• Ride-hailing, on average, costs about $3 per mile currently. 
• Industry watchers are hopeful that self-driving cars can bring that down by removing the drivers. 
• However, low utilization rates and expensive software might make that tricky to make happen in reality.

Automakers like GM and Ford are banking on the the assumption that if they can lower the cost per mile of self-driving taxis to $1 or less, demand will skyrocket. But a new analysis in the Harvard Business Review suggests their model may be flawed.

Why it matters: Carmakers are tearing apart their traditional businesses— exiting underperforming markets, closing factories and laying off workers — while diverting investment into future mobility technologies. But if self-driving taxi fleets don't take off as expected, their financial plans could be at risk.

What they're saying: Ride-hailing costs around $3 per mile today, according to GM, but only accounts for 1% of miles traveled. The driver represents most of that cost.

• Without a driver, the cost per mile falls to around $1 per mile.
• At that point, robotaxis will be so cheap everyone will travel that way — or so the theory goes. It's all about deploying at scale, as GM Cruise CEO Dan Ammann likes to say.

Yes, but: Authors Ashley Nunes and Kristen Hernandez see it differently.

• They found the estimated cost per mile of a robotaxi in San Francisco was 3 times higher than the cost of owning an older vehicle.
• The gap was due to lower utilization rates than carmakers assume. (Current taxis are in use about 50% of the time.)
• Even if robotaxis had substantially higher utilization rates, the cost of providing remote oversight by humans must be factored in.
• The only way for robotaxis to be cost competitive with older cars is if the remote operators are paid well below minimum wage, the authors said.

Consumer subsidies will be needed to realize the life-saving benefits of AVs, they conclude.

• That's likely to be a hard pill to swallow politically, but they point out that taxpayers already foot the bill for $18 billion of the $242 billion in road crash-related expenditures in the U.S. each year (based on 2010 figures).

The bottom line: Self-driving cars need to be affordable to serve those who need them most, and to keep carmakers' strategies afloat.

Go deeper: Here come the robotaxis

SEE ALSO: Waymo One passengers reveal what it's really like to ride in Alphabet's self-driving taxis

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NOW WATCH: Airports are dealing with massive lines during the government shutdown as TSA employees are working without pay

The healthcare industry is facing disruption due to accelerating technological innovation and growing demand for improved delivery of healthcare and lower costs. Tech startups are leading the way by seizing opportunities in the areas of the industry that are most vulnerable to disruption, including genomics, pharmaceuticals, administration, clinical operations, and insurance.

Venture funds and businesses are taking notice of these startups' potential. In the US, digital health funding reached $1.6 billion in Q1 2018, according to Rock Health — the largest first quarter on record, surpassing the $1.4 billion in venture funding seen in Q1 2016. These high-potential startups provide a glimpse into the future of the healthcare space and demonstrate how we’ll get there.

In this report, a compilation of various notes, Business Insider Intelligence will look at the top startups disrupting US healthcare in four key areas: artificial intelligence (AI), digital therapeutics, health insurance, and genomics. Startups in this report were selected based on the funding they've received over the past year, notable investors, the products they offer, and leadership in their functional area.

Here are some of the key takeaways from the report:

• Tech startups are entering the market by applying the “Silicon Valley” approach. They're targeting shortcomings and legacy systems that are no longer efficient.
• AI is being applied across five areas of healthcare to improve clinical operation workflows, cut costs, and foster preventative medicine. These areas include administration, big data analysis, clinical decision support, remote patient monitoring, and care provision.
  
• Health tech startups, insurers, and drug makers are rapidly exploring new ways to apply digital therapeutics to the broader healthcare market that replace or complement the existing treatment of a disease.
• Health insurance startups are taking advantage of the consumerization of healthcare to threaten the status quo of legacy players. 
• Genomics is becoming an increasingly common tool within the healthcare system as health organizations better understand how to extract the value from patients’ genetic data. 

 In full, the report:

• Details the areas of the US health industry that show the greatest potential for disruption.
• Forecasts the industry adoption of bleeding edge technology and how it will transform how healthcare organizations operate.
• Unveils the top five startups in AI, digital therapeutics, health insurance, and genomics, and how they're positioned to solve big issues that key players in healthcare face. 
• Explores what's next for the leading startups, providing a glimpse into the future of the healthcare space and demonstrating how we’ll get there.

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• Amazon CEO Jeff Bezos wrote a blog post on Thursday accusing National Enquirer publisher American Media Inc. (AMI) of trying to extort him over naked photos of him.
• AMI sent Bezos emails describing the photos they obtained of him and former news anchor Lauren Sanchez, Bezos said.
• These are the emails that Bezos said were sent to "blackmail" him.

On Thursday, Amazon CEO Jeff Bezos wrote a Medium blog post revealing the emails that he said were sent to blackmail him.

In the email, American Media Inc. (AMI), the publisher of the National Enquirer, threatened to publish personal photos of Bezos and the former news anchor Lauren Sanchez, including a naked selfie of Bezos, according to Bezos' post.

In January, the National Enquirer, a longtime ally of President Donald Trump, had published an exposé on the affair between Bezos and Sanchez. After that, Bezos hired investigators to look into who leaked his personal photos and texts.

AMI threatened to publish these photos unless Bezos and Gavin de Becker, Bezos' security boss leading that investigation into the exposé, make a public statement that they “have no knowledge or basis for suggesting that AMI’s coverage was politically motivated or influenced by political forces.” AMI also said it would keep those photos.

"Of course I don’t want personal photos published, but I also won’t participate in their well-known practice of blackmail, political favors, political attacks, and corruption. I prefer to stand up, roll this log over, and see what crawls out," Bezos wrote.

Here is the email that Bezos says he received from AMI, describing the photos it had obtained.

From: Howard, Dylan [dhoward@amilink.com] (Chief Content Officer, AMI)
Sent: Tuesday, February 5, 2019 3:33 PM
To: Martin Singer (litigation counsel for Mr. de Becker)
Subject:. Jeff Bezos & Ms. Lauren Sanchez Photos

 

CONFIDENTIAL & NOT FOR DISTRIBIUTION

 

Marty:

 

I am leaving the office for the night. I will be available on my cell — 917 XXX-XXXX.

 

However, in the interests of expediating this situation, and with The Washington Post poised to publish unsubstantiated rumors of The National Enquirer’s initial report, I wanted to describe to you the photos obtained during our newsgathering.

 

In addition to the “below the belt selfie — otherwise colloquially known as a ‘d*ck pick’” — The Enquirer obtained a further nine images. These include:

 

· Mr. Bezos face selfie at what appears to be a business meeting.

 

· Ms. Sanchez response — a photograph of her smoking a cigar in what appears to be a simulated oral sex scene.

 

· A shirtless Mr. Bezos holding his phone in his left hand — while wearing his wedding ring. He’s wearing either tight black cargo pants or shorts — and his semi-erect manhood is penetrating the zipper of said garment.

 

· A full-length body selfie of Mr. Bezos wearing just a pair of tight black boxer-briefs or trunks, with his phone in his left hand — while wearing his wedding ring.

 

· A selfie of Mr. Bezos fully clothed.

 

· A full-length scantily-clad body shot with short trunks.

 

· A naked selfie in a bathroom — while wearing his wedding ring. Mr. Bezos is wearing nothing but a white towel — and the top of his pubic region can be seen.

 

· Ms. Sanchez wearing a plunging red neckline dress revealing her cleavage and a glimpse of her nether region.

 

· Ms. Sanchez wearing a two-piece red bikini with gold detail dress revealing her cleavage.

 

It would give no editor pleasure to send this email. I hope common sense can prevail — and quickly.

 

Dylan.

And here are emails Bezos says he received from the National Enquirer publisher, laying out the terms for witholding publication of the photos:

From: Fine, Jon [jfine@amilink.com] (Deputy General Counsel, AMI)
Sent: Wednesday, February 6, 2019 5:57 PM
To: Martin Singer (Mr de Becker’s attorney)
Subject: Re: EXTERNAL* RE: Bezos et al / American Media et al

Marty -

Here are our proposed terms:

1. A full and complete mutual release of all claims that American Media, on the one hand, and Jeff Bezos and Gavin de Becker (the “Bezos Parties”), on the other, may have against each other.

2. A public, mutually-agreed upon acknowledgment from the Bezos Parties, released through a mutually-agreeable news outlet, affirming that they have no knowledge or basis for suggesting that AM’s coverage was politically motivated or influenced by political forces, and an agreement that they will cease referring to such a possibility.

3. AM agrees not to publish, distribute, share, or describe unpublished texts and photos (the “Unpublished Materials”).

4. AM affirms that it undertook no electronic eavesdropping in connection with its reporting and has no knowledge of such conduct.

5. The agreement is completely confidential.

6. In the case of a breach of the agreement by one or more of the Bezos Parties, AM is released from its obligations under the agreement, and may publish the Unpublished Materials.

7. Any other disputes arising out of this agreement shall first be submitted to JAMS mediation in California

Thank you,

Jon

Deputy General Counsel, Media

American Media, LLC

Jon P. Fine

Deputy General Counsel, Media

O: (212) 743–6513 C: (347) 920–6541

jfine@amilink.com

February 5, 2019

Via email:

mdsinger@lavelysinger.com

Martin D. Singer

Laveley & Singer

Re: Jeff Bezos / American Media, LLC, et al.

Dear Mr. Singer:

I write in response to your February 4, 2019, letter to Dylan Howard, and to address serious concerns we have regarding the continuing defamatory activities of your client and his representatives regarding American Media’s motivations in its recent reporting about your client.

As a primary matter, please be advised that our newsgathering and reporting on matters involving your client, including any use of your client’s “private photographs,” has been, and will continue to be, consistent with applicable laws. As you know, “the fair use of a copyrighted work, including such use by reproduction in copies . . . for purposes such as criticism, comment, news reporting . . . is not an infringement of copyright.” 17 USC Sec. 107. With millions of Americans having a vested interest in the success of Amazon, of which your client remains founder, chairman, CEO, and president, an exploration of Mr. Bezos’ judgment as reflected by his texts and photos is indeed newsworthy and in the public interest.

Beyond the copyright issues you raise, we also find it necessary to address various unsubstantiated defamatory statements and scurrilous rumors attributed to your client’s representatives in the press suggesting that “strong leads point to political motives”1 in the publication of The National Enquirer story. Indeed, you yourself declared the “politically motivated underpinnings” of our reporting to be “self-evident” in your correspondence on Mr. de Becker’s behalf to Mr. Howard dated January 31, 2019.

Once again, as I advised you in my February 1 response to your January 31 correspondence, American Media emphatically rejects any assertion that its reporting was instigated, dictated or influenced in any manner by external forces, political or otherwise. Simply put, this was and is a news story.

Yet, it is our understanding that your client’s representatives, including the Washington Post, continue to pursue and to disseminate these false and spurious allegations in a manner that is injurious to American Media and its executives.

Accordingly, we hereby demand that you cease and desist such defamatory conduct immediately. Any further dissemination of these false, vicious, speculative and unsubstantiated statements is done at your client’s peril. Absent the immediate cessation of the defamatory conduct, we will have no choice but to pursue all remedies available under applicable law.

As I advised previously, we stand by the legality of our newsgathering and reporting on this matter of public interest and concern. Moreover, American Media is undeterred from continuing its reporting on a story that is unambiguously in the public interest — a position Mr. Bezos clearly appreciates as reflected in Boies Schiller January 9 letter to American Media stating that your client “does not intend to discourage reporting about him” and “supports journalistic efforts.”

That said, if your client agrees to cease and desist such defamatory behavior, we are willing to engage in constructive conversations regarding the texts and photos which we have in our possession. Dylan Howard stands ready to discuss the matter at your convenience.

All other rights, claims, counterclaims and defenses are specifically reserved and not waived.

Sincerely,

SEE ALSO: Amazon CEO Jeff Bezos accuses National Enquirer publisher of 'extortion' over naked photos in extraordinary blog post

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NOW WATCH: We compared Apple's $159 AirPods to Xiaomi's $30 AirDots and the winner was clear

Digital has transformed retail possibilities.

And with e-commerce sales growing at nearly five times the rate of brick-and-mortar sales, retailers need to find cheaper and more efficient ways to deliver e-commerce orders.

But different age groups have different preferences for which delivery and fulfilment options are most important to them.

Find out which delivery features are most important to consumers as well as what fulfillment options retailers should be using to meet consumer demands in this new FREE slide deck from Business Insider Intelligence’s three-part Future of Retail 2018 series.

In this first installment of the series, Business Insider Intelligence explores delivery and fulfillment, including consumers’ delivery preferences, the challenges those demands pose to retailers, and the strategies retailers can use to meet consumers’ expectations of fulfillment without tanking their profitability.

As an added bonus, you will also gain immediate access to our exclusive Business Insider Intelligence Daily newsletter.

To get your copy of the first part of this FREE slide deck, simply click here.

SEE ALSO: 

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• In an extraordinary blog post on Thursday, Amazon CEO Jeff Bezos said the National Enquirer and its parent company AMI threatened to publish intimate personal photos of the billionaire tech exec. 
• AMI allegedly threatened to publish the photos, unless Bezos stopped his investigation into the original National Enquirer report of his affair — and unless he made a statement disavowing that the original National Enquirer investigation into his alleged affair was politically motivated, says the blog. 
• Bezos said that he refuses to give in to "extortion and blackmail," and believes that it would be a "lie" to say that there was no political motive, noting that the National Enquirer has long been an ally of President Donald Trump, a fierce critic of Bezos and Amazon. 
• David Pecker, the publisher of the National Enquirer, has been linked to the Saudi government. Bezos wrote that the "Saudi angle" to his investigation "seems to have hit a particularly sensitive nerve" with Becker.
• According to e-mails published by Bezos, lawyers for AMI argued that the intimate photos qualify as newsworthy because they reflect on his judgment as CEO of Amazon — a notion that Bezos rejected, saying that Amazon's string of successes "speak for themselves." 
• Bezos acknowledged that his ownership of the Washington Post is a "complexifier" for the situation, but says that it will be will be "something I will be most proud of when I’m 90 and reviewing my life." 
• Representatives for Amazon and AMI did not respond to a request for comment. 

SEE ALSO: Amazon CEO Jeff Bezos accuses National Enquirer publisher of 'extortion' over naked photos in extraordinary blog post

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NOW WATCH: Netflix copycats are changing the streaming game and making viewers pay the price

• On Thursday, AOL CEO Tim Armstrong announced he'll be launching a new company focused on the direct-to-consumer retail market.
• In a bizarre memo sent to friends and family explaining his latest venture, published by CNBC, Armstrong announced his company's 'spirit animal'.
• Armstrong chose the wolf for a variety of reasons, not all of them lupine related.

Apparently, former AOL CEO Tim Armstrong takes his spirit animals seriously. 

In a bizarre memo published by CNBC that was sent to friends and family to explain his latest venture — the dtx company — Armstrong wrote: "Our spirit animal is the wolf, as we believe the strength of the wolf is in the pack, and the strength of the pack is in the wolf. We also love wolf because it is 'Flow' backwards and we are building a Flow State culture." 

The dtx company — which stands for "direct to everything"— aims to help "empower consumers and companies to build direct relationships," according to the memo.

Read more:Former AOL CEO Tim Armstrong launched a new company that wants to help Instagram brands grow and put on Coachella-like 'experiences'

Armstrong said that the "x" in "dtx" is symbolic because it's "two arrows meeting in the middle as we believe in two-way or no way."He also emphasized that the spelling be lowercased, saying "we are lowercase because our partners are UPPERCASE." 

To date, dtx has already invested in a half dozen companies, including health beverage company Dirty Lemon, bra-maker Third Love, and manicure company OIive & June.

Armstrong also told CNBC that he wants to launch 'experiences' involving direct-to-consumer brands, which he envisions to be a mix between the Consumer Electronics Show in Las Vegas and Coachella. 

Read the full Armstrong memo in CNBC's report. 

SEE ALSO: Amazon CEO Jeff Bezos accuses National Enquirer publisher of 'extortion' over naked photos in extraordinary blog post

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NOW WATCH: Netflix copycats are changing the streaming game and making viewers pay the price

• US intelligence services reportedly intercepted communications in which Crown Prince Mohammed bin Salman of Saudi Arabia said he would use "a bullet" against Washington Post columnist Jamal Khashoggi.
• The remarks in September 2017 provided further evidence of Mohammed bin Salman's alleged role in Khashoggi's gruesome murder more than one year later.
• US analysts reportedly believed the crown prince may have been speaking metaphorically when referring to using "a bullet," but concluded that his desire to silence Khashoggi was evident.

US intelligence services reportedly intercepted communications in which Crown Prince Mohammed bin Salman of Saudi Arabia said he would use "a bullet" against Washington Post columnist Jamal Khashoggi, if he did not stop publishing unflattering reports about the country, according to current and former US and foreign officials cited in a New York Times report published Thursday.

The crown prince reportedly said the remarks to Turki Aldakhil, a top aide, in September 2017. US analysts believe the crown prince may have been speaking metaphorically when referring to using "a bullet," but concluded that his desire to silence Khashoggi was evident, The Times said.

In the recording, the crown prince reportedly said he wanted Khashoggi to return to the kingdom, a trip that Khashoggi had been wary about due to his fraught relationship with Saudi Arabia. According to the intelligence report, the crown prince reportedly complained to Aldakhil that Khashoggi's reports were hurting his image as a reformer.

Aldakhil denied the implications of the recording in a statement to The Times.

"These allegations are categorically false," Aldakhil reportedly said. "They appear to be a continuation of various efforts by different parties to connect His Royal Highness Crown Prince Mohammed bin Salman to this horrific crime. These efforts will prove futile."

Another aide reportedly pushed back against Mohammed bin Salman's threats, but the crown prince stressed that Saudi Arabia ought not to worry about how other countries perceive its rule over its citizens.

The communications were reportedly analyzed after US intelligence agencies combed through Mohammed bin Salman's text messages and calls, a routine procedure for other foreign officials, according to The Times.

The conversation provided further evidence of Mohammed bin Salman's alleged role in the gruesome murder of Khashoggi.

On October 2, 2018, the 59-year-old Khashoggi, went to the Saudi Consulate in Istanbul, Turkey, to obtain documentation to marry his fiancée, Hatice Cengiz. He was never seen leaving the building and is believed to have been assassinated by Saudi agents. The CIA reportedly concluded with "high confidence" that the crown price had ordered the assassination.

Weeks after Khashoggi's disappearance and after giving numerous conflicting reports, Saudi officials finally admitted Khashoggi had died after an altercation. However, Saudi Arabia denied having intentionally killed him, despite reports of overwhelming evidence to the contrary from US and Turkish intelligence agencies.

SEE ALSO: CIA reportedly concludes Saudi crown prince ordered assassination of Washington Post contributor Jamal Khashoggi

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NOW WATCH: Watch President Trump announce deal to end the government shutdown for 3 weeks

• Digital trust is the confidence people have in a platform to protect their information and provide a safe environment for them to create and engage with content.
• Business Insider Intelligence surveyed over 1,300 global consumers to evaluate their perception of Facebook, Twitter, Snapchat, Instagram, LinkedIn, and YouTube.
• Consumers’ Digital Trust rankings differ across security, legitimacy, community, user experience, shareability, and relevance for the six major social networks.

If you feel like “fake news” and spammy social media feeds dominate your Internet experience, you’re not alone. Digital trust, the confidence people have in platforms to protect their information and provide a safe environment to create and engage with content, is in jeopardy.

In fact, in a new Business Insider Intelligence survey of more than 1,300 global consumers, over half (54%) said that fake news and scams were "extremely impactful” or “very impactful” on their decision to engage with ads and sponsored content.

For businesses, this distrust has financial ramifications. It’s no longer enough to craft a strong message; brands, marketers, and social platforms need to focus their energy on getting it to consumers in an environment where they are most receptive. When brands reach consumers on platforms that they trust, they enhance their credibility and increase the likelihood of receiving positive audience engagement.

The Digital Trust Report 2018, the latest Enterprise Edge Report from Business Insider Intelligence, compiles this exclusive survey data to analyze consumer perceptions of Facebook, Twitter, Snapchat, Instagram, LinkedIn, and YouTube.

The survey breaks down consumers’ perceptions of social media across six pillars of trust: security, legitimacy, community, user experience, shareability, and relevance. The results? LinkedIn ran away with it.

As the most trusted platform for the second year in a row – and an outlier in the overall survey results – LinkedIn took the top spot for nearly every pillar of trust — and there are a few reasons why:

• LinkedIn continues to benefit from the professional nature of its community — users on the platform tend to be well behaved and have less personal information at risk, which makes for a more trusting environment.
• LinkedIn users are likely more selective and mindful about engagement when interacting within their professional network, which may increase trust in its content.
• Content on LinkedIn is typically published by career-minded individuals and organizations seeking to promote professional interests, and is therefore seen as higher quality than other platforms’. This bodes well for advertisers and publishers to be viewed as forthright, honest, persuasive, and trustworthy.

Want to Learn More?

Enterprise Edge Reports are the very best research Business Insider Intelligence has to offer in terms of actionable recommendations and proprietary data, and they are only available to Enterprise clients.

The Digital Trust Report 2018 illustrates how social platforms have been on a roller coaster ride of data, user privacy, and brand safety scandals since our first installment of the report in 2017.

In full, the report analyzes key changes in rankings from 2017, identifies trends in millennials' behavior on social media, and highlights where these platforms (as well as advertisers) have opportunities to capture their attention.

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• Jeff Bezos says that the National Enquirer argued that it would be in the public interest to publish intimate private photos of him, because they reflect on his judgment as the CEO of Amazon.
• Bezos had a snappy response: He personally built Amazon up to become one of the most valuable and important companies in the world. "I will let those results speak for themselves."
• Despite Bezos' snappy comeback, it's worth noting that his divorce from wife MacKenzie Bezos does carry some risks for Amazon shareholders — risks that could become exacerbated by this whole dramatic episode.

It's the position of the National Enquirer, it seems, that it would be in the public interest to publish intimate photos of Jeff Bezos — including at least one racy selfie — because they would reflect on his business judgment as CEO of Amazon.

That's according to Bezos himself, in a defiant blog post claiming that the National Enquirer, and its publisher, David Becker, were engaging in "extortion and blackmail" over those photos. To support his claims, Bezos published what appear to be e-mails from lawyers representing the National Enquirer, and its parent company, AMI.

"With millions of Americans having a vested interest in the success of Amazon, of which your client remains founder, chairman, CEO, and president, an exploration of Mr. Bezos’ judgment as reflected by his texts and photos is indeed newsworthy and in the public interest," said one of these e-mails, in part.

In the blog post, Bezos indicated that he's having none of it, saying that Amazon's status as one of the most valuable and influential companies in the world should be proof enough of his business acumen.

Writes Bezos:

"AMI’s claim of newsworthiness is that the photos are necessary to show Amazon shareholders that my business judgment is terrible. I founded Amazon in my garage 24 years ago, and drove all the packages to the post office myself. Today, Amazon employs more than 600,000 people, just finished its most profitable year ever, even while investing heavily in new initiatives, and it’s usually somewhere between the #1 and #5 most valuable company in the world. I will let those results speak for themselves."

However, amid this unfolding drama, it's worth noting that this episode could very well have big ramifications for Amazon shareholders. Jeff Bezos and his wife, MacKenzie, are in the process of divorcing, and have no prenupital agreement.

This divorce carries two big risks for Amazon shareholders, legal experts recently told Business Insider. First, the divorce itself could distract Bezos from his duties as CEO of Amazon and owner of the Washington Post. Second, MacKenzie could become one of Amazon's largest shareholders, affecting the balance of power at the company.

Both of those risks could be exacerbated if things get messy between Jeff and MacKenzie Bezos ahead of the finalization of the divorce. While it remains to be seen how this will play out, Bezos' stand on this matter is unlikely to help in that regard.

SEE ALSO: Jeff Bezos' impending divorce carries some big risks for Amazon shareholders

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NOW WATCH: How Apple went from a $1 trillion company to losing over 20% of its share price

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

Not that long ago, many home-appliance and consumer-electronics makers were gearing up for what they thought would soon be a rapidly growing market for smart home devices.

The instant popularity of the Nest thermostat, introduced in 2011, seemed to confirm their hopes. But those expectations were dashed in the coming years as the market for connected home devices later stagnated. 

Even with these challenges, many of the biggest consumer technology companies are now moving into the smart home market. For example, Apple, which recently released its self-installed smart home ecosystem, called the Apple Home, traditionally doesn't move into a market until it's very mature and only when it can release a perfected product. Further, Google this fall launched the Google Home and its companion ecosystem, hoping to jump into the voice-activated smart home speaker market, which Amazon currently dominates with its Echo product line. 

In a new report, Business Insider Intelligence examines the demographics of the average smart home device owner and discuss why current smart home device owners are appealing to tech companies. The report also examines the plans of various tech giants in the smart home market and discuss their monetization strategies, and makes suggestions for how these companies can position themselves to make their products and devices more appealing to the mass market.

Here are some key takeaways from the report:

• Tech companies primarily enter the market to enhance a core revenue stream or service, while device makers desire to collect data to improve their products and prevent costly recalls.
• We forecast there will be $4.8 trillion in aggregate IoT investment between 2016 and 2021.
• These companies are also seeking to create an early-mover advantage for themselves, where they gain an advantage by this head start on adoption.
• Major barriers to mass market adoption that still must overcome include technological fragmentation and persistently high device prices.

In full, the report:

• Details the market strategy of prominent tech companies and device makers, and analyzes why which ones are best poised to succeed once adoption ticks up.
• Offers insight into current ownership through an exclusive survey from Business Insider Intelligence and analyzes what demographics will drive adoption moving forward.
• Explains in detail which companies are poised to succeed in the market in the coming years as adoption increases and mass market consumers begin to purchase smart home devices.

Join the conversation about this story »

NOW WATCH: Apple forever changed the biggest tech event of the year by not showing up

• Model Chrissy Teigen invited Rep. Alexandria Ocasio-Cortez to watch the Grammy Awards on Sunday.
• "AOC hello my hero, do you wanna come over and watch the grammys with us? there will be pizza," Teigen tweeted.
• Ocasio-Cortez accepted the invitation, and the exchanged quickly went viral.

Chrissy Teigen, the model and cook book author, invited Rep. Alexandria Ocasio-Cortez over to her house to watch the Grammy Awards on Sunday and the New York Democrat accepted.

"AOC hello my hero, do you wanna come over and watch the grammys with us? there will be pizza," Teigen asked Ocasio-Cortez via Twitter on Friday. Teigen's husband, singer, songwriter, and EGOT winner John Legend, will be at the Grammys. 

A couple hours later, Ocasio-Cortez replied, poking fun at her own cooking skills and social media presence.

"Yes! we can live-tweet me burning something in the kitchen," the 29-year-old New York Democrat wrote. 

The response online was swift and overwhelming. 

"This is the duo I didn’t know I needed!" one Twitter user wrote. 

"She can have my portion!" actor Jesse Tyler Ferguson tweeted in response to Teigen's offer.

"This can be a pay per view event with the proceeds to charity," another joked. 

Teigen and Legend are both outspoken progressives and both frequently take to social media to criticize Republicans, lambast President Donald Trump, and voice support for liberal politicians and policies. 

Teigen also retweeted a viral video of Ocasio-Cortez delivering an impassioned argument for campaign-finance reform and stronger government ethics laws during a House Oversight Committee hearing on Wednesday. 

SEE ALSO: Alexandria Ocasio-Cortez invented a 'Corruption Game' to slam lax government ethics laws during a viral Oversight Committee hearing

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NOW WATCH: Meet the three women who married Donald Trump

• Ellen Page called out Hillsong Church for having "infamously anti-LGBTQ" values after Chris Pratt praised the congregation on "The Late Show with Stephen Colbert."
• Pratt told Colbert his pastor at Zoe Church, a congregation of Hillsong, inspired him to participate in a Bible-inspired fast. 
• Hillsong, a Christian church that originated in Australia and opened in the US in 2010, is popular among A-list celebrities. 
• But it also has an anti-LGBTQ history. Founder Brian Houston said in 2015 that he believed marriage is between a man and a woman.

Ellen Page called out Chris Pratt's 'infamously anti-LGBTQ" church after the actor spoke about his spirituality on "The Late Show with Stephen Colbert."

Pratt is known to attend Zoe Church, a congregation of Hillsong, a popular Christian church regularly attended by A-listers like Justin Bieber, Selena Gomez, the Jenners, and the Kardashians.

Pratt told Colbert on Thursday night that his pastor inspired him to participate in the Bible-Inspired Daniel Fast, which is "based on the fasting experiences of the Old Testament prophet,"according to its website.

"It's kind of like our Lent, you know, give something up. So for 21 days I had no meat, no sugar, no alcohol, and it was actually amazing. It was really cool,"Pratt said of the fast.

Page tweeted a Hollywood Reporter article about Pratt's appearance on Colbert's show, and questioned by the church's history wasn't brought up.

"Oh. K. Um. But his church is infamously anti lgbtq so maybe address that too?" Page said.

Hillsong has a history of participating in gay conversion therapy, which was detailed in a Daily Beast expose in 2016.

According to the expose, Hillsong pastors tried to "pray the gay away" and preached about overcoming gay demons.

Read more:Chris Pratt just finished his 21-day Bible-inspired diet where he only ate fruits, vegetables, and unleavened bread

Hillsong founder Brian Houston published a blog in 2015 saying that he believed marriage is between a man and a woman.

"Hillsong Church welcomes ALL people but does not affirm all lifestyles. Put clearly, we do not affirm a gay lifestyle and because of this we do not knowingly have actively gay people in positions of leadership, either paid or unpaid," he said.

While many of Hillsong's celebrity attendees have praised the church's spirituality and faith, none have spoken out against its history of homophobia.

Hillsong was founded by Houston in Australia in 1983, and brought to the United States in 2010.

The church released a statement last year after "60 Minutes"aired a segment accusing Houston’s father of pedophilia. 

"It should be emphasized that Pastor Brian is not a perpetrator of abuse, has never been accused of abuse, and took immediate action to expose and stop a child abuser," the statement said.

INSIDER has reached out to Hillsong for comment. 

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• When my boyfriend asked what kind of engagement ring I wanted, I offered to go to the store with him to pick it out.
• I knew exactly what I wanted and found a ring I love.
• I was worried our proposal wouldn't be as suspenseful because I knew what the ring looked like, but my boyfriend still surprised me.

I still remember when my now husband first asked me what I liked in an engagement ring. It wasn't a shocking question — we had been dating for years, we had recently purchased a house together, and we were right on track to get married. Still, it was exciting to hear my boyfriend ask that question, and luckily I was prepared.

I knew exactly what kind of engagement ring I wanted, and I had known for a while. It wasn't that I went out of my way to look at them; it's just that I had begun paying more attention to them, learning the names of different diamond cuts and the meaning of the world "halo." Enough of my friends and acquaintances had gotten engaged for me to know exactly what I wanted and what I didn't want, and it was important to me that I got it.

So when he asked, I didn't hesitate. I told him I wanted a round diamond (with the quality being more important than the size), a simple band, no giant halo but maybe something small, possibly a cushion-cut halo, and nothing that stuck up too high off my finger. It might sound boring to some, but it was what I envisioned on my left hand, glimmering in the light: something classic, sparkly, and pretty that I would always love.

As I explained, in detail, what I wanted (without a picture of the exact ring I was imagining), I could see my boyfriend getting a little flustered. He grew up without sisters, he didn't have close female friends, and he was not, by any means, familiar with jewelry. He said he was nervous because he wanted me to love my ring, so I said, "Do you want me to go to the store with you to pick one out?"

At first I thought he was going to say no, because some guys I know have said they prefer to pick out the ring, as they feel it's their responsibility. But he looked relieved and agreed immediately. So a few weeks later, we headed to the jewelry store to do some research together.

Read more: 33 alternative styles if you don't want a traditional engagement ring

On our way to the store, I felt a touch of disappointment. Picking out my own engagement ring wasn't exactly the most romantic thing in the world. When he proposed, I would be looking down at a ring I had already seen, and, I thought, I wouldn't even be quite as surprised that it was happening. It wasn't exactly the stuff of romantic comedies, where the man painstakingly picks out the perfect ring for his bride-to-be.

In the end, though, I knew it was the right decision for both of us

I am a very particular person when it comes to what I wear. I have trouble putting on something I don't like, even to please someone close to me. I had seen many, many engagement rings that made me cringe inside, ones I could not imagine on my finger. If my boyfriend presented me with a ring I hated, I didn't know how I would react — and if I made him feel bad about his choice, I would probably feel awful. And, really, is it fair to expect a woman to walk around wearing a ring she doesn't like instead of just asking for one she loves? "I'm the one who has to wear it and look at it every day," I reminded myself. "I should absolutely adore it."

Sure, I could have done what many women do and showed him some photos of rings I liked, hoping he'd pick the one I liked the most, or something closest to the image. There's nothing wrong with doing that — it was just that I could sense his anxiety in making the choice on his own, even with a little guidance, and I knew that we would both benefit from me picking out the exact ring.

I found my perfect ring in the second jewelry store we went to: a round diamond in a small cushion-cut halo, a plain band, and a pretty setting with tiny diamonds on the side. When we left, he asked me if I wanted to look around more — I didn't. I did not talk to him about the size of the diamond, leaving that decision up to him (it felt weird to discuss that part). I didn't ask when I would get it, either, although I really wanted to. While I felt flushed and happy at the thought of picking out a ring, I also left still feeling a tiny bit sad that some of the suspense was gone from our proposal.

In the end, though, I had nothing to worry about. My now husband shocked with me with an intimate and romantic proposal at the Eiffel Tower during our first trip to Paris on a chilly March night, and when I saw the ring in his hand, there was absolutely no sadness in my body at all. I didn't care that I knew what the ring looked like, because it didn't matter in that moment.

Whenever someone sees my ring and makes a comment like, "He did a good job!" I always let them know that I picked it out

Some people are surprised and can barely conceal that, some people say things like, "But didn't that take the fun out of it?" and some people just say what a good idea that is. I get it, it's not for everyone — but my husband and I agree that it was the best decision either of us could have made. I am thrilled with my ring, and it was one less thing about the proposal he didn't have to feel anxious about.

• Read more about engagements and weddings:
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• 15 ways weddings will look different in 2019
• An engagement ring is a major purchase — here's the best way to pay for it

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• Google is notorious for having fun with numbers. 
• On Friday, the search giant said that it paid a security researcher an award of $1,337 — a stylized way of writing “leet,” as in “elite,” a reference to a programming joke that goes back to the '80s. 
• This came as part of Google's annual report on its bug bounty program, where it pays security experts to find flaws and vulnerabilities in its software. The program paid out $3.4 million to 317 total security researchers in 2018. 
• Google often plays little tricks like this with its bug bounty program: It once paid out $6,006.13 —  or, Google spelled-out numerically — to the researcher who managed to buy the "Google.com" domain for one minute.

Google is notorious for having fun with numbers, and it looks like the company's difficult 2018 didn't slow that down at all. 

Google shared on Friday its annual report on its Security Vulnerability Reward Program, where it pays out bounties to experts and enthusiasts who find flaws in its software. All told, Google says, the program paid out $3.4 million to 317 participants in 2018. 

However, the report singles out one particular story: That of researcher Dzmitry Lukyanenka, who became a full-time bug bounty hunter after losing his job. 

Google told Business Insider that it awarded multiple bounties to Lukyanenka this year, most of which totalled $1,337 — a stylized way of writing “leet,” as in “elite,” in a joke that programmers have been making since the ’80s. Even today, it’s not uncommon for a programmer or gamer to joke that they are a “1337 h4x0r,” which is to say, an “elite hacker,” or that someone else is a “n00b,” or “newbie.”

Google also told us that throughout the years, the prolific Lukyanenka has been paid a $1,337 bounty a dozen times, or $16,044  — an amount that has become known internally at Google as "1dmitry," after the researcher's first name. Separately, Google also paid Lukyanenka $1,337 several other times in the form of grants, unrelated to finding specific security vulnerabilities, to support his work, while also doubling down on the joke.

This isn't the first time that Google's bug bounty program has made a joke out of its payout structure. In its 2015 bug bounty report, the company said it paid out $6,006.13 —  or, Google spelled-out numerically — to the researcher who managed to buy the "Google.com" domain for one minute. After that researcher revealed his intentions to donate the windfall to charity, Google doubled the amount. 

Read more:Google reveals how much it paid the guy who bought Google.com for one minute — and it's hysterical

However, the math jokes go well beyond this program. That same year, Google's parent company Alphabet bought back $5,099,019,513.59 worth of stock — or, the square root of 26, the number of letters in the alphabet, times a billion.

Also, in 2011, Google bid $3.14159 billion, or pi billion dollars, for Nortel patents.

This year's bug bounty payouts were bigger than those in 2017, when Google paid $2.9 million to 274 researchers. The company said that half of the bounties in 2018 went towards vulnerabilities found in its Android and Chrome platforms. 

Got a tip? Contact this reporter via Signal at +1 (209) 730-3387, email nbastone@businessinsider.com, or direct message on Twitter @nickbastone.

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• Kim Kardashian West posted a photo of herself in a golden outfit on Friday with the caption: "fast fashion brands, can you please wait until I wear this in real life before you knock it off?"
• Less than three hours later, the fast-fashion brand Missguided posted a knockoff of the outfit on Instagram, alongside a photo of Kardashian West's photo. The post has since been deleted. 
• The incident reveals just how fast turnaround is in the fast-fashion industry in 2019. 

Kim Kardashian West had one request when she shared a photo of herself on Friday. 

"Going through old fitting pics & found this gold look that Kanye made for me for my Miami trip last summer (I went w the neon vibes instead)," Kardashian West captioned a photo of herself in a golden outfit on Instagram. 

"P.S. fast fashion brands, can you please wait until I wear this in real life before you knock it off?" she continued, adding a laughing-crying emoji. 

Kardashian West published her Instagram post at around 10 a.m. EST. 

By noon EST, the fast-fashion brand Missguided had a response — a design that is a direct knockoff of the outfit.

One image was the one that Kardashian West had posted mere hours earlier; the second was a model wearing a similar golden outfit. 

"The devil works hard but Missguided works harder," Missguided captioned the photos.

Just before 4 p.m. ET, Missguided's post was deleted. The fast-fashion brand did not respond to Business Insider's request for comment. 

The incident perfectly encapsulates the fast-fashion industry's race to transform inspiration — whether it be celebrities like Kardashian West or runway designs — into inexpensive reality.

Fashion does not have the same level of protection as things like art, literature, and film, allowing fast-fashion brands like Zara and Forever 21 to quickly churn out less expensive copycats. 

Read more: Zara and Forever 21 have a dirty little secret

E-commerce-centric brands like Missguided and Fashion Nova are accelerating the process even more, releasing new products within hours of drawing inspiration from Instagram and celebrities. 

Fashion Nova, for example, releases more than 1,000 new clothing items every week. CEO Richard Saghian told WWD that it takes the company just 48 hours to design and manufacture a product.

SEE ALSO: These 10 fashion and beauty brands are poised to have a huge 2019

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• Army researchers have invented a new grenade designed to take down enemy drones.
• The grenade, designed to be launched from the standard grenade launchers used by military and law enforcement, is packed with a net that can ensnare troublesome unmanned aerial systems.
• Initial testing indicates that this new invention is an effective counter-drone solution that is cheaper and simpler than most alternatives.

It's likely that whoever US troops fight in the next war, these enemies will be armed with drones. That's why Army researchers have invented a smart and cost-effective way to bring them down.

The US Army has invented a new grenade in the 40 mm configuration that is packed with a net and specifically designed to take out enemy drones.

The weapon, which was developed by Army engineers at the Armament Research, Development, and Engineering Center (ARDEC) in New Jersey, can be launched from the standard grenade launchers regularly used by the US military and law enforcement.

Here's how it works, according to a patent...

The projectile contains a net with weights, the patent detailed. As the round nears the target, a signal from a control board releases the net stored inside, according to the recent patent.

The weapon can theoretically be used to counter both single and swarming drones.

Terrorist groups and insurgents in the Middle East have used commercial quadcopters for reconnaissance, as well as the dropping of improvised munitions.

The Army's simple yet effective invention has purportedly outperformed existing net-centric counter-drone techniques, such as drone-operated drag nets, where a pilot must outmaneuver an enemy aerial drone. That tactic would likely be ineffective against a swarm of drones, which a sophisticated adversary like Russia would be capable of wielding.

Furthermore, the new net-packed grenade is a lot cheaper than surface-to-air weapons, such as surface to air missiles, to take out an adversary's drones. A US ally once used a $3 million Patriot missile to shoot down a quadcopter drone that probably cost no more than $200, US Army Gen. David Perkins last year, calling attention to the need for affordable counter-drone capabilities.

Read More: An Army general says an ally used a $3 million Patriot missile to shoot down a $200 drone

Ground units equipped with the M320 grenade launchers could carry dozens of these grenades to eliminate enemy drones from hundreds of yards away, TechLink, the Department of Defense’s national partnership intermediary for technology transfer, explained, adding that units equipped with the Mk-19 launchers could down enemy drones from even farther away.

The Army wants to eventually expand this concept to disable boats and trucks and much more.

Join the conversation about this story »

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• The Alliance of American Football kicks off play this Saturday.
• The league sports eight teams competing in a 10-week season, with teams made up of former pros and college standouts.
• There's no predicting the league's future, but for fans looking for a new way to interact with the sport they love, or just in need of some February football, it's well worth checking out.

There's good news for football fans who were wondering what they'd do with their weekends now that the NFL postseason is in the books — this Saturday, the Alliance of American Football will kick off its inaugural season with four games.

The league is the vision of Charlie Ebersol, the son of NBC executive Dick Ebersol and director of the "30 for 30" documentary "This Was the XFL," who believed the time was right for a second football league to take hold in America.

Ebersol's vision for the league is wide-ranging, embracing interactivity and technology to create something fans have never seen before, while still appealing to those simply looking for a February fix of football.

For now, we can only wait and see how the league plays out. Take a look below at the eight teams that will make up the AAF, including their head coaches, odds to win the title, and some names you might be familiar with on each roster.

Arizona Hotshots

Home stadium: Sun Devil Stadium

Head coach: Rick Neuheisel

Key players: Trevor Knight (QB), Josh Huff (WR), Freddie Martino (WR)

Odds to win title: +275

Salt Lake Stallions

Home stadium: Rice-Eccles Stadium

Head coach: Dennis Erickson

Key players: Josh Woodrum (QB), Matt Asiata (RB), Kenny Bell (WR)

Odds to win title: +400

Orlando Apollos

Home stadium: Spectrum Stadium

Head coach: Steve Spurrier

Key players: Garrett Gilbert (QB), Austin Appelby (QB), De'Veon Smith (RB)

Odds to win title: +450

• Virginia's top three Democratic politicians are embroiled in scandals, launching the Commonwealth into a state of chaos. 
• Governor Ralph Northam and Attorney General Mark Herring both admitted to wearing blackface in the 1980s, but neither have resigned. 
• Meanwhile, Lieutenant Governor Justin Fairfax is accused of sexual assaulting a woman at the 2004 Democratic National Convention. 
• The crisis has no clear end in sight, with all the politicians standing their ground. Here's where the situation currently stands. 

Virginia has been mired in political turmoil over the past week as its Democratic governor, lieutenant governor, attorney general, and a key member of the State Senate found themselves embroiled in separate scandals involving wearing racially offensive blackface, editing yearbooks containing blackface photos, and allegations of sexual assault. 

The revelations have brought Virginia's long and painful history of systemic racism to the forefront of the public discussion and put Democrats in a bind.

Here's a timeline of everything we know so far, and what could happen next: 

Ralph Northam offered conflicting explanations for a photo on his yearbook page

On February 1, the right-leaning blog Big League Politics published a photo from a page in Eastern Virginia Medical School's 1984 yearbook that included a photograph of a person wearing blackface standing next to another in a Klu Klux Klan costume. 

On Friday night, Northam put out a statement apologizing for having appeared in the photograph after its authenticity was confirmed by other outlets, but did not state whether he was the person in blackface or the costume. 

Soon after, a slew of Democratic state and federal officials called on Northam to resign office and let Lieutenant Governor Justin Fairfax, a progressive African-American politician many considered to be a rising star in the party, take over the governorship. 

But in a stunning press conference the next day, Northam walked back his statement from the night before. He denied being one of the people in the yearbook photo, but said he had painted his face black with shoe polish for a Michael Jackson look-alike contest during the 1980s — even offering to moonwalk on the podium. 

Northam's performance at the press conference spurred even more outrage and calls for him to step aside, including from US Senators Mark Warner and Tim Kaine. But Northam's political fate got more complicated when his lieutenant governor found himself at the center of his own scandal. 

Read more:How Virginia Governor Ralph Northam went from being a respected US Army veteran and physician to being embroiled in two national controversies

Justin Fairfax continues to deny troubling allegations of sexual assault

On Sunday night, Big League Politics published a screenshot from a social media page belonging to Vanessa Tyson, a professor of political science at Scripps College, on which she wrote that someone who assaulted her at the 2004 Democratic National Convention "would likely get a VERY big promotion," with the article heavily implying that person was Fairfax.

At around 3 a.m. on Monday, Fairfax's office put out a statement strongly denying Fairfax had ever assaulted anyone, with Fairfax later calling the allegations a "totally fabricated story out of the blue."

Fairfax's statement claimed the Washington Post had reviewed his accuser's claims and found "inconsistencies and red flags" in her account. The Post later pushed back on that claim, saying they decided not to run Tyson's story due to lack of corroboration, not because of any inconsistencies. 

On Wednesday, Tyson came forward and alleged in a lengthy and detailed statement of her own that Fairfax forced her to preform oral sex on him in a hotel room at the DNC. She has retained the high-power law firm that represented Christine Blasey Ford during the Kavanaugh hearings. 

Fairfax's camp remains on the offense, maintaining that Fairfax and Tyson had a consensual sexual encounter that involved no assault or coercion. They have threatened to sue"people who continue to spread these false allegations," and even suggested rival politicians planted the story to smear Fairfax, who planned to run for Governor in 2021.

Read more: Meet Justin Fairfax, who is poised to become Virginia's governor if Ralph Northam resigns

Democratic politicians have approached the situation with caution. Jennifer Wexton, a freshman congresswoman from Northern Virginia, tweeted that she believed Tyson but did not explicitly call on Fairfax to resign, and other lawmakers have called for the matter to be formally investigated.

The Virginia Democratic Party said in a Tuesday statement they are will "continue to evaluate" the allegations. 

Mark Herring admitted to donning blackface in the 1980s

With Northam and Fairfax embroiled in scandal, state officials looked to Democratic Attorney General Mark Herring to take over the reins of government in the event that the governor and lieutenant governor both stepped down. 

But after a Wednesday morning meeting with members of the House of Delegates Black Caucus, Herring put out a statement disclosing that he too had worn blackface to a 1984 party as a 19-year-old college freshman. 

Read more: Virginia Attorney General Mark Herring reveals that he also wore blackface during college, threatening a constitutional crisis

In the statement, Herring said his "contributing to the pain Virginians have felt is the greatest shame I have ever felt" and that his conduct in college "is in no way reflective of the man I am today." 

Herring did not, however, offer his own resignation after previously calling on Northam to step down. While some accused him of hypocrisy, other Democrats and political commentators commended Herring's honesty and genuine remorse over his actions.                                                                                                                                                                      

Democratic State Senate leader edited a yearbook with racist content

On Thursday, the Virginia Pilot reported that Tommy Norment, the current majority leader of the Virginia State Senate, had edited a 1968 Virginia Military Institute yearbook that featured offensive photos of people in blackface and racial slurs. 

“I was kind of the first sergeant,” Norment told the Virginia Pilot of his position as managing editor on the yearbook staff. “I'm still culpable, but it is by association with a team that produced that yearbook with those photos.”

While Norment has not faced the same level of backlash as Northam or Herring, his involvement in editing the yearbook highlighted how pervasive racist behavior and attitudes persist in Virginia, with officials at the highest level of government perpetuating racism at various points during their lives. 

What will happen next?

If all three officials step down, the third in line to the governorship would be Kirk Cox, the Republican speaker of the House of Delegates.

Cox came into his current position when the results of a 2017 House of Delegates election resulted in a exact tie — and the Republican candidate won his seat by random drawing. 

Because a Republican is third in line, political analysts deem it highly unlikely for all three officials to resign. But it remains an open question as to if any will step down and who would take their place. 

Politico reported Friday that Northam has hired a top crisis management firm to represent him and that he has no plans to step down — for now.

In light of a viable Democratic alternative to take over the governorship, Northam looks to be trying to ride out the scandal and wait for the news cycle to move on, staying in office even without the support and trust of his own party. 

"On Friday when Democrats were calling on Northam to resign, it was kind of an obvious case. It wasn't just that Northam had done something wrong, but Fairfax was lined up to be Governor," FiveThirtyEight political writer and analyst Perry Bacon Jr. said in a FiveThrityEight politics podcast episode Wednesday. 

"Now all three men are scathed. Wearing blackface is problematic, I would argue that sexual assault is much more significant," he added. "I do think Fairfax may be in the worst trouble here." 

With all three politicians standing their ground for now, the situation is unlikely to be resolved in the immediate future, and become only become more complicated and painful by the day. 

Join the conversation about this story »

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• The rate at which iPhone users replace their devices is heading toward an all-time low, Bernstein analyst Toni Sacconaghi said in a new report.
• The proportion of iPhones in use that will be replaced this fiscal year will be only 16%, he said.
• Owners of iPhones that they bought new are likely to hold on to them for at least four years.
• The decline in replacement rates will slow the growth of Apple's much touted services business, he said.

Apple customers are holding onto their old iPhones longer than ever as fewer and fewer of them find reasons to upgrade to new models, a new report indicates.

And that slowdown in Apple's main business could weigh heavily on its up-and-coming services business.

Only about 16% of the total iPhones in service are likely to be swapped out for new ones this year, Bernstein analyst Toni Sacconaghi said in a research note Friday. Meanwhile, customers who bought their iPhones new are now starting to wait around four years before replacing them with new ones, and replacement cycles could get even longer in the near future, he said.

"Current upgrade rates have slowed dramatically and may be lower than investors realize," Sacconaghi said in the report. He continued: "Replacement cycles are elongating ... a lot."

Apple reported disappointing holiday quarter results last week, thanks largely to poor sales of the iPhone, which provides well more than half of its revenue and earnings. The company has struggled to find demand for its latest models, which it launched last fall, and has reportedly cut production of them repeatedly.

Read this: iPhone sales crater 15% in Apple's worst holiday results in a decade, and the forecast looks just as grim

Don't expect a quick rebound in iPhone sales

Like some other analysts, Sacconaghi doesn't expect Apple's phone sales to rebound anytime soon. He expects the number of iPhones it will sell in its current fiscal year to fall 19% from last year and to decline another 1% a year in fiscal 2020 and 2021.

"It is not obvious that the current year's iPhone offerings will be compelling enough to drive material upgrades," he said. Fiscal 2020, he continued "could still be a tough year, given the lack of an obvious must-have feature in the upcoming cycle's iPhones."

The steep drop Sacconaghi expects this year in iPhone sales translates into a sharp reduction in upgrades and replacement rates. As recently as Apple's 2015 fiscal year, the number of iPhones it sold — 231 million — represented about a third of the total number in service worldwide. Even last year, when the number of phones it sold basically didn't grow from the year before, the number that Apple did sell — about 218 million — represented about 22% of its total user base.

The expected further decline this year would drop Apple's upgrade rate to an unprecedentedly low level, he noted.

The replacement cycle is growing longer

Many analysts focus on replacement cycles — the length of time before users swap out their phones — rather than upgrade rates. But the two are linked, and the fall in upgrade rates implies that customers are waiting longer and longer to get new phones, Sacconaghi said.

"What does a 16% overall upgrade rate imply for [replacement] cycles?" he said. "The short answer is ... it's bad."

In the past, iPhone owners who bought their phones new replaced them at least every three years, Sacconaghi said. Given his expectations for iPhone sales and upgrade rates, current phone owners in the same position will likely replace them every four years.

That's "a drastic step-up from prior cycles," he said.

Even if the upgrade rate stays constant in future years, the replacement rate will likely grow even longer — possibly to 4-1/2 years or more — given that Apple's total user base is increasing.

Apple ceased reporting the number of iPhones it sells each quarter as of the end of its last fiscal year. And it's never released the number of users who have second-hand devices. So Sacconaghi's figures are based on informed estimates from the numbers Apple has released, such as its past unit sales and its overall user base, and executives' past comments that have characterized its results.

"Modeling iPhone's installed base is as much art as science," he said.

Weak iPhone sales will hamper Apple's services growth

Sacconaghi estimates that about 32% of the total number of iPhones in use are second-hand phones. Owners of such devices are much less likely than owners of new ones to replace them with new models, he said. Perhaps more concerning for Apple and investors, owners of second-hand phones are less likely to spend on Apple's services, he said. 

As its phone sales have slowed, Apple has been touting the growth of its services business, which includes things such as Apple Music subscriptions, commissions on app store sales, and payments from Google for promoting its search engine.

The problem for Apple is that services revenue is tied in no small part to sales of new phones, Sacconaghi said. He forecasts that the company's services business will grow by just 15% this fiscal year after growing by more than 20% in each of the last three years.

"This deceleration [in iPhone sales] should present a headwind to services growth going forward," he said.

• Read more on Apple:
• The most important things we learned from Apple's earnings call
• Apple's iPhone woes have a silver lining: Customers are now spending $814 for each phone it sells
• Here's why Apple's iPhone sales won't get better anytime soon
• Here's why Apple's China situation is at 'code red,' and why it needs to take dramatic action to plug up a key weakness in the business

SEE ALSO: Apple needs to get serious about video. Here are 3 Hollywood studios it could buy to boost its new streaming service.

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• Michael B. Jordan has become a household name thanks to his roles on the big screen.
• The "Black Panther" star didn't grow up with dreams of being an actor.
• His first TV role was on "The Sopranos," despite many thinking it was on "The Wire."

Born in Santa Ana, California, Michael B. Jordan's career took off after his breakthrough role as Wallace on "The Wire." The actor went on to star on everything from TV shows like "Friday Night Lights" to award-worthy movies like "Fruitvale Station" and "Black Panther."

Here are 10 facts you might not know about Michael B. Jordan.

His first role was on "The Sopranos," not "The Wire."

Most people think Michael B. Jordan's acting debut was on "The Wire." Although his performance as young, street-smart Wallace was his breakthrough, his first TV credit was on a one-off episode in season one of "The Sopranos" when he was 12 years old.

He didn't let his mom watch the shooting of that final scene in "The Wire."

During an interview with Vulture, Jordan opened up about shooting the tragic final scene of his in "The Wire" in which his character is shot and dies.  

"I remember telling my mom not to show up on set that day," he said. "My mom gets extremely emotional, and this was kind of too much. I didn't want her to see it.

The "B" in his name stands for Bakari.

The "B" in Michael B. Jordan's name stands for Bakari. The name is Swahili and means "promising." As for his first name, he was named after his father Michael A. Jordan.