Yearly Archives: 2020

News: EU lawmakers to push audio-visual sector on geoblocking

• November 30, 2020
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European Union lawmakers are considering whether current rules aimed at limiting the practice of geoblocking across the bloc should be extended to cover access to streaming audio-visual content. Access to services like Netflix tends to be gated to individual EU Member States, meaning Europeans can be barred from accessing libraries of content offered elsewhere in

European Union lawmakers are considering whether current rules aimed at limiting the practice of geoblocking across the bloc should be extended to cover access to streaming audio-visual content.

Access to services like Netflix tends to be gated to individual EU Member States, meaning Europeans can be barred from accessing libraries of content offered elsewhere in the region. So if you’re trying to use your Netflix subscription to access the service after moving to another Member State, or want to access inventory offered by Netflix elsewhere in Europe, the answer is typically a big fat no, as we’ve reported before.

This undermines the core concept of the EU’s Single Market (and the Digital Single Market — aka the frictionless ecommerce end-goal which rules such as those limiting geoblocking aim to deliver).

The Commission is alive to ongoing issues around online access to audio-visual content. In a review of the two-year-old Geo-blocking Regulation published today, it says it will kick off discussions with the audiovisual sector on ways to improve consumer access to this type of copyrighted content across the bloc.

It says the planned talks will feed its upcoming Media and Audiovisual Action Plan — which aims to help European market players scale up and reach new audiences. However it’s not committing to any specific actions as yet. So whether the push yields anything more nuanced than another ‘no’ remains to be seen. (The movie industry being a blocker to freer digital flows of content is, after all, not a new story.)

“Increased access and circulation of audiovisual content will benefit an increasing demand across-borders, including in border regions and with linguistic minorities,” the Commission suggests in a press release on its review of the current rules.

It notes that on average a European consumer only has access to 14% of the films available online in all the Member States as a whole (the EU27), with “significant variations” by country (such as viewers in Greece having access only to 1.3% of the films available online in the EU, vs those in Germany having access to 43.1%).

Its review also highlights growing demand (especially for younger age ranges) to access audio-visual content offered in other Member States — noting it almost doubled between 2015 and 2019 (from 5% to 9%).

“A 2019 Eurobarometer confirmed that there is interest in gaining access to audio-visual content offered in different Member States,” it adds.

For other types of copyrighted content — including music, e-books and videogames — the Commission sounds less convinced of the need for regulatory reform.

“The Report concludes that a further extension of the scope would not necessarily bring substantial benefits to consumers in terms of choice of content, as the catalogues offered are rather homogeneous (in many instances beyond 90%) among Member States,” it writes, also flagging “potential impacts” on the price of such services in Member States (which can vary).

After 18 months of application of the current Geo-blocking Regulation (in force since December 2018), the Commission review lauds progress in reducing some obstacles — claiming there’s been “a stark reduction in barriers caused by location requirements, from 26.9% down to 14% of approximately 9,000 websites surveyed”.

“Such restrictions prevent users from attempting to register to foreign websites due to a postal address in another Member State, and is important because registration is a key stage of the online shopping process,” it notes.

“A further decrease in restrictions that users faced when trying to access websites cross-border was reported (e.g. users were denied access or automatically rerouted), the remainder of which was residual (only 0.2% of websites blocking access).”

It also credits the regulation with boosting the amount of cross-border delivery purchases, saying the increased access to cross-border websites provided by regulation led to an increase of 1.6% in the EU27 compared to 2015, adding that a third of the surveyed websites offered cross-border delivery.

Commenting in a statement, the internal market commissioner, ThierryBreton, said: “This first review of the Geo-blocking Regulation already shows first positive results. We will further monitor its effects and discuss with stakeholders, notably in the context of the Media and Audio-visual Action Plan to ensure the industry can scale up and reach new audiences, and consumers can fully enjoy the diversity of goods and services in the different EU Member States.”

News: ServiceNow is acquiring Element AI, the Canadian startup building AI services for enterprises

• November 30, 2020
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ServiceNow, the cloud-based IT services company, is making a significant acquisition today to fill out its longer-term strategy to be a big player in the worlds of automation and artificial intelligence for enterprises. It is acquiring Element AI, a startup out of Canada. Founded by AI pioneers and backed by some of the world’s biggest

ServiceNow, the cloud-based IT services company, is making a significant acquisition today to fill out its longer-term strategy to be a big player in the worlds of automation and artificial intelligence for enterprises. It is acquiring Element AI, a startup out of Canada.

Founded by AI pioneers and backed by some of the world’s biggest AI companies — it raised hundreds of millions of dollars from the likes of Microsoft, Intel, Nvidia and Tencent, among others — Element AI’s aim was to build and provision AI-based IT services for enterprises, in many cases organizations that are not technology companies by nature.

Terms of the deal are not being disclosed, a spokesperson told TechCrunch, but we are attempting to find out elsewhere. Element AI was valued at between $600 million and $700 million when it last raised money, $151 million (or C$200 million at the time) in September 2019.

If it’s anywhere near or around that figure, this deal would be ServiceNow’s biggest acquisition.

A spokesperson confirmed that ServiceNow is making a full acquisition and will retain most of Element AI’s technical talent, including AI scientists and practitioners, but that it will be winding down its existing business after integrating what it wants and needs.

“Our focus with this acquisition is to gain technical talent and AI capabilities,” she said. That will also include Element AI co-founder and CEO, JF Gagné, joining ServiceNow, and co-founder Dr. Yoshua Bengio taking on a role as technical advisor.

The startup is headquartered in Montreal, and ServiceNow’s plan is to create an AI Innovation Hub based around that “to accelerate customer-focused AI innovation in the Now Platform.” (That is the brand name of its automation services.)

Last but not least, ServiceNow will start re-platforming some of Element AI’s capabilities, she said. “We expect to wind down most of Element AI’s customers after the deal is closed.”

The deal is the latest move for a company aiming to build a modern platform fit for our times.

ServiceNow, under CEO Bill McDermott (who joined in October 2019 from SAP), has been on a big investment spree in the name of bringing more AI and automation chops to the SaaS company. That has included a number of acquisitions this year, including Sweagle, Passage AI, and Loom (respectively for $25 million, $33 million and $58 million), plus regular updates to its larger workflow automation platform.

ServiceNow has been around since 2004, so it’s not strictly a legacy business, but all the same the publicly-traded company, with a current market cap of nearly $103 billion, is vying to position itself as the go-to company for “digital transformation” — the buzz term for enterprise IT services this year, as everyone scrambles to do more online, in the cloud, and remotely to continue operating through a global health pandemic and whatever comes in its wake.

“Technology is no longer supporting the business, technology is the business,” McDermott said earlier this year. In a tight market where it is completely plausible that Salesforce might scoop up Slack, ServiceNow is making a play for more tools to cover its own patch of the field.

“AI technology is evolving rapidly as companies race to digitally transform 20th century processes and business models,” said ServiceNow Chief AI Officer Vijay Narayanan, in a statement today. “ServiceNow is leading this once-in-a-generation opportunity to make work, work better for people. With Element AI’s powerful capabilities and world class talent, ServiceNow will empower employees and customers to focus on areas where only humans excel – creative thinking, customer interactions, and unpredictable work. That’s a smarter way to workflow.”

Element AI was always a very ambitious concept for a startup. Dr Yoshua Bengio, winner of the 2018 Turing Award who co-founded the company with AI expert Nicolas Chapados and Jean-François Gagné (Element AI’s CEO) alongside Anne Martel, Jean-Sebastien Cournoyer and Philippe Beaudoin, saw a gap in the market.

Their idea was to build AI services for businesses that were not tech companies in their DNA, but would still very much need to tap into the innovations of the tech world in order to continue growing and remaining competitive with said tech companies as the latter moved deeper into a wider range of industries and the companies themselves required increasing sophistication to operate and grow. They needed, in essence, to disrupt themselves before getting unceremoniously disrupted by someone else.

And on top of that, Element AI could work for and with the tech companies taking strategic investments in Element AI, as those investors wanted to tap some of that expertise themselves, as well as work with the startup to bring more services and win more deals in the enterprise. In addition to its four (sometimes fiercely competitive) investors, other backers included the likes of McKinsey.

Yet what form all of that would take was never completely clear.

When I covered the startup’s most recent tranche of funding last year, I noted that it wasn’t very forthcoming on who its customers actually where. Looking at its website, it still isn’t, although it does lay out several verticals where it aims to work. They include insurance, pharma, logistics, retail, supply chain, manufacturing, government and capital markets.

There were some other positive points. Element AI also played a strong ethics card with its AI For Good efforts, starting with work with Amnesty in 2018 and most recently Mozilla. Indeed, 2018 — a year after Element AI was founded — was also the year AI seemed to hit the mainstream consciousness — and also start to appear somewhat more creepy, with algorithmic misfires, pervasive facial recognition, and more “automated” applications that didn’t work that well and so on — so launching an ethical aim definitely made sense.

But for all of that, it seems that there perhaps were not enough threads there to need a bigger cloth as a standalone business. Glassdoor reviews also speak of an endemic disorganization at the startup, which might not have helped, or was perhaps a sign of bigger issues.

“Element AI’s vision has always been to redefine how companies use AI to help people work smarter,” said Element AI Founder and CEO, Jean-Francois Gagné in a statement. “ServiceNow is leading the workflow revolution and we are inspired by its purpose to make the world of work, work better for people. ServiceNow is the clear partner for us to apply our talent and technology to the most significant challenges facing the enterprise today.”

The acquisition is expected to be completed by early 2021.

News: Moderna claims 94% efficacy for COVID-19 vaccine, will ask FDA for emergency use authorization today

• November 30, 2020
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Drugmaker Moderna has completed its initial efficacy analysis of its COVID-19 vaccine from the drug’s Phase 3 clinical study, and determined that it was 94.1% effective in preventing people from contracting COVID-19 across 196 confirmed cases from among 30,000 participants in the study. Moderna also found that it was 100% effective in preventing severe cases

Drugmaker Moderna has completed its initial efficacy analysis of its COVID-19 vaccine from the drug’s Phase 3 clinical study, and determined that it was 94.1% effective in preventing people from contracting COVID-19 across 196 confirmed cases from among 30,000 participants in the study. Moderna also found that it was 100% effective in preventing severe cases (such as those that would require hospitalization) and says it hasn’t found any significant safety concerns during the trial. On the basis of these results, the company will file an application for emergency use authorization (EUA) with the U.S. Food and Drug Administration (FDA) on Monday.

Seeking an EUA is the next step towards actually beginning to distribute and administer Moderna’s COVID-19 vaccine, and if granted the authorization, it will be able to provide it to high-risk individuals in settings where it could help prevent more deaths, such as with front-line healthcare workers, ahead of receiving a full and final regulatory approval from the U.S. healthcare monitoring agency. Moderna will also seek conditional approval from the European Medicines Agency, which will enable similar use ing the EU.

Moderna’s vaccine is an mRNA vaccine, which provides genetic instructions to a person’s body that prompts them to create their own powerful antibodies to block the receptor sites that allows COVID-19 to infect a patient. It’s a relatively new therapeutic approach for human use, but has the potential to provide potentially even more resistance to COVID-19 than do natural antibodies, and without the risk associated with introducing any actual virus, active or otherwise, to an inoculated individual in order to prompt their immune response.

In mid-November, Moderna announced that its COVID-19 vaccine showed 94.5% efficacy in its preliminary results. This final analysis of that same data hews very close to the original, which is promising news for anyone hoping for an effective solution to be available soon. This data has yet to be peer reviewed, though Moderna says that it will now be submitting data from the Phase 3 study to a scientific publication specifically for that purpose.

Moderna’s vaccine candidate is part of the U.S’s Operation Warp Speed program to expedite the development, production and distribution of a COVID-19 vaccine, initiated earlier this year as a response to the unprecedented global pandemic. Other vaccines, including one created by Pfizer working with partner BioNTech, as well as an Oxford University/AstraZeneca-developed candidate, are also far along in their Phase 3 testing and readying for emergency approval and use. Pfizer has already applied with the FDA for its own EUA, while the Oxford vaccine likely won’t be taking that step in the U.S. until it completes another round of final testing after discovering an error in the dosage of its first trial – which led to surprising efficacy results.

News: Apple on the hook for €10M in Italy, accused of misleading users about iPhone water resistance

• November 30, 2020
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Apple’s marketing of iPhones as ‘water resistant’ without clarifying the limits of the feature and also having a warranty that excludes cover for damage by liquids has got the company into hot water in Italy. The Italian competition authority (AGCM) has informed the tech giant of an intent to fine it €10 million for commercial

Apple’s marketing of iPhones as ‘water resistant’ without clarifying the limits of the feature and also having a warranty that excludes cover for damage by liquids has got the company into hot water in Italy.

The Italian competition authority (AGCM) has informed the tech giant of an intent to fine it €10 million for commercial practices related to the marketing and warranty of a number of iPhone models since October 2017, starting with the iPhone 8 through to the iPhone 11, following an investigation into consumer complaints related to its promotion of water resistance and subsequent refusal to cover the cost of repairs caused by water damage.

In a document setting out the AGCM’s decision dated towards the end of October — which was made public today (via Reuters) — the regulator concludes Apple violated the country’s consumer code twice because of what it characterizes as “misleading” and “aggressive” commercial practices.

Its investigation found Apple’s iPhone marketing tricked consumers into believing the devices were impermeable to water, rather than merely water resistant — with the limitations of the feature not given enough prominence in ads. While a disclaimer stating that Apple’s warranty excludes damage by liquids was deemed an aggressive attempt to circumvent consumer rights obligations — given its heavy promotion of the devices as water resistant.

Apple places a liquid contact indicator inside iPhones, which changes from white or silver to red on contact with liquid, and checking the indicator is a standard step undertaken by its repair staff.

The AGCM report cites examples of consumers who’s iPhone had taken a “short dive” in the sea being refused cover. Another complainant had been washing their device under the tap — which Apple deemed improper use.

A third reported that their one-month old iPhone XR stopped working after coming into contact with water. Apple told them they must buy a new device — albeit at a subsidized price.

While an iPhone XS user, with a one-year old handset who reported it had never come into contact with water was refused coverage by Apple support who said it had, complained to the regulator there’s no way for a consumer to prove their device was not immersed in water for more than the length of time and depth to which Apple’s small print specifies it has water resistance.

We’ve reached out to Apple for comment on the AGCM’s findings.

The tech giant has 60 days from the date it was notified of the regulator’s intent to fine to appeal the decision.

The size of the penalty is well under half of the operating profit the regulator says Apple’s Italian operation made in the year September 2018 to September 2019, when it note it recorded revenues on its sales and services of €58,652,628; and an operating profit of €26,918,658.

Two years ago Italy’s competition watchdog also fined Apple and Samsung around $15M for forcing updates on consumers that may slow or break their devices. While, this February, France fined Apple $27 million for capping the OS performance of iPhones with older batteries.

Apple has also faced much larger penalties from competition authorities elsewhere in Europe — including being notified of a $1.2BN fine by France’s competition authority in March this year, which accused the tech giant of operating a reseller cartel along with two wholesale distribution partners, Ingram Micro and Tech Data.

Apple also had to stump up as much as €500M in back taxes demanded by French authorities last year.

While some $15BN from Apple’s European HQ is sitting in an escrow account to cover a 2016 European Commission ‘State Aid’ charge that it illegally benefited from corporate tax arrangements in Ireland between 2003 and 2014.

In July Apple and Ireland won the first round of an appeal against the charge. But the Commission filed an appeal in September — meaning the case will go up to the CJEU, likely adding years more of legal wrangling.

EU lawmakers are continuing to work on pushing for global reform of digital taxation, while some Member States push on with their own digital taxes.

News: UK shrinks timetable for telcos to stop installing 5G kit from Huawei

• November 30, 2020
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The UK government has squeezed the timetable for domestic telcos to stop installing 5G kit from Chinese suppliers, per the BBC, which reports that the deadline for installation of kit from so-called ‘high risk’ vendors is now September. It had already announced a ban on telcos buying kit from Huawei et al by the end

The UK government has squeezed the timetable for domestic telcos to stop installing 5G kit from Chinese suppliers, per the BBC, which reports that the deadline for installation of kit from so-called ‘high risk’ vendors is now September.

It had already announced a ban on telcos buying kit from Huawei et al by the end of this year — acting on national security concerns attached to companies that fall under the jurisdiction of Chinese state surveillance laws. But, according to the BBC, ministers are concerned carriers could stockpile kit for near-term installation to create an optional buffer for themselves since it has allowed until 2027 for them to remove such kit from existing 5G networks. Maintaining already installed equipment will also still be allowed up til then.

A Telecommunications Security Bill which will allow the government to identify kit as a national security risk and ban its use in domestic networks is slated to be introduced to parliament tomorrow.

Digital secretary Oliver Dowden told the BBC he’s pushing for the “complete removal of high-risk vendors”.

In July the government said changes to the US sanction regime meant it could no longer manage the security risk attached to Chinese kit makers.

The move represented a major U-turn from the policy position announced in January — when the UK said it would allowed Chinese vendors to play a limited role in supplying domestic networks. However the plan faced vocal opposition from the government’s own back benches, as well as high profile pressure from the US — which has pushed allies to expel Huawei entirely.

Alongside policies to restrict the use of high risk 5G vendors the UK has said it will take steps to encourage newcomers to enter the market to tackle concerns that the resulting lack of suppliers introduces another security risk.

Publishing a supply chain diversification strategy for 5G today, Dowden warns that barring “high risk” vendors leaves the country “overly reliant on too few suppliers”.

“This 5G Diversification Strategy is a clear and ambitious plan to grow our telecoms supply chain while ensuring it is resilient to future trends and threats,” he writes. “It has three core strands: supporting incumbent suppliers; attracting new suppliers into the UK market; and accelerating the development and deployment of open-interface solutions.”

The government is putting an initial £250 million behind the 5G diversification plan to try to build momentum for increasing competition and interoperability.

“Achieving this long term vision depends on removing the barriers that prevent new market entrants from joining the supply chain, investing in R&D to support the accelerated development and deployment of interoperable deployment models, and international collaboration and policy coordination between national governments and industry,” it writes.

In the short to medium term the government says it will proritize support for existing suppliers — so the likely near term beneficiary of the strategy is Finland’s Nokia.

Though the government also says it will “seek to attract new suppliers to the UK market in order to start the process of diversification as soon as possible”.

“As part of our approach we will prioritise opportunities to build UK capability in key areas of the supply chain,” it writes, adding: “As we progress this activity we look forward to working with network operators in the UK, telecoms suppliers and international governments to achieve our shared goals of a more competitive and vibrant telecoms supply market.”

We’ve reached out to Huawei for comment on the new deadline for UK carriers to stop installing its 5G kit.

The company has continued to reject security concerns attached to its business.

News: HungryPanda raises $70M for a food delivery app aimed at overseas Chinese consumers

• November 30, 2020
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Food delivery apps have been a big deal this year for consumers stuck at home and unable (or unwilling) to go to restaurants or grocery stores; and for investors who are eyeing the opportunity to back rising stars to help them grow. Today came the latest development in that story: HungryPanda, which makes a Mandarin-language

Food delivery apps have been a big deal this year for consumers stuck at home and unable (or unwilling) to go to restaurants or grocery stores; and for investors who are eyeing the opportunity to back rising stars to help them grow.

Today came the latest development in that story: HungryPanda, which makes a Mandarin-language app specifically targeting Chinese consumers outside of China, has raised $70 million to continue its global expansion in delivering food from Chinese restaurants and Asian grocery stores targeting the Chinese diaspora.

Estimates put the number of Chinese people living abroad (counting students and first-generation immigrants, and counting those living outside of the Mainland, Taiwan, Hong Kong and Macau) at around 50 million, with most of them concentrated in other Asian countries, so that is a specific target for the startup. Longer term, there are tens of millions more people if you consider second-, third- and further generations of people, although that will likely see big changes to the app, including introducing other languages.

The funding comes on the back of a surge of usage of HungryPanda . It is now live in 47 cities (versus 31 in February of this year) across Australia, Canada, France, New Zealand, the UK — where it is was founded. Growing some 30-fold in the last three years, HungryPanda’s CEO and founder Eric Liu said in an interview that it is already profitable in its earliest markets in the UK, as well as in New York City, and is safely en route to getting into the black in other locations, too.

The Series C is being led by Kinnevik (a prolific backer of e-commerce startups), with participation also from 83North and Felix Capital (which backed HungryPanda in its last round of $20 million earlier this year), and Piton Capital and Burda Principal Investment.

HungryPanda is not disclosing its valuation right now, but it’s notable that most of its four-year life has been spent bootstrapped — it has raised only $90 million to date, all of it this year.

Food apps have come into their own this year. Already popular with consumers who like the convenience of using a phone or website to browse and order food to be brought to their door, during the Covid-19 pandemic, many services were stretched to capacity in cities where people were being ordered to shelter in place and restaurants were closed.

E-marketer estimates that in the US alone, usage went up by more than 25%. It all still came at a cost, though. For example, the increased measures that needed to be taken to ensure social distancing meant higher costs for the companies, which are often already stretched in their unit economics.

In that sea of apps, however, you might be hard-pressed to distinguish one from another. At one point in the UK, for example, even the delivery bags and logos of two big rivals, Deliveroo and Uber Eats, looked the same.

HungryPanda is a very different bird compared to these. For starters, the whole app is in Mandarin. And it focuses primarily (in most cases, only) on Chinese food. If you want pizza or a burger, or if you want to read the menu in English, go somewhere else.

The app was founded four years ago by Liu, who was an international student in computer science student at the University of Nottingham. Coming over from China, even though there are indeed a number of Chinese restaurants in the city, he and other Chinese students found it nearly impossible to order from them.

The reasons? All of the menus were in English, and the names of dishes, as they were translated, had no meaning for them; and in any case they were all essentially filtered and altered for local (read: British) palates. This was a bigger deal than it might be for some: Chinese people prefer to eat “traditional” food, said Liu, and they take the business of eating very seriously.

His solution was to build an app that provided all the information to students like him in a format that they could actually use, including items that typically might only be offered on side menus to Chinese customers in Mandarin, if at all.

What’s interesting is that while food delivery unit economics can be very challenging in a sprawling city, the same does not apply typically to HungryPanda. Typically, at a company like Deliveroo, the rule of thumb has been to be slightly above two deliveries per hour per driver to make that hour profitable. That is not always possible, however, in the real world. (And that’s before counting all of the other costs around marketing, and so on.)

HungryPanda, however, was delivering to students who were in dormitories, and often ordering in groups to eat “family style”. It meant that HungryPanda was mitigating a lot of the typical unit economics, said Antoine Nussenbaum, the co-founder of Felix Capital.

“This made the efficiency of delivering much higher,” he added.

The same has gone for grocery delivery. Panwen Chen, the global VP of strategy and an early employee of the company, was also a student at Nottingham and said, considering that even students don’t want to eat out all that time, getting groceries was next to impossible for him and others like him.

“I didn’t have a car, and so getting to the Chinese grocery in Nottingham meant taking two buses or 50-60 minute walk,” he said. “Before you know it, you’re struggling with very heavy bags of groceries. It’s not a nice experience. We then started working with groceries, and what we found was that with food delivery we already had the infrastructure, so it was a natural extension of what we do, especially since the community was the same. That helped us to understand also what they wanted.”

He added that takeaway ready-made food is still majority of the startup’s business, both growing very fast.

Loading in one, then two functions into the app sets up HungryPanda for how it might grow further in the future. Asia has been a pioneer on that front, with apps like WeChat, and more specifically those focused around delivery services like Grab, really carving out a place for themselves as “super apps,” providing users with a vast array of services beyond the core, original purpose of those apps.

Consumers and businesses in the wider network are accustomed to the existence of “super apps”, and they are well-used. In a world where some of the homegrown Chinese apps have found it harder to break into international markets (and in some cases like the USA, they may be downright challenged to do so) this gives HungryPanda, which is a UK app, an interesting position, potentially as a partner or as a strong competitor in those markets.

Indeed it already provides a wide range of offers to users from partner organizations, which stretch well beyond basic food ordering.

HungryPanda started for Liu as a side project to school, and his plan was to go on to the London School of Economics for post-graduate work after getting his Nottingham degree. The business took off, though, and so he deferred for two years. Last year, he got the reminder from the LSE to nudge him on what happens next, and he said he ended up deferring indefinitely for now.

“I feel it’s been not just a good experience for me, but for the Chinese community that uses us,” he said. He now lives in New York City, building the business in the US.

News: Gartner: Q3 smartphone sales down 5.7% to 366M, slicing Covid-19 declines in Q1, Q2

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We are now into the all-important holiday sales period, and new numbers from Gartner point to some recovery underway for the smartphone market as vendors roll out a raft of new 5G handsets. Q3 smartphone figures from the analysts published today showed that smartphone unit sales were 366 million units, a decline of 5.7% globally

We are now into the all-important holiday sales period, and new numbers from Gartner point to some recovery underway for the smartphone market as vendors roll out a raft of new 5G handsets.

Q3 smartphone figures from the analysts published today showed that smartphone unit sales were 366 million units, a decline of 5.7% globally compared to the same period last year. Yes, it’s a drop; but it is still a clear improvement on the first half of this year, when sales slumped by 20% in each quarter, due largely to the effects of Covid-19 on spending and consumer confidence overall.

That confidence is being further bolstered by some other signals. We are coming out of a relatively strong string of sales days over the Thanksgiving weekend, traditionally the “opening” of the holiday sales cycle. While sales on Thursday and Black Friday were at the lower end of predicted estimates, they still set records over previous years. With a lot of tech like smartphones often bought online, this could point to stronger numbers for smartphone sales as well.

On top of that, last week IDC — which also tracks and analyses smartphones sales — published a report predicting that sales would grow 2.4% in Q4 compared to 2019’s Q4. Its take is that while 5G smartphones will drive buying, prices still need to come down on these newer generation handsets to really see them hit with wider audiences. The average selling price for a 5G-enabled smartphone in 2020 is $611, said IDC, but it thinkgs that by 2024 that will come down to $453, likely driven by Android-powered handsets, which have collectively dominated smartphone sales for years.

Indeed, in terms of brands, Samsung, with its Android devices, continued to lead the pack in terms of overall units, with 80.8 million units, and a 22% market share. In fact, the Korean handset maker and China’s Xiaomi were the only two in the top five to see growth in their sales in the quarter, respectively at 2.2% and 34.9%. Xiaomi’s numbers were strong enough to see it overtake Apple for the quarter to become the number-three slot in terms of overall sales rankings. Huawei just about held on to number two. See the full chart further down in this story with more detail.

Also worth noting: overall mobile sales — a figure that includes both smartphones and feature phones — were down 8.7% 401 million units. That underscores not just how few feature phones are selling at the moment (smartphones can often even be cheaper to buy, depending on the brands involved or the carrier bundles), but also that those less sophisticated devices are seeing even more sales pressure than more advanced models.

Smartphone slump: it’s not just Covid-19

It’s worth remembering that even before the global health pandemic, smartphone sales were facing slowing growth. The reasons: after a period of huge enthusiasm from consumers to pick up devices, many countries reached market penetration. And then, the latest features were too incremental to spur people to sell up and pay a premium on newer models.

In that context, the big hope from the industry has been 5G, which has been marketed by both carriers and handset makers as having more data efficiency and speed than older technologies. Yet when you look at the wider roadmap for 5G, rollout has remained patchy, and consumers by and large are still not fully convinced they need it.

Notably, in this past quarter, there is still some evidence that emerging/developing markets continue to have an impact on growth — in contrast to new features being drivers in penetrated markets.

“Early signs of recovery can be seen in a few markets, including parts of mature Asia/Pacific and Latin America. Near normal conditions in China improved smartphone production to fill in the supply gap in the third quarter which benefited sales to some extent,” said Anshul Gupta, senior research director at Gartner, in a statement. “For the first time this year, smartphone sales to end users in three of the top five markets i.e., India, Indonesia and Brazil increased, growing 9.3%, 8.5% and 3.3%, respectively.”

The more positive Q3 figures coincide with a period this summer that saw new Covid-19 cases slowing down in many places and the relaxation of many restrictions, so now all eyes are on this coming holiday period, at a time when Covid-19 cases have picked up with a vengeance, and with no rollout (yet) of large-scale vaccination or therapeutic programs. That is having an inevitable drag on the economy.

“Consumers are limiting their discretionary spend even as some lockdown conditions have started to improve,” said Gupta of the Q3 numbers. “Global smartphone sales experienced moderate growth from the second quarter of 2020 to the third quarter. This was due to pent-up demand from previous quarters.”

Digging into the numbers, Samsung has held on to its top spot, although its growth was significantly less strong in the quarter. Even with that slump, Samsung is still a long way ahead.

That is in part because number-two Huawei, with 51.8 million units sold, was down by more than 21% since last year. It has been having a hard time in the wake of a public relations crisis after sanctions in the US and UK, due to accusations that its equipment is used by China for spying. (Those UK sanctions, indeed, have been brought up in timing, just as of last night.)

That also led Huawei earlier this month to confirm the long-rumored plan to sell off its Honor smartphone division. That deal will involve selling the division, reportedly valued at around $15 billion, to a consortium of companies.

It will be interesting to see how Apple’s small decline of 0.6% to 40.6 million units to Xiaomi’s 44.4 million, will shift in the next quarter, on the back of the company launching a new raft of iPhone 12 devices.

“Apple sold 40.5 million units in the third quarter of 2020, a decline of 0.6% as compared to 2019,” said Annette Zimmermann, research vice president at Gartner, in a statement. “The slight decrease was mainly due to Apple’s delayed shipment start of its new 2020 iPhone generation, which in previous years would always start mid/end September. This year, the launch event and shipment start began 4 weeks later than usual.”

Oppo, which is still not available through carriers or retail partners in the US, rounded out the top five sellers with just under 30 million phones sold. The fact that it and Xiaomi do so well despite not really having a phone presence in the US is an interesting testament to what kind of role the US plays in the global smartphone market: huge in terms of perception, but perhaps less so when the chips are down.

“Others” — that category that can take in the long tail of players who make phones, continues to be a huge force, accounting for more sales than any one of the top five. That underscores the fragmentation in the Android-based smartphone industry, but all the same, its collective numbers were in decline, a sign that consumers are indeed slowly continuing to consolidate around a smaller group of trusted brands.

Source: Gartner (November 2020)

News: The Trump administration will add SMIC, China’s largest chipmaker, to its defense blacklist: report

• November 30, 2020
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SMIC, one of largest chip makers in the world, is among several companies that the Department of Defense plans to designate as being owned or controlled by the Chinese military, reports Reuters. Earlier this month, President Donald Trump signed an executive order, set to go into effect on January 11, that would bar U.S. investors

SMIC, one of largest chip makers in the world, is among several companies that the Department of Defense plans to designate as being owned or controlled by the Chinese military, reports Reuters. Earlier this month, President Donald Trump signed an executive order, set to go into effect on January 11, that would bar U.S. investors from buying securities from companies on the defense blacklist.

In a statement to Reuters, SMIC said it continues “to engage constructively and openly with the U.S. government” and that it “has no relationship with the Chinese military and does not manufacture for military end-users or end-uses.”

The largest semiconductor maker in China, SMIC holds about 4% of the worldwide foundry market, estimates market research firm TrendForce. Its U.S. customers have included Qualcomm, Broadcom and Texas Instruments.

There are currently 31 companies on the defense blacklist. SMIC is one of four new companies that the Department of Defense plans to add, according to Reuters. The others are China Construction Technology, China International Engineering Consulting Corp and China National Offshore Oil Corp (CNOOC).

The company delisted from NYSE in May 2019, but it said that the decision was prompted by the limited trading volume and high administrative costs, not the U.S.-China trade war or the U.S. government’s blacklisting of Huawei and other Chinese tech companies.

SMIC has already been impacted by export restrictions that prevent them from purchasing key equipment from American suppliers. At the beginning of October, it told shareholders that export restrictions set by the U.S. Bureau of Industry and Security could have “material adverse effects” on its production.

The executive order, and the possible addition of new companies to the defense blacklist, is in-line with the Trump administration’s hard stance against Chinese tech companies, including Huawei, ZTE and ByteDance, that it claims are a potential national security threat through their alleged ties to the Chinese government and military. But the future of a lot of the current administration’s policies after the Joe Biden assumes the presidency on January 20 is uncertain.

TechCrunch has contacted SMIC for comment.

News: Primer, the fintech helping merchants consolidate the payments stack, raises £14M Series A

• November 29, 2020
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Primer, the U.K. fintech that wants to help merchants consolidate their payments stack and easily support new payment methods in the future, has raised £14 million in Series A funding. The round was led by Accel, who I understand were quite proactive in persuading Primer to take the VC firm’s money. The young company wasn’t

Primer, the U.K. fintech that wants to help merchants consolidate their payments stack and easily support new payment methods in the future, has raised £14 million in Series A funding. The round was led by Accel, who I understand were quite proactive in persuading Primer to take the VC firm’s money.

The young company wasn’t actively fund-raising, having quietly raised £3.8 million in funding announced in May. Instead, the team was heads down building out the product and wooing potential customers by holding technical workshops and in-depth interviews over Zoom with 100 merchants — activity that didn’t go unnoticed.

Also participating in the Series A are existing investors: Balderton, SpeedInvest and Seedcamp, who were joined in the round by new backer RTP Global. Sonali De Rycker, partner at Accel, will join Primer’s board.

Founded by ex-PayPal employees – via PayPal’s acquisition of Braintree — Primer wants to offer one payments API to (hopefully) rule them all, with the explicit aim of bringing greater transparency to a merchant’s payment stack.

The thinking is that larger merchants, especially those that operate in more than one geography, have to support an array of payment methods, which brings with it significant technical overhead, a poor user experience, and lack of transparency.

Primer, now described as a “low code” platform, carries out a lot of that heavy-lifting on behalf of merchants and while remaining steadfastly payment method agnostic. By doing so, the idea is to reduce friction when adopting new payment methods as they come to market, and be able to provide better insights into things like how well each checkout option is performing.

As well as payment-service-providers (PSPs), the platform has connectors for fraud providers, chargeback services, subscription billing engines, BI tools, loyalty and rewards platforms. Both payments and non-payments services can be “seamlessly connected to the checkout experience and payments flow via workflows, enabling merchants to unify their fraud migration efforts, build sophisticated transaction routing, and solve complex flows – all with no code,” explains Primer.

Primer says the additional funding will be used for international business development and scaling its team. Billed as a remote-first company, Primer has 23 employees across six countries, and says it has already picked up traction across mid-market and large enterprise e-commerce merchants across Europe.

Comments Paul Anthony, Primer’s co-founder and head of product and engineering: “During our time at PayPal, we saw first-hand the technical burden online merchants face trying to offer the best payments experiences to their customers globally. Our low-code approach enables merchants’ payments teams to manage and expand their payments ecosystems, and maintain sophisticated payments logic with a familiar workflow UI”.

Meanwhile, the new investment brings Primer’s total funding to £17.8 million, and comes only a few weeks after the initial launch of the company’s platform.

News: Gillmor Gang: Electrical Banana

• November 29, 2020
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Thanks I’m giving for the start of the first big online season. Yes, the pandemic has put in place a gigantic move to the digital for our immediate and accelerated future. We all know how this plays out in the required state of things pre-vaccine. But there’s an undercurrent not so hidden there of a

Thanks I’m giving for the start of the first big online season. Yes, the pandemic has put in place a gigantic move to the digital for our immediate and accelerated future. We all know how this plays out in the required state of things pre-vaccine. But there’s an undercurrent not so hidden there of a dynamic answer to my wife’s stubborn question: Where’s my Jetpack?

She’s a child of the 60s, a post-Beatles time of imploding dreams and dashed expectations. James Bond got to fly a Jetpack, but the telltale burned gasoline exhaust made the effect an artifact of what wasn’t going to happen. In an electric decade and noise-canceling AirPods, maybe it’s more likely to surface than not, but if so, what’s the next Jetpack?

My vote is for the electric newsletter, a notification engine that knows what I’m tracking, projects the trends circulating my core peers, and invests proactively in the products we want to accelerate. It’s a self healing economy, a research coordinator, a humor and media rewarder. On the Gang, we use a blend of live streaming, backchannel notifications, and everything up to but not including a newsletter.

From its earliest days, Twitter promised a future where RSS authority would be mined in a social context. What I mean by that is RSS delivered the ability, the chair in the sky opportunity Louis C.K. described, the chance to explore the world alongside the artists formerly known as accredited journalists. It was always a tough sell for the displaced gatekeepers, but flash forward to today and you can see they’re all bloggers and podcasters now.

The moment the meritocracy window opened, the definition of success moved to the readers, the viewers, the social enterprise as Marc Benioff insisted. Software as a service mined those social signals as fuel for what the iPhone delivered in the mobile wave. Now the mobile economy is expanding to the silicon on the desktop. M1 seems like an evolution, but its entry point on consumer laptops is designed to produce network effects in the same way Office 97 boosted Windows 95 into orbit.

So where is this electric newsletter if it’s so important? As a vehicle for finding stuff I didn’t know I cared about, newsletters suffer from too many of them with too few business models driving them. Subscriptions derive revenue but reduce the network effects of advertising supported subsidy of firewalls. You get reach but quantity explodes. Context glut is not a pretty thing, either.

Our early attempts at constructing a Gang newsletter spawned the realtimeTelegram feed; its group-shared notification stream valuable as much for what we skipped as when we dipped in to it. As a framing device for the Gillmor Gang recording sessions, we could anticipate both what we wanted to talk about and what we wanted to avoid. Trump fatigue gets burned off in Telegram, while science and innovation get drilled down on and fleshed out in advance.

Adding a Twitter feed (follow @gillmorgang) pushes Likes and retweets into the mix. The live recording stream generates Facebook Watch Parties and additional comments. An edited version here on TechCrunch adds this related commentary. But where’s the newsletter for all these live pieces?

Perhaps the answer goes back to the Jetpack? It may not be the Jetpack we are looking for, but rather the components that make up this stream as a service. A Jetpack offers the dream of instant teleportation without the traffic jams or being polite about your Uber driver’s musical taste. Zoom already offers some of that promise, where saving the commute opens up hours in your day. Zoom-enabled shopping and delivery management will go a long way.

As Donovan presciently proclaimed, Electrical Banana gonna to be the very next phase. My electric newsletter is the perfect definition of a pipe dream. It’s not so much as when it’s going to get here as what.

__________________

The Gillmor Gang — Frank Radice, Michael Markman, Keith Teare, Denis Pombriant, Brent Leary, and Steve Gillmor . Recorded live Friday, November 20, 2020.

Produced and directed by Tina Chase Gillmor @tinagillmor

@fradice, @mickeleh, @denispombriant, @kteare, @brentleary, @stevegillmor, @gillmorgang

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