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Yesterday — October 22nd 2020Your RSS feeds

Smartphone shipments rebound to an all-time high in India

By Manish Singh

Smartphone shipments reached an all-time high in India in the quarter that ended in September this year as the world’s second largest handset market remained fully open during the period after initial lockdowns due to the coronavirus, according to a new report.

About 50 million smartphones shipped in India in Q3 2020, a new quarterly record for the country where about 17.3 million smartphone units shipped in Q2 (during two-thirds of the period much of the country was under lockdown) and 33.5 million units shipped in Q1 this year, research firm Canalys said on Thursday.

Xiaomi, which assumed the No.1 smartphone spot in India in late 2018, continues to maintain its dominance in the country. It commanded 26.1% of the smartphone market in India, exceeding Samsung’s 20.4%, Vivo’s 17.6%, and Realme’s 17.4%, the marketing research firm said.

Image Credits: Canalys /

But the market, which was severely disrupted by the coronavirus, is set to see some more shifts. Research firm Counterpoint said last week that Samsung had regained the top spot in India in the quarter that ended in September. (Counterpoint plans to share the full report later this month.)

According to Counterpoint, Samsung has benefited from its recent aggressive push into online sales and from the rising anti-China sentiments in India.

The geo-political tension between India and China has incentivised many consumers in India to opt for local brands or those with headquarters based in U.S. and South Korea. And local smartphone firms, which lost the market to Chinese giants (that command more than 80% of the market today) five years ago, are planning a come back.

Indian brand Micromax, which once ruled the market, said this month that it is gearing up to launch a new smartphone sub-brand called “In.” Rahul Sharma, the head of Micromax, said the company is investing $67.9 million in the new smartphone brand.

In a video he posted on Twitter last week, Sharma said Chinese smartphone makers killed the local smartphone brands but it was now time to fight back. “Our endeavour is to bring India on the global smartphone map again with ‘in’ mobiles,” he said in a statement.

India also recently approved applications from 16 smartphone and other electronics companies for a $6.65 billion incentives program under New Delhi’s federal plan to boost domestic smartphone production over the next five years. Foxconn (and two other Apple contract partners), Samsung, Micromax, and Lava (also an Indian brand) are among the companies that will be permitted to avail the incentives.

Missing from the list are Chinese smartphone makers such as Oppo, Vivo, OnePlus and Realme.

Before yesterdayYour RSS feeds

The OpenStack Foundation becomes the Open Infrastructure Foundation

By Frederic Lardinois

This has been a long time coming, but the OpenStack Foundation today announced that it is changing its name to “Open Infrastructure Foundation,” starting in 2021.

The announcement, which the foundation made at its virtual developer conference, doesn’t exactly come as a surprise. Over the course of the last few years, the organization started adding new projects that went well beyond the core OpenStack project, and renamed its conference to the “Open Infrastructure Summit.” The organization actually filed for the “Open Infrastructure Foundation” trademark back in April.

Image Credits: OpenStack Foundation

After years of hype, the open-source OpenStack project hit a bit of a wall in 2016, as the market started to consolidate. The project itself, which helps enterprises run their private cloud, found its niche in the telecom space, though, and continues to thrive as one of the world’s most active open-source projects. Indeed, I regularly hear from OpenStack vendors that they are now seeing record sales numbers — despite the lack of hype. With the project being stable, though, the Foundation started casting a wider net and added additional projects like the popular Kata Containers runtime and CI/CD platform Zuul.

“We are officially transitioning and becoming the Open Infrastructure Foundation,” long-term OpenStack Foundation executive president Jonathan Bryce told me. “That is something that I think is an awesome step that’s built on the success that our community has spawned both within projects like OpenStack, but also as a movement […], which is [about] how do you give people choice and control as they build out digital infrastructure? And that is, I think, an awesome mission to have. And that’s what we are recognizing and acknowledging and setting up for another decade of doing that together with our great community.”

In many ways, it’s been more of a surprise that the organization waited as long as it did. As the foundation’s COO Mark Collier told me, the team waited because it wanted to be sure that it did this right.

“We really just wanted to make sure that all the stuff we learned when we were building the OpenStack community and with the community — that started with a simple idea of ‘open source should be part of cloud, for infrastructure.’ That idea has just spawned so much more open source than we could have imagined. Of course, OpenStack itself has gotten bigger and more diverse than we could have imagined,” Collier said.

As part of today’s announcement, the group also announced that its board approved four new members at its Platinum tier, its highest membership level: Ant Group, the Alibaba affiliate behind Alipay, embedded systems specialist Wind River, China’s FiberHome (which was previously a Gold member) and Facebook Connectivity. These companies will join the new foundation in January. To become a Platinum member, companies must contribute $350,000 per year to the foundation and have at least two full-time employees contributing to its projects.

“If you look at those companies that we have as Platinum members, it’s a pretty broad set of organizations,” Bryce noted. “AT&T, the largest carrier in the world. And then you also have a company Ant, who’s the largest payment processor in the world and a massive financial services company overall — over to Ericsson, that does telco, Wind River, that does defense and manufacturing. And I think that speaks to that everybody needs infrastructure. If we build a community — and we successfully structure these communities to write software with a goal of getting all of that software out into production, I think that creates so much value for so many people: for an ecosystem of vendors and for a great group of users and a lot of developers love working in open source because we work with smart people from all over the world.”

The OpenStack Foundation’s existing members are also on board and Bryce and Collier hinted at several new members who will join soon but didn’t quite get everything in place for today’s announcement.

We can probably expect the new foundation to start adding new projects next year, but it’s worth noting that the OpenStack project continues apace. The latest of the project’s bi-annual releases, dubbed “Victoria,” launched last week, with additional Kubernetes integrations, improved support for various accelerators and more. Nothing will really change for the project now that the foundation is changing its name — though it may end up benefitting from a reenergized and more diverse community that will build out projects at its periphery.

Miniso, the Japanese-looking variety store from China, sees shares jump in US IPO

By Rita Liao

Investors are jumping aboard a value store chain that is bringing Japanese-inspired lifestyle goods to consumers around the world. The company, Miniso, raised $608 million from an initial public offering in New York on Thursday. It debuted at $24.40, above its pricing range of $16.50 to $18.50, and finished the day up 4.4%.

Everything about the seven-year-old firm — from its name, branding, products, to its website — suggests it is Japanese, except in fact it was born and bred in China. It bears a striking similarity to Muji, Uniqlo and dollar store Daiso in many ways, and has been called a copycat of its Japanese lifestyle predecessors.

The company, backed by Tencent and Hillhouse Capital, seems to intentionally, albeit misleadingly, brand itself as Japanese. In its public messaging, such as this press release and its country-specific site, it describes itself as a firm co-founded by Chinese entrepreneur Ye Guofu and Japanese designer Miyake Junya in Tokyo in 2013. But its Japanese origin is nowhere to be seen in its IPO prospectus.

Instead, the document lists the southern Chinese metropolis Guangzhou as the firm’s first base and Ye as the sole founder and current chief executive. All key directors and executives appear to be Chinese.

Branding confusion aside, there’s no denying Miniso has successfully wooed many young, price-sensitive consumers who welcome choice overload. Over 80% of its store visitors in China are under the age of 40. As of June, more than 95% of its products in China were below 50 yuan or $7.08 — thanks to the vicinity of abundant manufacturers — and the firm prides itself on the goal to launch 100 new SKUs every seven days.

Miniso’s revenue reached $1.4 billion in 2019, compared to $17.85 billion for 71-year-old Uniqlo and $4.17 billion for 39-year-old Muji. It recorded a loss of $44 million last year. 

The firm’s retail stores, decorated by its iconic bright red color reminiscent of the Uniqlo brand, span over 80 countries today. 40% of its 4,200 stores are outside of China. Over 90% of its outlets are franchise stores, one reason why it’s able to expand rapidly, but the model also means Miniso has limited control over its large network of third-party operators.

OnePlus co-founder Carl Pei leaves the company to start a new venture

By Manish Singh

Carl Pei, who co-founded the smartphone giant OnePlus in his 20s, is leaving the company, two sources familiar with the matter told TechCrunch.

Pei played an instrumental role in designing the OnePlus smartphone lineup over the years, including the recently launched OnePlus Nord, which has been the company’s biggest hit to date. Outside Shenzhen, China, where OnePlus is headquartered, Pei has also been the face of the Chinese firm, appearing at trade conferences, interacting with loyal customers and giving interviews to the media.

In the early years of OnePlus, Pei devised various marketing strategies for best positioning the company’s products and creating hype about them. In 2014 and 2015, when OnePlus struggled with scaling its inventories, the company sold its phones through invites and several other clever marketing techniques, including one in which people were required to destroy their current phones to buy a new OnePlus smartphone.

In the early days of OnePlus, Pei lived almost exclusively in low-cost hotels in China and India to better understand the market and easily travel to new cities. OnePlus is now one of the most successful premium smartphone makers in India and several other markets.

“We didn’t have proper product management. What we lacked in experience, we made up in hours,” he said in an earlier interview. He talked more about the company’s early days and the state of the smartphone market at Disrupt 2019.

Once he publicly asked Samsung to hire him so that he could learn more about overseeing operations and logistics. “So, Samsung, today I have a proposal for you: let me be your intern. Seriously. I would be honored to learn from your team about how you’ve been able to scale, run, and manage your business so successfully,” he wrote on his personal blog.

Pei reached out to Pete Lau in 2012 through social media. The two started OnePlus a year later. “He said, ‘I want to change the world.’ I thought this kid has ambitious thoughts and dreams. I think it comes from the heart and it’s very important. I think he has tenacity,” Lau recalled in an interview in 2015.

Years before they started OnePlus, Pei collaborated with a friend and sold white-labeled MP3 players in China.

Pei, 31, is not joining Samsung, but has clarity on what he wishes to do next. He is starting his own venture and is in talks with investors to raise capital, according to one of the sources who requested anonymity, as they are not authorized to speak to the media. Pei did not respond to a request for comment early Monday.

China’s digital yuan tests leap forward in Shenzhen

By Rita Liao

Shenzhen, known for its maker community and manufacturing resources, is taking the lead in trialing China’s digital yuan.

Last week, the city issued 10 million yuan worth of digital currency to 50,000 randomly selected residents. The government doled out the money through mobile “red envelopes,” a tool designed to digitize the custom of gifting money in red packets and first popularized by WeChat’s e-wallet.

The digital yuan is not to be mistaken as a form of cryptocurrency. Rather, it is issued and managed by the central bank, serving as the statutory, digital version of China’s physical currency and giving Beijing a better grasp of its currency circulation. It’s meant to supplement, not replace, third-party payments apps like WeChat Pay and Alipay in a country where cash is dying out.

For example, the central government may in the future issue subsidies to local offices by sending digital yuan, which can help tackle issues like corruption.

Shenzhen is one of the four Chinese cities to begin internal testing of the digital yuan, announced a government notice in August without going into the specifics. The latest distribution to consumers is seen as the country’s first large-scale, public test of the centrally issued virtual currency.

Nearly 2 million individuals in Shenzhen signed up for the lottery, according to a post from the local government. Winners could redeem the 200 yuan red envelope within the official digital yuan app and spend the virtual money at over 3,000 retail outlets in the city.

As its next step, Shenzhen will launch a (vaguely defined) “fintech innovation platform” through its official digital currency institute, said a new central government document detailing the city’s five-year development measures, including attracting more foreign investment in cutting-edge technologies. The city will also play a key role in furthering the digital yuan’s research and development, application and international collaboration.

In April, the city’s digital currency vehicle launched a wave of recruiting for technical positions like mobile app architects and Android developers.

Shenzhen was established in 1980 as China’s first special economic zones and is now home to tech behemoths like Tencent, Huawei and DJI and innovation hubs like HAX and Trouble Maker. President Xi Jinping is scheduled to visit the city this week to commemorate the city’s 40th anniversary.

While the central bank provides logic and infrastructure undergirding the digital yuan, there’s much room for commercial banks and private firms to innovate on the application level. Both ride-hailing platform Didi and JD’s fintech arm have recently unveiled steps to help accelerate the digital yuan’s real-life implementation.

Chinese browser Tuber offers a glimpse beyond the Great Firewall — with caveats

By Rita Liao

China now has a tool that lets users access YouTube, Facebook, Twitter, Instagram, Google and other internet services that have otherwise long been banned in the country — selectively.

Called Tuber, the mobile browser debuted on China’s third-party Android stores this week, with an iOS launch in the pipeline. The landing page of the app features a scrolling feed of YouTube videos, with tabs at the bottom that allow users to visit other mainstream Western internet services.

While some celebrate the app as an unprecedented “opening up” of the Chinese internet, such as this state media journalist, others quickly noticed the browser comes with a veil of censorship. YouTube queries for politically sensitive keywords such as “Tiananmen” and “Xi Jinping” returned no results on the app, according to tests done by TechCrunch.

Using the app also comes with liabilities. Registration requires a Chinese phone number, which is tied to a person’s real identity. The platform could suspend users’ accounts and share their data “with the relevant authorities” if they “actively watch or share” content that breaches the constitution, endangers national security and sovereignty, spreads rumors, disrupts social orders or violates other local laws, according to the app’s terms of service.

Rather than blocking sites beyond the purview of Beijing and tracking the “illegal” use of VPNs to circumvent the Great Firewall, China now has an app that gives its people a glimpse into the Western internet — with the caveat that their digital footprint may be under close watch by the authorities.

Much about the service remains unclear, such as its origin, the motive behind it and the technology it uses to get past China’s elaborate censorship engine. The operator of the app’s official website (上海丰炫信息技术有限公司) is 70% owned by a subsidiary of Qihoo 360, a Chinese cybersecurity software giant, according to business registration information.

If Tuber appears to target YouTube watchers in China with its video-first interface, its sister product Sgreennet, available on both PC and mobile, is a regular web browser connecting users to censored overseas sites. Qihoo 360 itself has been in the Chinese browser market since 2008.

Based on VPN encryption technologies, Sgreennet allows “no one to track, collect or share a user’s private data,” the app claims, a pledge that will likely draw skepticism amongst those familiar with Qihoo 360’s tainted reputation. Musical.ly’s early investor Fu Sheng alleged back in 2010 that Qihoo 360 logged user data including passwords. Software maker Sogou sued the company in 2013 over anticompetitive tactics. The most known and notorious incident is its prolonged battle with Tencent a decade ago that disrupted hundreds of millions of users’ activity.

For an annual fee of around $50, Sgreennet enables users to skip ads, stream Netflix content, download high-definition videos, perks that will likely touch a nerve with the likes of YouTube.

Within two days, Tuber has attracted over 5 million downloads just on Huawei’s Android app store. It’s certainly not the first browser in China to claim it can get around the Great Firewall without VPNs, though few have drawn as much attention. A now-banned article introducing the app went viral on WeChat on Friday and seems to have contributed to its overnight success. It’s safe to say tens of millions in China have already used the app to sample a heavily censored Western internet.

It’s unclear whether Beijing granted Qihoo 360 the green light to pursue the browser project. It’s unsurprising if that was the case, given two of the firm’s executives are key members of the Cybersecurity Association of China, an organization aiming to align industry and academia around the government’s cyber governance issues, including censorship.

Qihoo 360 cannot be immediately reached for comment. As of Saturday afternoon, Tuber has been removed from the Huawei Android store and the downloaded copy stops functioning, leaving users with a message that it is “undergoing a system upgrade.”

The story was updated on October 9 with background information and on October 10 to add the app was removed from the app store.

Hong Kong logistics unicorn Lalamove unveils foray into the US

By Rita Liao

Lalamove, an on-demand logistics service active in China, Southeast Asia, and Latin America, has officially entered the U.S. seven years after launch.

As the COVID-19 pandemic keeps millions of Americans home, Hong Kong-based Lalamove believes it can seize the growing demand for delivery services in the country. It makes its debut in the Dallas Fort-Worth area, a major hub for distribution and logistics in the U.S. In days the service will launch in Chicago and Houston.

The startup was one of the first in Hong Kong to hit the $1 billion unicorn valuation mark alongside its archrival GoGoVan. Its business is multifold and highly localized, but essentially it works as an Uber for businesses and individuals that need to move goods within the city.

In China, where it’s known as Huolala (货拉拉), it primarily serves as a broker between shippers who need to send cargo and a network of truck drivers. In Southeast Asia, the business functions similarly with the addition of food delivery for restaurants, a crowded and cash-burning space. In the U.S., its fleet of sedans, SUVs and pickup trucks are available 24/7, allowing it to target customers spanning catering, retail, e-commerce, manufacturing and construction, with fees starting at $8.90.

“Delivery is essential, especially during the pandemic. But many local businesses don’t have or cannot afford in-house fleets, so we’re excited to work with businesses in the Dallas Fort-Worth area to provide same-day, on-demand delivery services to their customers,” said Blake Larson, international managing director at Lalamove and formerly co-founder of Rocket Internet’s Asia-focused e-hailing startup Easy Taxi.

Like GoGoVan, Lalamove was founded by a Hong Kong entrepreneur who was educated in the U.S. Both companies have scored fundings from heavyweight institutions from China and elsewhere.

Lalamove’s investors included Hillhouse Capital, Sequoia Capital China and Xiaomi founder’s Shunwei Capital. Through a merger with China’s 58 Suyun, GoGoVan counts Tencent, Alibaba, KKR and New Horizon Capital amongst its backers.

The Hong Kong startup’s global expansion comes at a time when TikTok stumbles in the U.S. due to its links to China. In the logistics startup’s case, a Chinese team operates the Chinese division Huolala, while separate international teams manage the overseas segments of Lalamove, TechCrunch understands. The core of TikTok’s challenge in the U.S. is the video app’s dependence on its Chinese parent ByteDance’s technological capabilities.

To date, Lalamove has verified and onboarded more than 500 partner drivers in Dallas Fort-Worth, with plans to add another 500 in the area by the end of this year. It’s also hiring for its regional operational office at a time when the U.S. is struck by widespread virus-induced layoffs, furloughs and slowdown in hiring.

Lalamove claims it has to date matched more than 7 million users with a pool of over 700,000 delivery partners in 22 markets around the world.

Here’s the curtain raise on the Sight Tech Global agenda

By Ned Desmond

The goal of Sight Tech Global, a virtual, global event on December 2-3, 2020, is to gather the world’s top experts who are applying advanced technologies, notably AI, to the future of accessibility and assistive tech for people who are blind or visually impaired.

Today we’re excited to roll out most of the agenda. There are another half-dozen sessions and breakouts still to come, notably sessions on AI bias and civil rights. What we’ve discovered over the many weeks of research and conversation is a consistent, strong interest on the part of researchers, technologists and product and design thinkers to convene and talk over the future — its promises, challenges and even threats.

We’re delighted to have top-level talent from virtually every leading technology company, many research universities and some startups ready for fireside chats and small panel discussions with expert moderators. Some sessions will take questions from our audience as well.

When the event dates are closer, we will add dates and times to each of these sessions as well as announce additional speakers. Register today to get a free pass and please browse the first edition of the Sight Tech Global agenda below.

Seeing AI: Where does Microsoft’s blockbuster app go from here?

With ever more powerful computer and data resources available in the cloud, Microsoft’s Seeing AI mobile app is destined to become a steadily better ally for anyone with vision challenges. Co-founder Saqib Shaikh leads the engineering team that’s charting the app’s cloud-enabled future.

Saqib Shaikh, co-founder of Seeing AI, Microsoft
Moderator: Devin Coldewey, TechCrunch

The future according to OrCam

As AI-based computer vision, voice recognition and natural language processing race ahead, the engineering challenge is to design devices that can perceive the physical world and communicate that information in a timely manner. Amnon Shashua’s OrCam MyEye is the most sophisticated effort yet to merge those technologies in a seamless experience on a dedicated device.

Amnon Shashua, co-founder of OrCam and Mobileye
Moderator: Matthew Panzarino, TechCrunch

Accessibility from the wheels up: The Waymo self-driving taxi

If people who are blind or visually impaired find Uber and Lyft liberating, imagine how they will feel summoning a self-driving ride from an app on their mobile phones. But wait, how exactly will they locate the cars and what happens when they climb in? Presenter Clem Wright is responsible for the self-driving taxi’s accessibility, and he will be joined by leadership from two organizations closely involved in that effort: The Lighthouse for the Blind SF and the Foundation for Blind Children.

Clem Wright, Accessibility product manager, Waymo
/> Marc Ashton, CEO, Foundation for Blind Children
Bryan Bashin, CEO, Lighthouse for the Blind
Moderator: Kirsten Korosec, TechCrunch

Our AI future is already here

Whether it’s Alexa, Tesla or Facebook, AI is already deeply embedded in our daily lives. Few understand that better than Dr. Kai-Fu Lee, a scientist who developed the first speaker-independent, continuous speech recognition system as a Ph.D. student at Carnegie Mellon, led Google in China and held senior roles at Microsoft and Apple. Today, Dr. Lee runs Sinovation Ventures, a $2 billion fund based in China, is president of the Sinovation’s Artificial Intelligence Institute and has 50 million followers on social media.

Dr. Kai-Fu Lee, chairman and CEO, Sinovation Ventures
/> Moderator: Ned Desmond, Sight Tech Global

The future of AT devices and the companies that make them

Dedicated devices versus accessible platforms? Victor Reader Stream versus iPhones and Alexa? How will AT companies take advantage of a world with cloud data and edge computational power, AI algorithms and more demanding customers than ever? Humanware, eSight and APH are already looking far into that future.

Gilles Pepin, CEO, Humanware
Greg Stilson, head of Global Innovation, APH
Charles Lim, CTO, eSight
Moderator: Betsy Beaumon, CEO, Benetech

If the Jetsons had screen readers, would they be using keyboard commands?

The screen reader is arguably the most consequential digital technology ever for people who are blind or visually impaired. At the same time, screen readers depend on a dizzying array of keyboard commands, and — when it comes to reading websites in a browser — they struggle with the ugly reality of poor website accessibility. New technologies may lead the way to better outcomes.

Glen Gordon, Software fellow, Vispero; architect, JAWS
James Teh, Accessibility engineer, Mozilla; co-founder, NVDA
Léonie Watson, director, TetraLogical
Moderator: Matt King, Accessibility technical program manager, Facebook

Alexa, what is your future?

When Alexa launched six years ago, no one imagined that the voice assistant would reach into millions of daily lives and become a huge convenience for people who are blind or visually impaired. This fall, Alexa introduced personalization and conversational capabilities that are a step-change toward more human-like home companionship. Amazon’s Josh Miele and Anne Toth will discuss the impact on accessibility as Alexa becomes more capable.

Anne Toth, director, Alexa Trust at Amazon
Josh Miele, principal accessibility researcher, Lab126 at Amazon
/> Moderator: Devin Coldewey, TechCrunch

Augmented reality and perception: What’s the best way to get the message across?

It’s one thing for an AI-based system to “know” when it’s time to turn left, who came through the door or how far away the couch is: It’s quite another to convey that information in a timely fashion with minimal distraction. Researchers are making use of haptics, visual augmented reality (AR), sound and language to figure out the right solutions.

Amos Miller, Product strategist, Microsoft AI and Research
Ashley Tuan, VP Medical Devices, Mojo Vision
Sile O’Modhrain, associate professor, Performing Arts Technology, University of Michigan
Moderator: Nick Giudice, professor of Spatial Informatics, University of Maine

Wayfinding: Finding the mark

Map apps on mobile phones are miraculous tools accessible via voice output, but mainstream apps don’t announce the detailed location information (which people who are blind or visually impaired really want), especially inside buildings and in public transportation settings. Efforts in the U.S. and U.K. are improving accessible navigation.

Tim Murdoch, founder and CEO, Waymap
Nick Giudice, professor of Spatial Informatics, University of Maine
Moderator: Mike May, chief evangelist, GoodMaps

Computer vision, AI and accessibility: What’s missing from this picture?

For an AI to interpret the visual world on behalf of people who are blind or visually impaired, the AI needs to know what it’s looking at, and no less important, that it’s looking at the right thing. Mainstream computer vision databases don’t do that well — yet.

Danna Gurari, assistant professor and director of the Image and Video Computing Group, University of Texas
Patrick Clary, product manager, AI and accessibility, Google
/> Moderator: Roberto Manduchi, professor CS and Engineering, UC Santa Cruz

Keep an out for more sessions and breakouts later this month. In the meantime, registration is open. Get your pass today!

Sight Tech Global is eager to hear from potential sponsors. We’re grateful to current sponsors Amazon, Ford, Google, Microsoft, Mojo Vision, Waymo, Wells Fargo and Humanware. All sponsorship revenues go to the nonprofit Vista Center for the Blind and Visually Impaired, which has been serving the Silicon Valley area for 75 years.

Special thanks to the Sight Tech Global advisors — Tech Matters Jim Fruchterman, UC Santa Cruz’s Roberto Manduchi, Verizon Media’s Larry Goldberg, Facebook’s Matt King and Be My Eyes’ Will Butler — who are playing an invaluable role on this project.

Transportation VCs suggest frayed US-China ties will impact mobility markets

By Connie Loizos

On Tuesday, during TechCrunch’s annual Mobility event, we had the opportunity to interview three investors who spend much of their time focused narrowly on shifts in the transportation industry and we talked with the three — Amy Gu of Hemi Ventures, Reilly Brennan of Trucks VC, and Olaf Sakkers of Maniv Mobility — about a wide range of related issues to get their take. You can check out that interview below; in the meantime, we’re pulling out parts of the conversation that we found particularly interesting:

How the pandemic is affecting fundraising and the trends they’re watching

Olaf Sakkers: In dense cities, no one is taking transit, so you’re seeing a big shift toward micromobility, but in other cities, there’s been a big uptake in car use and secondhand and new-car demand despite of economic impacts. [You’re seeing this] trade-off between us getting out, and more goods and services that are coming to us than before, [including] food and other things. We’re also seeing a lot of geographic and culture variances, but those are things we’re seeing immediately.

Amy Gu: One thing that COVID has changed a lot is healthcare, which has become more important (during the pandemic) but also raised questions about how we make it more mobile. We’ve been looking at telemedicine companies and remote health care.

Is COVID-19 driving people to buy bikes, scooters and used cars instead of renting?

Reilly Brennan: People fell off micromobility platforms not because they didn’t like them, but they liked them so much, they wanted to buy [the scooters and bikes]. The ways a typical dealership makes money with financing, maintenance and service will come to micromobility. There isn’t much of a used market right now for e-bikes and e-scooters because there aren’t many of them, but that ecosystem will become stronger … [you can imagine] buying outright, leasing, subscriptions, wrapping in theft control … all the tricks you’ve seen carmakers bring to car financing, [meaning] not owning or renting but something in-between.

This new Southeast Asian fund has its eye on Chinese cross-border firms

By Rita Liao

As U.S.-China relations remain tense, Southeast Asia becomes the darling for investors and tech companies from both sides as they seek overseas expansion. Behemoths like Google, Facebook, Alibaba, Tencent and ByteDance have elbowed into the region. Some set up shop, while others formed alliances and took stakes in local startups.

Now five prominent investors originating from the region are ready to claim their slice of the market. Singapore-based Altara Ventures debuted this week with a goal to raise over $100 million for its first fund focused on early-stage tech startups in Southeast Asia, with an eye on those with ties to China.

The financial vehicle was co-founded by Dave Ng, former head of Eight Roads Ventures, the investment arm of Fidelity International, along with four other general partners. They are Koh Boon Hwee, former chairman of DBS Group and Singapore Telecommunications; Tan Chow Boon and Seow Kiat Wang, who, along with Hwee, co-founded Omni Industries (bought by Celestica) and later managed private equity investments together; and Gavin Teo, a former product manager at Xbox and Zynga and a colleague of Ng at B Capital, a fund started by Facebook co-founder Eduardo Saverin.

Altara derives from the English word “altitude” and the Bahasa word “nusantara”, the historical designation for maritime Southeast Asia, a coinage that captures the firm’s ambition to back early-stage startups concurrent with the region’s technological advancement. The firm considers sectors ranging from fintech, consumer, enterprise software, logistics, healthcare through to education.

What happened in the Chinese internet realm has become a source of inspiration for entrepreneurs in its neighboring countries, and ideas flow from China into Southeast Asia in various ways.

“The first is around Chinese founders bringing their expertise from what they have done and gained in China to Southeast Asia as a new market. This could be totally new startups that they cofound with Southeast Asian entrepreneurs, and together they tackle whitespace opportunities here,” Ng explained to TechCrunch.

“We have also seen Chinese entrepreneurs who were first posted to the Southeast Asian region under tech giants such as Alibaba and Lazada, Ant Financials and etc coming out to start up on their own.”

The second type is what particularly interests Altara, for Ng believed the fund can “back and contribute our experience, expertise and network in Southeast Asia to them.”

What’s more, the investor is bullish on the future of the Southeast Asian tech industry as the U.S. and China enter “a phase of bifurcation.”

“We think Southeast Asia will benefit from its position as the connector of East and West. Over the next 10 to 20 years, we will see more talent and capital coming into the region.”

TikTok rumors beg the question: Did Trump solve anything?

By Danny Crichton

Over the past 24 hours, rumors picked up by Bloomberg, the Wall Street Journal and CNBC have put some boundaries on what a possible deal between Oracle and TikTok’s parent company ByteDance will look like.

In its current incarnation floating around the DC press corps, it appears that TikTok’s data on American users will be stored in Oracle’s cloud, with Oracle acting as a “trusted technology partner.” Oracle will have some sort of real-time source code verification duty, in which it will audit TikTok’s codebase to ensure that there aren’t “backdoors” that allow China to siphon data into its national security apparatus. ByteDance will create a new organization for its U.S. operations, which will have a board of directors approved by the U.S. government and will have a license agreement to access TikTok’s algorithms. One member of that board (at least) will come from the American national security community.

There remains a pretty yawning gap in these rumors over what the ownership of this new entity looks like, and precisely who is going to own what. Oracle is presumed to take a fairly large stake, with CNBC reporting this morning that it will get a 20% stake. Walmart apparently has broken away from its deal partner Microsoft, and is still pursuing some sort of deal engagement with the company, now with Oracle as its champion.

While President Trump has repeatedly said that a deal had to be reached by September 15, his executive order gave the parties until September 20 to hash out an agreement. Therefore, we expect a final deal to be approved — or denied outright — in the next two to three days.

Obviously, all terms are still under negotiation, and for all we know, McDonalds will end up buying the company (it’s been that kind of year).

Given what we know so far though, how did the Trump administration do in furthering its goals? The administration has repeatedly said that it wants to protect American users, particularly the young users who love TikTok, from the prying eyes of China. It also wanted to ensure that any protections would last into the future and couldn’t be changed retrospectively by, say, a more aggressive future policy implemented by China. And Trump has also said that the U.S. government should be paid for allowing the company to essentially continue to exist in the U.S. at all.

The latter point is the easiest one — U.S. government lawyers have said outright that the country can’t accept a payment for allowing a deal through, a point that Trump now appears to agree with.

So let’s head over to national security and privacy. Hosting American data on American soil helps with some jurisdictional issues of course. So-called data sovereignty laws have been popular in the European Union, China, India, Brazil and elsewhere as a means of ensuring that citizen data comports with the laws of those citizens’ countries. If the EU wants better privacy protections than America for instance, then it actually needs to “own” its own data to put its policies into place.

However, what has not been made clear is how “TikTok US” (or whatever the entity is called) will be able to take advantage of its parent company’s algorithms without actually handing American data over for processing.

The kinds of algorithms that run TikTok’s feed — like other social media feeds or Google’s search results — require real-time tuning of millions if not billions of parameters benchmarked against the quality of the user experience. For instance, users who linger on a particular video for longer than others, interact with it in specific ways, and share it are all data points that get fed into the “algorithm” to optimize exactly what each user sees in their own feeds.

This is an extraordinarily hard problem, and one that the word “algorithm” barely begins to describe. TikTok has to ingest billions of data points in real time from its app, needs to evaluate mullions of uploaded videos in real time, and needs to curate a custom stream of videos in real time for hundreds of millions of active users. That’s not an algorithm so much as a massively scaled computing system.

In the current deal framework, it sounds like “TikTok US” will supposedly “license” the underlying systems that power TikTok Global’s feeds. Yet, there has so far been zero clarity on how those algorithmic systems can tune their parameters without peering into U.S. data, or even how you can bifurcate such a system into a global half and a U.S.-only half.

One answer might be that the U.S.will just have an entirely independent algorithmic system that is tuned to the tastes of U.S. users and doesn’t take input from other global sources. That might work, although it’s an open question whether the smaller scale of TikTok US’ data will allow it to create as compelling a feed as today.

The larger issue is the pace of change in these systems. Updates to these algorithmic systems happen around the clock as engineers, product managers, data scientists and others determine ever more optimal and novel ways to improve the user experience. TikTok’s engineering team is expected to stay in China, meaning that any entity licensing those systems would have to absorb that constant avalanche of new code changes and integrate it into the U.S. codebase. Worse, those changes would have to be continuously evaluated by Oracle for backdoors — an incredibly hard engineering problem that remains by and large unsolved even if certain services offer a modicum of protection here.

Finally, building this infrastructure is not going to be easy. We haven’t heard much on how long TikTok would have to transition its systems, but it is hard to imagine that the company could rebuild its infrastructure on Oracle, add in real-time source code verification, completely separate its core machine learning algorithms into independent systems, and do all that while continuing to adapt its product to changing consumer whims in anything less than three years. One doesn’t just rebuild the code from scratch of a system used by hundreds of millions of people.

In all honesty, the rapid iterations required of a social media service will wither and die in the deal framework offered here. Which means that TikTok’s U.S. engineering efforts look all but doomed if this deal is approved.

Then there is this deal term of potentially adding an all U.S. government-approved board, with at least one director coming with a national security background. That experience isn’t unheard of in tech companies these days: Amazon just last week added former National Security Agency director Keith Alexander to its board, presumably due to the company’s expanding cloud services sales to the government.

Given that so many of the concerns expressed by the administration were around citizen privacy though, how exactly does this board structure protect privacy whatsoever? The company will essentially replace presumed Chinese surveillance with presumed American surveillance, and that’s a Pyrrhic victory in the end. We’ve heard next to nothing in these rumors about how the company can better protect user data in a more transparent fashion.

So the net-net right now is that the U.S. government isn’t going to get paid its tithe/bribe, the company’s engineering velocity is going to crater from bureaucracy, and its user data won’t have any more protections than what pretty much already exists with other social networks.

Maybe in the end, killing TikTok was the goal all along. Certainly some analysts in the DC national security community would like to see that happen. But at least from the seat over here, what a colossal failure of imagination and opportunity.

Blume Ventures’ Karthik Reddy on Indian startup ecosystem, geo-political tension with China and coronavirus

By Manish Singh

Despite the coronavirus outbreak, which has slowed down deal-making across the world, dozens of startups in India have raised considerable amounts in recent months. Unacademy, which raised $110 million in February, closed a new round of $150 million this month.

These large check sizes, and the frequency at which they are being bandied out, were almost unheard of in India just 10 years ago. The list of problems these local startups were solving then was also quite smaller back in the day.

Karthik Reddy has seen this change very closely.

He co-founded venture capital firm Blume Ventures, where he also serves as a partner, 10 years ago. In a wide-ranging interview at Disrupt 2020, Reddy talked about the state of the startup ecosystem in India, some of the challenges it is confronting today and what lies ahead for the market.

“Fifteen years is what you should consider the active VC build-out in India. For the first five to seven years, we were kind of faking it till we make it. We sold the idea that we can replicate what the U.S. and China have done,” he said.

The breakout moment in India happened when low-cost Android smartphones flooded the market. A handful of startups with consumer-facing services such as Flipkart, Paytm and Zomato emerged to serve the first tens of millions of smartphone users in the country.

“The Hail Mary moment there was Reliance Jio’s arrival in the market,” he said. India’s richest man, Mukesh Ambani, entered the telecommunications market in the second half of 2016 with the world’s cheapest mobile tariff.

Moreover, for several months, Ambani simply did not charge Jio subscribers anything for access to 4G data. So India at large, once conscious about each megabyte it spent on the internet, suddenly started consuming gigabytes of content everyday. “It democratized data and smartphones at a scale that we have not seen in countries other than China,” said Reddy.

Karthik Reddy is the co-founder of Blume Ventures, the largest Indian venture capital firm

As hundreds of millions of users in India arrived on the internet, scores of startups in the country started to solve more complex problems: Bangalore-based startup Meesho today is helping millions of women sell products digitally; Classplus, a Blume Ventures-backed startup, has built a Shopify-like platform for teachers and coaching centres to serve students directly.

As India grew into the world’s second largest internet consumer, it has also attracted American and Chinese technology groups, all of which are looking for their next billion users. Several major investment firms, including Silver Lake, Alibaba Group, Tencent, GGV Capital, Tiger Global, General Atlantic, KKR, Vista, and Owl Ventures have also arrived and become aggressive in their investments in recent years.

But the geo-political tension between India and China have slightly complicated matters. In April this year, India amended its foreign direct investment policy to China to seek approval from New Delhi for their future deals in the country. Chinese investors have ploughed billions of dollars into the Indian startup ecosystem in recent years.

It’s a sensitive topic, given the involvement of the government, that most VCs in India are not comfortable addressing it even off the record. But Reddy weighed in.

“If not an arm or limb, it cuts off a finger or two for your choices. You are a little handicapped,” he said. “But there’s a caveat to that. It’s limited to certain segments of the market. I don’t think China and Hong Kong investors, even though they were very familiar with Chinese VC success story, were really interested in India’s deep tech and cross-border tech,” he said.

Today those areas account for more than a third of the robust ecosystem in India, Reddy argued. “If you look at the entire ecosystem collectively, there’s a single-digit influence of Chinese capital. […] If you ask me personally, 40% of my portfolio is not even remotely affected by it,” he said.

But several large consumer-facing Indian startups, such as Paytm, Zomato and Udaan, do have Chinese investors on their cap tables. Reddy said they would be impacted as uncertainty looms over when — and if — India would offer any relaxation to its current stand.

He said he is hopeful that the government would provide some distinction to VC-managed fund money that is not necessarily Chinese just because it’s run by someone who originated there.

Reddy also spoke about why he thinks early-stage startups, despite the proliferation of VC firms in India focusing on young firms, continue to receive less attention. We also spoke about how the coronavirus is impacting his portfolio startups and the industry at large and what advice he has for startup founders to navigate the turbulence times. You can watch this and much more in the interview below.

Justice Department says WeChat users won’t be penalized under Trump’s executive order

By Catherine Shu

In a Wednesday filing in federal court, the United States government said that users who use or download WeChat “to convey personal or business information” will not be subject to penalties under President Donald Trump’s executive order banning transactions with the Tencent-owned messaging app.

Trump issued the executive order against WeChat on August 6, the same day he issued a similar one banning transactions with ByteDance, the parent company of TikTok, claiming national security concerns. Both orders caused confusion because they are set to go into effect 45 days after being issued, but said that Secretary of Commerce Wilbur Ross will not identify what transactions are covered until then.

With that deadline now looming at the end of this week, WeChat users in America are still uncertain about the app’s future. Though WeChat is the top messaging app by far in China, where it also serves as an essential conduit for payments and other services, the U.S. version of the app has relatively limited features. It is used by Chinese-Americans, and other members of the Chinese disapora in the U.S., to keep in touch with their family and other people in China. With other popular messaging apps, like Facebook Messenger and WhatsApp, banned in China, WeChat is often the most direct communication channel available to them.

The U.S. government’s filing (embedded below) was made as part of a request for a preliminary injunction against the executive order brought by the U.S. WeChat Users Alliance, a non-profit organization initiated by attorneys who want to preserve access to WeChat for users in the U.S. A hearing is scheduled for Thursday.

In it, attorneys from the Justice Department said the U.S. Commerce Department is continuing to review transactions and will clarify which ones are affected by Sept. 20, but “we can provide assurances that [Secretary Ross] does not intend to take actions that would target persons or groups whose only connection to WeChat is their use or downloading of the app to convey personal or business information between users, or otherwise define the relevant transaction in such a way that would impose criminal or civil liability on such users.”

But in a response (also embedded below), the U.S. WeChat Users Alliance said that the Department of Justice’s filing instead demonstrates why a preliminary injunction is necessary. “Having first failed to articulate any actual national security concerns, the administration’s latest ‘assurances’ that users can keep using WeChat, and exchange their personal and business information, only further illustrates the hollowness and pre-textual nature of the Defendants’ ‘national security rationales.'”

The U.S. WeChat Users Alliance filed for the injunction on August 21. In an open letter published on its site, it said a complete ban of WeChat “will severely affect the lives and the work of millions of people in the U.S. They will have a difficult time talking to family relatives and friends back in China. Countless people or businesses who use WeChat to develop and contact customers will also suffer significant economic losses.”

The group also believes that the executive order “violates many provisions of the U.S. Constitution,” and the Administrative Procedure Act.

China tops 110 million 5G users in less than a year

By Rita Liao

Over 110 million users in China have signed up for 5G plans, announced president of the China Academy for Information and Communications Technology (CAICT), a think tank under the telecoms watchdog Ministry of Industry and Information Technology, at an industry event on Wednesday.

That makes China the largest 5G market in terms of user size, the think tank president said. The milestone came in less than a year after China’s top carriers rolled out  5G plans for consumers, and just over a year after the authority began issuing 5G licenses for commercial use.

The number is still a small fraction of the overall subscription. In June, China’s three state-run carriers collectively commanded some 1.6 billion mobile subscribers (suggesting China’s 1.4 billion population owned over one mobile device per capita).

China’s 5G ambition is a multi-pronged effort among the government, network carriers, telecoms equipment makers, device makers, and software developers. Policymakers need to show consumers visible improvement on network speed, and as such the carriers have been aggressively setting up 5G base stations across the country — more than 460,000 towers by July.

China was adding an average of 15,000 new 5G base stations every week, said an official in July. The government has plans to raise that number to 600,000 by the end of 2020, covering all prefectural-level cities nationwide. A clear winner in China’s 5G push is Huawei, which makes both 5G devices and the infrastructure that undergirds the next-gen network.

In the meantime, Huawei, Oppo, Xiaomi and their rivals are rushing to launch 5G compatible handsets. China has sold over 93 million units of 5G mobile phones this year so far, according to recent data released by CAICT. 5G phones accounted for 60% of total shipments in August.

China’s rapid shift to 5G is also driving the need for new hardware parts like integrated circuits. The country produced over 100 billion units of ICs during the first half of 2020, representing a 16.4% year-over-year gain, said an industry official in July, adding that much of the demand came from 5G-related projects.

DCM is poised to make roughly $1 billion off its $26 million bet on Bill.com

By Connie Loizos

David Chao, the cofounder of the cross-border venture firm DCM, speaks English, Japanese, and Mandarin. But he also knows how to talk to founders.

It’s worth a lot. Consider that DCM could see more than $1 billion from the $26.4 million it invested across 14 years in the cloud-based business-to-business payments company Bill.com, starting with its A round. Indeed, by the time Bill.com went public last December, when its shares priced at $22 apiece, DCM’s stake — which was 16% sailing into the IPO — was worth a not-so-small fortune.

Since then, Wall Street’s lust for both digital payments and subscription-based revenue models has driven Bill.com’s shares to roughly $90 each. Little wonder that in recent weeks, DCM has sold roughly 70 percent of a stake that’s currently valued at roughly $900 million and was worth than $1 billion a few weeks ago. (It still owns 30 percent of its position.)

We talked with Chao earlier today about Bill.com, on whose board he sits and whose founder, René Lacerte, is someone Chao backed previously. We also talked about another very lucrative stake DCM holds right now, about DCM’s newest fund, and about how Chao navigates between the U.S. and China as relations between the two countries worsen. Our conversation has been edited lightly for length and clarity.

TC: I’m seeing you owned about 33% of Bill.com after the first round. How did that initial check come to pass? Had you invested before in Lacerte?

DC: That’s right. René started [an online payroll] company called PayCycle and we’d backed him and it sold to Intuit [in 2009] and René made good money and we made money. And when he wanted to start this next thing, he said, ‘Look, I want to do something that’s a bigger outcome. I don’t want to sell the company along the way. I just want this time to do a big public company.’

TC: Why did he sell PayCycle if that was his ambition?

DC: It was largely because when you’re a first-time CEO and entrepreneur and a large company offers you the chance to make millions and millions of dollars, you’re a bit more tempted to sell the company. And it was a good price. For where the company was, it was a decent price.

Bill.com was a little bit different. We had good offers before going public. We even had an offer right before we went public.  But René said, ‘No, this time, I want to go all the way.’ And he fulfilled that promise he’d made to himself. It’s a 14-year success story.

TC: You’ve sold most of your stake in recent weeks for $900 million; how does that outcome compare with other recent exits for DCM? 

DC: We actually have another recent one that’s phenomenal. We invested in a company called Kuaishou in China. It’s the largest competitor to Bytedance’s TikTok in China. We’ve invested $49.3 million altogether and now that stake is worth $3.8 billion. The company is still private held, but we actually cashed out around 15% of our holdings. and with just that sale alone we’ve already [seen 10 times] that $30 million.

TC: How do you think about selling off your holdings, particularly once a company has gone public?

DC: It’s really case by case. In general, once a company goes public, we probably spend somewhere between 18 months to three years [unwinding our position]. We had two big IPOs in Japan last year. One company [had] a $1 billion market cap; the other was a $2 billion company. There are some [cases] that are 12 months and there are some [where we own some shares] for four or five years.

TC: What types of businesses are these newly public companies in Japan?

DC: They’re both B2B. One is pretty much the Bill.com of Japan. The other makes contact management software

TC: Isn’t DCM also an investor in Blued, the LGBTQ dating app that went public in the U.S. in July?

DC: Yes, our stake wasn’t  very big,  but we were probably the first major VC to jump in because it was controversial.

TC: I also saw that you closed a new $880 million early stage fund this summer.

DC: Yes, that’s right. It was largely driven by the fact that many of our funds have done well. We’re now on fund nine, but our fund seven is on paper today 9x, and even the fund that Bill.com is in, fund four, is now more than 3x. So is fund five. So we’re in a good spot.

TC: As a cross-border fund, what does the growing tension between the U.S and China mean for your team and how it operates?

DC: It’s not a huge impact. If we were currently investing in semiconductor companies, for example, I think it would be a pretty rough period, because [the U.S.] restricts all the money coming from any foreign sources. At least, you’d be under strong scrutiny. And if we invested in a semiconductor company in China, you might not be able to go public in the U.S.

But the kinds of deals that we do, which are largely B2B and B2C — more on the software and services side — they aren’t as impacted. I’d say 90% of our deals in China focus on the domestic market. And so it doesn’t really impact us as much.

I think some of the Western institutions putting money into the Chinese market — that might be decreasing, or at least they’re a little bit more on the sidelines, trying to figure out whether they should be continuing to invest in China. And maybe for Chinese companies, less companies will go public in the U.S., etcetera. But some of these companies can go public in Hong Kong.

TC: How you feel about U.S. administration’s policies?  Do you understand them? Are you frustrated by them?

DC: I think it requires patience, because what [is announced and] goes on the news, versus what is really implemented and how it truly affects the industry, there’s a huge gap.

[Correction: This story originally reported that DCM had sold nearly $900 worth of shares and maintains another 30%; the firm’s entire position is currently worth $900 million, with 30% of those shares still held.]

Elon Musk says Tesla will ‘one day’ produce ‘super efficient home HVAC’ with HEPA filtering

By Darrell Etherington

Elon Musk has previously touted the “Bioweapon Defense Mode” boasted by Tesla’s vehicles, which are designed to provide excellent air quality inside the car even in the face of disastrous conditions without, thanks in part to high-efficiency HEPA air filtration. Now, Musk has said on Twitter that he hopes to one day provide similar air filtration along with home HVAC systems.

Tesla, while primarily an automaker, is also already in the business of home energy and power generation, thanks to its acquisition of SolarCity, its current production of solar roofing products and its business building Tesla batteries for storage of power generated from green sources at home. While it hasn’t yet seemed to make any moves to enter into any other parts of home building or infrastructure, HVAC systems actually would be a logical extension of its business, since they represent a significant part of the overall energy consumption of a home, depending on its heating and cooling sources.

We will make super efficient home hvac with hepa filters one day

— Elon Musk (@elonmusk) September 11, 2020

Boosting home HVAC efficiency would have the added benefit of making Tesla’s other home energy products more appealing to consumers, since it would presumably help make it easier to achieve true off-grid (or near off-grid) self-sufficiency.

As for the company’s HEPA filtration, despite the jokey name, Tesla actually takes Bioweapon Defense Mode very seriously. In a blog post in 2016, it detailed what went into the system’s design, along with testing data to back up its claims of a HEPA filter that’s “ten times more efficient than standard automotive filters.” While Tesla doesn’t cited wildfires in that post, it does list “California freeways during rush hour, smelly marshes, cow pastures in the Central Valley of California, and major cities in China” in terms of challenges it wanted it to be able to handle.

Many experts are predicting that the wildfires we’re currently seeing devastating large portions of the west coast of the U.S. will only get worse as environmental conditions continue to suffer the impact of climate change. Given that, and given Tesla’s larger business goals of offering a range of products that neutralize or reduce the ecological impact of its customers, more efficient and effective home HVAC products don’t seem that far outside its operational expertise.

Trump says deadline for TikTok sale won’t be extended

By Catherine Shu

The United States government will not extend the September 20 deadline for Beijing-based ByteDance to sell TikTok, President Donald Trump said on Thursday. This adds urgency to negotiations because TikTok may be banned in the United States if it can’t reach an agreement with a buyer.

“We’ll see what happens. It’ll either be closed up or they’ll sell it,” Trump said before boarding Air Force One at Joint Base Andrews.

Trump issued an executive order last month claiming there is “credible evidence” that ByteDance “might take action that threatens to impair the national security of the United States.” ByteDance was already in negotiations with Microsoft for a sale. Several other large American tech companies have since reportedly entered into talks with popular video-sharing app–but potential new roadblocks to a deal have also emerged.

Despite TikTok’s larger user base and value as one of the most popular social media apps among Gen Z, there are currently several issues that may lower its attractiveness for buyers.

For example, the software code used in ByteDance’s apps, including TikTok, are developed by engineers and developers at its Beijing headquarters. This makes separating TikTok from ByteDance more complicated on a technical level. Another factor is an update China made two weeks ago to export control laws that cover artificial intelligence technologies. TikTok’s AI-based algorithms, which shows new content to users depending on their interests and browsing history, are valuable and a huge part of its success. After the export control policy update was issued by China’s Ministry of Commerce, ByteDance said it will “strictly follow” the new rules, but that might prevent ByteDance from including TikTok’s personalized recommendation and AI-based technology in a sale, making it a less attractive acquisition.

In addition to Microsoft, contenders for TikTok reportedly include other American tech heavyweights like Twitter, Google and Oracle. Walmart has even put itself forward as a buyer, in a potential partnership with Microsoft.

TikTok’s security is also under a magnifying glass in several other countries. For example, it was among a roster of Chinese apps banned in India  over “national security and defence” concerns,” and is currently being investigated by French data security watchdog CNIL.

TikTok has fought back against those claims. Last month, it sued the Trump administration, stating in an announcement on August 24 that it “we strongly disagree with the Administration’s position that TikTok is a national security threat.”

In its complaint, TikTok said it has taken “extraordinary measures to protect the privacy and security of TikTok’s user data” by storing data in the U.S. and Singapore, and creating barriers between TikTok’s U.S. user data and the data of other ByteDance products like Douyin.

Since launching in 2017, TikTok, ByteDance’s international version of Douyin, has become firmly entrenched in internet culture, especially among Gen Z. In the U.S. alone, TikTok says it has over 100 million users in the U.S. and employs about 1,500 people.

Even though several apps, including Instagram, are trying to position themselves as TikTok alternatives with similar short-form video sharing features, no frontrunner has emerged so far. In fact, a new report by analytics firm Sensor Tower said that in August, TikTok was the most downloaded non-gaming app worldwide, with more than 63.3 million installs. TikTok users are so committed to the app that at least one VPN provider, ExpressVPN, saw a spike in traffic after the U.S. government proposed a potential ban in July.

Some cybersecurity experts say that TikTok’s data collection practices are similar to other social media apps that depend on advertising revenue. But a major concern revolves around its ownership by a Chinese company that may be forced to capitulate to demands for data by the Chinese government. A Chinese cybersecurity law requires Chinese tech companies, like ByteDance, to comply with government’s requests for user data. ByteDance has said it would resist attempts by the Chinese government access TikTok’s user data

Security concerns about TikTok also increased after a Wall Street Journal analysis published in August found that TikTok went around an Android operating system feature designed to limit how much data, including unique identifiers called MAC addresses, that apps can collect from users. According to the WSJ, TikTok stopped collecting unique identifiers in November, but its investigation raised questions about TikTok’s commitment to protecting user privacy. In a statement to the WSJ, TikTok said “like our peers, we constantly update our app to keep up with evolving security challenges.”

It’s not just Republicans who are taking a stance against TikTok. In July, Joe Biden’s presidential campaign reportedly asked its staff to remove TikTok from their work and personal devices.

The U.S government’s scrutiny of TikTok began escalating last year when Sens. Charles Schumer (D-NY) and Tom Cotton (R-AR) asked Joseph Maguire, then the acting director of national intelligence, to assess if TikTok can be forced to turn over American users’ data to Chinese authorities.

Carbon Health to launch 100 pop-up COVID-19 testing clinics across the US

By Darrell Etherington

Primary care health tech startup Carbon Health has added a new element to its “omnichannel” healthcare approach with the launch of a new pop-up clinic model that is already live in San Francisco, LA, Seattle, Brooklyn and Manhattan, with Detroit to follow soon – and that will be rolling out over the next weeks and months across a variety of major markets in the U.S., ultimately resulting in 100 new COVID-19 testing sites that will add testing capacity on the order of around an additional 100,000 patients per month across the country.

So far, Carbon Health has focused its COVID-19 efforts around its existing facilities in the Bay Area, and also around pop-up testing sites set up in and around San Francisco through collaboration with genomics startup Color, and municipal authorities. Now, Carbon Health CEO and co-founder Even Bali tells me in an interview that the company believes the time is right for it to take what it has learned and apply that on a more national scale, with a model that allows for flexible and rapid deployment. In fact, Bali says the they realized and began working towards this goal as early as March.

“We started working on COVID response as early as February, because we were seeing patients who are literally coming from Wuhan, China to our clinics,” Bali said. “We expected the pandemic to hit any time. And partially because of the failure of federal government control, we decided to do everything we can to be able to help out with certain things.”

That began with things that Carbon could do locally, more close to home in its existing footprint. But it was obvious early on to Bali and his team that there would be a need to scale efforts more broadly. To do that, Carbon was able to draw on its early experience.

“We have been doing on-site, we have been going to nursing homes, we have been working with companies to help them reopen,” he told me. “At this point, I think we’ve done more than 200,000 COVID tests by ourselves. And I think I do more than half of all the Bay Area, if you include that the San Francisco City initiative is also partly powered by Carbon Health, so we’re already trying to scale as much as possible, but at some point we were hitting some physical space limits, and had the idea back in March to scale with more pop-up, more mobile clinics that you can actually put up like faster than a physical location.”

Interior of one of Carbon Health’s COVID-19 testing pop-up clinics in Brooklyn.

To this end, Carbon Health also began using a mobile trailer that would travel from town to town in order to provide testing to communities that weren’t typically well-served. That ended up being a kind of prototype of this model, which employs construction trailers like you’d see at a new condo under development acting as a foreman’s office, but refurbished and equipped with everything needed for on-site COVID testing run by medical professionals. These, too, are a more temporary solution, as Carbon Health is working with a manufacturing company to create a more fit-for-purpose custom design that can be manufactured at scale to help them ramp deployment of these even faster.

Carbon Health is partnering with Reef Technologies, a SoftBank -backed startup that turns parking garage spots into locations for businesses, including foodservice, fulfilment, and now Carbon’s medical clinics. This has helped immensely with the complications of local permitting and real estate regulations, Bali says. That means that Carbon Health’s pop-up clinics can bypass a lot of the red tape that slows the process of opening more traditional, permanent locations.

While cost is one advantage of using this model, Bali says that actually it’s not nearly as inexpensive as you might think relative to opening a more traditional clinic – at least until their custom manufacturing and economies of scale kick in. But speed is the big advantage, and that’s what is helping Carbon Health look ahead from this particular moment, to how these might be used either post-pandemic, or during the eventual vaccine distribution phase of the COVID crisis. Bali points out that any approved vaccine will need administration to patients, which will require as much, if not more infrastructure than testing.

Exterior of one of Carbon Health’s COVID-19 testing pop-up clinics in Brooklyn.

Meanwhile, Carbon Health’s pop-up model could bridge the gap between traditional primary care and telehealth, for ongoing care needs unrelated to COVID.

“A lot of the problems that telemedicine is not a good solution for, are the things where a video check-in with a doctor is nearly enough, but you do need some diagnostic tests – maybe you might you may need some administration, or you may need like a really simple physical examination that nursing staff can do with the instructions of the doctor. So if you think about those cases, pretty much 90% of all visits can actually be done with a doctor on video, and nursing staff in person.”

COVID testing is an imminent, important need nationwide – and COVID vaccine administration will hopefully soon replace it, with just as much urgency. But even after the pandemic has passed, healthcare in general will change dramatically, and Carbon Health’s model could be a more permanent and scalable way to address the needs of distributed care everywhere.

Huawei phones will start running on HarmonyOS in 2021

By Rita Liao

Huawei is planning to launch its proprietary Harmony operating system on smartphones in 2021, the firm announced at its annual developer conference in Dongguan on Thursday.

The readiness of HarmonyOS handsets will largely be contingent on the number of apps Huawei can attract within a short window. HMS Core, Huawei’s counterpart to Google Play Services and the toolkit helping developers build and manage apps, now includes 96,000 apps, the company said today. That’s up from 81,000 in July and 60,000 in March.

In comparison, both Google Play and Apple App Store have accumulated apps numbered in the millions.

To lure more apps into its ecosystem, Huawei announced that a beta version of its second-generation operating system — HarmonyOS 2.0 — for mobile developers will launch by the end of this year. Meanwhile, the beta version of HarmonyOS will go open-source for tablets, smartwatches, and in-car systems starting this week.

Huawei’s operating system has a current reach of 490 million users through the company’s family of hardware products.

The telecoms giant shipped 105 million handsets in the first half of 2020, down from 118 million in the same period of 2019 as consumers respond to Huawei phones’ loss of key Android features and a global economic downturn. Huawei’s consumer business, consisting mainly of smartphone sales, pulled in 255.8 billion yuan ($37.4 billion) in H1, up from 220.8 billion yuan the year before.

More updates to follow…

Viral article puts the brakes on China’s food delivery frenzy

By Rita Liao

For China’s food delivery workers, life can feel like a constant battle with algorithms, traffic police, and disgruntled customers.

An essay detailing the hazardous work conditions of China’s food delivery drivers went viral on the internet on Tuesday, causing a moment of national reckonings on algorithmic harms to people.

In China’s populated urban hubs, one won’t miss the army of express couriers speeding and honking on their scooters. Their reckless driving, according to the investigative report from China’s People magazine, is largely a result of stringent algorithms that penalize late delivery; what’s more, the machines fail to fully factor in real-life variables like weather and traffic and often put drivers’ lives at risk. Within hours, the story had gained over 100,000 views and was shared widely and discussed on the WeChat messenger.

While food delivery platforms boast increasingly fast delivery thanks to state-of-the-art machine learning, the lofty goals the algorithms set for drivers are often attainable only by breaking traffic rules and working extended hours. Sitting indoors, customers tap on streamlined apps, detached from the dangerous delivery journey. To avoid bad reviews and wage cuts, drivers dash and honk pedestrians out of their way to be on time.

Within the first six months of 2019, Shanghai recorded 325 injuries and deaths involving food and parcel delivery drivers alone, with Alibaba’s Ele.me and Tencent-backed Meituan, the food delivery leaders, accounting for nearly 70% of the accidents.

“Most people won’t care if their order arrives two minutes sooner or 10 minutes late. Platforms can actually be more forgiving of delivery drivers. We are more patient than expected,” said a reader comment with 33,000 likes.

On the flip side is an enormous market opportunity. The food ordering industry in China is estimated to reach 665 billion yuan ($97 billion) by 2020. A total of 398 million or nearly 45% of China’s internet users ordered food online as of March. In contrast, online delivery penetration in the U.S. will reach about 9% by 2020.

Millions of drivers are powering China’s food delivery economy, with nearly 4 million on Meituan by 2019 and 3 million on Ele.me at last count.

This isn’t the first time that China has come to grips with safety for food delivery drivers. Following a series of road accidents in 2017, Chinese police ordered on-demand platforms to improve safety standards for drivers. A commentary from China’s state newspaper at the time called for “more humane” management for take-out couriers.

Alibaba has taken notice of the latest critique. About 12 hours after the article published, Ele.me announced it will add a feature that allows customers to voluntarily extend wait time by five or 10 minutes. It also promised that the platform won’t penalize couriers with good credit and service history even when they are occasionally late. Meituan, Ele.me’s main rival, has yet to respond to the issues brought up by the widely circulated article.

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