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Jeff Bezos Amazon CEO Jeff Bezos REUTERS/Rick Wilking

An investment bank's report that Amazon is tip-toeing around the pharmacy space sent Wall Street scrambling to understand CEO Jeff Bezos' next move.

Analysts at Leerink Partners wrote that Amazon may be in discussions with mid-sized pharmacy benefit managers "in an effort to get into various contract arrangements."

Pharmacy benefit managers (PBMs) act as the gatekeeper between whoever is paying for your drug (Medicare, your insurer etc.) and whoever is selling the drug to you.

They manage lists called formularies that determine which drugs you can and cannot have. The companies first popped up in the 1960s to help insurers handle mountains of paperwork. Now PBMs navigate the expensive, opaque system that is American healthcare. About 80% of the market is controlled by the biggest three PBMs, Express Scripts, CVS Health and UnitedHealth Group.

"Our specialists indicated that Amazon may be speaking with mid-sized PBMs now in an effort to get into the pharmacy services space," said the Leerink report. "It may take ~24 months to get licensed in 50 states, but our specialists believe that this is the direction Amazon is moving in."

If you had your druthers

Andrew Miller, Vice President of Operations at of Detroit-based PBM Meridian Rx, doesn't think that necessarily has to take that much time for Amazon to enter the space.

"If I were Amazon... I'd be looking to buy a small mail order facility. Amazon's strength is obviously the distribution so if you bought a small mail order licensed in 50 states it would be plug and play," he said. "I think they're looking for an adjudication system, and I think they're looking for a network of pharmacies."

In its report, Leerink seems to imply that Amazon is talking about partnering up with a PBM once it has a pharmacy business. That's because the pharmaceutical business requires more than just your regular logistics company. You need to know how to navigate the healthcare system.

Leerink highlighted that in its report, addressing concerns that Amazon's entrance into the field would hit distributors the hardest.

From the report [emphasis ours]:

Throughout the trip, investors were very persistent in asking about the impact of Amazon. CAH [Cardinal Health] highlighted that the biggest risk could be home delivery of medical products, but the issue here is that medical billing is very complicated.

If a member wants a product delivered to his or her home, and if they want that product covered by his or her insurance, then making sure that the claim is sent to the plan in a proper format is critical. It is unclear to us, as of now, how Amazon would manage through this challenge. 

A PBM could help with that. And maybe not just partnering with one. If you're Amazon not just buy a PBM and not have to deal with another party at all? If there's anything PBMs get knocked for, it's their lack of transparency. Critics accuse PBMs of having their hand in every part of the distribution chain — of taking rebates from drug companies in exchange for a good spot on formularies, for example.

So why would a giant like Amazon want to bother with all that?

Rumors and speculation

Miller told Business Insider that about 3 weeks ago he was contacted by a consultant doing research for an unnamed company with 270,000 employees in the retail space. The consultant said the company employed pharmacists.

"You get weird calls but usually you can figure out who they are pretty quick, this one I haven't been able to figure out." 

This is what the consultant talked to Miller about:

The retailer is looking into buying a small to mid-sized PBM. If the acquisition cost is under a certain price, the purchase wouldn't need board approval. If it's over a certain price, though, the purchase would need board approval. They also discussed the retailer partnering with a PBM.

"To my knowledge, they talked to seven to eight mid-level PBMs and the board was going to meet within the next month [as of 3 weeks ago] to decide its action," Miller said.

We asked Amazon if they were the ones poking around asking these questions, or if it employs pharmacists, and the company said that it simply doesn't respond to rumors and speculation. Amazon is also larger than the company described to Miller. 

So maybe it's not just Amazon poking around. There are a couple other possibilities. Whoever else it is, they want a piece.

Original author: Linette Lopez
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bill gates windows 3.0Bill Gates poses with Windows 3.0, the 1990 operating system that introduced "control-alt-delete" to Windows.Microsoft Archive

Bill Gates, the Microsoft co-founder and the world's richest man, is not usually one to look back. Indeed, his first and most famous book to date was titled "The Road Ahead." 

So it's no surprise that Gates had a philosophical answer when pressed at a Bloomberg event today on whether or not he regrets "control-alt-delete," the infamous two-handed keystroke for logging in to or restarting a Windows PC.

“You can’t go back and change the small things in your life without putting the other things at risk,” Gates said, according to a report in Quartz.

However, Gates does go on to admit that if he could change one thing without affecting linear time too harshly, he would have made it a single button. 

This isn't the first time Gates has made this point, either: Back in 2013, Gates said that he originally intended for "control-alt-delete" to be a single button, but IBM got in the way. Back around 1980, when the two companies were collaborating on the original IBM PC, Microsoft couldn't get IBM to spare a dedicated button on the keyboard.

This is something that IBM PC co-creator David Bradley once copped to, during a panel discussion at a media event. 

"I may have invented it, but Bill made it famous," Bradley said — leaving Gates, also sitting on the stage, looking somewhere between bemused and annoyed. 

You can watch that moment here:

For all the second-thoughts about it, control-alt-delete has stuck around: It's still in current versions of Windows 10, now used primarily to access the task manager or to switch logged-in users quickly.

Get the latest IBM stock price here.

Original author: Matt Weinberger
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Apple Watch Series 3The design of the Apple Watch is unchanged since 2014.Reuters

Apple's new Watch made lots of headlines on Wednesday — but for all the wrong reasons.

The latest version of the company's wrist-worn gadget — the Apple Watch Series 3 with LTE — was found to have an embarrassing glitch.

It turns out that the watch's LTE cellular connectivity, which is supposed to let users make phone calls directly from their wrists and has been touted by Apple as a key selling point, doesn't always work very well. 

Actually, it's a bug with the watch's Wi-Fi, but the end-result is the same: LTE doesn't work the way it's supposed to. Reviews of the device, which hits stores shelves on Friday, were merciless. Apple's stock fell as much as 3% at one point on Wednesday. 

Apple is working on a fix, which will be delivered in a future software release, an Apple spokesperson told Business Insider. 

But the issues with Apple's new watch don't stop at bad reviews, inconsistent wireless, or even a short battery life. (It can only manage an hour of talk time when using LTE.)

The problem with the Apple Watch Series 3 with LTE is that it's a sign that Apple has lost sight of the principle that led to its meteoric rise: Apple doesn't sell technology for technology's sake. It figures out what people want to do (even when people don't know it themselves) and provides technology to make it possible. 

"Part of the hardest thing about coming up with new products is to figure out a really cool set of technologies that you can implement it with and make it easy, but also figuring out something that people want to do," late Apple CEO Steve Jobs once said.  "We've all seen products that have come out that have been interesting but just fall on their face because not enough people want to do them." 


Apple WatchAppleHarvard Business School professor Clayton Christensen puts this same concept in a similar way he calls the "jobs to be done" theory. In an over-simplified nutshell, consumers don't buy technologies or products, they pick things that can complete specific jobs for them. 

And recently, at least one Wall Street analyst has suggested that Apple has lost its ability to find new jobs to be done. 

"[Apple chief design officer] Jony Ive's Industrial Design Group has shown a knack for identifying jobs even before consumers know of their need. The iPod's '1,000 songs in your pocket' was an example. Moreover, Apple's functional organization and metrics appear to align with the jobs to be done approach. Still, the company seems to be struggling to identify the jobs for Apple Watch and Apple Pay," UBS analyst Steven Milunovich wrote last year. 

Beyond beach bums

apple watch marketingApple/ScreenshotSo what's the Apple Watch Series 3 With LTE's job? 

Here's the marketing copy Apple wrote on its website:

Answer a call from your surfboard. Ask Siri to send a message. Stream your favorite songs on your run. And do it all while leaving your phone behind.

Are these really jobs that consumers are trying to fill? Hardcore surfers who want to answer pressing business calls in the ocean seems like a niche.

Siri can already send a message from an iPhone, and there isn't a ton of evidence that that's a popular feature on the phone, anyway. Having the ability to leave your phone at home is a big deal for runners but that's still a subset of the general population. 

Here's how Apple COO Jeff Williams introduced the new watch earlier this month:

Now you have the freedom to go anywhere with just your Apple Watch. This has been our vision from the very beginning and we believe built-in cellular make Series 3 the ultimate expression of Apple Watch. Now you can go for a run with just your watch and still be connected. You can leave your phone when you go to the beach or just run a quick errand. And it’s really nice to know you can be reached if needed while staying in the moment.


For Bluetooth and Wi-Fi connectivity, we developed a custom wireless chip, we call W2. There’s nothing else like it. It delivers up to 85% faster Wi-Fi while being 50% more power efficient for both Bluetooth and Wi-Fi. And we’ve added a barometric altimeter. So now you get flights of stairs climbed and elevation gains after a workout. We’re also releasing an app for developers. This can be great for skiing and snowboarding acts. 

Of course, the biggest challenge of all was adding cellular. You see, our little watch is already packed, and you have to add antennas, radios, power amplifiers, a SIM card. And if you don’t do it right, it gets so big it looks like a house arrest bracelet and you’re not going to want to wear it.

Aside from this specific use case Apple keeps repeating that involves a beach bum who also needs to pick up important calls from the shore, the main sales pitch is focused on how impressive the device is technologically.

Apple Watch Series 3Apple

Selling the wrong thing

Sure, it's an achievement that Apple figured out how to make LTE wireless work on a such a small device, and managed to do it with same sized-battery as the previous, non-LTE model. But most people don't buy $400 gadgets because the cellular chip is so technically impressive.

One hour of "talk time" battery life may actually be a huge accomplishment given how power-hungry an LTE modem is. But for the average consumer, one hour of talk time sounds like a weakness, not a selling point.

The potential of the Apple Watch is easy to see. If it didn't have any battery issues, and it were slightly more powerful, it's easy to imagine it replacing a phone for some people. If and when it gets packed with more advanced sensors, it could become a critical tool that everyone needs to keep an informed eye on their health. And someday, if technology breaks the right way, you could leave your keys at home and use your watch as your universal ID to do everything from starting your car to unlocking the door at the office. 

But consumers don't buy the potential of a product, they buy a device to fill a specific job in their lives today. And adding LTE to the Apple Watch doesn't really solve any additional use cases, except maybe for a runner. Instead, it seems like Apple released this cellular watch because it was on a hardware roadmap from two years ago — "this has been our vision from the very beginning" — and because it could.

And that's ultimately a much bigger problem with the Apple Watch than some pre-release glitches. 

Visit Markets Insider for constantly updated market quotes for individual stocks, ETFs, indices, commodities and currencies traded around the world. Go Now!

Original author: Kif Leswing
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iMessage iOS 11A close-up of Apple's new app drawer in iMessage.AppleWhen you downloaded iOS 11, you may have noticed something new inside iMessage: a strip of app icons at the bottom of the screen. 

The icons, called an app drawer, include a brand-new GIFs button, quick access to the App Store, the ability to send songs via Apple Music, and more.

The new app drawer is Apple's way of building off the changes it made to iMessage in iOS 10. Back then, Apple introduced a special iMessage App Store and added drawing features. But iOS 11 takes things one step further — and it's going to make your life a lot easier. 

Here's how to use the new iMessage:

Original author: Avery Hartmans
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Tom Blomfield, CEO, Monzo Tom Blomfield, CEO, Monzo. Monzo

LONDON — Startup bank Monzo is doing away with one of its most popular features — unlimited free ATM withdrawals overseas.

The company, which offers a prepaid money card and is rolling out current accounts, is asking its customers to choose the best new charging option for ATM fees abroad, saying its existing policy has become simply too costly to continue.

Withdrawals from international holes-in-the-wall cost Monzo between 1-2% of each transaction. Costs have more than doubled in the last year from £6 to £16 per user, the company says.

"This seems to be a result of a combination of factors, including people using their Monzo cards more frequently, increased awareness of the free cash withdrawals we’ve offered, and people signing up specifically to use the Monzo card abroad," Tristan Thomas, Monzo's head of marketing and community, wrote in a blog post this week.

Anecdotally, this rings true. I have recommended Monzo to friends and family to use when traveling abroad thanks to its free ATM withdrawals and good rates. (I also included it in a roundup last year of fintech products that can help you save money when traveling.)

13% of users account for 85% of the ATM fee costs, Monzo says, suggesting that a small core of users have been using Monzo extensively abroad.

"We want to build a sustainable, viable business that is around for many years to come," Tristan says. "At the moment, the rising costs of foreign ATM withdrawals makes that difficult."

Spending on cards while abroad, online sales in foreign currencies, and UK ATM withdrawals will all still remain free, Monzo says. But it is asking users to what to do about the overseas ATM withdrawals, offering three options:

1% charge for ATM withdrawals in Europe, 2% charge for withdrawals Rest of World 1.5% charge for ATM withdrawals everywhere outside the UK £200 free allowance per month, 3% charge for withdrawals thereafter everywhere outside the UK

Monzo is inviting feedback from its customer base on its website here.

Number26 founders Maximilian Tayenthal and Valentin Stalf. N26's cofounders, from left, Maximilian Tayenthal and Valentin Stalf. The startup bank shut some accounts last year over ATM fees. Number26

The company is not the first fintech to run into issues with ATM withdrawals. Last year German startup bank N26 shuttered some customer accounts, saying they were running up too great a cost in ATM fees. Travel money card Revolut also introduced fees for ATM withdrawals at the end of last year.

All are grappling with a core problem for many fintech startups — can they convert all their users into paying customers?

Businesses like Monzo and Revolut have caught the attention of investors and the press thanks to the rapid growth of their customer bases. Revolut didn't exist two years ago but already has over half a million users.

Many people have undoubtedly signed up for startups like these because of the low-cost or free services that they offer. Usually, the costs of these services are simply absorbed by the business.

These startups argue that, while giving things like ATM withdrawals costs them money, the cost of user acquisition is still lower than what traditional banks pay. If they can make money from a user through another service, overdrafts say, once they've hooked them with free withdrawals, the up front investment and economics make sense.

However, both Revolut and Monzo are loss making and the claim that they can ultimately make enough money from users to cover costs remains just a theory.

Early indications suggest it could be easier said than done. Travelex launched a card to rival Revolut last year, the SuperCard, which offered free spending abroad but a 2.99% fee on any ATM withdrawals. Clearly, the hope was that customers would get the card but end up doing an ATM withdrawal here and there, giving Travelex a bit of revenue.

Things have not gone to plan. Travelex shut down the SuperCard scheme in May, citing "much higher than anticipated" costs. It seems that it is easier to simply charge the customer the foreign exchange fees up front so that everyone's on the same page.

There are other examples of plans going awry. Monese, a banking app for migrants, found that when people reached their monthly free activity cap, rather than pay for services people just stopped using the app. It has since pivoted to a paid-for model, to ensure customers are willing to pay from the start.

Across fintech, we may well see the growing creep of up-front charges for services as many startups clock that giving away freebies is not quite the same as winning loyal customers.

Original author: Oscar Williams-Grut
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