Sunday, 29 November 2020

This Week in Apps: Snapchat clones TikTok, India bans 43 Chinese apps, more data on App Store commission changes

Welcome back to This Week in Apps, the TechCrunch series that recaps the latest in mobile OS news, mobile applications, and the overall app economy.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People now spend three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

This week, we’re digging into more data about how the App Store commission changes will impact developers, as well as other top stories, like Snapchat’s new Spotlight feed and India’s move to ban more Chinese apps from the country, among other things.

We also have our weekly round-up of news about platforms, services, privacy, trends, and other headlines.

Weekly News

Platforms

Apple’s App Store Connect will now require an Apple ID with 2-step verification enabled.
Apple announces holiday schedule for App Store Connect. New apps and app updates won’t be accepted Dec. 23-27 (Pacific Time).
SKAdNetwork 2.0 adds Source App ID and Conversion Value. The former lets networks identify which app initiated a download from the App Store and the latter lets them know whether users who installed an app through a campaign performed an action in the app, like signing up for a trial or completing a purchase.
Apple rounded up developer praise for its App Store commission change. Lending their names to Apple’s list: Little 10 Robot (Tots Letters and Numbers), Broadstreet (Brief), Foundermark (Friended), Shine, Lifesum, Med ART Studios (Sprout Fertility Tracker), RevenueCat, OK Play, SignEasy, Jump Rope, Wine Spectator, Apollo for Reddit, SwingVision Tennis, Cinémoi.

Services

Fortnite adds a $12/mo subscription offering a full season battle pass, 1,000 monthly bucks and a Crew Pack featuring an exclusive outfit bundle. More money for Apple to miss out on, I guess.
14 U.S. states plus Washington D.C. have now adopted COVID-19 contact tracing apps. CA and other states may release apps soon. Few in the U.S. have downloaded the apps, however, which limits their usefulness.
Samsung’s TV Plus streaming TV service comes to more Galaxy phones

Security & Privacy

Apple’s senior director of global privacy, Jane Horvath, in a letter to the Ranking Digital Rights organization, confirms App Tracking Transparency feature will arrive in 2021. The feature will allow users to disable tracking between apps. The letter also slams Facebook for collecting “as much data as possible” on users.
Baidu’s apps banned from Google Play, Baidu Maps and the Baidu App, were leaking sensitive user data, researchers said. The apps had 6M U.S. users and millions more worldwide.

Apps in the News

Robinhood’s co-founder Baiju Bhatt steps down as co-CEO ahead of IPO.
TikTok’s deadline for a sale gets another extension, this time to Dec. 4th.
Google launches an AR app for “The Mandalorian“
Google launches Task Mate in India which pays users for taking pictures of storefronts or recording short voice clips, the latter which is likely being used to train speech recognition systems.
Nintendo’s Animal Crossing: Pocket Camp adds AR features.
Microsoft’s Translator app for Android can now automatically translate speech in one-on-one conversations.
TikTok adds a feature that allows users to avoid videos that could trigger epileptic seizures.
Parler users haven’t actually left Twitter, it seems.
Google Docs, Sheets, and Slides can now edit Microsoft Office files on iOS. The feature already worked on Android and the web.
Roblox hosts a Ready Player Two treasure hunt in its app.
Spotify is still testing Stories.

Trends

Image Credits: Sensor Tower

U.S. Brick-and-mortar retail apps saw 27% growth in first three quarters of 2020, or nearly double the growth of online retailer apps (14%), as measured by new installs. Top apps included Walmart, Target, Sam’s Club, Nike, Walgreens, and The Home Depot.
App Annie forecast estimates shoppers will spend over 110M hours in (Android) mobile shopping apps this holiday season.
PayPal and Square’s Cash app have scored 100% of the newly-issued supply of bitcoins, report says.
All social media companies now look alike, Axois argues, citing Twitter’s Fleets and Snap’s TikTok-like feature as recent examples.

Funding and M&A

CoStar Group, a provider of commercial real estate info and analytics, acquires Homesnap’s platform and app for $250M to move into the residential real estate market.
Remote work app Friday raises $2.1M seed led by Bessemer Venture Partners
Stories-style Q&A app F3 raises $3.9M. The team previously founded Ask.fm.
Edtech company Kahoot acquires Drops, a startup whose apps help people learn languages using games, for $50M.
Mobile banking app Current raises $131M Series C, led by Tiger Global Management.
Square buys Credit Karma’s tax unit, Credit Karma Tax, for $50M in cash.

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Thursday, 26 November 2020

Foxconn could move some iPad and MacBook production to Vietnam

Following a request from Apple, Foxconn could be shifting production out of China for some iPad and MacBook models according to a report from Reuters. The new assembly lines would be based in Vietnam.

As a recent investigation from The Information highlighted, both companies are intrinsically connected. The Taiwanese manufacturer is Apple’s main production partner. Apple is also Foxconn’s main client. When it comes to raw numbers, Foxconn is making 60% to 70% of iPhones, Apple’s main product.

Over the past few years, Apple has tried to diversify its supply chain in two major ways. First, Apple is trying to work with other manufacturing companies, such as Luxshare Precision Industry and Wistron.

Second, Apple is trying to manufacture its products in different countries. New tariffs and import restrictions have made that issue more pressing.

According to Reuters, Apple asked Foxconn to move some iPad and MacBook assembly to Vietnam. The assembly line should be operating at some point during the first half of 2021.

In addition to Vietnam, Foxconn also produces iPhone 11 devices in a plant near Chennai, India. Wistron also assembles iPhone models in India. Foxconn has also manufactured some iPhone models in Brazil.

Apple begins assembling iPhone 11 in India

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Tesla is now worth half a trillion dollars

Surging Tesla shares have pushed the company’s market capitalization to more than $515 billion, a fivefold increase since the start of the year.

The traditionally volatile stock has continued to experience price swings. But since reaching a low for the year in March, Tesla’s share price has been on an upward trajectory that accelerated in August. Tesla’s share price, which rose 4.6% in morning trading to $545.62, has helped blast its CEO Elon Musk into the upper stratosphere of Bloomberg’s Billionaire Index. As of Tuesday, Musk’s net worth had risen $7.24 billion to more than $128 billion. Only Amazon’s Jeff Bezos stands in his way to becoming the world’s wealthiest person.

Tesla shares have been fueled over the past week by news that it will be added to the S&P 500 index in December. Since Friday, the company has added more than $52 billion to its market cap — the equivalent of adding nearly one and a half Ford Motor Co., to its valuation.

The S&P Dow Jones Indices announced November 16 that Tesla will officially join the benchmark index prior to trading December 21, putting the electric automaker in the same company as heavyweights like Apple, Berkshire Hathaway and Microsoft.

When Tesla joins the S&P 500, it will be among the most valuable companies on the benchmark. Its weighting will be so influential that the S&P DJI is mulling whether to add the stock at the full float-adjusted market capitalization weight all at once or in two tranches.

Tesla’s addition to the S&P 500 isn’t just a symbolic nod. Joining the S&P 500 has real financial benefits, as investors that have index-tracked funds will be forced to buy shares. With share prices already popping, that will mean investors will have to sell other stocks to make room for Tesla.

Tesla is a chain of startups, Elon Musk explains

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The downfall of adtech means the trust economy is here

Richard Jones Contributor

Richard is CMO of Cheetah Digital, a cross-channel customer engagement solution provider. As an expert in zero-party data, he is committed to helping brands provide a value exchange with consumers through the lifecycle in return for consumer attention, engagement and loyalty.

2020 has brought about much-needed social movements. In June, activists launched the Stop Hate for Profit campaign, a call to hold social media companies like Facebook accountable for the hate happening on their platforms.

The idea was to pull advertising spending to wake these social platforms up. More than 1,200 businesses and nonprofits joined the movement, including brands such as The North Face, Patagonia and Verizon. I led my company, Cheetah Digital, to join alongside some of our clients like Starbucks and VF Corp.

Stop Hate for Profit highlighted social media hitting its tipping point. Twitter and Snapchat chose to stand up against hate speech, banning political ads and taking action to flag misinformation. Facebook, unfortunately, has not yet been as proactive, or at best it’s been sporadic in its response.

While many thought the movement would come and go, the reality is it has only just begun. With America conducting arguably its most divisive election in history, these problems won’t just go away. For marketers, Stop Hate for Profit is more than a social movement — it is pointing to an issue with ad tech as a whole.

I believe we are seeing the downfall of ad tech as we know it with social media boycotts and data privacy leading the charge.

The social media quagmire

In May, Forrester released a report titled “It’s OK to Break Up with Social Media” that contained statistics indicating that consumers are fed up with social media: 70% of respondents said they don’t trust social media platforms with their data. Only 14% of consumers believe the information they read on social media is trustworthy. 37% of online adults in the U.S. believe social media does more harm than good.

Here is the reality we need to get back to: Social media isn’t built for marketers to reach consumers. In the beginning of the social media craze, brands rushed to get on board and join the conversations. What many brands discovered is these channels became a platform for customer complaints not for building positive brand perception. Furthermore, the social platforms marketers flocked to as an avenue to reach customers began charging marketers just to get to the customers.

If the ad industry is serious about transparency, let’s open-source our SDKs

The algorithms that define what content you see unfortunately make it harder for people to see opposing views, and this more than anything else polarizes society further. If you start looking at QAnon content, very soon that’s all the algorithms feed you. You might spend more time on social platforms fueling their ad dollars, but you have also lost a grip on reality. Marketers must admit things have gone too far on social media and it is okay to move on.

Privacy matters

Imagine you are in need of a minor surgery. Perhaps you take an Uber ride to the specialist for a consultation. Next, you go get the surgery and it is successful. Soon you find yourself at home recovering and all is well. That is, until you start scrolling Facebook. Suddenly advertisements pop up for medical malpractice lawyers, but you haven’t told anyone about the surgery and you certainly didn’t post about it on social media.

Here you are, just wanting to rest and recover at home, but instead you are being bombarded by advertisements. So how did those ads get there? You left a digital footprint, your data was sold and now you’re being hit with intrusive ads. To me, this story crystallizes the abuse ad tech has been fostering in the world around us. There’s an utter invasion of privacy and consumers aren’t blind to it.

Data privacy has been a focus of conversation for marketers for several years now. Just this year, America saw the California Consumer Privacy Act (CCPA) go into effect and become enforceable. This legislation gives back control of data to the consumer. In June, Apple announced updates to make it harder for apps and publishers to track location data and use it for ad targeting. At the beginning of August, Meredith and Kroger announced a partnership to provide first-party sales data for advertising efforts in an attempt to move off of cookies. It is clear data privacy is not a fad going away anytime soon.

Where do marketers go from here?

I believe the future of marketing is the trust economy. The Stop Hate for Profit campaign, the invasion of privacy and shifting attitudes and behaviors of consumers point to the end of an era where marketers relied upon third-party data. Trust is now the most impactful economic power, not data. We conducted research earlier this year with eConsultancy, and our findings revealed that 39% of U.S. consumers don’t like personal ads driven from cookie data. People don’t want to be tracked and targeted as they click around the web. Ad tech’s roof is caving in and marketers must adjust.

The old methods of marketing won’t carry you through into the era of the trust economy. It is time to look to new channels and revisit old channels. We have to shift back to the channels where we own what is being said. Advertising on social platforms should be focused on driving consumers to owned channels where you can capture their permissions and data to connect with them directly. Consider email as a channel to focus on.

Don’t worry — it works. That same eConsultancy report found nearly three out of four consumers made a purchase in the last 12 months from an email sent by a brand or retailer and massively outperformed social ads when it came to driving sales. Similarly nine times as many U.S. consumers want to increase their participation in loyalty programs in 2020 than those that want to reduce their involvement. You have to ensure you are owning your data and loyalty programs are a treasure trove of consumer data you own. Emily Collins from Forrester does a good job of explaining why you can achieve this with a true loyalty strategy, not just a rewards program.

Your goal should be to build direct connections to consumers. Building trust means offering a value exchange for data and engagement, not going and buying it from a third-party. Fatemah Khatibloo, a principal analyst for Forrester wrote, “Zero-party data is that which a customer intentionally and proactively shares with a brand. It can include purchase intentions, personal context, and how the individual wants the brand to recognize her.” This zero-party data is foundational for the trust economy and you should check out her advice on how it helps you navigate privacy and personalization.

Take responsibility

The trust economy is really about asking yourself, as a marketer, what you stand for. How do you view your relationship with consumers? Do you care? What kind of relationship do you want? Privacy has to be part of this. Accountability is crucial. We must be accountable to where we are putting our money. It’s time to stop supporting hate, propping up the worst of society and fueling division. Start taking responsibility, caring about social issues and building meaningful relationships with consumers built on trust.

We need universal digital ad transparency now

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Wednesday, 25 November 2020

Despite pandemic, forecasts predict US online holiday sales increase of 20%-30% or more

Strong e-commerce sales are predicted to help lift overall holiday retail spending in the U.S., according to forecasts released today by the National Retail Federation (NRF) and eMarketer. Both firms expect to see overall retail sales growth during November and December, though the market may be impacted by slowing brick-and-mortar sales.

Of the two, NRF had the more optimistic forecast. It estimates U.S. holiday sales during November and December will increase between 3.6% and 5.2% year-over-year, for a total between $755.3 billion and $766.7 billion. That’s compared with a 4% increase in 2019 to $729.1 billion, and an average of a 3.5% increase over the past five years.

Image Credits: NRF

Growth will come from online and other non-store sales, which are included in the total, which will increase between 20% and 30% to reach between $202.5 billion and $218.4 billion. That’s up from $168.7 billion last year.

NRF’s takeaway is that consumers are willing to spend — perhaps because of the challenging year that 2020 has been, rather than despite it.

“After all they’ve been through, we think there’s going to be a psychological factor that they owe it to themselves and their families to have a better-than-normal holiday,” noted NRF Chief Economist Jack Kleinhenz. “There are risks to the economy if the virus continues to spread, but as long as consumers remain confident and upbeat, they will spend for the holiday season,” he added.

The firm also noted Americans may have reduced their spending in other categories, like personal services, travel and entertainment due to the pandemic, which could increase the money they have for retail spending.

EMarketer, on the other hand, paints a less rosy picture when it comes to overall sales.

The firm predicts that total holiday season retail sales will see the lowest growth rate at just 0.9% year-over-year. This growth will come from the e-commerce sector, which will see its highest growth rate — 35.8% — since the firm began tracking retail sales in 2008. Brick-and-mortar sales, on the other hand, will decline 4.7%.

The discrepancy between these two firms’ estimates have to do with how they calculate “retail sales.”

EMarketer’s estimates include auto and gasoline sales, but exclude restaurants, travel and event sales. NRF’s figures, on the other hand, exclude auto, gasoline and restaurants.

However, both agree on an e-commerce surge. NRF notes online sales were already up 36.7% year-over-year in the third quarter — in part, due to early holiday shopping. This year, some 42% of consumers had started shopping earlier than usual, it recently found. Plus, retail sales were up 10.6% in October 2020 versus October 2019, in aggregate, its forecast noted.

But whether it’s 20% to 30% growth or 35.8%, depending on the firm, it’s clear e-commerce is saving the day here.

NRF also expects seasonal hiring to be in line with recent years, as retailers hire between 475,000 and 575,000 seasonal workers compared with 562,000 in 2019. Some of that hiring may have already taken place in October, due to early shopping, it said.

Though Black Friday may not see the same levels of in-person shopping as in years past, brick-and-mortar retailers have made it easier to shop digitally, then either have items shipped home, picked up in-store, or even curbside. Outside of Amazon, Walmart and Target have particularly benefited from investments in e-commerce, as both retailers easily beat Wall St. expectations in their latest earnings reports, released just ahead of the holiday quarter.

Online, however, Cyber Monday will continue to rule, however, eMarketer says.

Image Credits: eMarketer

Of the five big online shopping days in 2020, eMarketer says Cyber Monday will again beat out Black Friday in terms of overall e-commerce sales, at $12.89 billion compared with Black Friday’s $10.20 billion. But Thanksgiving Day will see the most year-over-year growth in e-commerce sales, at 49.5%, followed by Black Friday, Small Business Saturday, Cyber Sunday and Cyber Monday.

Image Credits: eMarketer

In a mobile forecast, analytics firm App Annie predicted Americans would spend over 110 million hours in shopping apps on Android devices during the two-week period consisting of Black Friday and Cyber Monday weeks. It noted the pandemic had already accelerated mobile device usage to 4 hours, 20 minutes per day, and Americans spent over 61 million hours shopping during the week of Prime Day.

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7 things we just learned about Sequoia’s European expansion plans

Sequoia Capital, the renowned Silicon Valley venture capital firm that has backed companies like Apple, Google, Dropbox, Airbnb and Stripe, recently disclosed that it had opened its first office in Europe. To staff up, it hired partner Luciana Lixandru away from rival Accel Partners.

Even without an official European presence, Sequoia has quietly operated in the region for more than a decade, first investing in Klarna in 2010. Other Europe-founded companies in its portfolio include Baaima, CEGX, Charlotte Tilbury, Dashlane, Evervault, FON Wireless, Front, Graphcore, Mapillary, Metaswitch Networks, n8n, Remote, Skyscanner, Songkick, Tessian, Tourlane, UiPath, Unity and 6Winderkinder (Wunderlist).

Yet, it is only now that the VC firm is putting people on the ground here in Europe, starting with an office in London that has a remit to invest across the continent.

Working alongside Lixandru is a more junior investor, George Robson, who joined from Revolut. Most recently, Sequoia recruited Zoe Jervier Hewitt from EQT as head of talent in Europe. And finally, Matt Miller, a Sequoia U.S. veteran, is also part of the European efforts and plans to relocate next year, while I also understand that Sequoia’s Doug Leone will be spending a lot of his time in Europe.

Last week at the virtual “Node by Slush” event, I interviewed Lixandru and Miller and teased out some important details about Sequoia’s plans.

1. Sequoia now believes Europe is producing market leaders ahead of Silicon Valley

“There has been this evolution and maturity of the tech ecosystem that has been really meaningful, that has attracted us to want to put down boots on the ground and be more invested in Europe than ever before,” said Sequoia partner Matt Miller.

“One change is in the attitudes of young people. Europe has always been this place where there’s been incredible talent coming out of the computer science programs, across the universities across the continent and the U.K., and these young people previously, were going into careers in investment banking and consulting are bigger conglomerates. And now that those young people are interested in startups and technology careers, that’s fueling a lot of great ideas and a lot of great talent.

“There was a long time this question of, when will there be a $10 billion plus startup, and now there’s multiple of them across the continent. And now the question has really changed: When will there be the next hundred billion dollar startup in Europe, and I think it’s just an evolution over time.

“We find ourselves getting pulled more and more. So when … we want to invest in the best AI semiconductor company in the world, we looked at them in China, Israel and Europe. And the one we wanted to invest in was Graphcore, in Bristol [in the U.K.]. And when we looked … [to] invest in the best process automation company in the world, we looked at automation anywhere in California … and we looked at companies all over the world, and the one we wanted to invest in was UiPath in Romania. And that is increasingly becoming the case.”

“To some extent, success breeds success, too,” said Lixandru. “I think role models are really powerful. And the fact that there have been these category-leading companies created out of Europe, but that are winning on a global scale, like Spotify, Adyen and UiPath … I think that’s really inspirational to the next generation of founders. And I think that has helped a lot.”

2. The firm will make investments out of the same fund as the U.S.

“We work as one partnership across two geographies, and we invest from the same pool of capital across both geographies,” explained Lixandru. “And the rationale behind that is exactly what Matt talked about. We want to be able to partner with category leading companies, and if they start in Paris, or in Stockholm, or in San Francisco, for us, it does not make a difference. We want to partner with them early. And we want to be able to help them on the ground early … whether they start here in Europe or in the U.S.”

Related to this, Sequoia will share carry — the fund’s profits — with partners across the U.S. and Europe, regardless of where partners reside or where the deal was sourced.

“One of the things that I love the most about Sequoia having been here close to nine years now is the way that we operate is very, very team centric, and that everybody is compensated the same amount in a fund, whether or not it is the investment that they lead or the investment that their partner led,” said Miller. “So when we make an investment, we lock arms together as a team, and we work collectively to help that company be successful.”

Miller said portfolio companies in Europe also get to work with Sequoia’s operational supporting partners in the U.S., too. “And the economic model is one that supports that,” he said.

3. Sequoia will continue building out a team on the ground in Europe

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Tuesday, 24 November 2020

Decrypted: Apple and Facebook’s privacy feud, Twitter hires Mudge, mysterious zero-days

Trump’s election denialism saw him retaliate in a way that isn’t just putting the remainder of his presidency in jeopardy, it’s already putting the next administration in harm’s way.

In a stunning display of retaliation, Trump fired CISA director Chris Krebs last week after declaring that there was “no evidence that any voting system deleted or lost votes, changed votes or was in any way compromised,” a direct contradiction to the conspiracy-fueled fever dreams of the president who repeatedly claimed, without evidence, that the election had been hijacked by the Democrats. CISA is left distracted by disarray, with multiple senior leaders leaving their posts — some walked, some were pushed — only for the next likely chief to stumble before he even starts because of concerns with his security clearance.

Until yesterday, Biden’s presidential transition team was stuck in cybersecurity purgatory because the incumbent administration refused to trigger the law that grants the incoming team access to government resources, including cybersecurity protections. That’s left the incoming president exposed to ongoing cyber threats, all while being shut out from classified briefings that describe those threats in detail.

As Biden builds his team, Silicon Valley is also gearing up for a change in government — and temperament. But don’t expect too much of the backlash to change. Much of the antitrust allegations, privacy violations and net neutrality remain hot button issues, and the tech titans resorting to cheap “charm offenses” are likely to face the music under the Biden administration — whether they like it or not.

Here’s more from the week.

THE BIG PICTURE

Apple and Facebook spar over privacy — again

Apple and Facebook are back in the ring, fighting over which company is a bigger existential threat to privacy. In a letter to a privacy rights group, Apple said its new anti-tracking feature will launch next year, which will give users the choice of blocking in-app tracking, a move that’s largely expected to cause havoc to the online advertising industry and data brokers.

Given an explicit option between being tracked and not, as the feature will do, most are expected to decline.

Apple’s letter specifically called out Facebook for showing a “disregard for user privacy.” Facebook, which made more than 98% of its global revenue last year from advertising, took its own potshot back at Apple, claiming the iPhone maker was “using their dominant market position to self-preference their own data collection, while making it nearly impossible for their competitors to use the same data.”

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