Архив метки: China

TikTok adds video reactions to its newly-merged app

Just about a month after the merger of the short-form video apps Musical.ly and TikTok, the app is introducing a new social feature, allowing users to post their reactions to the videos that they watch.
Instead of text comments, these reactions will take the form of videos that are essentially superimposed on top of existing clips. The idea of a reaction video should be familiar to anyone who’s spent some time on YouTube, but TikTok is incorporating the concept in way that looks like a pretty seamless.
To post a reaction, users just need to choose the React option in the Share menu for a given video. The app will then record your audio and video as the clip plays. You can also decide where on the screen you want your reaction video to appear.
If you don’t recognize the TikTok name, that’s probably because the app only launched in the United States at the beginning of August, but it’s been available in China for a couple of years.

Back in 2017, Bytedance — the Chinese company behind TikTok as well as news aggregator Toutiao — acquired Musical.ly for around $1 billion. It eventually merged the two apps to combine their audiences and features; Musical.ly users were moved over with their existing videos and settings.
The company says Reactions will be available in the updated app on Google Play and the Apple App Store over the next day or two.

TikTok adds video reactions to its newly-merged app

Samsung forecasts slowing profit growth for Q2, missing analyst estimates

Samsung has put out earnings guidance for its Q2 which indicate quarterly growth at its slowest for more than a year — as a lack of new ideas to sell high end smartphones drags on the company’s bottom line.
The electronics maker is reporting estimated profit of 14.8 trillion Korean won (USD$13.2BN) on revenue of 58 trillion Korean won (USD$51.9BN) for the quarter.
Samsung’s expectation just misses an average estimate of 14.9 trillion won from 18 analysts polled by Thomson Reuters, and shares in the company are down just over 2 per cent on the earnings guidance news.
The Q2 forecast compares to profit of 15.64 trillion Korean Won (USD$14BN) on revenue of 60.56 trillion Korean Won (USD$54.2BN) for its Q1 — when Samsung reported a record operating profit off the back of growth in its semiconductor business plus the early global launch of its flagship Galaxy S9 smartphone.
Despite that Q1 high, it had prepared investors for a Q2 slowdown — warning in April of challenging conditions ahead, citing weakness in the display panel segment and a decline in profitability on the mobile side, amid rising competition in the high-end smartphone segment.
At the same time, the global smartphone market is shrinking — even in China, the erstwhile growth engine for smartphones after Western markets saturated. So Samsung’s smartphone business is facing a dual squeeze from shrinking sales opportunities and rising competition from the likes of China’s Huawei and Xiaomi — two rival Android device makers that have been carving out additional marketshare.
Meanwhile, Samsung’s main rival for high end smartphone profits, Apple, beat analyst estimates of iPhones shipments in its Q2 in May, despite an earlier miss in the holiday quarter — showing the staying power of its high end smartphone brand and a positive, if slow burn, response to how it’s iterating its mobile business, with the iPhone X.
Returning to Samsung, the positive story for the company — continued record growth for its chip business — is still not filling the smartphone-shaped profit hole in its books, even as restarting momentum in the smartphone segment is looking increasingly tough in a very tough market. 
The Galaxy S9 is a solid smartphone but serving up more of the same equals diminishing returns in the fiercely competitive Android space. And investors look circumspect, with shares in Samsung down around 12% this year.
One wild card on the device innovation front: Samsung has been teasing its R&D work to build a foldable smartphone for multiple years. Ahead of Apple’s iPhone X flagship launch last year Samsung suggested it was targeting 2018 to finally release a product.
However this is also a risky strategy given the obvious manufacturing challenges, and — beyond that — question marks over whether a foldable smartphone is really the type of mainstream innovation that could fire up major momentum among high end handset buyers or be viewed as a niche gimmick.

Samsung forecasts slowing profit growth for Q2, missing analyst estimates

How ZTE became the focal point of US/China relations

Here in the States, ZTE has been content with a kind of quiet success. The Chinese smartphone maker has landed in the top five quarter after quarter (sometimes breaking the top three, according to some analysts), behind household names like Apple, Samsung and LG. Suddenly, however, the company is on everyone’s lips, from cable news to the president’s Twitter account.
It’s the kind of publicity money can’t buy — but it’s happening for one of the worst reasons imaginable. ZTE suddenly finds itself in the eye of a looming trade war between superpowers. Iranian sanctions were violated, fines levied and seven-year international bans were instated.
It’s like a story ripped from the pages of some Cold War thriller, though instead of Jason Bourne, it’s that one budget smartphone company that you’ve maybe heard of, who maybe makes that weird Android phone with two screens.
So, how did we get here?
ZTE began U.S. operations in 1998, a little over a decade after forming in Shenzhen (and a year after going public in China) as Zhongxing Semiconductor Co., Ltd. The change of name to Zhongxing Telecommunications Equipment reflects the newfound focus for the company, which employees around 75,000 and operates in 160 countries.
While ZTE has flirted with premium and sometimes bizarre devices, in the smartphone world, the company is primarily known for its budget hardware. It’s no coincidence that the company was tapped by google to be the first to run Android Oreo Go Edition (nee Android Go). The manufacturer has found particular success in the developing world, while making significant gains in the U.S. by releasing dozens of low-cost devices targeted at prepaid users.
In recent years, however, the company has come under increased scrutiny on two fronts. First, there’s the issue of the company’s perceived ties to the Chinese government. It’s the same thing that’s tripped up fellow Chinese handset manufacturer Huawei in its pursuit of the U.S. market.
In Huawei’s case, multiple warnings from top U.S. security agencies has severely hobbled any chance of making significant headway in this country. The company kicked off the year with the one-two punch of having AT&T pull out of a deal last minute, only to have Best Buy stop restocking its product on store shelves. ZTE, on the other hand, has run into less headwind there.
In February, top officials at the FBI, CIA and NSA all warned against buying product from both companies over remote surveillance concerns and later ending their sale at military bases. But after making significant inroads through non-contract carriers like Boost, Cricket and Metro PCS, the warnings appear to have had little impact on the company.
The same, however, can’t be said of a seven-year ban.
In 2016, the U.S. Commerce Department found the company guilty of violating U.S. sanctions. The department disclosed internal documents from the company naming “ongoing projects in all five major embargoed countries — Iran, Sudan, North Korea, Syria and Cuba.” That’s a big issue when selling a product that contains, by some estimates, a quarter of components created by U.S. companies — not to mention all of the Google software.
The following year, the company pleaded guilt and agreed to a $1.19 billion fine, along with the stipulation that it would punish senior management for the transgression. Last month, however, the DOC said ZTE failed to live up to the latter part of the deal, issuing an even steeper fine as a result.
“ZTE misled the Department of Commerce,” the department said in a statement to TechCrunch at the time. “Instead of reprimanding ZTE staff and senior management, ZTE rewarded them. This egregious behavior cannot be ignored.”
The new punishment bans U.S. component manufacturers from selling to ZTE for seven years. A few days later, the company told TechCrunch that the export ban would “severely impact” its chances of survival. And then, last week, the company ceased major operating activities.
“As a result of the Denial Order, the major operating activities of the company have ceased,” it wrote in an exchange filing. “As of now, the company maintains sufficient cash and strictly adheres to its commercial obligations subject in compliance with laws and regulations.”
In the meantime, the company was reportedly meeting with companies like Google in hopes of figuring out a workaround, while China was said to be meeting with U.S. officials to discuss the steep ban. For some, the ZTE ban was seen as a political move amidst a potential trade war, and a major roadblock toward negotiations.

President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!
— Donald J. Trump (@realDonaldTrump) May 13, 2018

That leads us to Sunday, when Trump tweeted, “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”
Job loss in China seems like an odd motivator for any U.S. president, let along Trump, but things make significantly more sense when you consider the sheer size of a company like ZTE. If a U.S. trade ban caused the company to fold, it’s easy to see how that could severely impact already tenuous relations between the two countries.
“The Chinese have suggested that ZTE was a show-stopper,” international studies expert Scott Kennedy succinctly told NPR, “if you kill this company, we’re not going to be able to cooperate with you on anything.”

The Washington Post and CNN have typically written false stories about our trade negotiations with China. Nothing has happened with ZTE except as it pertains to the larger trade deal. Our country has been losing hundreds of billions of dollars a year with China…
— Donald J. Trump (@realDonaldTrump) May 16, 2018

And that brings us to this morning — and other Trump tweet. “The Washington Post and CNN have typically written false stories about our trade negotiations with China,” Trump writes. “Nothing has happened with ZTE except as it pertains to the larger trade deal. Our country has been losing hundreds of billions of dollars a year with China[…]…haven’t even started yet! The U.S. has very little to give, because it has given so much over the years. China has much to give!”
Those tweets, it should be noted, were most likely posted in reaction to bipartisan concern about Trump’s focus. “#China intends to dominate the key industries of the 21st Century not through out innovating us, but by stealing our intellectual property & exploiting our open economy while keeping their own closed,” Marco Rubio tweeted earlier this week. “Why are we helping them achieve this by making a terrible deal on ZTE?”
So things are weird. And it’s 2018, so expect that it will only get weirder from here.

How ZTE became the focal point of US/China relations

The 5G wireless revolution will come, if your city council doesn’t block it first

The excitement around 5G is palpable at the Brooklyn 5G Summit this week, and for good reason. Once the province of academic engineers, there is increasingly a consensus emerging among technology leaders that millimeter-wave technology is ready for prime time.
Yet there remain large barriers to a successful rollout, particularly at the local government level. Those challenges could prevent the U.S. from aggressively competing with other nations like China, which are investing massive resources to lead this next generation of wireless technology.
The Summit, now in its fifth year and organized by New York University’s Wireless Center, Nokia and IEEE, is designed to showcase New York’s technology leadership in the space. New York has been at the forefront of wireless for many years, with the first mobile phone call taking place in Midtown Manhattan.
That was 45 years ago though. This month, New York learned that it had been selected as one of two initial sites for a 5G testbed by the Platforms for Advanced Wireless Research program, which is managed by the National Science Foundation in concert with a consortium of wireless companies.
Through a program called COSMOS, researchers will deploy a total of 249 large, medium and mostly small cell nodes to West Harlem (including Columbia University’s Morningside Heights main campus) in order to investigate the performance of 5G in an urban setting. New York was awarded an initial grant of $3.6 million to execute the initiative.
This sort of testbed model is quite progressive in the wireless industry. While the notion of a minimum viable product and constant test feedback is a hallmark of software startups, that mentality has not been translated well into the wireless world. The hope for this testbed is that as new equipment is invented in the coming years, the West Harlem network can be continuously upgraded, serving as a model for potential deployments onto operators’ networks across the country.
It’s also critical because the network architecture of wireless is expected to change drastically in the years ahead. More computing will be done at the “edge” in order to reduce network latency and power the internet of things. In order to handle that traffic, new machine learning algorithms are going to have to be deployed that can actively manage traffic and ensure that applications have reliable performance. A realistic testbed provides key training data and analytics that can improve those algorithms and ultimately deliver better services to customers.
The good news is that the U.S. has conceived and launched this test program. The bad news is that we may still be too slow to win the competition for this generation of wireless tech.
The wireless industry’s trade association, the CTIA, has declared the rollout of 5G a “race” between the United States and the Asian nations of China, Korea and Japan. The U.S. widely won the competition for 4G technologies, but the rise of Huawei as a dominant force in the wireless equipment space means that competition for technological leadership has never been more keen.
The White House and the federal government have made a 5G rollout a national security priority, but getting 5G wireless into the hands of consumers is likely to be stymied by opposition from local city councils and mayors around the issue of site access.
In order to provide reliable cell service, operators need to deploy cell sites near consumers. While they don’t need direct line of sight for the spectrum used in 4G, buildings and other objects can interfere with signals, making it critical to have a dense mesh of sites in urban environments.
Concerns about cancer, historical preservation and fees for renting space have slowed the expansion of wireless services to communities across the country. Permits for erecting a new cell site can easily take a year or more.
In the 4G world, that was somewhat manageable, since the network architecture was built with large cell sites as the core of the network. With 5G though, technologists are pushing for greater decentralization through deployment of microcells that would be closer to street-level, improving quality of service while lowering power requirements. The fear is that if permits continue to take so long for every new site, the burden of that process could kill 5G in the United States.
The FCC is investigating how to reduce the burden of siting requirements, and one option is to exempt from review the kinds of small cells that are at the heart of 5G. That plan though has faced significant pushback from environmental and historical preservation activists, who don’t want the federal government overruling local government decisions on wireless rollouts.
One attendee of the Summit this morning joked that “It takes 18 months to review a permit, and one hour to install” a small cell. Others noted that it takes just a few short weeks to deploy cell sites in South Korea and China, one reason those countries are in many ways leading the race for 5G.
As with any summit, there were buzzwords galore, but the reality is that the U.S. has an incredible opportunity to win this critical space. But we will need to fight in jurisdictions across the country if we ever want to see this technology actually arrive in our hands.

The 5G wireless revolution will come, if your city council doesn’t block it first

Qualcomm’s war may be over, but the casualties are just starting to be calculated

The epic battle between Qualcomm and Broadcom seems to have reached its armistice, with President Trump using the power of CFIUS to block the transaction this past week, ending what would have been the largest tech M&A transaction of all time.
It may be all quiet on the semiconductor front, but Qualcomm and Broadcom will now need to find a path forward to win the peace and secure access to the coming 5G wireless market. Qualcomm faces a daunting number of challenges, including a potential takeover battle waged by the spurned son of its founder. Broadcom will have to find a new path to use acquisitions to continue its growth.
As with any war though, the damage from this conflict isn’t exclusive to the two enemy combatants. The future of corporate governance and shareholder autonomy is now being reevaluated in light of the actions used by Qualcomm in its defense against Broadcom’s hostile takeover. In addition, America’s openness to foreign investment is increasingly under scrutiny.
Qualcomm picks up the pieces
Hostile takeovers are always going to be damaging affairs, no matter the outcome. The most important mandate for any board of directors — and particularly for the boards of technology companies — is to identify long-term threats and opportunities facing a company, and guide the executive team toward the best possible outcome for shareholders. Hostile takeovers are firefighting affairs — the discussions of the board are jolted from roadmaps, strategy, and vision to the minute-by-minute tactics of defending the company from marauding invaders.
Qualcomm should be directing its attention to strategy, but it faces additional wars on nearly every front. It’s fighting shareholders for its future, fighting Apple and Huawei over its revenues, fighting China over its acquisition of NXP, and now potentially fighting its founder’s son from a private takeover attempt.
Many of Qualcomm’s shareholders see the company’s performance as disappointing. While its stock has fluctuated over the past six years, today’s share price is essentially flat from where it stood in January of 2012. Compare that to Broadcom, which in the same timeframe has seen an increase of about 740%, and the PHLX Semiconductor Sector index, a basket index of the industry, which has seen its value increase by about 280%.
Unsurprisingly, shareholders were enticed by the opportunity to suddenly realize a 35% premium on their shares with Broadcom’s $82-a-share offer. Unlike Qualcomm’s board, shareholders were very interested in accepting Broadcom’s offer. In fact, we now know that Qualcomm’s board knew that it has lost the battle against Broadcom with its own shareholders during the acquisition process. As Bloomberg reported this week:
The votes started to come in on Friday, March 2. By Sunday it was clear that Qualcomm’s defense had failed.
Four of the six directors Broadcom had nominated were polling so far ahead of their Qualcomm peers that the race was effectively over, according to data viewed by Bloomberg. The remaining two were winning by less substantial margins. Making it worse, Mollenkopf and Jacobs, the architects of Qualcomm’s standalone plan, had received some of the fewest votes.
Inside the Qualcomm camp, the mood was bleak; assuming the trend continued, the board would lose control of the company at the shareholder meeting.
Broadcom’s message was one of quiet confidence. The company knew it had won, one person close to the discussions said. At that point, the person said, it was just a question of by how many votes, and who was going to leave the board.
Broadcom was winning the battle with shareholders, so Qualcomm’s board shifted to a terrain far more favorable to it: Washington bureaucrats. From the same Bloomberg report, “Federal lobbying disclosures for 2017 showing that Qualcomm spent $8.3 million, or roughly 100 times the $85,000 Broadcom spent…” These weren’t regulators; these were friends.
In late January, Qualcomm’s board submitted a preliminary, voluntary, and confidential notice to CFIUS asking for a review of Broadcom’s potential board coup. When Broadcom attempted to redomicile to the United States to avoid CFIUS purview (as it would no longer be a foreign company but a domestic one after it redomiciled), the government’s anger was palpable and sealed the company’s fate. The board’s original outreach to CFIUS precipitated the sequence of events that led to Trump’s block this past week.
Qualcomm’s board won the war, but it is still facing a rebellion from its own bosses. The board will be up for election unopposed this week at the company’s delayed shareholders meeting. Perhaps taking a page from tomorrow’s Russian presidential election, some shareholders are withholding their votes from the board slate to show their displeasure with the entire saga. From the Wall Street journal, “Institutional Shareholder Services Inc., an influential proxy-advisory firm, … in a note to investors late Wednesday, stood by its original recommendation that shareholders vote for four Broadcom nominees for Qualcomm’s 11-person board, even though the votes won’t count.”
That shareholder meeting will no doubt be eventful. While the board and the company’s execs will argue that they have a strategy moving forward, they confront two other ongoing firefighting challenges and one new one that could be another round of bruising internecine warfare.
Qualcomm is still in the midst of its $44 billion NXP acquisition, which continues to wait on Chinese regulatory approval. The timeline for that approval is still unclear, but even when Qualcomm does receive it, the company will still have to close the deal and actually implement the transaction. That will take significant time and energy.
Even more complicated is the continuing fight with Apple and Huawei over Qualcomm’s IP licensing revenue. Licensing revenue is crucial for Qualcomm, and the litigation around the fight will force the board to continue monitoring the day-to-day legal tactics of the company rather than focus on a longer-term vision of how to work with the largest smartphone producer in the world to generate profits.
On top of those two challenges, another takeover attempt could potentially exhaust the board further. Yesterday, Qualcomm’s board voted to remove board member Paul Jacobs, who is the son of Qualcomm’s founder and the company’s former chief executive from 2005 to 2014. He had been demoted from executive chairman to director just last week. As the New York Times noted, “The split, which means no member of the Jacobs family will be involved at the top echelons of Qualcomm for the first time in 33 years, was not friendly.”
According to reports, Jacobs is attempting to raise more than $100 billion to buy the company, potentially leveraging SoftBank’s Vision Fund in the process. SoftBank, of course, is a Japanese company, and the Vision Fund has significant capital from foreign countries including Saudi Arabia and the United Arab Emirates. Even more ironically, Qualcomm is an investor in the Vision Fund.
Jacobs is following in the footsteps of Michael Dell who bought the eponymous tech company back in 2013 in a take-private transaction worth $24 billion. Can Jacobs even raise the required amount of capital, four times more than Dell? Will Qualcomm be forced to run back to the Trump administration in order to avoid a “foreign” takeover of the firm yet again, this time by the son of the company’s founder?
My guess — fairly weakly held — is that the answers are yes and no. Jacobs will find the money, and the board won’t fight a distinguished former executive — even if Jacobs was running seriously behind in shareholder approval in the Broadcom fight. We will learn more in the coming weeks, but expect more strategic actions here (maybe from Intel) as well.
Broadcom regroups
Despite its very public failure, Broadcom is in a much stronger position coming out of this battle. It beat analyst estimates this week for its Q1 earnings, and has seen impressive growth in its wireless communications segment, which were up 88% year-over-year. It also managed to lower expenses, which helped drive an increase in gross margin to 64.8% (aren’t fabless and patents awesome?)
Broadcom continues to deliver strong results, but the big question post-Qualcomm is really what’s next? Qualcomm was the single most important chip company that might have been available for purchase (Intel is out of Broadcom’s league). While it plans to continue to redomicile to the U.S., which should allow it to get back into the acquisition game in America, Broadcom may struggle in the coming years to find the kinds of accretive acquisitions that can keep its growth on the trajectory it has been on over the past few years.
Shareholder power wanes?
The biggest questions coming out of the Qualcomm / Broadcom spat is not related to the companies themselves, but the entire intellectual edifice of shareholder rights and the framework used by American companies to conduct corporate governance.
Qualcomm’s board of directors took extraordinary steps to block the Broadcom acquisition. They unilaterally went to Washington to get an injunction not on a deal — which had never been consummated between the two companies — but to block Broadcom from replacing its board of directors in a standard shareholder vote. This is a very important distinction: Qualcomm’s board saw the direction shareholders wanted to go, and essentially decided to just ignore the election process entirely.
From Dealpolitik columnist Ronald Barusch:
This change threatens over three decades of a carefully balanced governance system. Since the Delaware Supreme Court approved the use of the poison-pill takeover defense in 1985, the courts have basically blessed the following tradeoff: On the one hand, corporate directors can fight tooth and nail to stop a deal and the courts will give only limited scrutiny to defensive tactics.
However, the board is strictly limited in any moves to interfere with shareholders’ ability to replace directors and force a company to change course that way. In the vernacular of a leading Delaware case, a “just say no” defense doesn’t mean “just say never.” A bidder with enough patience who can convince a target’s shareholders to change directors has a path at least toward cooperation on resolving regulatory impediments to a deal.
This is a unique case as Barusch notes, but at what point can boards use every method at their disposal to prevent their own shareholders — the people they have a fiduciary duty to represent — from taking charge of the company? This past week presents one of the most complex examples to date, and it wouldn’t surprise me if a shareholder decides to attempt a legal attack on Qualcomm.
The other side of the potential waning of power for shareholders is CFIUS itself. The Trump administration ended a potential deal for a company that shareholders were widely in favor of. Where do the rights of shareholders to realize a return on their equity end and the right of America as a nation to control national security technology start?
We are on new terrain, and there are no clear answers here. In many ways, it depends on what happens over the next few years of the Trump administration. If there are more blocks like what we saw this week, we could see a radical change in the corporate calculus that would have a long-term negative effect on the value of some American companies.
Hostile takeovers may be incredible drama for writers like yours truly, but they have enormous consequences for companies and the employees who work at them. Qualcomm is going to have to shore up its support with a whole host of stakeholders in the coming months (while dealing with a potential take-private fight), while Broadcom needs to find its next strategy for further growth. All of us are going to have to deal with new uncertainty around the power of shareholders to shape the destiny of their companies. The war is over, but the aftermath and its consequences have just begun.

Qualcomm’s war may be over, but the casualties are just starting to be calculated