Daily Tech Snippet: Monday February 9

• Alibaba, Xiaomi have reason to worry: Apple has disrupted the Chinese smartphone market: When Apple reported a record-shattering profit of $18 billion last month, the company said its growth came largely from sales in greater China. This week, some research firms gave a clearer picture of just how big Apple has become in China. Both Kantar Worldpanel and Canalys, firms that track global smartphone sales, said Apple’s iOS mobile operating system gained market share in China at the expense of Google’s Android. Chris Jones, an analyst for Canalys, said that in the fourth quarter of last year, iOS was in 12.3 percent of the smartphones sold in China, a sharp increase from 5 percent in the previous quarter. Android was in 86.3 percent of smartphones in the fourth quarter, compared with 93.7 percent in the third quarter, according to Mr. Jones. Canalys estimates that Apple is now the top smartphone vendor in China. But Mr. Jones said Canalys would explain how it reached this conclusion only to clients, not with the news media or competitors. Kantar Worldpanel found slightly different results. It focused its research on so-called urban China — a portion of mainland China where smartphones are more commonplace. Kantar also found that Apple’s iOS gained at the expense of Android. But the firm found that Apple was the No. 2 vendor in the region, with about 21.5 percent of the market, behind the Chinese smartphone maker Xiaomi (29.2 percent) and ahead of Huawei and Samsung (about 12 percent each). Whether Apple is No. 1 or No. 2, its growth in China has been remarkable. Just last October, the company was the No. 6 smartphone maker in China, behind Huawei, Lenovo, Samsung, Xiaomi and Yulong, according to Canalys. Kantar Worldpanel also noted that about a quarter of the Chinese consumers who bought iPhones in the last three months were buying smartphones for the first time. Carolina Milanesi, a Kantar analyst, said Apple’s introduction of the iPhone 6 and iPhone 6 Plus, which both have larger screens than previous iPhones, clearly drove the growth. “The success that Apple is seeing is certainly coming from the larger screen,” she said. She added that sales there of the larger iPhone 6 Plus surpassed sales of the iPhone 6 in December. Timothy D. Cook, Apple’s chief executive, said recently that it was only a matter of time until the majority of the company’s sales would come from China. The company plans to open 25 retail stores in greater China over the next two years, adding to the 15 stores it now operates in the area.

• ..Against that backdrop, Alibaba will buy a minority stake in little-known domestic smartphone maker Meizu Technology Co for $590 million, as the e-commerce giant extends its hardware growth strategy into mobile devices. Alibaba, now worth $213 billion by market value, didn't disclose how big its holding will be in a privately owned handset maker that is a distant rival to much bigger smartphone firms like Xiaomi Inc [XTC.UL]. Based in Zhuhai, Guangdong, Meizu employs more than 1,000 people, according to its website. The deal will help Alibaba push its mobile operating system within China through Meizu's handsets, while giving Meizu access to Alibaba's e-commerce sales channels and other resources, the companies said in a joint statement. Alibaba has in the past concentrated on software and services, including its core e-commerce business. Now, in a move reminiscent of U.S. rival Amazon.com Inc's own foray into smartphones with the Fire Phone, the Meizu investment builds on Alibaba's more recent efforts to develop in hardware, like internet TV via set-top boxes. "The investment in Meizu represents...an important step in our overall mobile strategy as we strive to bring users a wider array of mobile offerings and experiences," said Wang Jian, Alibaba's chief technology officer, in Monday's statement. China is the world's largest smartphone market, with 557 million people accessing the internet via mobile devices, according to government data. But smartphone sales are flagging. Shipments in China were 389 million phones in 2014, down from 423 million the previous year, according to China's Ministry of Industry and Information Technology. Meizu also doesn't feature among China's top smartphone brands. The top four in the fourth quarter of 2014 were Apple Inc, Xiaomi, Samsung Electronics Co Ltd and Huawei Technologies Co Ltd [HWT.UL], according to data research firm Canalys.

• The move is seen as Alibaba's effort to kickstart its struggling mobile phone division: Alibaba is stumping up more than half a billion dollars to kick its lacklustre mobile phone business into gear. The NYSE-listed e-commerce giant today announced a $590 million investment in Chinese phone-maker Meizu. The deal grants Alibaba an undisclosed “minority” share in the Guangdong-based company, which sold 1.5 million of its Android-based smartphones in January, but it is particularly notable for the strategic alliance between the two. Meizu, which operates a Xiaomi-like online sales model but is yet to break into China’s top five smartphone companies based on sales, will integrate its hardware with Alibaba’s struggling operating system. Aliyun, which is based around Android, is used for smartphones and smart TV sets. The move is an interesting one when you consider that Xiaomi, the smartphone success story of 2014, is rapidly moving into e-commerce after starting out in mobile hardware and software.

• India's efforts to attract electronics manufacturing are finally gaining some traction: General Electric Co. and Nidec Corp. are among companies looking to take advantage of a subsidy India is offering for electronics manufacturing amid Prime Minister Narendra Modi’s push to boost economic growth. The government has received at least 60 applications, with about half of them approved, for a subsidy of as much as 25 percent on capital investment, Ajay Kumar, joint secretary in the Department of Electronics & Information Technology, said in an interview in New Delhi. More than 40 submissions were made after Modi took office in May, he said. “The subsidy is a very good investment scheme that existed before Modi, but it wasn’t marketed very well,” Sunil Kumar, compliance officer at Nidec’s Indian unit, said by phone. “The government machinery is functioning better than before.” India introduced incentives in July 2012 for new projects and for expansion in electronics manufacturing in industries such as telecommunications, automobiles, medical and semiconductors. It started accepting applications for subsidies from August 2013, said Kumar at the Department of Electronics. “Suddenly with the emphasis on Digital India, electronics makers know there’ll be more demand for their products,” said Kumar. “Now, practically on a weekly basis applications come in.” Jabil Circuit Inc., the maker of electronics for Apple Inc. that got approval for its investment proposal in June, plans to double its revenue from a factory in the western city of Pune making products including television set-top boxes, Sunil Naik, operations manager at the India unit, said by phone. The St. Petersburg, Florida-based company, which plans to invest as much as $20 million, has already spent $6 million.

• Recent product updates from Facebook showcase the firm's sophistication in location targeting and audience targeting: Local Awareness Ads: Overview: Businesses now have the option of targeting their Facebook ads to individuals located near one of their brick-and-mortar stores. Details: Driving foot traffic that leads to sales is now a reality via Facebook. Advertisers can set a radius as small as a mile, and the Facebook ads will show up on the phones or web browsers of anyone who lives or was recently within that distance of a store. Businesses can even include directions in their ad, via a button that launches a map app on a consumer’s phone. Retailer Opportunities: Instead of broadly targeting your ads to an entire city, you can now reach people within a mile of your store. What You Should Know: This new geotargeting feature is really only beneficial to those online retailers that also have a brick-and-mortar presence. Also, these ads aren’t served in real-time, meaning that someone walking past your business won’t immediately see your store’s ad. Local awareness ads are available only for US business owners. Facebook Combines Atlas, Audience Network and LiveRail: Overview: The past two years of Facebook launches and acquisitions have now come together to show ads across the internet and track purchases they inspire both online and offline. Details: In February 2013, Facebook acquired Microsoft’s Atlas, a suite of tools for online ad measurement. Facebook is using Atlas as part of its push to measure across devices and platforms, and to leverage display targeting capabilities. In July 2014, Facebook acquired LiveRail, a video platform. Meanwhile, Facebook had built and launched Audience Network, a mobile ad network that lets advertisers easily extend their Facebook ad campaigns to appear in other mobile apps. The combo of Atlas, LiveRail and Audience Network now gives Facebook the connectivity to tie each of these pieces together. Retailer Opportunities: Advertisers on Atlas can buy ads on Facebook or use Audience Network to extend their campaigns to LiveRail and mobile apps. What You Should Know: Facebook understands its users’ identities in a way most platforms don’t. And the company’s wealth of user data means it can target ads more accurately.

• Google is making a serious telecom play, and US telcos are nervous: First it conquered search. Then it was online video and advertising. Now Google is turning its attention toward telecom — and it’s no experiment. In recent months, Google has said it’s bringing ultra-fast Internet to at least 18 cities, including Atlanta and Nashville. It announced pilot tests of a low-cost, modular smartphone. The company’s joined an influential lobbying group for upstart telecom firms. And now Google is considering an entry into wireless service, as first reported by The Information, a technology news site founded by former Wall Street Journal reporter Jessica Lessin. All this adds up to what appears to be a serious play in the communications space, with broad implications for what consumers will pay for service, how businesses will compete and even the regulations that affect how Americans experience their technology. Google would reportedly offer wireless service by piggybacking off of Sprint and T-Mobile’s networks — essentially paying those companies so that Google can resell their services under its own brand. In addition, it would blend the two networks and allow its customers to hop between them depending on which carrier’s signal is strongest. Phones on the Google service would also be able to make calls over WiFi hotspots, meaning that at all times, devices would be hunting for the best of three options. Combine that with its forthcoming smartphone, the Android operating system and the Google-owned apps that ride on top of it all, and you’d get a formidable silo of hardware, software and services.

• Rocket's Foodpanda.com has bought Indian rival Just Eat India, financials not disclosed: Foodpanda.com, a Rocket Internet-backed global, multi-location online food ordering marketplace (which operates under Hellofood brand in some markets) has acquired its Indian rival Just Eat India. The transaction details are not disclosed. Founded in April 2012, Foodpanda features location-specific listing of restaurants on its site. Users can check out menus, along with special offers, post that they can order and get food delivered to their homes. One can also search for restaurants according to cuisine, and/or by other parameters such as vegetarian/non-veg, healthy food, etc. The company helps restaurants increase sales through online and mobile platforms and also provides them with technology and analytics. Last year, the firm had raised $20 million in funding from Phenomen Ventures, a Russia-based venture capital firm and a group of unnamed investors. Globally, the company is present in over 40 countries in Europe, Asia, the Middle East, Africa and Latin America. Just Eat Plc was launched in Denmark in 2001 and was traded publicly on the London Stock Exchange. The company’s Indian business was launched as ‘Hungry Bangalore’ back in 2006, but was renamed (in 2011) when Just Eat acquired a majority stake in the business. In this space, Mumbai-based hybrid startup incubation platform Antfarm Business Incubator Pvt Ltd (Ant Farm) had acquired city-based food delivery venture Meals on Wheels, run by Meal O Wheel Pvt Ltd, in a stock-and-cash deal worth Rs 11-15 crore ($1.7-2.4 million) in November 2014.