China

Huawei says US ban will cost it $30B in lost revenue

Posted by | 5g, Android, Asia, China, China Mobile, huawei, mit media lab, Mobile, Nicholas Negroponte, operating system, Ren Zhengfei, smartphone, telecommunications | No Comments

Following a string of trade restrictions from the U.S., China’s telecoms equipment and smartphone maker Huawei expects its revenues to drop $30 billion below forecast over the next two years, founder and chief executive Ren Zhengfei said Monday during a panel discussion at the company’s Shenzhen headquarters.

Huawei’s production will slow down in the next two years while revenues will hover around $100 billion this and next year, according to the executive. The firm’s overseas smartphone shipment is tipped to drop 40%, he said, confirming an earlier report from Bloomberg.

That said, Ren assured that Huawei’s output will be “rejuvenated” by the year 2021 after a period of adjustment.

Huawei’s challenges are multifaceted as the U.S. “entity list” bars it from procuring from American chip makers and using certain Android services, among a list of other restrictions. In response, the Chinese behemoth recently announced it has been preparing for years its own backup chips and an alternative smartphone operating system.

“We didn’t expect the U.S. to attack Huawei with such intense and determined effort. We are not only banned from providing targeted components but also from joining a lot of international organizations, collaborating with many universities, using anything with American components or even connecting to networks that use American parts,” said Ren at the panel.

The founder said these adverse circumstances, though greater than what he expected, would not prevent the company from making strides. “We are like a damaged plane that protected only its heart and fuel tank but not its appendages. Huawei will get tested by the adjustment period and through time. We will grow stronger as we make this step.”

huawei

“Heroes in any times go through great challenges,” reads a placard left on a table at a Huawei campus cafe, featuring the image of a damaged World War II aircraft (Photo: TechCrunch)

That image of the beaten aircraft holding out during hard times is sticking to employees’ minds through little motivational placards distributed across the Huawei campus. TechCrunch was among a small group of journalists who spoke to Huawei staff about the current U.S.-China situation, and many of them shared Ren’s upbeat, resilient attitude.

“I’m very confident about the current situation,” said an employee who has been working at Huawei for five years and who couldn’t reveal his name as he wasn’t authorized to speak to the press. “And my confidence stems from the way our boss understands and anticipates the future.”

More collaboration

Although 74-year-old Ren had kept a quiet profile ever since founding Huawei, he has recently appeared more in front of media as his company is thrown under growing scrutiny from the west. That includes efforts like the Monday panel, which was dubbed “A Coffee With Ren” and known to be Ren’s first such fireside chat.

Speaking alongside George Gilder, an American writer and speaker on technology, and Nicholas Negroponte, co-founder of the MIT Media Lab, Ren said he believed in a more collaborative and open economy, which can result in greater mutual gains between countries.

“The west was the first to bring up the concept of economic globalization. It’s the right move. But there will be big waves rising from the process, and we must handle them with correct rather than radical measures,” said Ren.

“It’s the U.S. that will suffer from any effort to decouple,” argued Gilder. “I believe that we have a wonderful entrepreneurial energy, wonderful creativity and wonderful technology, but it’s always thrived with collaboration with other countries.”

“The U.S. is making a terrible mistake, first of all, picking on a company,” snapped Negroponte. “I come from a world where the interest isn’t so much about the trade, commerce or stock. We value knowledge and we want to build on the people before us. The only way this works is that people are open at the beginning… It’s not a competitive world in the early stages of science. [The world] benefits from collaboration.”

“This is an age for win-win games,” said one of the anonymous employees TechCrunch spoke to. He drew the example of network operator China Mobile, which recently announced to buy not just from Huawei but also from non-Chinese suppliers Nokia and Ericsson after it secured one of the first commercial licenses to deploy 5G networks in the country.

“I think the most important thing is that we focus on our work,” said Ocean Sun, who is tasked with integrating network services for Huawei clients. He argued that as employees, their job is to “be professional and provide the best solutions” to customers.

“I think the commercial war between China and the U.S. damages both,” suggested Zheng Xining, an engineer working on Huawei’s network services for Switzerland. “Donald Trump should think twice [about his decisions].”

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Aptoide, a Play Store rival, cries antitrust foul over Google hiding its app

Posted by | Android, antitrust, app-store, Apps, aptoide, China, competition, Developer, Europe, european commission, european union, Google, Google Play, huawei, online marketplaces, operating systems, play store, Portugal, TC | No Comments

As US regulators gear up to launch another antitrust probe of Google’s business, an alternative Android app store is dialling up its long time complaint of anti-competitive behavior against the search and smartphone OS giant.

Portugal-based Aptoide is launching a campaign website to press its case and call for Google to “Play Fair” — accusing Mountain View of squeezing consumer choice by “preventing users from freely choosing their preferred app store”.

Aptoide filed its first EU antitrust complaint against Google all the way back in 2014, joining a bunch of other complainants crying foul over how Google was operating Android.

And while the European Commission did eventually step in, slapping Google with a $5BN penalty for antitrust abuses last summer after a multi-year investigation, rivals continue to complain the Android maker still isn’t playing fair.

In the case of Aptoide, the alternative Android app store says Google has damaged its ability to compete by unjustifiably flagging its app as insecure.

“Since Summer 2018, Google Play Protect flags Aptoide as a harmful app, hiding it in users’ Android devices and requesting them to uninstall it. This results in a potential decrease of unique Aptoide users of 20%. Google Play Protect is Google’s built-in malware protection for Android, but we believe the way it works damages users’ rights,” it writes on the site, where it highlights what it claims are Google’s anti-competitive behaviors, and asks users to report experiences of the app being flagged.

Aptoide says Google has engaged in multiple behaviors that make it harder for it to gain or keep users — thereby undermining its ability to compete with Google’s own Play Store.

“In 2018, we had 222 million yearly active users. Last month (May’19), we had 56 million unique MAU,” co-founder and CEO Paulo Trezentos tells TechCrunch. “We estimate that the Google Play removal and flagging had cause the loss of 15% to 20% of our user base since June’18.”

(The estimate of how many users Aptoide has lost was performed using Google SafetyNet API which he says allows it to query the classification of an app.)

“Fortunately we have been able to compensate that with new users and new partnerships but it is a barrier to a faster growth,” he adds.

“The googleplayfair.com site hopes to bring visibility to this situation and help other start ups that may be under the same circumstances.”

Among the anti-competitive behaviors Aptoide accuses Google of engaging in are flagging and suspending its app from users’ phones — without their permission and “without a valid reason”.

“It hides Aptoide. User cannot see Aptoide icon and cannot launch. Even if they go to ‘settings’ and say they trust Aptoide, Aptoide installations are blocked,” he says. “If it looks violent, it’s because it’s a really aggressive move and impactful.”

Here’s the notification Aptoide users are shown when trying to override Google’s suspension of Aptoide at the package manager level:

Even if an Aptoide user overrides the warning — by clicking ‘keep app (unsafe)’ — Trezentos says the app still won’t work because Google blocks Aptoide from installing apps.

“The user has to go to Play Protect settings (discover it it’s not easy) and turn off Play protect for all apps.”

He argues there is no justification for Aptoide’s alternative app store being treated in this way.

“Aptoide is considered safe both by security researchers [citing a paper by Japanese security researchers] and by Virus Total (a company owned by Google),” says Trezentos, adding: “Google is removing Aptoide from users phone only due to anticompetitive practices. Doesn’t want anyone else as distribution channel in Android.”

On the website Aptoide has launched to raise awareness and inform users and other startups about how Google treats its app, it makes the claim that its store is “proven… 100% secure” — writing:

We would like to be treated in a fair way: Play Protect should not flag Aptoide as a harmful app and should not ask users to uninstall it since it’s proven that it’s 100% secure. Restricting options for users goes against the nature of the Android open source project [ref10]. Moreover, Google’s ongoing abusive behaviour due to it’s dominant position results in the lack of freedom of choice for users and developers.We would like to keep allowing users and developers to discover and distribute apps in the store of their choice. A healthy competitive market and a variety of options are what we all need to keep providing the best products.

Trezentos stands by the “100% secure” claim when we query it.

“We think that we have a safer approach. We call it  ‘security by design’: We don’t consider all apps secure in the same way. Each app has a badge depending on the reputation of the developer: Trusted, Unknown, Warning, Critical,” he says.

“We are almost 100% sure that apps with a trusted badge are safe. But new apps from new developers, [carry] more risk in spite of all the technology we have developed to detect it. They keep the badge ‘unknown‘ until the community vote it as trusted. This can take some weeks, it can take some months.”

“Of course, if our anti-malware systems detect problems, we classify it as ‘critical’ and the users don’t see it at all,” he adds.

Almost 100% secure then. But if Google’s counter claim to justify choking off access to Aptoide is that the app “can download potentially harmful apps” the same can very well be said of its Play Store. And Google certainly isn’t encouraging Android users to pause that.

On the competition front, Aptoide presents a clear challenge to Google’s Android revenues because it offers developers a more attractive revenue split — taking just 19%, rather than the 30% cut Google takes off of Play Store wares. (Aptoide couches the latter as “Google’s abusive conditions”.)

So if Android users can be persuaded to switch from Play to Aptoide, developers stand to gain — and arguably users too, as app costs would be lower.

While, on the flip side, Google faces its 30% cut being circumvented. Or else it could be forced to reduce how much it takes from developers to give them a greater incentive to stock its shelves with great apps.

As with any app store business, Aptoide’s store of course requires scale to function. And it’s exactly that scale which Google’s behavior has negatively impacted since it began flagging the app as insecure a year ago, in June 2018, squeezing the rival’s user-base by up to a fifth, as Aptoide tells it.

Trezentos says Google’s flagging of its app store affects all markets and “continues to this day” — despite a legal ruling in its favor last fall, when a court in Portugal ordered Google to stop removing Aptoide without users’ permission.

“Google is ignoring the injunction result and is disregarding the national court. No company, independently of the size, should be above court decisions. But it seems that is the case with Google,” he says.

“Our legal team believe that the decision applies to 82 countries but we are pursuing first the total compliance with the decision in Portugal. From there, we will seek the extension to other jurisdictions.”

“We tried to contact Google several times, via Google Play Protect feedback form and directly through LinkedIn, and we’ve not had any feedback from Google. No reasons were presented. No explanation, although we are talking about hiding Aptoide in millions of users’ phones,” he adds.

“Our point in court it’s simple: Google is using the control at operating system level to block competitors at the services level (app store, in this case). As Google has a dominant position, that’s not legal. Court [in Portugal] confirmed and order Google to stop. Google didn’t obey.”

Aptoide has not filed an antitrust complaint against Google in the US — focusing its legal efforts on that front on local submissions to the European Commission.

But Trezentos says it’s “willing to cooperate with US authorities and provide factual data that shows that Google has acted with anti-competitive behaviour” (although he says no one has come knocking to request such collaboration yet.)

In Europe, the Commission’s 2018 antitrust decision was focused on Android licensing terms — which led to Google tweaking the terms it offers Android OEMs selling in Europe last fall.

Despite some changes rivals continue to complain that its changes do not go far enough to create a level playing field for competition.

There has also not been any relief for Aptoide from the record breaking antitrust enforcement. On the contrary Google appears to have dug in against this competitive threat.

“The remedies are positive but the scope is very limited to OEM partnerships,” says Trezentos of the EC’s 2018 Android antitrust decision. “We proposed additionally that Google would be obliged to give the same access privileges over the operating system to credible competitors.”

We’ve reached out to the Commission for comment on Aptoide’s complaint.

While it’s at least technically possible for an OEM to offer an Android device in Europe which includes key Google services (like search and maps) but preloads an alternative app store, rather than Google Play, it would be a brave device maker indeed to go against the consumer grain and not give smartphone buyers the mainstream store they expect.

So, as yet, there’s little high level regulatory relief to help Aptoide. And it may take a higher court than a Portuguese national court to force Google to listen.

But with US authorities fast dialling up their scrutiny of Mountain View, Aptoide may find a new audience for its complaint.

“The increased awareness to Google practices is reaching the regulators,” Trezentos agrees, adding: “Those practices harm competition and in the end are bad for developers and mobile users.”

We reached out to Google with questions about its treatment of Aptoide’s rival app store — but at the time of writing the company had not responded with any comment. 

There have also been some recent rumors that Aptoide is in talks to supply its alternative app store for Huawei devices — in light of the US/China trade uncertainties, and the executive order barring US companies from doing business with the Chinese tech giant, which have led to reports that Google intends to withdraw key Android services like Play from the company.

But Trezentos pours cold water on these rumors, suggesting there has been no change of cadence in its discussions with Huawei.

“We work with three of top six mobile OEMs in the world. Huawei is not one of them yet,” he tells us. “Our Shengzhen office had been in conversations for some months and they are testing our APIs. This process has not been accelerated or delayed by the recent news.”

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US/China trade uncertainty adds to global smartphone growth woes

Posted by | 5g, Android, Asia, canalys, China, donald trump, huawei, Mobile, Samsung, smartphone, Trade war | No Comments

Analyst Canalys has updated its forecast of global smartphone shipments — saying it expects just 1.35 billion units to ship in 2019, a year-on-year decline of 3.1%.

This follows ongoing uncertainty around US-China trade talks and the presidential order signed by Trump last month barring US companies from using kit by Chinese device makers, including Huawei, on national security grounds — which led to reports that Google would withdraw supply of key Android services to Huawei.

“Due to the many uncertainties surrounding the US/China trade talks, the US Executive Order signed on 15 May and subsequent developments, Canalys has lowered its forecasts to reflect an uncertain future,” the analyst writes.

It says its forecast is based on the assumption that restrictions will be stringently applied to Huawei once a 90-day reprieve which was subsequently granted expires — the temporary licence run from May 20, 2019, through August 19, 2019 — making it difficult for the world’s second largest smartphone maker by sales to roll out new devices in the short term, especially outside China, even as it takes steps to mitigate the effect of component and service supply issues.

“Its overseas potential will be hampered for some time,” the analyst suggests. “The US and China may eventually reach a trade deal to alleviate the pressure on Huawei, but if and when this will happen is far from clear.”

“It is important to note that market uncertainty is clearly prompting vendors to accelerate certain strategies to minimize the short- and long-term impact in a challenging business environment, for example, shifting manufacturing to different countries to hedge against the risk of tariffs. But with recent US announcements on tariffs on goods from more countries, the industry will be dealing with turmoil for some time,” added Nicole Peng, Canalys VP, mobility, in a statement.

It expects other smartphone makers to seek to capitalize on short term opportunities created by the uncertainty hitting the Chinese tech giant, and predicts that South Korea’s Samsung will benefit the most — “thanks to its aggressive device strategy and its ability to quickly ramp up production”.

By 2020, it expects the market to have settled a little — with active contingency plans to be in place in major mobile supply chains and channels to “mitigate Huawei’s decline”, as well as gear up for 5G device rollouts.

Canalys takes the view that 5G and other hardware innovations will be positive drivers for consumer demand — expecting smartphone shipments to return to soft growth globally in 2020, rising 3.4% to 1.39BN, albeit with some subtle regional variations that it says will allow some to recover faster than others.

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Science publisher IEEE bans Huawei but says trade rules will have ‘minimal impact’ on members

Posted by | Android, Asia, China, Education, fedex, Gadgets, huawei, IEEE, Intel, New York, Policy, Qualcomm, smartphone, telecommunications, U.S. government | No Comments

The IEEE’s ban on Huawei following new trade restrictions in the United States has sent shock waves through global academic circles. The organization responded saying the impact of the trade policy will have limited effects on its members, but it’s hard at this point to appease those who have long hailed it as an open platform for scientists and professors worldwide to collaborate.

Earlier this week, the New York-headquartered Institute of Electrical and Electronics Engineers blocked Huawei employees from being reviewers or editors for its peer-review process, according to screenshots of an email sent to its editors that first circulated in the Chinese media.

Unbelievable, IEEE is forced to ban Huawei employees from peer-reviewing papers or handling papers as editors. pic.twitter.com/pkvQeOUI07

— Junhui Qian (@qian_junhui) May 29, 2019

The IEEE later confirmed the ban in a statement issued on Wednesday, saying it “complies with U.S. government regulations which restrict the ability of the listed Huawei companies and their employees to participate in certain activities that are not generally open to the public. This includes certain aspects of the publication peer review and editorial process.”

In mid-May, the U.S. Department of Commerce’s Bureau of Industry and Security added Huawei and its affiliates to its “Entity List,” effectively barring U.S. firms from selling technology to Huawei without government approval.

It’s unclear what makes peer review at the IEEE a technology export, but the science association wrote in its email to editors that violation “may have severe legal implications.”

Whilst it’s registered in New York, the IEEE bills itself as a “non-political” and “global” community aiming to “foster technological innovation and excellence for the benefit of humanity.”

Despite its removal of Huawei scientists from paper vetting, the IEEE assured that its compliance with U.S. trade restrictions should have “minimal impact” on its members around the world. It further added that Huawei and its employees can continue to participate in other activities as a member, including accessing the IEEE digital library; submitting technical papers for publication; presenting at IEEE-sponsored conferences; and accepting IEEE awards.

As members of its standard-setting body, Huawei employees can also continue to exercise their voting rights, attend standards development meetings, submit proposals and comment in public discussions on new standards.

A number of Chinese professors have reprimanded the IEEE’s decision, flagging the danger of letting politics meddle with academic collaboration. Zhang Haixia, a professor at the School of Electronic and Computer Engineering of China’s prestigious Peking University, said in a statement that she’s quitting the IEEE boards in protest:

This is Haixia Zhang from Peking University, as an old friend and senior IEEE member, I am really shocked to hear that IEEE is involved in “US-Huawei Ban” for replacing all reviewers from Huawei, which is far beyond the basic line of Science and Technology which I was trainedand am following in my professional career till now.

…today, this message from IEEE for “replacing all reviewers from Huawei in IEEE journals” is challenging my professional integrity. I have to say that, As a professor, I AM NOT accept this. Therefore, I decided to quit from IEEE NANO and IEEE JMEMS editorial board untill one day it come back to our common professional integrity.

The IEEE freeze on Huawei adds to a growing list of international companies and organizations that are severing ties or clashing with the Chinese smartphone and telecom giant in response to the trade blacklist. That includes Google, which has blocked select Android services from Huawei; FedEx, which allegedly “diverted” a number of Huawei packages; ARM, which reportedly told employees to suspend business with Huawei; as well as Intel and Qualcomm, which also reportedly cut ties with Huawei. 

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Eyeing an entry into China, Roblox enters strategic partnership with Tencent

Posted by | children, China, Education, games, Gaming, kids, Roblox, STEM, Tencent | No Comments

Kids gaming platform Roblox has its sights set on China with today’s news that it has entered into a strategic relationship with Chinese tech giant Tencent. The companies announced a strategic partnership that will initially focus on education — specifically, coding fundamentals, game design, digital citizenship and entrepreneurial skills.

The joint venture — still unnamed — will be based in Shenzhen, Roblox says. And its eventual goal is to bring Roblox to China. This is something Roblox has been steadily working toward ahead of today, most recently by adding support for Chinese languages and making its coding curriculum available for free in Chinese.

The first initiative from the new JV will be a scholarship fund that sponsors 15 young developers, who will fly to the U.S. to attend a week-long creator camp at Stanford University. The camp, taught by iD Tech, will teach the students game design, including how to create 3D worlds, along with programming fundamentals using Roblox’s developer tools and Lua code.

Roblox and Tencent, together with the China Association for Educational Technology (CAET), are calling for applications from creators ages 10 through 15. Teachers will be encouraged to nominate their students, who can apply online on Roblox’s website. The submissions close on June 14, and scholarship recipients will be notified on June 28.

The first camp will run the week of July 23, and a second session will run the week of August 18. During camp, students will work, eat and stay at Stanford.

“I’m extremely excited to partner with Roblox,” said Steven Ma, senior vice president of Tencent, in a statement. “We believe technological advancement will help Chinese students learn by fueling their creativity and imagination. Our partnership with Roblox provides an engaging way to reach children of all ages across China to develop skills like coding, design, and entrepreneurship.”

“Tencent is the perfect partner for Roblox in China,” added Roblox founder and CEO Dave Baszucki. “They have a deep understanding of the Chinese market and share our belief of the power of digital creation and our vision to bring the world together through play.”

The multi-year JV will continue to invest in educational initiatives, including local coding camps, training programs for instructors to build custom courses and more.

Unlike other gaming companies, Roblox has to do more than just finding a way into China with the help of a local partner — it also has to create an active community of game creators in the region. That’s because Roblox is a gaming platform, not a game maker itself. Instead, third-party creators build their own games on Roblox for others to play.

Roblox gets a share of the revenue the games make through sales of virtual goods.

In 2017, Roblox said it paid out $30 million to its creator community, and noted that number would more than double in 2018. In April, Roblox noted that game players and creators now spend more than a billion hours per month on its platform. Now valued at more than $2.5 billion, Roblox claims more than 90 million monthly active users — a number that could dramatically increase if Roblox launched in China.

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China’s largest chipmaker is delisting from the NYSE

Posted by | Android, Asia, China, Companies, Google, huawei, Intel, Qualcomm, shanghai, spokesperson, telecommunications, United States, Xiaomi | No Comments

The U.S-China trade war is increasingly influencing tech. Huawei has suffered a turbulent past week with key suppliers pausing work with the company, and now China’s largest chipmaker is planning to delist from the New York Stock Exchange.

Semiconductor Manufacturing International Corp (SMIC) announced in a filing published Friday that it plans to delist next month ending a 15-year spell as a public company in the U.S. The firm will file a Form 25 to delist on June 3, which is likely to see it leave the NYSE around ten days later. SMIC, which is backed by the Chinese government and state-owned shareholders, will focus on its existing Hong Kong listing going forward but there will be trading options for those holding U.S-based ADRs.

In its announcement, SMIC said it plans to delist for reasons that include limited trading volumes and “significant administrative burden and costs” around the listing and compliance with reporting.

What it doesn’t say is that this is linked to the frosty relationship between the U.S. and China, and already the company has played that rationale.

“SMIC has been considering this migration for a long time and it has nothing to do with the trade war and Huawei incident. The migration requires a long preparation and timing has coincided with the current trade rhetoric, which may lead to misconceptions,” a spokesperson told CNBC.

Still, it is impossible to ignore the current context. Huawei’s entry to a U.S. blacklist has paused its relationship with key suppliers including ARM, Qualcomm, Intel and Google, which supplies the Android OS for its phones, so SMIC’s decision to remove its financial links to the U.S. fees into fears of a bifurcation of U.S. and Chinese tech, deliberate or not.

SMIC’s shares dropped 4 percent in Hong Kong on Friday. Trading of its U.S-based ADRs crossed one million on Friday, that’s well above an above 90-day volume of nearly 150,000 per day.

The company is China’s largest chip firm, specializing in integrated circuit manufacturing with clients such as Qualcomm, Broadcom and Texas Instruments. SMIC made a profit of $746.7 million in 2018 on revenues of $3.36 billion. Its most recent Q1 results released earlier this month saw revenue fall 19 percent year-on-year.

There has always been tension around Chinese companies using U.S. public markets to go public, and not just from an American standpoint. Chinese companies are increasingly exploring other options, including Hong Kong — where Xiaomi went public last year — while a-soon-to-launch ‘science and tech’ board in Shanghai is hotly touted as an alternative destination.

The board launches in pilot mode next month, but already Chinese bankers and tech companies have found it challenging to deliver on expectations, as a Reuters report earlier this year concluded.

Update: The headline of this article has been updated to reflect that SMIC is delisting from the NYSE not the Nasdaq

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China’s largest chipmaker is delisting from the Nasdaq

Posted by | Android, Asia, China, Companies, Google, huawei, Intel, Qualcomm, shanghai, spokesperson, telecommunications, United States, Xiaomi | No Comments

The U.S-China trade war is increasingly influencing tech. Huawei has suffered a turbulent past week with key suppliers pausing work with the company, and now China’s largest chipmaker is planning to delist from the New York Stock Exchange.

Semiconductor Manufacturing International Corp (SMIC) announced in a filing published Friday that it plans to delist next month ending a 15-year spell as a public company in the U.S. The firm will file a Form 25 to delist on June 3, which is likely to see it leave the NYSE around ten days later. SMIC, which is backed by the Chinese government and state-owned shareholders, will focus on its existing Hong Kong listing going forward but there will be trading options for those holding U.S-based ADRs.

In its announcement, SMIC said it plans to delist for reasons that include limited trading volumes and “significant administrative burden and costs” around the listing and compliance with reporting.

What it doesn’t say is that this is linked to the frosty relationship between the U.S. and China, and already the company has played that rationale.

“SMIC has been considering this migration for a long time and it has nothing to do with the trade war and Huawei incident. The migration requires a long preparation and timing has coincided with the current trade rhetoric, which may lead to misconceptions,” a spokesperson told CNBC.

Still, it is impossible to ignore the current context. Huawei’s entry to a U.S. blacklist has paused its relationship with key suppliers including ARM, Qualcomm, Intel and Google, which supplies the Android OS for its phones, so SMIC’s decision to remove its financial links to the U.S. fees into fears of a bifurcation of U.S. and Chinese tech, deliberate or not.

SMIC’s shares dropped 4 percent in Hong Kong on Friday. Trading of its U.S-based ADRs crossed one million on Friday, that’s well above an above 90-day volume of nearly 150,000 per day.

The company is China’s largest chip firm, specializing in integrated circuit manufacturing with clients such as Qualcomm, Broadcom and Texas Instruments. SMIC made a profit of $746.7 million in 2018 on revenues of $3.36 billion. Its most recent Q1 results released earlier this month saw revenue fall 19 percent year-on-year.

There has always been tension around Chinese companies using U.S. public markets to go public, and not just from an American standpoint. Chinese companies are increasingly exploring other options, including Hong Kong — where Xiaomi went public last year — while a-soon-to-launch ‘science and tech’ board in Shanghai is hotly touted as an alternative destination.

The board launches in pilot mode next month, but already Chinese bankers and tech companies have found it challenging to deliver on expectations, as a Reuters report earlier this year concluded.

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ByteDance, TikTok’s parent company, plans to launch a free music streaming app

Posted by | Apple, Apps, Asia, bytedance, China, india, Media, Mobile, musical.ly, Snap, Spotify, tiktok | No Comments

Does the overcrowded and cut-throat music streaming business have room for an additional player? The world’s most valuable startup certainly thinks so.

Chinese conglomerate ByteDance, valued at more than $75 billion, is working on a music streaming service, two sources familiar with the matter told TechCrunch. The company, which operates popular app TikTok, has held discussions with music labels in recent months to launch the app as soon as the end of this quarter, one of the sources said.

The app will offer both a premium and an ad-supported free tier, one of the sources said. Bloomberg, which first wrote about the premium app, reported that ByteDance is targeting emerging markets with its new music app. A ByteDance spokesperson declined to comment.

For ByteDance, interest in a music app does not come as a surprise. Snippets of pop songs from movies and albums intertwined with videos shot by its humongous user base is part of the service’s charm. The company already works with music labels worldwide to licence usage of their tracks on its platform. In China, where ByteDance claims to have tie-ups with more than 800 labels, it has been aggressively expanding efforts to find music talents and urge them to make their own tracks.

Besides, ByteDance has been expanding its app portfolio in recent months. Earlier this year, the company released Duoshan, a video chat app that appears to be a mix of TikTok and Snap. This week, it launched Feiliao, another chat app that is largely focused on text-driven conversations. At some point, the company may have realized the need for a standalone music consumption app.

When asked about TikTok’s partnership with music labels last month, Todd Schefflin, TikTok’s head of global music business development, told WSJ that music is part of the app’s “creative DNA” but it is “ultimately for short video creation and viewing, not a product for music consumption.”

The private Chinese company is likely eyeing India as a key market for its music app. The company has been in discussion with local music labels T Series and Times Music for rights. Moreover, its apps are estimated to have more than 300 million monthly active users in the nation, though there could be significant overlaps among them.

India may have also inspired ByteDance to consider a free, ad-supported version of its music app. Even as more than 150 million users in India listen to music online, only a tiny portion of this user base is willing to pay for it.

This has made India a unique battleground for local and international music giants, most of which offer an ad-supported, free version of their apps in the market. Even premium offerings from Apple and Spotify cost less than $1.2 a month. India is the only market where Spotify offers a free version of its app that has access to the entire catalog on demand.

The launch of the app could put the spotlight again on ByteDance in India, where its TikTok app recently landed in hot water. An Indian court banned the app for roughly a week after expressing concerns over questionable content on the platform. Ever since the nation lifted the ban on TikTok, the company has become visibly cautious about its movement.

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Trump’s Huawei ban also causing tech shocks in Europe

Posted by | Android, China, Europe, european commission, finland, Google, Google Play, Government, huawei, Jolla, Mobile, Nokia, play store, Qwant, Sami Pienimäki, search engine, smartphone, smartphones, stmicroelectronics, Trade war, trump, United States | No Comments

The escalating U.S.-China trade war that’s seen Chinese tech giant Huawei slapped on a U.S. trade blacklist is causing ripples of shock across Europe too, as restrictions imposed on U.S. companies hit regional suppliers concerned they could face U.S. restrictions if they don’t ditch Huawei.

Reuters reports shares fell sharply today in three European chipmakers — Infineon Technologies, AMS and STMicroelectronics — after reports suggested some already had, or were about to, halt shipments to Huawei following the executive order barring U.S. firms from trading with the Chinese tech giant.

The interconnectedness of high-tech supply chains coupled with U.S. dominance of the sector and Huawei’s strong regional position as a supplier of cellular, IT and network kit in Europe suddenly makes political risk a fast-accelerating threat for EU technology companies, large and small.

On the small side is French startup Qwant, which competes with Google by offering a pro-privacy search engine. In recent months it has been hoping to leverage a European antitrust decision against Google  Android last year to get smartphones to market in Europe that preload its search engine, not Google’s.

Huawei was its intended first major partner for such devices. Though, prior to recent trade war developments, it was already facing difficulties related to price incentives Google included in reworked EU Android licensing terms.

Still, the U.S.-China trade war threatens to throw a far more existential spanner in European Commission efforts to reset the competitive planning field for smartphone services — certainly if Google’s response to Huawei’s blacklisting is to torch its supply of almost all Android-related services, per Reuters.

A key aim of the EU antitrust decision was intended to support the unbundling of popular Google services from Android so that device makers can try selling combinations that aren’t entirely Google-flavored — while still being able to offer enough “Google” to excite consumers (such as preloading the Play Store but with a different search and browser bundle instead of the usual Google + Chrome combo).

Yet if Google intends to limit Huawei’s access to such key services, there’s little chance of that.

(In a statement responding to the Reuters report Google suggested it’s still deciding how to proceed, with a spokesperson writing: “We are complying with the order and reviewing the implications. For users of our services, Google Play and the security protections from Google Play Protect will continue to function on existing Huawei devices.”)

Going on Google’s initial response, Qwant co-founder and CEO Eric Léandri told us he thinks Google has overreacted — even as he dubbed the U.S.-China trade war “world war III — economical war but it’s a world war for sure.”

“I really need to see exactly what President Trump has said about Huawei and how to work with them. Because I think maybe Google has overreacted. Because I haven’t [interpreted it] that way so I’m very surprised,” he told TechCrunch.

“If Huawei can be [blacklisted] what about the others?,” he added. “Because I would say 60% of the cell phone sales in Europe today are coming from China. Huawei or ZTE, OnePlus and the others — they are all under the same kind of risk.

“Even some of our European brands who are very small like Nokia… all of them are made in China, usually with partnership with these big cell phone manufacturers. So that means several things but one thing that I’m sure is we should not rely on one OS. It would be difficult to explain how the Play Store is not as important as the search in Android.”

Léandri also questioned whether Google’s response to the blacklisting will include instructing Huawei not to even use its search engine — a move that could impact its share of the smartphone search market.

“At the end of the day there is just one thing I can say because I’m just a search engine and a European one — I haven’t seen Google asking to not be by default in Huawei as search engine. If they can be in the Huawei by default as a search engine so I presume that everyone else can be there.”

Léandri said Qwant will be watching to see what Huawei’s next steps will be — such as whether it will decide to try offering devices with its own store baked in in Europe.

And indeed how China will react.

“We have to understand the result politically, globally, the European consequences. The European attitude. It’s not only American and China — the rest of the world exists,” he said.

“I have plan b, plan c, plan d, plan f. To be clear we are a startup — so we can have tonnes of plans, The only thing is right now is it’s too enormous.

“I know that they are the two giants in the tech field… but the rest of the world have some words today and let’s see how the European Commission will react, my government will react and some of us will react because it’s not only a small commercial problem right now. It’s a real political power demonstration and it’s global so I will not be more — I am nobody in all this. I do my job and I do my job well and I will use the maximum opportunity that I can find on the market.”

We’ve reached out to the Commission to ask how it intends to respond to escalating risks for European tech firms as Trump’s trade war steps up.

Also today, Reuters reports that the German Economy Minister is examining the impact of U.S. sanctions against Huawei on local companies.

But while a startup like Qwant waits to see what the next few months will bring — and how the landscape of the smartphone market might radically reconfigure in the face of sharply spiking political risk, a different European startup is hoping to catch some uplift: Finland-based Jolla steers development of a made-in-Europe Android alternative, called Sailfish OS.

It’s a very tiny player in a Google-dominated smartphone world. Yet could be positioned to make gains amid U.S. and Chinese tech clashes — which in turn risk making major platform pieces feel a whole lot less stable.

A made-in-Europe non-Google-led OS might gain more ground among risk averse governments and enterprises — as a sensible hedge against Trump-fueled global uncertainty.

“Sailfish OS, as a non-American, open-source based, secure mobile OS platform, is naturally an interesting option for different players — currently the interest is stronger among corporate and governmental customers and partners, as our product offering is clearly focused on this segment,” says Jolla co-founder and CEO Sami Pienimäki .

“Overall, there definitely has been increased interest towards Sailfish OS as a mobile OS platform in different parts of the world, partly triggered by the on-going political activity in many locations. We have also had clearly more discussions with e.g. Chinese device manufacturers, and Jolla has also recently started new corporate and governmental customer projects in Europe.”

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Google says its app store will continue to work for existing Huawei smartphone owners

Posted by | Android, Apps, Asia, China, Developer, Gadgets, Google, Google Play, Google Play Store, huawei, Security | No Comments

Google said today that existing users of Huawei Android devices can continue to use Google Play app store, offering some relief to tens of millions of users worldwide even as it remains unclear if the Chinese tech giant will be able to use the fully-functioning version of Android in its future phones.

Existing Huawei phone users will also be able to enjoy security protections delivered through Google Play Protect, the company said in a statement to TechCrunch. Google Play Protect is a built-in malware detector that uses machine learning to detect and weed out rogue apps. Google did not specify whether Huawei devices will receive future Android updates.

The statement comes after Reuters reported on Sunday that Google is suspending some businesses with Huawei, the world’s second largest smartphone maker that shipped over 200 million handsets last year. The report claimed, a point not addressed by Google, that future Android devices from Huawei will not run Google Mobile Services, a host of services offered by Google including Google Play Store, and email client Gmail. A Huawei spokesperson said the company is looking into the situation but has nothing to share beyond this.

For Huawei users’ questions regarding our steps to comply w/ the recent US government actions: We assure you while we are complying with all US gov’t requirements, services like Google Play & security from Google Play Protect will keep functioning on your existing Huawei device.

— Android (@Android) May 20, 2019

 

It’s a major setback for Huawei, which unless resolved in the next few weeks, could significantly disrupt its phone business outside of China. The top Android phone vendor, which is already grappling with controversy over security concerns, will have to rethink its software strategy for future phones if there is no resolution. Dearth — or delay in delivery — of future Android updates would also hurt the company’s reputation among its customers around the globe.

“We are complying with the order and reviewing the implications,” a company spokesperson said in a statement.

The two tech companies find themselves in this awkward situation as a result of the latest development in the ongoing U.S-China trade war. Huawei and 70 of its affiliates have been put on an “entity list” by the U.S. Commerce Department over national security concerns, requiring local giants such as Google and Intel to take approval from the government before conducting business with the Chinese firm.

Huawei may have already foreseen this. A company executive revealed recently that Huawei had built its own Android-based operating system in case a future event prevented it from using existing systems. Per Reuters, Huawei can also continue to use AOSP, the open source Android operating system that ships stripped off Google Mobile Services. And on paper, it can also probably have an app store of its own. But convincing enough stakeholders to make their apps available on Huawei’s store and continually push updates could prove incredibly challenging.

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