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Recode Daily: Apple’s watch problem, Facebook’s ad apology, Google’s $1.1 billion HTC deal

Plus, Facebook is moving into San Francisco, streaming is reanimating the music business, and Nest is back with a home-security suite.

Apple CEO Tim Cook introduces Apple Watch during the Apple launch event on Sept. 12, 2017 in Cupertino, Calif.
Apple CEO Tim Cook introduces Apple Watch during the Apple launch event on Sept. 12, 2017 in Cupertino, Calif.
Qi Heng / VCG via Getty Images

Apple says its new wireless Apple Watch has a problem, which led to some very mixed reviews for the $400 gadget. While testing the device for her review on The Verge, Lauren Goode discovered a bug — it tried to connect to unknown Wi-Fi networks instead of connecting to cellular; Apple has acknowledged the issue, and is “investigating a fix” for a future software release.

Facebook promises to have more humans overseeing its ad-targeting machine. COO Sheryl Sandberg called the social network’s recent ad-related snafu — allowing advertisers to target people who searched terms like “Jew hater” — “totally inappropriate and a fail on our part.” And Facebook is moving into San Francisco: The Menlo Park-based company has signed San Francisco's largest office lease in three years, leasing the entire office portion of a still-under-construction 70-story tower — 436,000 square feet — which could house up to 3,000 employees. [Kurt Wagner]

Google is paying $1.1 billion to buy part of Taiwanese firm HTC’s smartphone operations. The basics: Google wants more control over (and revenue from) hardware than Android and search ads can generate, and HTC — which put its shares on a trading halt before the announcement — is in bad shape. This means Google will directly challenge some of its Android partners, including Samsung, LG and Huawei. [Chris Welch / The Verge]

The music business is growing again — really growing — and it’s because of streaming. Spotify, Apple Music and other services now have 30 million U.S. subscribers, and streaming revenue is up 48 percent this year, to $2.5 billion, accounting for 62 percent of the U.S. music business. And that’s pushing the overall business back up from the fall that began with the ascent of Napster in 1999 — retail sales are up 17 percent, to $4 billion. [Peter Kafka / Recode]

Apple CEO Tim Cook called DACA — the Dreamers Act — the “biggest, biggest issue of our time.” Speaking on a panel with former New York City Mayor Michael Bloomberg yesterday — at Bloomberg’s own global executive forum — Cook said he and Apple are “pushing extremely hard on this," and said he had visited New York’s Ellis Island to feel what it might have been like to be an immigrant arriving there from overseas. [Dan Frommer / Recode]

Alphabet-owned Nest is launching new products, including an alarm system, a video doorbell and an outdoor surveillance camera. Wired gets an inside look at the development of the security suite from the company that made its name with a sexy thermostat but was sidetracked by product recalls, public infighting and the departure of its CEO and co-founder. [Steven Levy / Wired]

Top stories from Recode

Alphabet’s Waymo wants Uber to pay $2.6 billion in damages for a single allegedly stolen trade secret.

As of today, Waymo is pursuing nine separate trade secret claims.

Democrats are trying to limit foreign influence on U.S. elections — beginning with Google and Facebook ads.

Politicians want the FEC to crack down on “loopholes” that allow foreign entities to buy political ads online.

Recode presents ...

Tech companies like Facebook and YouTube think their businesses will continue to grow by absorbing the ad dollars once reserved for linear TV. Simulmedia CEO Dave Morgan doesn’t believe them, and on Recode Media with Peter Kafka, he says big advertisers will want their TV ads to start working more like digital ads, personalized to each viewer and able to be connected with buying behavior. Plus: The New York Times’ Jim Rutenberg talks about Russia’s information war in the U.S. and what its meddling in the 2016 elections means for Silicon Valley companies. [Eric Johnson]

Do you have questions about Consumer Reports and how it’s changing now that it seems as though everything is a tech product? On an upcoming episode of our Too Embarrassed to Ask podcast, Kara Swisher and Lauren Goode will be talking to Consumer Reports CEO Marta Tellado, so tweet your questions with the hashtag #TooEmbarrassed or email them to

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