Qualcomm

What China searched for in 2018: World Cup, trade war, Apple

Posted by | Android, Apple, artificial intelligence, Asia, Baidu, China, Entertainment, Facebook, Google, huawei, iQiyi, Netflix, oppo, producer, Qualcomm, quantum computing, search engine, shenzhen, smartphone, TC, Tencent, world cup | No Comments

Soon after Google unveiled the top trends in what people searched for in 2018, Baidu published what captivated the Chinese in a parallel online universe, where most of the West’s mainstream tech services, including Google and Facebook, are inaccessible.

China’s top search engine put together the report “based on trillions of trending queries” to present a “social collective memory” of internet users, said Baidu; 802 million people have come online in China as of August, and many of them use Baidu to look things up daily.

Overall, Chinese internet users were transfixed on a mix of sports events, natural disasters, politics and entertainment, a pattern that also prevails in Google’s year-in-search. On Baidu, the most popular queries of the year are:

  1. World Cup: China shares its top search with the rest of the world. Despite China’s lackluster performance in the tournament, World Cup managed to capture a massive Chinese fan base who supported an array of foreign teams. People filled bars in big cities at night to watch the heart-thumping matches, and many even trekked north to Russia to show their support.
  2. U.S.-China trade war: The runner-up comes as no surprise, given the escalating conflict between the world’s two largest economies. A series of events have stoked more fears of the stand-off, including the arrest of Huawei’s financial chief.
  3. Typhoon Mangkhut: The massive tropical cyclone swept across the Pacific Ocean in September, leaving the Philippines and South China in shambles. Shenzhen, the Chinese city dubbed the Silicon Valley for hardware, reportedly submitted more than $20.4 million in damage claims after the storm.
  4. Apple launch: The American smartphone giant is still getting a lot of attention in China even as local Android competitors like Huawei and Oppo chip away at its market share. Apple is also fighting a legal battle with chipmaker Qualcomm, which wanted the former to stop selling certain smartphone models in China.
  5. The story of Yanxi Palace: The historical drama of backstabbing concubines drew record-breaking views for its streamer and producer iQiyi, China’s answer to Netflix that floated in the U.S. in February. The 70-episode show was watched not only in China but also across more than 70 countries around the world.
  6. Produce 101: The talent show in which 101 young women race to be the best performer is one of Tencent Video’s biggest hits of the year, but its reach has gone beyond its targeted young audience as it popularized a meme, which made it to No. 9 on this list.
  7. Skr: A buzzword courtesy of pop idol Kris Wu, who extensively used it on a whim during iQiyi’s rap competition “Rap of China,” prompting his fans and internet users to bestow it with myriad interpretations.
  8. Li Yong passed away: The sudden death of the much-loved television host after he fought a 17-month battle with cancer stirred an outpouring of grief on social media.
  9. Koi: A colored variety of carps, the fish is associated with good luck in Chinese culture. Yang Chaoyue, a Produce 101 contestant whom the audience believed to be below average surprisingly rose to fame and has since been compared to a koi.
  10.  Esports: Professional gaming has emerged from the underground to become a source of national pride recently after a Chinese team championed the League of Legend finals, an event regarded as the Olympics for esports.

In addition to the overall ranking, Baidu also listed popular terms by category, with staple areas like domestic affairs alongside those with a local flavor, such as events that inspire national pride or are tear-jerking.

This was also the first year that Baidu added a category dedicated to AI-related keywords. The search giant, which itself has pivoted to go all in AI and has invested heavily in autonomous driving, said the technology “has not only become a nationwide buzzword but also a key engine in transforming lives across the globe.” In 2018, Chinese people were keen to learn about these AI terms: robots, chips, internet of things, smart speakers, autonomous driving, face recognition, quantum computing, unmanned vehicles, World Artificial Intelligence Conference and quantum mechanics.

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Qualcomm announces the Snapdragon 855 and its new under-display fingerprint sensor

Posted by | 5g, artificial intelligence, Gadgets, gigabit, hardware, Mobile, Qualcomm, snapdragon, system on a chip | No Comments

This week, Qualcomm is hosting press and analysts on Maui for its annual Snapdragon Summit. Sadly, we’re not there, but a couple of weeks ago, Qualcomm gave us a preview of the news. There’ll be three days of news and the company decided to start with a focus on 5G, as well as a preview of its new Snapdragon 855 mobile platform. In addition, the company announced its new ultrasonic fingerprint solution for sensors that can sit under the display.

It’ll probably still be a while before there’ll be a 5G tower in your neighborhood, but after years of buzz, it’s fair to say that we’re now getting to the point where 5G is becoming real. Indeed, AT&T and Verizon are showing off live 5G networks on Maui this week. Qualcomm described its event as the “coming out party for 5G,” though I’m sure we’ll hear from plenty of other players who will claim the same in the coming months.

In the short term, what’s maybe more interesting is that Qualcomm also announced its new flagship 855 mobile platform today. While the company didn’t release all of the details yet, it stressed that the 855 is “the world’s first commercial mobile platform supporting multi-gigabit 5G.”

The 855 also features a new multi-core AI engine that promises up to 3x better AI performance compared to its previous mobile platform, as well as specialized computer vision silicon for enhanced computational photography (think something akin to Google’s Night Light) and video capture.

The company also briefly noted that the new platform has been optimized for gaming. The product name for this is “Snapdragon Elite Gaming,” but details remain sparse. Qualcomm also continues to bet on AR (or “extended reality” as the company brands it).

The last piece of news is likely the most interesting here. Fingerprint sensors are now standard, even on mid-market phones. With its new 3D Sonic Sensors, Qualcomm promises an enhanced ultrasonic fingerprint solution that can sit under the display. In part, this is a rebranding of Qualcomm’s existing under-display sensor, but there’s some new technology here, too. The promise here is that the scanner will work, even if the display is very dirty or if the user installs a screen protector. Chances are, we’ll see quite a few new flagship phones in the next few months (Mobile World Congress is coming up quickly, after all) that will feature these new fingerprint scanners.

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Mobvoi launches new $200 smartwatch and $130 AirPods alternative

Posted by | Android, Apple, artificial intelligence, Asia, Assistant, China, computing, Gadgets, Google, indiegogo, Kickstarter, mobvoi, Qualcomm, smartwatches, TC, voice assistant, wearable devices | No Comments

Chinese AI company Mobvoi has consistently been one of the best also-rans in the smartwatch game, which remains dominated by Apple. Today, it launched a sequel to its 2016 TicWatch, which was a viral hit raising over $2 million on Kickstarter, and it unveiled a cheaper take on Apple’s AirPods.

The new TicWatch C2 was outed at a London event and is priced at $199.99. Unlike its predecessor, it has shifted from Mobvoi’s own OS to Google’s Wear OS. That isn’t a huge surprise, though, since Mobvoi’s newer budget watches and ‘pro’ watch have both already made that jump.

The C2 — which stands for classic 2 — packs NFC, Bluetooth, NFC and a voice assistant. It comes in black, platinum and rose gold. The latter color option — shown below — is thinner so presumably it is designed for female wrists.

However, there’s a compromise since the watch isn’t shipping with Qualcomm’s newest Snapdragon Wear 3100 chip. Mobvoi has instead picked the older 2100 processor. That might explain the price, but it will mean that newer Android Wear watches shipping in the company months have better performance, particularly around battery life. As it stands, the TicWatch C2 claims a day-two life but the processor should be a consideration for would-be buyers.

Mobvoi also outed TicPods Free, its take on Apple’s wireless AirPods. They are priced at $129.99 and available in red, white and blue.

The earbuds already raised over $2.8 million from Indiegogo — Mobvoi typically uses crowdfunding to gather feedback and assess customer interest — and early reviews have been positive.

They work on Android and iOS and include support for Alex and Google Assistant. They also include gesture-based controls beyond the Apple-style taps for skipping music, etc. Battery life without the case, which doubles as a charger, is estimated at 18 hours, or four hours of listening time.

The TicPods are available to buy online now. The TicWatch C2 is up for pre-sale ahead of a “wide” launch that’s planned for December 6.

Mobvoi specializes in AI and it includes Google among its investors. It also has a joint venture with VW that is focused on bringing Ai into the automotive industry. In China it is best known for AI services but globally, in the consumer space, it also offers a Google Assistant speaker called TicHome Mini.

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Apple’s 5G iPhone conundrum

Posted by | 5g, Apple, Apple Hardware Event 2018, Asia, China, Mobile, Qualcomm | No Comments

Wednesday is Apple’s big product release day, where analysts expect the company to release the next edition of the iPhone. While the usual upgrades to the screen, CPU, and storage are expected as always, one major lingering question is how the company is going to handle 5G, the next-generation telecommunications standard.

The conventional wisdom among analysts is that Apple will ignore 5G in 2018 and 2019 just as it took extra time to rollout 3G and 4G chipsets in its phones. A typical example of this analysis comes from Chris Smith at BGR, who says that “We already saw what Apple did when 4G LTE came out. The company waited for carriers actually to offer decent coverage before launching the first 4G iPhone. That was the iPhone 5, by the way, which launched more than a year after the first Android-based LTE phones came out.”

I’m not nearly as convinced. There are many reasons for Apple to ignore the tech this year, which I will get to in a moment, but one major factor could drive an earlier discussion of 5G than expected: Apple’s growth markets, particularly in China.

China is becoming one of Apple’s most important markets for its smartphones, and particularly for its flagship iPhone X. Its greater China revenue in the third quarter of this year was $9.6 billion, and its operating income from the region was just shy of Europe’s. More importantly, greater China is just slightly behind the Americas as the fastest-growing region for Apple’s sales.

That makes 5G a particularly challenging issue for the company. China has made 5G leadership a critical pillar of its industrial strategy, and many analysts believe the country will set the pace for 5G rollouts globally. Furthermore, Chinese consumers are deeply interested in buying premium products and experiences, and adoption for 5G is expected to be strong and rapid.

With the technical specifications around the 5G standard complete, companies are racing to build the chipsets and deploy the infrastructure necessary to enable this new standard in smartphones and other devices. Early networks are expected to be deployed in 2019, and chipset maker Qualcomm has publicly unveiled more than a dozen handset manufacturers who are partnering with it on 5G. For instance, Vivo, a Chinese smartphone manufacturer, announced today that it was developing its first “pre-commercial 5G smartphones” for launch next year.

The speed and timing of the 5G rollout is awkward for Apple, which has traditionally timed its iPhone events for September. It almost certainly will make no announcements this week, but its next iPhone launch would likely be September 2019 — giving Chinese handset manufacturers with early 5G devices nearly exclusive access to the local market for the first three quarters of next year.

Apple would find itself falling behind its competitors in a fast-moving and critical growth market. While the company has built a brand in the country with devoted fans, its place in the market is not nearly as secure as in the U.S., particularly as the trade war between the two nations reaches a fevered pitch.

There’s no doubt that the challenges for Apple to include the technology are immense. First is the patent licensing cost, which Jeremy Horwitz at VentureBeat put at roughly $21 per device, up from around $9 for 4G. Second, the leading American company in 5G is believed to be Qualcomm, which Apple has been fighting in a long-running patent war, to the point that the company has been actively trying to remove Qualcomm equipment from its phones. Apple’s name was notably absent from Qualcomm’s 5G partner list.

While some early chip designs are available, they are hardly ready for primetime, and certainly not for a flagship phone like the iPhone X. Nor do I expect that Apple will imply on Wednesday that the company will support 5G in future releases and dampen enthusiasm for its newly-released devices. No one wants to be told that next year’s devices are going to be better than one released just minutes ago.

Instead, I expect Apple will use smoke signals to clearly demonstrate that it intends to remain at the cutting edge of 5G deployment. That could include joining certain industry trade groups, testing the technology in a more public fashion, and potentially releasing a roadmap next year, say at its Worldwide Developers Conference, which is traditionally held in June and thus earlier in the year than its September iPhone events.

What would be concerning though is if we get to the end of 2018 and into 2019 with nary a peep from the company about its plans for the technology. Given its commitment to China, as well as its leading position within the smartphone market, the company has to engage on the technologies around 5G in a public manner in order to prevent a loss in its competitive position.

Ultimately, much will depend on China Mobile and other telcos in China as well as around the world on how fast they can deploy 5G infrastructure (sadly, it looks increasingly like the U.S. faces a bumpy road in that direction). Beyond gold iPhone rumors, 5G may well be the first time that China drives the company’s product roadmaps, and it should be wary of finding itself on the defensive.

more iPhone Event 2018 coverage

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Fossil announces new update to Android Wear watches with HR tracking, GPS

Posted by | Android, Apple Watch, computing, fossil, Gadgets, Google, gps, huawei watch, Qualcomm, smartwatches, TC, technology, ubiquitous computing, watches, wear os, wearable devices, Wearables | No Comments

Fossil’s Q watch line is an interesting foray by a traditional fashion watchmaker into the wearable world. Their latest additions to the line, the Fossil Q Venture HR and Fossil Q Explorist HR, add a great deal of Android Wear functionality to a watch that is reminiscent of Fossil’s earlier, simpler watches. In other words, these are some nice, low-cost smartwatches for the fitness fan.

The original Q watches included a clever hybrid model with analog face and step counter. As the company expanded into wearables, however, they went the Android Wear route and created a number of lower-powered touchscreen watches. Now, thanks to a new chipset, Fossil is able to add a great deal more functionality in a nice package. The Venture and the Explorist adds untethered GPS, NFC, heart rate and 24-hour battery life. It also includes an altimeter and gyroscope sensor.

The new watches start at $255 and run the Qualcomm Snapdragon Wear 2100 chip, an optimized chipset for fitness watches.

The watch comes in multiple styles and with multiple bands and features 36 faces, including health and fitness-focused faces for the physically ambitious. The watch also allows you to pay with Google Pay — Apple Pay isn’t supported — and you can store content on the watch for runs or walks. It also tracks swims and is waterproof. The Venture and Explorist are 40mm and 45mm, respectively, and the straps are interchangeable. While they’re no $10,000 Swiss masterpiece, these things look — and work — pretty good.

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Computer vision researchers build an AI benchmark app for Android phones

Posted by | AI, Android, Apps, artificial intelligence, Benchmark, Computer Vision, Developer, Europe, Google, hardware, huawei, MediaTek, Mobile, neural network, neural networks, Qualcomm, RAM, Samsung, Samsung Electronics, smartphones | No Comments

A group of computer vision researchers from ETH Zurich want to do their bit to enhance AI development on smartphones. To wit: They’ve created a benchmark system for assessing the performance of several major neural network architectures used for common AI tasks.

They’re hoping it will be useful to other AI researchers but also to chipmakers (by helping them get competitive insights); Android developers (to see how fast their AI models will run on different devices); and, well, to phone nerds — such as by showing whether or not a particular device contains the necessary drivers for AI accelerators. (And, therefore, whether or not they should believe a company’s marketing messages.)

The app, called AI Benchmark, is available for download on Google Play and can run on any device with Android 4.1 or higher — generating a score the researchers describe as a “final verdict” of the device’s AI performance.

AI tasks being assessed by their benchmark system include image classification, face recognition, image deblurring, image super-resolution, photo enhancement or segmentation.

They are even testing some algorithms used in autonomous driving systems, though there’s not really any practical purpose for doing that at this point. Not yet anyway. (Looking down the road, the researchers say it’s not clear what hardware platform will be used for autonomous driving — and they suggest it’s “quite possible” mobile processors will, in future, become fast enough to be used for this task. So they’re at least prepped for that possibility.)

The app also includes visualizations of the algorithms’ output to help users assess the results and get a feel for the current state-of-the-art in various AI fields.

The researchers hope their score will become a universally accepted metric — similar to DxOMark that is used for evaluating camera performance — and all algorithms included in the benchmark are open source. The current ranking of different smartphones and mobile processors is available on the project’s webpage.

The benchmark system and app was around three months in development, says AI researcher and developer Andrey Ignatov.

He explains that the score being displayed reflects two main aspects: The SoC’s speed and available RAM.

“Let’s consider two devices: one with a score of 6000 and one with a score of 200. If some AI algorithm will run on the first device for 5 seconds, then this means that on the second device this will take about 30 times longer, i.e. almost 2.5 minutes. And if we are thinking about applications like face recognition this is not just about the speed, but about the applicability of the approach: Nobody will wait 10 seconds till their phone will be trying to recognize them.

“The same is about memory: The larger is the network/input image — the more RAM is needed to process it. If the phone has a small amount of RAM that is e.g. only enough to enhance 0.3MP photo, then this enhancement will be clearly useless, but if it can do the same job for Full HD images — this opens up much wider possibilities. So, basically the higher score — the more complex algorithms can be used / larger images can be processed / it will take less time to do this.”

Discussing the idea for the benchmark, Ignatov says the lab is “tightly bound” to both research and industry — so “at some point we became curious about what are the limitations of running the recent AI algorithms on smartphones”.

“Since there was no information about this (currently, all AI algorithms are running remotely on the servers, not on your device, except for some built-in apps integrated in phone’s firmware), we decided to develop our own tool that will clearly show the performance and capabilities of each device,” he adds. 

“We can say that we are quite satisfied with the obtained results — despite all current problems, the industry is clearly moving towards using AI on smartphones, and we also hope that our efforts will help to accelerate this movement and give some useful information for other members participating in this development.”

After building the benchmarking system and collating scores on a bunch of Android devices, Ignatov sums up the current situation of AI on smartphones as “both interesting and absurd”.

For example, the team found that devices running Qualcomm chips weren’t the clear winners they’d imagined — i.e. based on the company’s promotional materials about Snapdragon’s 845 AI capabilities and 8x performance acceleration.

“It turned out that this acceleration is available only for ‘quantized’ networks that currently cannot be deployed on the phones, thus for ‘normal’ networks you won’t get any acceleration at all,” he says. “The saddest thing is that actually they can theoretically provide acceleration for the latter networks too, but they just haven’t implemented the appropriated drivers yet, and the only possible way to get this acceleration now is to use Snapdragon’s proprietary SDK available for their own processors only. As a result — if you are developing an app that is using AI, you won’t get any acceleration on Snapdragon’s SoCs, unless you are developing it for their processors only.”

Whereas the researchers found that Huawei’s Kirin’s 970 CPU — which is technically even slower than Snapdragon 636 — offered a surprisingly strong performance.

“Their integrated NPU gives almost 10x acceleration for Neural Networks, and thus even the most powerful phone CPUs and GPUs can’t compete with it,” says Ignatov. “Additionally, Huawei P20/P20 Pro are the only smartphones on the market running Android 8.1 that are currently providing AI acceleration, all other phones will get this support only in Android 9 or later.”

It’s not all great news for Huawei phone owners, though, as Ignatov says the NPU doesn’t provide acceleration for ‘quantized’ networks (though he notes the company has promised to add this support by the end of this year); and also it uses its own RAM — which is “quite limited” in size, and therefore you “can’t process large images with it”…

“We would say that if they solve these two issues — most likely nobody will be able to compete with them within the following year(s),” he suggests, though he also emphasizes that this assessment only refers to the one SoC, noting that Huawei’s processors don’t have the NPU module.

For Samsung processors, the researchers flag up that all the company’s devices are still running Android 8.0 but AI acceleration is only available starting from Android 8.1 and above. Natch.

They also found CPU performance could “vary quite significantly” — up to 50% on the same Samsung device — because of throttling and power optimization logic. Which would then have a knock on impact on AI performance.

For Mediatek, the researchers found the chipmaker is providing acceleration for both ‘quantized’ and ‘normal’ networks — which means it can reach the performance of “top CPUs”.

But, on the flip side, Ignatov calls out the company’s slogan — that it’s “Leading the Edge-AI Technology Revolution” — dubbing it “nothing more than their dream”, and adding: “Even the aforementioned Samsung’s latest Exynos CPU can slightly outperform it without using any acceleration at all, not to mention Huawei with its Kirin’s 970 NPU.”

“In summary: Snapdragon — can theoretically provide good results, but are lacking the drivers; Huawei — quite outstanding results now and most probably in the nearest future; Samsung — no acceleration support now (most likely this will change soon since they are now developing their own AI Chip), but powerful CPUs; Mediatek — good results for mid-range devices, but definitely no breakthrough.”

It’s also worth noting that some of the results were obtained on prototype samples, rather than shipped smartphones, so haven’t yet been included in the benchmark table on the team’s website.

“We will wait till the devices with final firmware will come to the market since some changes might still be introduced,” he adds.

For more on the pros and cons of AI-powered smartphone features check out our article from earlier this year.

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Europe updates its predatory pricing investigation against Qualcomm over UMTS baseband chips

Posted by | 3g, Europe, european commission, Mobile, Qualcomm, UMTS | No Comments

On the heels of Google getting served a $5 billion fine by the EU over monopolistic practices related to its Android operating system, the European Commission today resurfaced another ongoing case in the world of large U.S. tech companies. The EC said that it has added to its investigation into Qualcomm and its predatory pricing of UMTS baseband chips. Specifically, today the Commission has sent more details relating to elements of the “price cost” test that it had applied to measure just how much below cost Qualcomm was selling UMTS baseband chips to edge out competitors.

If the case is decided against Qualcomm, the company could face an additional fine of up to 10 percent of its worldwide revenues. In 2009, these were $10.4 billion, while in 2017, global turnover was over $22 billion.

The original, 2015 case was based on a complaint filed by Icera — once a big player in baseband chips — and dates back to practices between 2009 and 2011 and alleged that Qualcomm used its market position to negotiate artificially low prices for UMTS chips — used in 3G phones — in order to oust out Icera. Others that made similar chips include Nvidia.

Qualcomm has wasted little time in responding to the notice posted by the EC.

“This investigation, now in its ninth year, alleges harm in 2009-2011, to a competitor who chose years later to exit the market for reasons unrelated to Qualcomm,” said Don Rosenberg, general counsel and executive vice president of Qualcomm in a statement. “While the investigation has been narrowed, we are disappointed to see it continues and will immediately begin preparing our response to this supplementary statement of objections. We belief that once the Commission has reviewed our response it will find that Qualcomm’s practices are pro-competitive and fully consistent with European competition rules.”

Qualcomm is already in the middle of appealing a $1.23 billion fine in the EU over LTE chip dominance in the iPhone, related to deals that were made with Apple at the expense of another big rival of Qualcomm’s, Intel. (Never mind that Apple and Qualcomm are also in the middle of a patent dispute.)

This older case, as Qualcomm points out, has been narrowed since it was first announced almost exactly three years ago. And while we don’t know what the exact details of the supplementary objections are and whether they have expanded them again (we have contacted the EC to try to find out), the Commission also notes in its short statement — printed in full below — that sending an update to its calculations doesn’t necessarily imply the outcome of this case.

Statement below.

The European Commission has sent a Supplementary Statement of Objections to Qualcomm Inc. This is a procedural step in the Commission’s ongoing investigation under EU antitrust rules looking into whether Qualcomm engaged in ‘predatory pricing’. The Commission sent a Statement of Objections to Qualcomm in December 2015 detailing its concerns. In particular, the Commission’s preliminary view is that between 2009 and 2011 Qualcomm sold certain UMTS baseband chipsets at prices below cost, with the intention of eliminating Icera, its main competitor in the leading edge segment of the market at that time. UMTS chipsets are key components of mobile devices. They enable both voice and data transmission in third generation (3G) cellular communication. The Supplementary Statement of Objections sent today focuses on certain elements of the “price-cost” test applied by the Commission to assess the extent to which UMTS baseband chipsets were sold by Qualcomm at prices below cost. The sending of a Supplementary Statement of Objections does not prejudge the outcome of the investigation. More information is available on the Commission’s competition website, in the public case register under the case number AT.39711.

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Xiaomi CDRs, SoftBank’s successors and China’s Samsung investigation

Posted by | Asia, Government, Mobile, Qualcomm, Samsung, Softbank, sprint, TC, Xiaomi | No Comments

The weekend provided no rest to news-wary reporters, with major announcements coming from Xiaomi, SoftBank and the Chinese government the past few days that will continue to change the global tech landscape.

Xiaomi Chinese Depository Receipts

One of the most important yet underreported stories of 2018 has been the development of Chinese Depository Receipts (known as CDRs). I wrote a comprehensive primer on the investment mechanism a few weeks ago, but the summary is that CDRs will give mainland Chinese investors access to overseas-listed stocks that set up the right custodian accounts. Due to domestic capital controls and relatively weak stock exchange rules in China, many Chinese tech giants are listed on overseas stock exchanges in New York and Hong Kong.

Beijing-based Xiaomi, which produces a line of phones and offers mobile software services, is launching one of the most anticipated IPOs of the year, with a valuation expected to top tens of billions of dollars. In its official filing, the company targeted a fundraise of $10 billion. While Xiaomi is a sterling example of the potential success of Chinese entrepreneurs, local retail buyers would likely have had no access to buy the stock, which will be listed in Hong Kong.

Fiona Lau and Julie Zhu at Reuters are now reporting that Xiaomi could be one of the first companies to take advantage of the new CDR mechanism, potentially reserving 30 percent of its new issue for CDR buyers. That would be about $3 billion if the assumptions of the fundraise play out.

If the CDR mechanism works as expected, Chinese companies and potentially many others could suddenly tap a vast new pool of capital, either in the IPO process or more generally. That could push valuations for many of these issues higher than they might otherwise go, since Chinese mainland investors have limited ability to invest in overseas stocks due to capital controls. A valuation that might cause a New York-based money manager to flee might be more than palatable to a Chinese investor.

While Chinese tech giants are likely to quickly offer CDR options to take advantage of their local brand power and increase upward pressure on their stock prices, the bigger question in my mind is how long it will take overseas companies to offer similar measures and get access to this capital market. While companies like Facebook and Google are blocked or mostly blocked from mainland China, other companies like Apple have strong brand presence in the country, and could theoretically offer a CDR as it strives for a $1 trillion valuation. There are huge legal and policy roadblocks to overcome of course, but such a debut would be a major milestone in China’s financial development.

SoftBank executive changes

Japan’s SoftBank Group, which owns a set of major tech and finance companies, announced a new group of senior execs late on Friday that sets up something of a leadership contest to succeed the group’s founder, Masayoshi Son.

Several years ago, Son had indicated that Nikesh Arora, who had spent a decade at Google and eventually rose to be the company’s chief business officer, would succeed him. Arora became president and chief operating officer of SoftBank, but would last less than two years before heading out from the role. As a sort of coda to that chapter, we learned late last week that Arora has joined Palo Alto Networks as its CEO.

Now, SoftBank has announced that three people will take leadership roles in the company, and all three will join its board of directors. Rajeev Misra, who runs the $100 billion SoftBank Vision Fund, will become an executive vice president (EVP) while maintaining his duties to the fund.

Katsunori Sago, who until recently was the chief investment officer of Japan Post, Japan’s largest savings bank with a $1.9 trillion portfolio, will join SoftBank as an EVP and chief strategy officer. Sago had been rumored to be considering leaving Japan Post just a few weeks ago. Finally, former Sprint CEO Marcelo Claure was named an EVP and SoftBank’s new chief operating officer. Claure was elevated to executive chairman of Sprint last month, while stepping down as CEO.

Each of the three are positioned around the key tentpoles of SoftBank. SoftBank’s core business remains telecom, on which Claure will presumably spend significant time. The group’s financial interests, which includes a 100 percent stake in Fortress Investment Group, will likely get significant attention from Sago. And the SoftBank Vision Fund, which has received splashy headlines with its massive investments in global unicorn startups, is obviously a key future pillar of the company, giving Misra a powerful perch in the group.

Masayoshi Son is 60 years old today. While retirement seems to be the least likely course of action for the energetic entrepreneur, clearly he is starting to think through succession in a more robust way than he did before with Arora. That should make SoftBank investors far more content, and also provide a little bit of a competitive dynamic at the top of the organization to drive the group’s results in the years to come.

China initiates investigation into Samsung and other chip companies

The chip wars between China and the rest of the world continue to heat up. Now, it looks like Samsung, the world’s largest chipmaker, is in the crosshairs of Beijing, according to a Wall Street Journal report by Yoko Kubota. In addition to Samsung, Micron and SK Hynix were also ensnared in the investigation.

China has made building a strong indigenous chip industry a core pillar of its economic development strategy. In addition to a comprehensive plan known as Made in China 2025, the country has also been attempting to put together the world’s largest semiconductor venture capital investment fund, which in aggregate could have tens of billions of dollars in capital at its disposal.

The investigations against Samsung and the two chipmakers comes at the same time that China has also once again delayed the close of Qualcomm’s acquisition of NXP Semiconductors. Qualcomm has been waiting for months to get Beijing’s approval on that deal, which would provide the company a fresh source of revenue and a renewed product mix in strategic areas like automotive.

The use of economic investigations to help and hurt Chinese companies and their competitors is starting to become a mainstay. The United States used the negative conclusions of its investigation into Chinese telecommunications company ZTE in order to cut off its export licenses, practically killing the company. While the U.S. has now started to walk back that threat by floating the option of a large fine, it is clear that these sorts of tit-for-tat investigations are going to continue into the future.

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Facebook and Qualcomm will bring fast Wi-Fi to cities in mid-2019

Posted by | Facebook, Mobile, Qualcomm | No Comments

Facebook’s been talking Terragraph since way back during its 2016 F8 keynote. The social media giant’s ambitious plan to bring fast Wi-Fi to cities is taking another key step toward real world trials with the addition of Qualcomm. The chipmaking giant announced today that it will add the 60Ghz tech to its future chipsets, with plans to start trials in the middle of next year.

“It is based on the pre-802.11ay standard with enhancements provided by the Qualcomm Technologies’ chipset and the integrated software between Facebook and Qualcomm Technologies to support efficient outdoor operation and avoid interference in dense environments,” Qualcomm writes in the announcement.

San Jose has already been floated as a potential testing ground for the technology. It’s not the biggest U.S. city, but the Silicon Valley hub should prove a solid testing ground with its tech savvy population. The companies say the tech will be useful in lowering the cost of high-speed wireless and helping deliver connectivity to populated areas with significant obstacles, including those densely packed with buildings.

The latter, naturally, makes Terragraph a natural for urban environments, where digging up the ground for fiber is a nuisance, to say the least. Facebook is also looking to service more rural spots with its Antenna Radio Integration for Efficiency in Spectrum (ARIES) system, a technology that was unveiled at the same F8 event.  

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China closing in on massive new chip fund in bid to dominate US semiconductor industry

Posted by | Asia, China, Government, hardware, Industrial Policy, Intel, Mobile, Qualcomm | No Comments

China’s government has made technological independence from the United States one of its highest priorities. And now it appears to be putting its money where its messaging has been.

According to The Wall Street Journal, China is close to finalizing a $47 billion investment fund that would finance semiconductor research and chip startup development. The fund, formally the China Integrated Circuit Industry Investment Fund Co., appears to be underwritten predominantly by government capital sources.

Such a fund has been rumored for months, with the size of the fund ranging widely. Just two weeks ago, Reuters reported the fund would be $19 billion, while Bloomberg reported $31.5 billion two months ago. The exact number appears to be under intense negotiation among the Chinese leadership, and is also responsive to the increasingly tense trade negotiations with the United States.

If the $47 billion number pans out, it would be identical in size to a $47 billion fund that was financed by Tsinghua University, China’s leading engineering university, to spur the development of an indigenous semiconductor industry back in 2015.

China is highly dependent on foreign tech in its semiconductor industry, importing 90 percent of its chips in order to power its fast-growing economy. The Chinese government has always been wary of that dependency, but its fears were heightened in recent weeks after the United States banned American companies from selling components to ZTE, a prominent Chinese telecom equipment manufacturer.

Chinese President Xi Jinping has gone on something of an indigenous innovation tour in recent weeks, visiting factories across the country and encouraging further investment in the country’s technology industry. From the Communist Party of China’s official newspaper the People’s Daily two weeks ago, “National rejuvenation relies on the ‘hard work’ of the Chinese people, and the country’s innovation capacity must be raised through independent efforts, President Xi Jinping said on Tuesday.”

While the numbers discussed are eye-popping, so are the costs of developing leading-edge semiconductor technology. As semiconductors have grown more complex, costs have skyrocketed to maintain Moore’s Law. Intel spent more than $13 billion on R&D expenses alone in 2017, according to IC Insights, with Qualcomm, Broadcom, and Samsung each spending more than $3 billion.

While China may try to play catchup in the broad category of semiconductors, it is strategically placing its money on new areas like 5G wireless and artificial intelligence-focused chips where it might become a leading provider of technology. Concerns over 5G in particular have galvanized American attention on Qualcomm and its ability to compete in what is rare virgin territory in the telecom equipment space.

For American companies like Intel and Qualcomm, which are used to holding de facto monopolies on entire swaths of the semiconductor market, the renewed competition from China is going to pressure them to push their tech forward faster.

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