India smartphone shipments slashed in half in Q2 2020

Even the world’s second largest smartphone market isn’t immune to Covid-19.

Smartphone shipments in India fell 48% in the second quarter compared with the same period a year ago, the most drastic drop one of the rare growing markets has seen in a decade, research firm Canalys reported Friday evening.

About 17.3 million smartphone units shipped in Q2 2020, down from 33 million in Q2 2019, and 33.5 million in Q1 2020, the research firm said.

You can blame coronavirus for it.

New Delhi ordered a nationwide lockdown in late March to contain the spread of the virus that saw all shops across the country — save for some of those that sell grocery items and pharmacies — temporarily cease operation. Even e-commerce giants such as Amazon and Flipkart were prohibited from selling smartphones and other items classified as “non-essential” by the government.

The protracted lockdown lasted until mid-May after which the Indian government deemed that other stores and e-commerce deliveries could resume their services in much of country. New Delhi’s stringent measure explains why India’s smartphone market dipped so heavily.

China, the world’s largest smartphone market, in comparison saw only an 18% drop in shipments in the quarter that ended in March — the period when the country was most impacted by the virus. In Q1, when India was largely not impacted by the virus, smartphone shipments grew by 4% in the country. (Globally, smartphone shipments shrank by 13% in Q1 — a figure that is projected to only slightly improve to a  12% decline this year.)

“It’s been a rocky road to recovery for the smartphone market in India,” said Madhumita Chaudhary, an analyst at Canalys. “While vendors witnessed a crest in sales as soon as markets opened, production facilities struggled with staffing shortages on top of new regulations around manufacturing, resulting in lower production output.”

Smartphone shipment estimates for the Indian market through Q1 2019 to Q1 2020 (Canalys)

Despite the lockdown, Xiaomi maintained its dominance in India. The Chinese smartphone vendor, which has been the top smartphone vendor in India since late 2018, shipped 5.3 million smartphone units in the quarter that ended in June this year and commanded 30.9% of the local market, Canalys estimated.

With 3.7 million units shipment and 21.3% market share in India, Vivo retained the second spot. Samsung, which once ruled the Indian smartphone market and has made major investments in the country in recent months, settled for the third spot with 16.8% share.

Nearly every smartphone vendor has launched new handsets in India in recent weeks as they look to recover from the downtime and several more new smartphone launches are planned in the next one month.

But for some of these players the virus is not the only obstacle.

Anti-China sentiment has been gaining mindshare in India in recent months ever since more than 20 Indian soldiers were killed in a military clash in the Himalayas in June. “Boycott China” — and variations of it — has been trending on Twitter in India as a number of people posted videos destroying Chinese-made smartphones, TVs and other products. Late last month, India also banned 59 apps and services developed by Chinese firms.

Xiaomi, Vivo, Oppo, which now assumes the fourth spot in India, and other Chinese smartphone vendors command nearly 80% of the smartphone market in India.

Canalys’ Chaudhary, however, believes that these smartphone firms will be able to largely avoid the backlash as “alternatives by Samsung, Nokia, or even Apple are hardly price-competitive.”

Apple, which commands only 1% of the Indian smartphone market, was the least impacted among the top 10 vendors as iPhone shipments fell just 20% year-on-year to over 250,000 in Q2 2020, Canalys said.

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Apple opens another megastore in China amid William Barr criticism

Apple flexes its muscles in China with another megastore that unveiled on Friday. Located in Beijing’s upscale shopping district Sanlitun, the outlet replaces and more than doubles the size of Apple’s first store in China in the same location, which instantly caused a sensation back in 2008.

The landmark building reopened in the heat of U.S. scrutiny over the hardware behemoth’s ties with China. In a speech delivered on Thursday, Attorney General William Barr attacked a raft of American tech companies, including Apple, for playing by China’s rules. He singled out Apple for being “acquiescence to the Chinese Communists.”

Apple has long relied on China not just for manufacturing partners but also generating revenues from App Store (especially games) and iPhone sales. Nonetheless, local smartphone makers such as Huawei — which opened its largest store to date in June — have been chipping away at Apple’s Chinese market share in recent quarters, leaving the American giant in the fifth place with about 10% of total shipment, according to Counterpoint research.

Barr lambasted Apple for yanking apps on behalf of the Chinese government. Motives behind these bans can range from muting political sensitive services, like a map used in Hong Kong protests, to closing a regulatory loophole, which resulted in the removal of thousands of unlicensed games in China.

The new premise features Apple’s first integrated solar array in a retail store in China, allowing it to provide power to the store below like all Apple facilities worldwide running exclusively on renewable energy. The company claims it’s supporting enough clean energy in China to power more than 450,000 homes each year.

Over the last 12 years, the Sanlitun store has grown from 52 staff to 185 and has attracted more than 22 million visitors.

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Apple News adds new audio features, including a daily briefing, alongside expanded local coverage

Apple News is getting a significant upgrade. The news aggregation app, which ships preinstalled on Apple devices, is introducing several new features for readers and premium subscribers, including audio stories, a daily audio briefing called “Apple News Today” and expanded local coverage.

The audio briefing is somewhat of a competitor to Alexa’s Flash Briefing, which has become a popular way to catch up on the top news headlines. But in Apple’s case, the briefing is hosted by people, not a virtual assistant. Apple News editors and co-hosts, Shumita Basu and Duarte Geraldino, will guide listeners through the day’s headlines. They will then spend the remainder of the briefing discussing around three or four articles in a more in-depth fashion.

Image Credits: Apple

In total, the briefing will run for roughly seven to eight minutes in length and will be accessible to all Apple News readers in the U.S.

A new briefing will arrive every Monday through Friday, and can be played in the Apple News app in the U.S., in Apple Podcasts, or it can be launched using Siri voice commands across Apple devices, including Mac and HomePod.

Another new audio feature, audio stories, is only being made available to Apple News+ subscribers, however.

Starting today, Apple News will produce around 20 new audio stories per week across a range of topics, which are narrated by voice actors. These stories aren’t original content, but will instead be professionally narrated versions of feature reporting and other long-form pieces published by Essence, Esquire, Fast Company, GQ, New York Magazine, Sports Illustrated, TIME, Vanity Fair, Vogue, Wired and others, as well as newspapers like The Wall Street Journal and the Los Angeles Times.

Image Credits: Apple

Apple several years ago had partnered with SpokenLayer to bring audio narration to the news, but that effort was focused on enhancing the Apple Podcasts experience. The company says it’s not partnered with SpokenLayer on the new feature for Apple News, but is instead working with voice talent itself and recording these audio stories in its own studios. Apple declined to say how many have been hired to work on audio programming for Apple News, but did confirm it expanded headcount specifically for audio.

The audio stories will be made available to subscribers in the U.S. only. Apple didn’t say if it’s planning to expand the offering to international markets.

To make room for the new audio features, the Apple News app navigation experience has been redesigned. There’s now an “Audio” tab directing users to the new content at the bottom of the news application, in between the “News+” and “Following” tabs at the bottom of the screen. When tapped, users will first see the latest episode of Apple News Today at the top of the screen, followed by the new Audio Stories that you’ve added to your Up Next queue. Below that will be a set of personalized recommendations of what to listen to next.

While the tab organizes the new audio programming, users will also be introduced to audio as they’re browsing elsewhere in the app. For example, as you’re scrolling through news stories in the Today tab or reading News+ feeds, a new audio News+ badge will appear next to stories that have narration. You can then click that story to begin the narration without having to change screens. The feature will also allow you to transition back and forth between reading and listening as it will remember where you left off in a longer piece, and begin there when you return.

Related to these efforts, CarPlay will support the News app so users can listen to these audio stories and the Apple News Today briefing while driving. Listening progress will also sync between devices, as you move from iPhone to car and back again.

Image Credits: Apple

While the big news today is the audio programming coming to Apple News, the app is also today introducing expanded local coverage.

In select markets — San Francisco and the wider Bay Area, New York, LA and Houston — Apple News will feature a curated local news experience headed by a local editor. These sections will include a wider range of stories across areas like local weather, politics, sports, dining and restaurants, and other news, and will be personalized to each reader. Apple News rival Flipboard recently launched a similar feature to capitalize on the growing demand for local news, particularly amid the coronavirus pandemic where readers need access to their city and state’s reports of the impact of COVID-19 on their daily lives.

Image Credits: Apple

Apple News+ also today expanded its selection of local and regional newspapers to now offer access to The Charlotte Observer, The Idaho Statesman, The Kansas City Star, the Miami Herald, The News & Observer (Raleigh, NC) and The State (Columbia, SC) in the U.S. In Canada it added French-language newspaper Le Devoir and will bring on The Globe and Mail later this summer.

While the Apple News platform currently reaches over 125 million monthly active users in the U.S., U.K. Australia and Canada, the uptake on the News+ subscription has reportedly seen struggles in terms of growing its paid subscriber base. Earlier this year, Apple’s News service business chief, Liz Schimel, who managed relationship with publishers and advertisers, stepped down after the subscription service’s slow start, Bloomberg reported.

Publishers participating in Apple News+ keep 100% of the revenue from ads they sell and can participate in backfill ads that Apple sells, keeping 70% of the revenue. They can also sell their own subscriptions and receive a cut of Apple News+ revenue, based on engagement.

But not all publishers believe Apple News+ is the best way to grow their business. The New York Times, for example, announced in June it will no longer distribute articles in the Apple News app.

Despite the reports, Apple says it’s pleased with Apple News+ traction. But today’s new features are clearly designed to spark growth for the $9.99 per month paid subscription.

The new Apple News features will come by way of software updates ( iOS 13.6, iPadOS 13.6, or macOS 10.15.6), arriving today.

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(Image credits: Apple)

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Gmail for G Suite gets deep integrations with Chat, Meet, Rooms and more

Google is launching a major update to its G Suite productivity tools today that will see a deep integration of Gmail, Chat, Meet and Rooms on the web and on mobile, as well as other tools like Calendar, Docs, Sheets and Slides. This integration will become available in the G Suite early adopter program, with a wider roll-out coming at a later time.

The G Suite team has been working on this project for about a year, though it fast-tracked the Gmail/Meet integration, which was originally scheduled to be part of today’s release, as part of its response to the COVID-19 pandemic.

At the core of today’s update is the idea that we’re all constantly switching between different modes of communication, be that email, chat, voice or video. So with this update, the company is bringing all of this together, with Gmail being the focal point for the time being, given that this is where most users already find themselves for hours on end anyway.

Google is branding this initiative as a ‘better home for work’ and in practice, it means that you’ll not just see deeper integrations between products, like a fill calendaring and file management experience in Gmail, but also the ability to have a video chat open on one side of the window while collaboratively editing a document in real-time on the other.

Image Credits: Google

According to G Suite VP and GM Javier Soltero, the overall idea here is not just to bring all of these tools closer together to reduce the task-switching that users have to do.

Image Credits: Google

“We’re announcing something we’ve been working on since a little bit before I even joined Google last year: a new integrated workspace designed to bring together all the core components of communication and collaboration into a single surface that is not just about bringing these ingredients into the same pane of glass, but also realizes something that’s greater than the sum of its parts,” he told me ahead of today’s announcement. “The degree of integration across the different modes of communication, specifically email, chat, and video calling and voice video calling along with our existing physical existing strength in collaboration.”

Just like on the web, Google also revealed some of its plans when it first announced its latest major update to Gmail for mobile in May, with its Meet integration in the form of a new bar at the bottom of the screen for moving between Mail and Meet. With this, it’s expanding this to include native Chat and Rooms support as well. Soltero noted that Google things of these four products as the “four pillars of the integrated workspace.” Having them all integrated into a single app means you can manage the notification behavior of all of them in a single place, for example, and without the often cumbersome task-switching experience on mobile.

For now, these updates are specific to G Suite, though similar to Google’s work around bringing Meet to consumers, the company plans to bring this workspace experience to consumers as well, but what exactly that will look like still remains to be seen. “Right now we’re really focused. The people who urgently need this are those involved in productivity scenarios. This idea of ‘the new home for work’ is much more about collaboration that is specific to professional settings, productivity and workplace settings,” Soltero said.

But there is more…

Google is also announcing a few other feature updates to its G Suite line today. Chat rooms, for example, are now getting shared files and tasks, with the ability to assign tasks and to invite users from outside your company into rooms. These rooms now also let you have chats open on one side and edit a document on the other, all without switching to a completely different web app.

Also new is the ability in Gmail to search not just for emails but also chats, as well as new tools to pin important rooms and new ‘do not disturb’ and ‘out of office’ settings.

One nifty new feature of these new integrated workspaces is that Google is also working with some of its partners to bring their apps into the experience. The company specifically mentions DocuSign, Salesforce and Trello. These companies already offer some deep Gmail integrations, including integrations with the Gmail sidebar, so we’ll likely see this list expand over time.

Meet itself, too, is getting some updates in the coming weeks with ‘knocking controls’ to make sure that once you throw somebody out of a meeting, that person can’t come back, and safety locks that help meeting hosts decide who can chat or present in a meeting.

Image Credits:

Google Meet shows up in Gmail inboxes, a few years too late

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Over 2,500 games removed from Apple’s China App Store in early July, as crackdown begins

Over 2,500 mobile games have been removed from China’s App Store during the first week of July, according to a new report from app store intelligence firm Sensor Tower. The removals were expected due to a planned crackdown on unlicensed games, but this data is the first to demonstrate the impact on the app economy.

For comparison, the July figure is four times the number of games that were delisted during the first week of April, five times higher than the first week of May, and over four times higher than the first week of June.

The removals have to do with Apple’s new compliance with Chinese gaming regulations.

Apple earlier this year set a deadline of June 30 for app developers to comply with a Chinese law for mobile games, first introduced in 2016. The law requires game developers offering paid downloads or in-app purchases to get a license from one of the country’s censorship bodies, the General Administration of Press and Publication of China.

For years, iPhone game developers had skirted the law by publishing their games then waiting for their license approval. This can be a long and tedious process that could take many months, or longer if there’s a freeze underway — as in 2018. Then, the gaming industry saw a 9-month halt on the issuing of licenses as Chinese regulators reshuffled their duties to clamp down further on games containing pornography, gambling, violence and and any other content deemed inappropriate by Beijing.

Major Android app stores had already enforced the 2016 rule, but Apple’s loophole allowed a mobile gaming industry to thrive on the iPhone platform in China for years.

Apple’s decision was expected to see the removal of thousands of games from the App Store, starting July. Sensor Tower data indicates that came to pass.

However, its data is only able to capture those games that saw enough downloads to rank in the App Store’s charts, including the game subcategory charts.

Out of the 2,500+ games that were pulled, nearly 2,000 (80%) had less than 10,000 downloads since the start of 2012, the firm estimates. Together, the titles had seen a total of 133.4 million lifetime downloads.

Combined, the removed games generated $34.7 million in lifetime gross revenue, with one game accounting for more than $10 million and 6 that earned over $1 million.

Notable removals included Contract Killer Zombies 2 from Glu, Solitaire from Zynga, ASMR Slicing from Crazy Labs, Nonstop Chuck Norris from Flaregames. More recently, Hay Day from Supercell was also taken down.

The changes to the gaming market as well as the coronavirus impact on the app economy have already allowed the U.S. to reclaim the top spot in terms of iOS consumer spend in Q2. According to App Annie, the U.S. saw 30% quarter-over-quarter growth in iOS consumer spend in Q2, besting China.

The longer-term fallout from the removals may show up in Apple’s bottom line, as China has been the most lucrative mobile games market in the world, noted Sensor Tower, including on iOS. In 2019, games on China’s App Store generated an estimated $12.6 billion, or 33.2% of all global games spending on Apple’s marketplace last year, the firm said.

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LA’s Kickback is a social shopping app that converts users into marketing channels through cash rewards

Frankie Bernstein, the Venice, Calif.-based serial entrepreneur, knows marketing.

At his last startup, Markett, Bernstein turned college students into brand ambassadors who were paid by the companies they repped for proselytizing about them on campuses.

Now he’s using that knowledge to launch Kickback on iOS and Android. It’s invite-only at this point, but the idea is that it uses company’s marketing budgets to create shopping rewards and incentives for app users. In the same way that Markett turned college students into advocates for apps like Uber and Lyft, Kickback will turn shoppers into brand ambassadors through its app.

In-app referrals and discounts for shopping are nothing new to the e-commerce world. In China, apps like Pinduoduo have turned into billion dollar businesses on the strength of referrals. Indeed, Pinduoduo recently raised $1.1 billion in funding to hit a valuation of nearly $100 billion.

It was only a matter of time before an American company tried to copy its success. Kickback — like most new apps these days — is invite-only.

Once past the waiting list, users get discounts on brands and can earn cash-back rewards when they shop or when they encourage their friends to buy something with the app.

[gallery ids="2016896,2016897,2016898,2016899,2016900"]

So far brands on the app include Walmart, Sam’s Club, Nike, Alo Yoga, Reebok, Away, Planet Blue, Sonos, Winc, Postmates, Casper, Kate Somerville, Lacoste, Columbia. Users get discounts or cash rewards when they shop and earn “kickbacks” when they invite someone to shop using their discount code. Cash rewards can be withdrawn using PayPal, according to a statement.

“Our mission is to take the billions of dollars brands spend on advertising and put that money directly into the pockets of the people,” said Franky Bernstein, Founder and CEO of Kickback, in a statement. “Brands know the most powerful form of marketing is word of mouth. We like to say that people are 100% more likely to go on a first date, watch a movie or, in our case, try a new product or service if a friend tells them about it. People have always loved sharing their favorite products and services with their friends. Now with Kickback, they get paid for it.”

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Apple and Ireland win appeal against the European Commission’s $15 billion tax ruling

The General Court of the European Court of Justice has annulled an EU decision that involved Apple’s subsidiaries in Ireland. Four years ago, the European Commission said that Ireland had failed to collect €13 billion in taxes from Apple — roughly $15 billion.

According to the press statement, “the Commission did not succeed in showing to the requisite legal standard that there was an advantage for the purposes of Article 107(1) TFEU [Treaty of the Functioning of the European Union].”

Back in 2017, the Commission said Apple received illegal state aid and should have paid more taxes. But the General Court, Europe’s first instance court, says that this argument doesn’t represent a legal basis.

“According to the General Court, the Commission was wrong to declare that [Apple Sales International] and [Apple Operations Europe] had been granted a selective economic advantage and, by extension, State aid,” the court wrote in a statement.

Today’s decision represents a blow to the European Commission’s strategy to track down multinational corporations that have been optimizing their tax structure in order to lower their effective tax rate across Europe — a strategy that was mostly incarnated by then Competition Commissioner Margrethe Vestager.

Between 2003 and 2014, Apple operated with two main subsidiaries in Europe — Apple Sales International and Apple Operations Europe. Back then, the Commission said those subsidiaries attributed the vast majority of their profit to a head office that only exists on paper. “This selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014,” Vestager wrote in 2016.

Apple’s arguments have always been quite straightforward. According to the company, Ireland never cut a deal with Apple. “The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals,” Apple CEO Tim Cook said in 2016.

While Apple has continuously maintained that it complies with tax laws in Europe, it took advantage of favorable tax laws in Ireland and the so-called Double Irish tax structure.

As tax optimization schemes come and go, Apple changed its European structure in 2014. Apple Sales International and Apple Operations International moved its cash stockpile to the tiny island of Jersey.

In 2018, Apple started allocating money in case it had to pay back €13 billion to Ireland. Everything is currently sitting in an escrow account. The defeated side can still appeal the decision on points of law, so the money might remain in the escrow account a little longer.

Update: Executive Vice-President Margrethe Vestager wrote the following statement:

“Today’s judgment by the General Court annuls the Commission’s August 2016 decision that Ireland granted illegal State aid to Apple through selective tax breaks. We will carefully study the judgment and reflect on possible next steps.

The Commission’s decision concerned two tax rulings issued by Ireland to Apple, which determined the taxable profit of two Irish Apple subsidiaries in Ireland between 1991 and 2015. As a result of the rulings, in 2011, for example, Apple’s Irish subsidiary recorded European profits of US$ 22 billion (c.a. €16 billion) but under the terms of the tax ruling only around €50 million were considered taxable in Ireland.

The Commission stands fully behind the objective that all companies should pay their fair share of tax. If Member States give certain multinational companies tax advantages not available to their rivals, this harms fair competition in the EU. It also deprives the public purse and citizens of funds for much needed investments – the need for which is even more acute during times of crisis.

In previous judgments on the tax treatment of Fiat in Luxembourg and Starbucks in the Netherlands, the General Court confirmed that, while Member States have exclusive competence in determining their laws concerning direct taxation, they must do so in respect of EU law, including State aid rules. Furthermore, the General Court also confirmed the Commission’s approach to assess whether a measure is selective and whether transactions between group companies give rise to an advantage under EU State aid rules based on the so-called ‘arm’s length principle’.

The Commission will continue to look at aggressive tax planning measures under EU State aid rules to assess whether they result in illegal State aid. At the same time, State aid enforcement needs to go hand in hand with a change in corporate philosophies and the right legislation to address loopholes and ensure transparency. We have made a lot of progress already at national, European and global levels, and we need to continue to work together to succeed.”

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