What to expect from next week’s big iPhone event

It’s been a slow year for Apple hardware. The company has traditionally done a good job spreading announcements throughout the calendar, but aside from an iPad event in Chicago and a MacBook refresh a few months back, there’s been little news out of the company. Even this summer’s WWDC was utterly devoid of hardware news.

All that’s about to change at the big show being held next week at Steve Jobs Theater on the company’s new space-age Cupertino campus. Rumors are coming fast and furious, and by all accounts, there’s A LOT to expect, from a slew of new phones, to an updated Apple to some additional news on the iPad front.

Here’s a breakdown of some of what we expect from the big show on September 12.

iPhone XS: This is the big one. In more ways than one. Last year’s 10th anniversary iPhone event found the company intent on pushing the state of the art on iPhone (and bezel) technology. This year, we fully anticipate the arrival of the sequel.

The flagship model will arrive in two sizes — 5.8 and 6.5 inches, referred to as the iPhone XS and iPhone XS Plus (or, possibly, max), respectively. One of the smaller (but compelling) rumors of the bunch is the inclusion of a Lightning to USB-C cable in-box.

Yes, for better or worse, Apple is keeping Lighting around, but the new cable will make it easier to hook up to those new MacBooks and also enable fast charging. The phones will all supposedly be available in gold, as well, which appears to have been hinted at with the invite’s art work.

Cheaper iPhone X: Along with the flagships, Apple is said to be bringing a cheaper version of the X-style phone. After all, the first iPhone X was pretty commonly understood to be cost-prohibitive. The easiest way to drop the cost? Swap the OLED display for LCD, naturally. The phone will reportedly get Face ID as it drops the home button. As for the name? iPhone XC has been somewhat credibly floated.

Apple Watch Series 4: It’s the time of the season. The suggestion of a round face appears to be little more than wishful thinking, but the standard squircle shape has been improved a bit with the addition of an edge-to-edge display, marking the first major hardware redesign in the three years the watch has been kicking around. Along with a 15 percent larger display, battery and heart-rate monitoring are said to be improved, as well.

Etc.

Speaking of wishful thinking, here’s an assorted collection of what else could be on hand:

• HomePod Mini: A smaller version of the company’s premium smart speaker? Siri could certainly use the boost.
• MacBook Air upgrade: The legacy line is certainly due for an update, including a long-awaited Retina display.
• AirPods: Water resistance and improved Siri functionality could be on tap.
• iPad Pro: This one feels like a bit more of a crapshoot, all said, but a new iPhone X-style design is likely coming sooner or later.
• AirPower: A year should be enough time, right?

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Apple’s Shazam acquisition cleared by EU regulators

European regulators have given the green light to Apple’s December 2017 acquisition of music and image recognition discovery firm Shazam.

Apple Music is the second largest music streaming service in Europe, after Spotify. While Shazam offers what has been described as “a leading music recognition app” in the region (and globally).

TechCrunch broke the news of the acquisition last year — reporting the price for Apple picking up the veteran UK startup to be in the region of $400 million. Apple confirmed our scoop a few days later.

But two months later European Union competition regulators said they were reviewing the deal, a move triggered by concerns raised by multiple countries in the European Economic Area (EEA).

Then in April the Commission stepped the review up into a full-blown investigation.

Today, after carrying out its in-depth probe, the Commission says it’s satisfied the deal will not adversely affect competition in the EEA — and has given it the go-ahead.

Commenting in a statement, antitrust chief Margrethe Vestager, said: “Data is key in the digital economy. We must therefore carefully review transactions which lead to the acquisition of important sets of data, including potentially commercially sensitive ones, to ensure they do not restrict competition. After thoroughly analysing Shazam’s user and music data, we found that their acquisition by Apple would not reduce competition in the digital music streaming market.”

We’ve reached out to Apple for comment.

In reaching this decision, the Commission found that Apple and Shazam mainly offer complementary services that do not compete with each other.

It says its investigation looked at:

• whether Apple would obtain access to commercially sensitive data about customers of its competitors for the provision of music streaming services in the EEA, and whether such data could allow Apple to directly target its competitors’ customers and encourage them to switch to Apple Music. As a result, competing music streaming services could have been put at a competitive disadvantage
• considering Shazam’s strong position in the market for music recognition apps, whether Apple Music’s competitors would be harmed if Apple, after the transaction, were to discontinue referrals from the Shazam app to them

The decision to clear the deal was made after what it describes as “a wide range of investigative measures” were undertaken. It also says it took feedback from “key market participants in the digital music industry, including providers of music streaming and music recognition services, as well as other stakeholders”.

It said today that it does not believe the merged entity will be able to shut out competing providers by accessing commercially sensitive data about their customers — viewing Shazam’s data holdings as unable to “materially increase Apple’s ability to target music enthusiasts”.

It also does not believed the merged entity could shut out competing providers by restricting access to the Shazam app — saying the app has “a limited importance as an entry point to the music streaming services of Apple Music’s competitors”.

The Commission has also judged the combined user datasets of Shazam and Apple as not able to confer “a unique advantage to the merged entity in the markets on which it operates”.

“Any concerns in that respect were dismissed because Shazam’s data is not unique and Apple’s competitors would still have the opportunity to access and use similar databases,” it added.

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With a $10 million round, Nigeria’s Paga plans global expansion

Jake Bright Contributor

Jake Bright is a writer and author in New York City. He is co-author of The Next Africa.

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Nigerian digital payments startup Paga is gearing up for an international expansion with $10 million in funding let by the Global Innovation Fund. 

The company is planning to release its payments product in Ethiopia, Mexico, and the Philippines—CEO Tayo Oviosu told TechCrunch at Disrupt San Francisco.

Paga looks to go head to head with regional and global payment players, such as PayPal, Alipay, and Safaricom’s M-Pesa, according to Oviosu.

“We are not only in a position to compete with them, we’re going beyond them,” he  said of Kenya’s M-Pesa mobile money product. “Our goal is to build a global payment ecosystem across many emerging markets.”

Founded in 2012, Paga has created a multi-channel network and platform to transfer money, pay-bills, and buy things digitally that’s already serving 9 million customers in Nigeria—including 6000 businesses. All of whom can drop into one of Paga’s 17,167 agents or transfer funds from one of Paga’s mobile apps.

Paga products work on iOS, Android, and basic USSD phones using a star, hashtag option. The company has remittance partnerships with the likes of Western Union and Moneytrans and allows for third-party integration of its app.

Paga has also built out considerable scale in home market Nigeria—which boasts the dual distinction as Africa’s most populous nation and largest economy.

Since inception, the startup has processed 57 million transactions worth $3.6 billion, according to Oviosu.

That’s no small feat given the country straddles the challenges and opportunities of growing digital payments. Only recently did Nigeria’s mobile and internet penetration break 50 percent and 40 percent of the country’s 196 million remain unbanked.

To bring more of Nigeria’s masses onto digital commerce, Paga recently launched a new money transfer-app that further simplifies the P2P payment process from mobile devices.

For nearly a decade, Kenya’s M-Pesa—which has 20 million active users and operates abroad—has dominated discussions of mobile money in Africa.

Paga and a growing field of operators are diversifying the continent’s payment playing field.

Fintech company Cellulant raised $47 million in 2019 on its business of processing $350 million in payment transactions across 33 African countries.

In Nigeria, payment infrastructure company Interswitch has expanded across borders and is pursuing an IPO. And Nigerian payment gateway startups Paystack and Flutterwave have digitized volumes of B2B transactions while gaining global investment.

So why does Paga—a Nigerian payments company—believe it can expand its digital payments business abroad?

“Why not us?,” said CEO Oviosu. “People sit in California and listen to Spotify that was developed in Sweden. And Uber started somewhere before going to different countries and figuring out local markets,” he added.

“The team behind this business has worked globally for some of the top tech names. This platform can stand shoulder to shoulder with any payments company built somewhere else,” he said.

On that platform, Oviosu underscores it has positioned itself as a partner, not a rival, to traditional banks. “Our ecosystem is not built to compete with you, it’s actually complimentary to you,” he said of the company’s positioning to big banks—enabling Paga to partner with seven banks in Nigeria.

Paga also sees potential to adapt its model to other regulatory and consumer environments. “We’ve built an infrastructure that rides across all mobile networks,” said Oviosu. “We’re not trying to be a bank. Paga wants to work with the banks and financial institutions to enable a billion people to access and use money,” he said.

As part of the $10 million round (which brings Paga’s total funding up to $35 million), Global Innovation Partners will take a board seat. Other round participants include Goodwell, Adlevo Capital, Omidyar Network, and Unreasonable Capital.

Paga will use the Series B2 to grow its core development team of 25 engineers across countries and continents. It will also continue its due diligence on global expansion—though no hard dates have been announced.

On revenues, Paga makes money on merchant payments, bank to bank transfers, and selling airtime and data. “As we roll out other services, we will build a model where we will make money on savings and lending,” said the company’s CEO.

As for profitability, Paga does not release financials, but reached profitability in 2018, according to Oviosu—something that was confirmed in the due diligence process with round investors.

On the possibility of beating Interswitch (or another venerable startup) to become Africa’s first big tech IPO, Oviosu plays that down. “For the next 3-5 years I see us staying private,” he said.

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Google will struggle if it re-enters China, says its former country head

The odds are stacked against Google if the reports are true and the company is trying to bring its services back to China, according to the former head of Google China.

News reports last month uncovered details of internal plans to introduce a search product and a news app in China, moves that would mark a re-entry to the consumer market which Google left in 2010. The plans, which follow a noticeable increase in activity in China from Google, were widely criticized by activists and also raised concern internally from Google employees.

Kaifu Lee left the search giant nine years following a four-year stint, and today he’s best-known as one of the world’s leading thinkers on AI and the founding partner of Chinese VC Sinovation Ventures. Speaking at TechCrunch Disrupt San Francisco this week, he shared his belief that China’s tech ecosystem is rapidly catching the U.S. on AI — that also spills over into more general tech, and the kind of competitors that Google would face were it to return to China.

“I think re-entry is always difficult,” Lee said. But “the bigger issue really is can an American multinational succeed in China now that China has bifurcated into this parallel universe.”

Lee helmed Google’s China business in its battle against domestic search firm Baidu. He said that Google’s market share jumped from nine percent to 24 percent during his tenure, while total revenue was “approaching” $1 billion, but now the outlook in China is less rosy in 2018.

While he admitted that Google “should have a higher chance than any other company” at succeeding in China, he isn’t optimistic that it — or indeed any U.S. firm — can.

“People [in China] aren’t looking for a new search engine or an app store, new companies are emerging addressing previously unknown customer needs [and] innovations are coming out,” Lee explained.

“The new graduates generally prefer to work for Chinese companies and then, lastly, the heads of multinationals are really just professional managers. If they were to compete against local entrepreneurs who are gladiators in this colosseum, I don’t think the American companies will have a high chance of succeeding in this environment,” he added.

Kai-Fu Lee gives his prediction for Google's future success in China #TCDisrupt pic.twitter.com/TpuOPGAP5A

— TechCrunch (@TechCrunch) September 5, 2018

Google isn’t the only U.S. firm looking at China, of course.

Facebook briefly received approval for a China-based subsidiary — it was later withdrawn following media reports — while it has tested local products in the past and engaged in dialogue with regulators. Uber was more successful, but it famously spent more than $1 billion per year to compete in China before being sold to local rival Didi. The only companies that could be credited with not failing in China are LinkedIn, Evernote and Airbnb, and, in each case, the actual impact is debatable. Certainly, each has strong/stronger local rivals that remain active.

“I think any American company would have a hard time in China now, Apple being the single exception,” Lee said.” And I think that’s because [Apple is] mostly a hardware product and the product has become a fashion symbol… so that’s different.”

In the case of Google, the challenge is far different. Even local social media companies struggle to adhere to adequately police online content according to the whim of authorities. New media firm Toutiao, for example, had numerous apps temporarily suspended from local app stores, while it massively strengthened its content checking teams and made a public apology. Tencent, Alibaba and others also employ in-house teams to police the content and users on their platforms.

That’s a huge challenge without even thinking about finding the right product-market fit or engaging an audience.

China is beating the US on AI, says noted investor Kai-Fu Lee

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Google adds a bunch of rugged devices to its Android Enterprise Recommended program

Rugged smartphones, the kind of devices that business can give to their employees who work in harsh environments, are a bit of a specialty market. Few consumers, after all, choose their smartphones based on how well they survive six-foot drops. But there is definitely a market there, and IDC currently expects that the market for Android-based rugged devices will grow at 23 percent annually over the next five years.

It’s maybe no surprise that Google is now expanding its Android Enterprise Recommended program to include rugged devices, too. Chances are you’ve never heard of many of the manufacturers in this first batch (or thought of them as smartphone manufacturers): Zebra, Honeywell, Sonim, Point Mobile, Datalogic. Panasonic, which has a long history of building rugged devices, will also soon become part of this program.

The minimum requirements for these devices are pretty straightforward: they have to support Android 7+, offer security updates within 90 days of release from Google and, because they are rugged devices, after all, be certified for ingress protection and rated for drop testing. They’ll also have to support at least one more major OS release.

“Today’s launch continues our commitment to improving the enterprise experience for customers,” Google writes in today’s announcement. “We hope these devices will serve existing use cases and also enable companies to pursue new mobility use cases to help them realize their goals.“

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‘Five Eyes’ governments call on tech giants to build encryption backdoors — or else

A pact of five nation states dedicated to a global “collect it all” surveillance mission has issued a memo calling on their governments to demand tech companies build backdoor access to their users’ encrypted data — or face measures to force companies to comply.

The international pact — the US, UK, Canada, Australia and New Zealand, known as the so-called “Five Eyes” group of nations — quietly issued the memo last week demanding that providers “create customized solutions, tailored to their individual system architectures that are capable of meeting lawful access requirements.”

This kind of backdoor access would allow each government access to encrypted call and message data on their citizens. If the companies don’t voluntarily allow access, the nations threatened to push through new legislation that would compel their help.

“Should governments continue to encounter impediments to lawful access to information necessary to aid the protection of the citizens of our countries, we may pursue technological, enforcement, legislative or other measures to achieve lawful access solutions,” read the memo, issued by the Australian government on behalf of the pact.

It’s the latest move in an ongoing aggression by the group of governments, which met in Australia last week.

The Five Eyes pact was born to collect and share intelligence across the five countries, using each nations’ diplomatic power and strategic locations as chokepoints to gather the rest of the world’s communications.

Since the Edward Snowden disclosures in 2013, tech companies have doubled down on their efforts to shut out government’s lawful access to data with encryption. By using end-to-end encryption — where the data is scrambled from one device to another — even the tech companies can’t read their users’ messages.

Without access, law enforcement has extensively lobbied against companies using end-to-end encryption, claiming it hinders criminal investigations.

Security researchers and other critics of encryption backdoors have long said there’s no mathematical or workable way to create a “secure backdoor” that isn’t also impervious to attack by hackers, and widely derided any backdoor effort.

In 2016, rhetoric turned to action when the FBI launched a lawsuit to force Apple to force the company to build a tool to bypass the encryption in an iPhone used by the San Bernardino shooter, who killed 14 people in a terrorist attack months earlier.

The FBI dropped the case after it found hackers able to break into the phone.

But last month, the US government renewed its effort to set legal precedent by targeting Facebook Messenger’s end-to-end encryption. The case, filed under sealed, aims to break the encryption on the messaging app to wiretap conversations on suspected criminals.

It’s not the first time the Five Eyes nations have called for encryption backdoors. An Australian government memo last year called for action against unbreakable encryption.

Although the UK’s more recent intelligence laws have been interpreted as allowing the government to compel companies to break their own encryption, wider legal efforts across the other member states have failed to pass.

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For Labor Day, work harder

Labor Day is a holiday that just doesn’t fit Silicon Valley. It’s purported purpose is to celebrate working men and women and their — our — progress toward better working conditions and fairer workplaces. Yet, few regions in recent times have supposedly done more to “destroy” quality working conditions than the Valley, from the entire creation of the precarious 1099 economy to automation of labor itself.

My colleague John Chen offered the received wisdom on this discrepancy this weekend, arguing that Valley entrepreneurs should take the traditional message of Labor Day to heart, encouraging them to create more equitable, fair, and secure workplaces not just for their own employees, but also for all the workers that power the platforms we create and operate every day.

It’s a nice sentiment that I agree with, but I think he misses the mark.

What Silicon Valley needs — now more than ever before — is to double down on the kind of ambitious, hard-charging, change-the-world labor that created our modern knowledge economy in the first place. We can’t and shouldn’t slow down. We need more technological progress, not less. We need more automation of labor, not less. And we need as much of this innovation to happen in the United States as possible.

The tech industry may have become a dominant force by some metrics, but we are only just getting started. Entire industries like freight have little to no automation. Several billion people lack access to the internet, to say nothing of critical, basic infrastructure. Our drug pipeline is anemic, and costs for education, health care, construction, and government are continuing to skyrocket.

In short, we have barely scratched the surface of what we can achieve with software, with hardware, with better business models and better automation. These aren’t table scraps, but trillions dollar opportunities lying in wait for entrepreneurs to seize them.

And yet, we keep hearing persistent claims that overwork is a problem in the Valley. Discussions of work-life balance are practically de rigueur for startups these days, as are free meals and massages and unlimited vacation time. These demands are coming at a time when some of the most fertile opportunities for innovation in areas as diverse as robotics, space, biotech, cancer, and construction remain ripe for the taking.

It’s a hustlers world out there, and the message that those who want to shape that world should be hearing this Labor Day is simple: work harder. Hell, work today.

Certainly that’s the message ingrained in most places competing with the Valley these days. Mike Moritz wrote a column in the Financial Times earlier this year, comparing the hard-charging work ethic of Chinese tech entrepreneurs and workers with their Silicon Valley brethren. He didn’t mince words, and the piece ignited a firestorm of criticism.

But he’s right, and not just about Chinese founders. Entrepreneurs in developing and middle-income countries from India and South Korea to Brazil and Nigeria now have access to the same tools that top Valley startups use, with experience to boot. And they are hungry to transform their lot in life into something much more ambitious, much more grand.

We need to re-inject their level of urgency back into the Valley ethos and compete ferociously. We can’t rest on companies from the 1990s like Google, or the 1970s like Apple and Microsoft as the final wave of innovative companies. We need the next massive tech companies to be built, and they’re not going to be created 20-hour workweeks at a time.

Entrepreneurship is a rough and solitary life. Hustling isn’t fun, losing deals isn’t enjoyable, and working around the clock under intense pressure is not for the faint of heart. For those who want the easy road, there are many, many pathways today in the modern American economy that will guarantee it, whether that is a big tech giant, or some other Fortune 100 company.

Yet, the spirit of America is always choosing the bigger gamble, the bolder vision. And it is the people who stand up and demand that we make huge strides today — not tomorrow — that are going to own the future.

Of course, founding a company has to be a voluntary choice. No one should have to work for a pittance, or feel coerced into a high-pressure lifestyle when they aren’t ready and willing. No one should be locked into an economic system where they can’t improve their own income and status through tenacity and strategy. Our tech companies should absolutely be more diverse, and fairer to all people. Equity can and should be more widely distributed.

But when it comes to the true meaning of Labor Day in the American sense, we should celebrate the hard-working founders and entrepreneurs who are taking on the biggest challenges and focusing all of their talents on solving these critical human problems. That’s what made Silicon Valley what it is, and it’s the meaning of Labor Day that every founder and dreamer should center on.

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