.

Specs

Perhaps the biggest spec upgrade on the iPhone Xs is the new A12 Bionic chip, the industry’s first 7nm chip with 6.9 billion transistors. It has a 6-core CPU, with two high-performance cores that are 15 percent faster and 40 percent lower power than the A11. There’s also a new 4-core GPU in the A12 that’s 50 percent faster with tessellation and multilayer rendering.

Plus, there is a new neural engine with an 8-core dedicated machine learning processor.

So how does that translate to real-world use? Well, the new iPhone Xs is capable of 30 percent faster app opens thanks to that A12 Bionic chip.

As is standard with Apple, the company gave some other examples of how this processor will change the way we operate on our phones, including software upgrades from iOS 12 like AR, Memoji, and Siri shortcuts. Apple also did a demo from Bethesda showing off the A12 powering the new Elder Scrolls Blades game.

In the storage department, the iPhone Xs comes with up to 512GB of storage.

Developing… Please refresh

Apple today formally introduced the next generation of Apple Watch devices, the Series 4. Alongside the new devices, the company announced the updated watchOS 5 mobile operating system will ship on September 17.

The new version of watchOS was first shown off at this year’s Worldwide Developer Conference keynote, where flagship features like the Walkie-Talkie mode, smart Siri watch face, updated Podcast app, support for Siri shortcuts, and a “Raise to Speak to Siri” feature were highlighted.

The company didn’t really spend time reviewing these features today, as the new devices themselves were the focus.

Series 4 Apple Watch devices will offer 30% more screen space thanks to an edge-to-edge display, as was previously leaked and today confirmed. To take better advantage of that extra room, watchOS 5 will debut a new watch face that lets you pack in a lot more complications.

Now, you can add all kinds of extra complications to your Series 4 watch face – up to 8 on the new device. Among these, you can add photos of loved ones to the screen which you can tap to connect with, or if you’re traveling, you can customize a watch face that tracks different time zones. You could also use the extra space to create the ultimate health and fitness watch face, Apple says.

The modular face will get an update, too, with more graphical information from apps like stocks, heart rate and activity, and even those from third party developers. Debut developers include MLB At Bat, Qantas, and Life Zone nutrition app.

Other new watch faces designed to take advantage of the Series 4 display include a Breathe face, where the animation is timed around a deep breath, as well as a suite of motion faces (similar to live wallpapers), including Vapor, Liquid Metal, Fire and Water. These react uniquely with the curved edges of the case, Apple says.

WatchOS 5 also becomes a better workout companion with features like automatic workout detection which provides an alert to start a workout while giving retroactive credit, plus new dedicated workout types Yoga and Hiking. Runners will get extended battery life — which is increased to six hours — plus cadence for indoor and outdoor runs, pace alerts for outdoor runs, and rolling mile pace, which shows pace for the immediately preceding mile.

WatchOS 5 offers a ton of features, many of which Apple didn’t highlight today due to time constraints. But lists of new features found in beta builds are readily available, as are videos. They’re also available on Apple’s official watchOS 5 website here.

Today at a special event at Apple’s headquarters, Apple’s COO Jeff Williams unveiled the next generation Apple Watch. It’s thinner, faster and has a larger screen than previous generations. But that’s too be expected. The Apple Watch Series 4 is packed with several features that use the built-in heart monitor for medical purposes.

The Apple Watch has always included a built-in heart rate monitor but it has been limited to basic, standard functions of tracking the wearer’s heart rate.

The watch can now perform an ECG, detect atrial fibrillation, and detect when a person’s heart rate is too low. Apple even got the Watch certified by the FDA, a first, Williams said, among such a device as the Apple Watch.

It seems easy to use, too. According to Williams, who gave a demo on stage at the event, a person just needs to open the app, touch a finger to the digital crown, and the Watch performs the test using the electrodes built into the back of the watch. Because a person’s finger is touching the crown, the watch can detect electrical impulses from the heart and process the pulses with an algorithm built into the watch.

The entire process takes just 30 seconds.

Several companies and researchers have been using previous versions of the Apple Watch to detect AFib. The form factor and technical specs of the Apple Watch makes it a great device for such a test. But until now, the ability to detect AFib has been limited to these tests. Apple will soon make it available to all wearers of the Apple Watch 4.

All the health data is encrypted on the device and in the cloud, Williams said. AFib detection and ECG will be available later this year in the U.S. The company will then roll them out to other countries around the world.

The Series 4 starts at $399 for the aluminum version, and $499 for the aluminum version with cellular features. Pre-orders start on Friday and the device will be available on September 21st.

Apple just unveiled an updated Apple Watch. And this year’s new Watch is all about the display. Thanks to thinner bezels and a slightly bigger casing, you’ll see more on your screen.

“Apple Watch isn’t just the number one smart watch, it’s the number one watch in the world period,” Apple CEO Tim Cook said before introducing Apple COO Jeff Williams.

Williams framed the Apple Watch as a communication device, a fitness device and a health monitoring tool. For instance, the Apple Watch can notify you if you have an unusual heart rate. It’s clear that Apple has put aside the idea that the Apple Watch is an app platform.

“Everything about it has been redesigned and reengineered,” Williams said. The design still looks very familiar, but it’s clear that the screen is bigger. You don’t necessarily see it when there’s a dark watch face. But it’s striking in the Breath app for instance.

The small version has a 32 percent larger display, and the bigger version has a 35 percent larger display. Thanks to a brand new watch face, you can put up to eight complications at once. It looks busy but it works.

In order to put a bigger display, the company had to make the Watch slightly larger. The 38mm model is now called the 40mm model, and the 42mm model is now 44mm large.

According to Williams, the total volume of the Series 4 model is still smaller than the volume of the Apple Watch Series 3 thanks to a thinner design. So there you go — a larger Watch in a thinner body.

The displays now has rounded edges just like on the iPhone X. The digital crown has been redesigned to give you haptic feedback. The speaker is 50 percent louder. I’m not sure who uses this speaker, but if you need to make a quick phone call or use the new walkie-talkie feature in watchOS 5, it’s now better.

The back of the device is now made of black ceramic and sapphire crystal, which should help when it comes to cellular reception. The new system-on-a-chip (the S4) is supposed to be twice as fast as the one in the Series 3. Thanks to a new gyroscope, the Watch can detect a fall, which could be particularly useful for elderly. If the device senses a fall and you don’t move for a minute, the Apple Watch will automatically call emergency services.

In addition to traditional heart beat data, the device will now track heart rhythm and notify you if you have atrial fibrillation. But you can even take a full ECG from the Watch now. You just have to open the app and hold your finger on the crown for 30 seconds. All your data is then stored in the Health app on your iPhone. You can then share the PDF of your ECG with a doctor.

Apple had already written patents about ECG on the Watch, but the fact that it’s already available is a surprise. You generally can’t buy an ECG device over the counter. And the Apple Watch has received FDA clearance for the Apple Watch’s ECG feature.

AFib detection and ECG will be available later this year in the U.S. The company will then roll them out to other countries around the world.

Williams used this opportunity to remind everyone that the company won’t have access to your medical information. All your health and fitness data is encrypted on your device.

And that’s a wrap for the new Apple Watch. It features brand new heart rate features, a larger display with a refined design, a faster chipset and the same battery life. The Apple Watch Series 4 is available in the same aluminum and stainless steel versions. In addition to grey and black stainless steel, there’s a new gold stainless steel option.

All existing bands will be compatible with the new Watch. You’ll also be able to buy a new Nike band as well as new Hermès bands. The Series 3 is sticking around for $279. The Series 4 starts at $399 for the aluminum version, and $499 for the aluminum version with cellular features. Pre-orders start on Friday and the device will be available on September 21st.

As usual, Apple used its annual iPhone event to provide us with a few fresh stats about the state of its business. The most important one came right at the start of today’s event.  Apple CEO Tim Cook announced that the company is about to sell its 2 billionth iOS device.

“We’re about to hit a major milestone,” he said. “We are about to ship our two billionth iOS device.”

We know that Apple had shipped about 1.2 billion iPhones by early 2017. This is all iOS devices, though, not just iPhones, so it’s no surprise the number is quite a bit higher.

“This is astonishing,” he said. “iOS has changed the way we live. From the way we learn to the way we work. To how we are entertained to how we shop, order our food and get our transportation and stay in touch with one another.”

It’s worth noting that Google announced two billion Android users in early 2017.

In addition to these new iOS stats, Cook also announced that Apple’s stores now see 500 million visitors per year.

Five months after launching a pilot program with the iconic White Castle fast food chain, Impossible Foods is taking its meatless burger substitute to every one of the company’s restaurants.

With the rollout, White Castle becomes the largest fast food chain to include the Impossible Burger on its menu and the largest customer for the purveyor of beef-like meat-substitutes.

At a low low cost of $1.99 the Impossible Slider does achieve the near impossible of bringing a processed vegan food option to consumers at a price point that everyone can afford.

The company first unveiled the Impossible Slider at 140 locations in New York, Chicago and New Jersey, and the burger is now available in 377 restaurants across 13 states.

“White Castle is teaching us how to popularize plant-based meat and become a mainstream, mass market menu item and cultural icon,” said Impossible Foods’ Founder and CEO Dr. Patrick O. Brown, in a statement.

From its first appearance in David Chang’s Momofuku Nishi restaurant in 2016, the Impossible Burger is now available in 3,000 locations including restaurants, corporate cafeterias, universities and foodservice locations in the U.S., Hong Kong, and Macau according to a company statement.

It has been seven years since the company raised its first $7 million investment from Khosla Ventures . Since that time Impossible Foods has managed to amass another $443 million in financing — including a convertible note from the Singaporean global investment powerhouse Temasek (which is backed by the Singaporean government) and the Chinese investment fund Sailing Capital (a state-owned investment fund backed by the Communist Party-owned Chinese financial services firm, Shanghai International Group).

The company built its first large-scale manufacturing plant in Oakland, Calif. last year and expects to add a second shift to the factory to double production.

As we wrote earlier the heart of Impossible Burger’s technology is the heme molecule and the ability to make its vegetable matter appear as bloody as a medium rare burger.

Heme is present in most living things and, according to Impossible Foods, it’s the molecule that gives meat its flavor. The company says that it’s the presence of the heme molecule in muscle that makes meat taste like meat. Impossible Foods engineers and ferments yeast to produce that heme protein naturally found in plants, called soy leghemoglobin.

“It’s the iron-containing molecule that carries oxygen in the blood… what makes meat red or pink… It’s essential for every living cell on earth,” says Brown. “The thing that we discovered was that pretty much the entire flavor experience of meat that distinguishes it from all other foods is due to heme. Heme transforms fatty acids into the bloody flavored odorant molecules, and when you cook meat, the protein that holds the meat at a certain temperature unfolds and lets loose.”

Brown says Impossible Foods can make fish flavors, chicken flavors and pork flavors, but is going to stick to ground beef for the foreseeable future.

The next trick for the company is to manipulate the flavor profile of its meat substitute so its burgers can win in blind taste tests against any other combination of meat patty.

“The company’s mission is to completely replace animals in the food system by 2035,” says Brown. “The only way to do it is to do a better job than any animal at producing the most nutritious, delicious, affordable and versatile foods. And it will be a very interesting proof of concept landmark when we have a burger that is — for flavor and deliciousness — the best burger on earth… that’s going to send a very important signal to the world.”

The FDA is giving makers of e-cigarettes 60 days to come up with a more effective, forceful plan to combat underage use of the products.

FDA Commissioner Dr. Scott Gottlieb is yet again moving the goal posts for e-cig companies. He now considers underage use of electronic nicotine delivery systems (ENDS) an epidemic, forcing the government to make a choice that we all knew was coming: save the smokers or save the kids?

“I believe in the power of American ingenuity to solve a lot of problems, including this one,” said Gottlieb in a statement. “I’m deeply disturbed by the trends I’ve seen. I’m disturbed by an epidemic of nicotine use among teenagers. So, we’re at a crossroads today. It’s one where the opportunities from new innovations will be responsibly seized on right now, or perhaps lost forever.”

E-cigarettes, like the Juul (which owns more than 70 percent of the market by revenue), offer smokers what some say is a healthier alternative to so-called “analog” cigarettes. Smoking is the leading cause of preventable death, according to the CDC, with 6 million deaths per year worldwide, and that number is expected to rise to 8 million by 2030.

Public Health England says that e-cigarettes are 95 percent less harmful than combustible cigarettes. Addiction, which in this case is caused by nicotine, is always harmful, but not nearly as threatening as the harm caused by actual smoke from traditional cigarettes.

On the spectrum of risk, e-cigarettes should seem like a huge win in the decades-long battle against smoking.

But that was before teenagers started using e-cigarettes, including the Juul, at a surprisingly increasing rate. The FDA says more than 2 million middle and high school students were regular users of e-cigarettes last year. While nicotine isn’t all that harmful to a fully developed brain, the developing brain of a teenager is inordinately susceptible to addiction, and underage use of nicotine delivery systems may leave these users addicted to nicotine for life.

This dilemma obviously leaves e-cig makers in a tough spot, but it is also a sticky situation for the FDA. In July of last year, the FDA decided to extend the deadline for e-cigarettes to get FDA approval. This decision was made in part to give e-cig makers and the FDA itself the opportunity to thoughtfully and cooperatively figure out the ‘rules of the road’ in a budding new industry that Gottlieb himself believes is to the benefit of public health. As part of the extension, e-cig makers could leave their products on the market with the caveat that they were not allowed to bring new products to market.

In the wake of growing use by minors, the agency is now walking back some of those decisions. The FDA is keeping an even closer eye on offline and online retailers selling to minors, as well as watching for ‘straw purchases’ on the e-cig makers own online storefronts.

But the FDA is putting a good deal of the responsibility on the e-cig makers themselves. These companies, which include JUUL, Vuse, MarkTen, blu e-cigs, and Logic (97 percent of the market), will have sixty days to present the agency with a more comprehensive and effective plan to eliminate underage use of e-cigs, or the agency will have to re-evaluate its decision to extend the FDA deadline and leave these existing products on the market.

“JUUL Labs will work proactively with FDA in response to its request,” said Juul Labs spokesperson Victoria Davis. “We are committed to preventing underage use of our product, and we want to be part of the solution in keeping e-cigarettes out of the hands of young people. Our mission is to improve the lives of adult smokers by providing them with a true alternative to combustible cigarettes. Appropriate flavors play an important role in helping adult smokers switch. By working together, we believe we can help adult smokers while preventing access to minors, and we will continue to engage with the FDA to fulfill our mission.”

One of the trends that the agency has observed is minors attraction to flavors, particularly flavor-based cartridge devices, as opposed to open-tank vaping. The Juul happens to fall in the former category. If the FDA doesn’t see the response it’s hoping for in the next sixty days, flavors may well be the first piece to be taken off the market.

Juul Labs, in particular, has already done quite a bit to stymie underage use, from raising the age of purchase to 21+ on its website, removing everyone but real-life former smokers from its social media, investing $30 million into its own youth prevention plan, and working with online retailers to pull unauthorized listings of the product from their sites.

The letter from the FDA, then, suggests that the agency is looking for much more drastic action.

Big tobacco stocks are up on word of the news.

The FDA is giving makers of e-cigarettes 60 days to come up with a more effective, forceful plan to combat underage use of the products.

FDA Commissioner Dr. Scott Gottlieb is yet again moving the goal posts for e-cig companies. He now considers underage use of electronic nicotine delivery systems (ENDS) an epidemic, forcing the government to make a choice that we all knew was coming: save the smokers or save the kids?

“I believe in the power of American ingenuity to solve a lot of problems, including this one,” said Gottlieb in a statement. “I’m deeply disturbed by the trends I’ve seen. I’m disturbed by an epidemic of nicotine use among teenagers. So, we’re at a crossroads today. It’s one where the opportunities from new innovations will be responsibly seized on right now, or perhaps lost forever.”

E-cigarettes, like the Juul (which owns more than 70 percent of the market by revenue), offer smokers what some say is a healthier alternative to so-called “analog” cigarettes. Smoking is the leading cause of preventable death, according to the CDC, with 6 million deaths per year worldwide, and that number is expected to rise to 8 million by 2030.

Public Health England says that e-cigarettes are 95 percent less harmful than combustible cigarettes. Addiction, which in this case is caused by nicotine, is always harmful, but not nearly as threatening as the harm caused by actual smoke from traditional cigarettes.

On the spectrum of risk, e-cigarettes should seem like a huge win in the decades-long battle against smoking.

But that was before teenagers started using e-cigarettes, including the Juul, at a surprisingly increasing rate. The FDA says more than 2 million middle and high school students were regular users of e-cigarettes last year. While nicotine isn’t all that harmful to a fully developed brain, the developing brain of a teenager is inordinately susceptible to addiction, and underage use of nicotine delivery systems may leave these users addicted to nicotine for life.

This dilemma obviously leaves e-cig makers in a tough spot, but it is also a sticky situation for the FDA. In July of last year, the FDA decided to extend the deadline for e-cigarettes to get FDA approval. This decision was made in part to give e-cig makers and the FDA itself the opportunity to thoughtfully and cooperatively figure out the ‘rules of the road’ in a budding new industry that Gottlieb himself believes is to the benefit of public health. As part of the extension, e-cig makers could leave their products on the market with the caveat that they were not allowed to bring new products to market.

In the wake of growing use by minors, the agency is now walking back some of those decisions. The FDA is keeping an even closer eye on offline and online retailers selling to minors, as well as watching for ‘straw purchases’ on the e-cig makers own online storefronts.

But the FDA is putting a good deal of the responsibility on the e-cig makers themselves. These companies, which include JUUL, Vuse, MarkTen, blu e-cigs, and Logic (97 percent of the market), will have sixty days to present the agency with a more comprehensive and effective plan to eliminate underage use of e-cigs, or the agency will have to re-evaluate its decision to extend the FDA deadline and leave these existing products on the market.

“JUUL Labs will work proactively with FDA in response to its request,” said Juul Labs spokesperson Victoria Davis. “We are committed to preventing underage use of our product, and we want to be part of the solution in keeping e-cigarettes out of the hands of young people. Our mission is to improve the lives of adult smokers by providing them with a true alternative to combustible cigarettes. Appropriate flavors play an important role in helping adult smokers switch. By working together, we believe we can help adult smokers while preventing access to minors, and we will continue to engage with the FDA to fulfill our mission.”

One of the trends that the agency has observed is minors attraction to flavors, particularly flavor-based cartridge devices, as opposed to open-tank vaping. The Juul happens to fall in the former category. If the FDA doesn’t see the response it’s hoping for in the next sixty days, flavors may well be the first piece to be taken off the market.

Juul Labs, in particular, has already done quite a bit to stymie underage use, from raising the age of purchase to 21+ on its website, removing everyone but real-life former smokers from its social media, investing $30 million into its own youth prevention plan, and working with online retailers to pull unauthorized listings of the product from their sites.

The letter from the FDA, then, suggests that the agency is looking for much more drastic action.

Big tobacco stocks are up on word of the news.