Daily Tech Snippet: Friday, March 27

• KiranaNow: Amazon launches hyperlocal express delivery service linking neighbourhood kirana stores to consumers: Amazon, which runs an online marketplace in India, has launched an express delivery platform in partnership with mom-and-pop stores called ‘KiranaNow’. It has launched the service in Bangalore on a pilot run before taking it to other cities in the country. Notably this is an India-specific platform. In most other international markets, Amazon itself is the prime seller (though it also has other vendors) and operates like a conventional inventory-based e-com venture, a model it itself spread around the world. “With this service we want to provide to our customers an instant and convenient access to their ecosystem of stores for their everyday needs right from their mobile phone. And likewise empower the Kirana stores with tools and technology to transform their growth in the digital economy,” an Amazon India spokesperson told Techcircle.in. The deliveries will be done via Amazon’s own logistics unit Amazon Transportation Service Private Limited, besides delivery boys of kirana stores themselves as well as third party vendors. Last year, Amazon had also roped in kirana stores or neighbourhood mom-and-pop retail stores to serve as pick-up and delivery points for products for its customer orders. In the US, Amazon offers such pick-up options as an alternative to home delivery through lockers placed in public areas. Amazon spokesperson added that this independent pilot project it ran with kirana stores last year has since scaled to over 500 outlets across 20+ cities. Meanwhile, the KiranaNow service has been launched only on the mobile browser platform and claims to deliver orders within two-four hours. KiranaNow has been added to ‘Shop by Department’ on Amazon.in’s mobile browser version. When chosen, the user is led to a page with various categories like daily cooking essentials, drinks and beverages, personal care, household supplies, etc. There is an option to sign up with Kirana Now. Last we checked it threw a message saying: ‘Sorry something went wrong. We are working on fixing it’. The products were also showing as currently unavailable. To be fair, it is just the beginning and the firm says it is currently offering the service to select pincodes in Bangalore. Moreover, this is available only between 9AM and 6PM. Notably, this pitches Amazon against e-grocers like BigBasket, ZopNow and Godrej Nature’s Basket (which recently acquired EkStop) as also express delivery service providers such as Grofers, which essentially picks products from local vendors to supply to consumers.

• US R&D spending surges 6.7% Y/Y, with largest gain since 1996; software spend up 10% - both leading indicators of productivity: Corporate spending on research and development rose 6.7 percent in 2014, almost twice the previous year’s gain and the biggest advance since 1996, according to Commerce Department data. The pickup was capped by a 14 percent fourth-quarter surge that signals additional increases are on the way. The spending could extend the momentum of an era of growth-inducing innovation that produced smartphones and tablet computers, 3-D printers, cloud software that delivers services via the Internet and hydraulic fracturing that is making the U.S. more energy self-sufficient. Combined with what’s still on the drawing board, such initiatives raise the odds productivity will rebound, boosting the standard of living. “CEOs wouldn’t be paying all these researchers -- which is where the R&D budget primarily flows to -- unless they thought that there was something really interesting going on,” Jason Cummins, chief U.S. economist and head of research in Washington for hedge fund Brevan Howard Inc. “R&D surges like this sow the portents of better productivity growth three, five, 10 years later.” The U.S. could benefit from such a boost. Employee output per hour has climbed 0.7 percent a year on average since 2011, compared with gains of 2.5 percent from 1990 through 2005, a period encompassing what some economists have called a “productivity miracle.” The pickup in R&D spending last year was paced by well-known names, as 18 companies in the Standard & Poor’s 500 Index boosted such investment by 25 percent or more from 2013, according to data compiled by Bloomberg. The list includes drug-makers such as Pfizer Inc., travel-booking firms Priceline Group Inc. and TripAdvisor Inc., and Apple Inc. and Google Inc. Pharmaceutical companies were some of the biggest spenders on R&D in 2012, running up a $48.1 billion tab, according to the latest data from a survey by the National Science Foundation. The information industry -- including publishing, telecommunications and data processing -- shelled out $46.8 billion, while transportation-equipment makers spent about $42.3 billion. The U.S. is a leader in R&D spending in part because some 70 percent of venture capital money is based here, said Subramanian. This is “another good barometer of how innovation-oriented a particular region is,” and shows that America is “hyper-focused” on that investment, even if some of the venture capital money ends up in foreign companies, she said. The benefits of increased spending on R&D also are likely to help spur sluggish wage growth, Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, wrote in a March 19 research note. More investment in intellectual property -- which includes software and entertainment in addition to R&D -- should prompt acceleration in incomes in the next couple years, he wrote. Spending on computer software, which is tallied separately from the government’s R&D category, also has shown a revival. It increased at a 10.1 percent pace in the fourth quarter, its best gain since 2011.

• Lyft Adds Profiles to Make Ride Sharing More Personalized: Unlike Uber, the giant ride-hailing start-up with its powerful name and sleek, black-and-silver branding, Lyft has gone for a warmer, fuzzier exterior. Lyft drivers eschew fit and finish for large, pink dashboard mustaches to identify themselves. The company encourages lively conversation between passengers and drivers. It is, to some degree, a kinder, gentler and perhaps more convivial form of taking an Uber car. Expect more of the same in the future. On Thursday, Lyft plans to add user profiles for drivers and passengers to its app, essentially adding another personal touch to the act of taking a ride somewhere. The additions are not extreme. People are asked to provide their hometown, music tastes or other things about themselves that may be interesting topics of conversation. If a user has connected their Facebook account, the Lyft app can show if drivers and passengers have mutual friends in common. “It’s our first step on the road map to personalizing that in-car experience,” said Tali Rapaport, vice president of product at Lyft, who was tasked with creating the profiles. The feature is entirely optional, and users aren’t forced to turn it on. Part of the exercise is certainly branding. Lyft recently brought on Kira Wampler, a former executive at Trulia, to be its chief marketing officer. Since joining in December, Ms. Wampler has helped revamp Lyft’s image, swapping the furry mustaches that Lyft drivers stuck to their cars with the “glowstache,” a luminescent replica that sits atop a driver’s dashboard so that passengers can spot their rides. But profiles speak to Lyft’s broad vision of the company. Lyft is pushing Line, its car pool product, as the future of the company, one where there’s a “butt in every seat,” as Ms. Rapaport put it. Instead of hailing a personal car, calling a Lyft Line offers passengers a discount for picking up one or two more people who are traveling along a similar route. As they travel the route, passengers are dropped off at different points along the way. Passengers save money and, in theory, net income goes up for both Lyft and the driver. Lyft’s ideal version of the future is to have as many people using Lyft Line as possible, cutting down on the number of cars on the road. So an addition like user profiles, however small, may make the experience of traveling by car pool more enjoyable. Topics of conversation are easily available, for instance, or a driver may play a track from a passenger’s favorite band. “When you build a product that touches millions of people, it should be human, not transactional,” said John Zimmer, co-founder and president of Lyft.

• Late to streaming - Apple finally developing streaming music service to rival Spotify: In what would be the biggest change to its music strategy in years, Apple is pressing ahead with a sweeping overhaul of its digital music services that would allow the company to compete directly with streaming upstarts like Spotify. Almost a year after agreeing to pay $3 billion for Beats, the maker of hip headphones and a streaming music service, Apple is working with Beats engineers and executives to introduce its own subscription streaming service. The company is also planning an enhanced iTunes Radio that may be tailored to listeners in regional markets, and, if Apple gets what it wants, more splashy new albums that will be on iTunes before they are available anywhere else, according to people briefed on the company’s plans. In a sign of how important Beats is in reshaping Apple’s digital music, the company has made a musician a point man for overhauling the iPhone’s music app to include the streaming music service, as opposed to an engineer. Trent Reznor, the Nine Inch Nails frontman who was the chief creative officer for Beats, is playing a major role in redesigning the music app, according to two Apple employees familiar with the product, who spoke on the condition they not be named because the plans are private. Perhaps most telling for Apple is what its new streaming service will not have: a lower price than rival services. According to several music executives, who spoke on the condition of anonymity because the talks are private, Apple recently tried but failed to persuade record labels to agree to lower licensing costs that would have let Apple sell subscriptions to its streaming service for $8 a month — a discount from the $10 that has become standard for services like Spotify, Rhapsody and Rdio. That $2 markdown may be small, but Apple’s failure to secure it reflects a shift in the company’s relationship with the music industry. While Apple once enjoyed enormous negotiating power as the dominant force in digital music — an area it helped pioneer more than a decade ago with music downloads — it now faces an array of new competitors and finds itself in the position of needing to modernize its offerings to catch up to the streaming revolution. That has weakened Apple’s leverage — and the labels could not be happier about it. Apple’s turn toward streaming is a matter of necessity, as listeners increasingly shift from music downloads to streaming. According to the Recording Industry Association of America, downloads generated $2.6 billion in revenue in 2014, down 8.5 percent from the year before. Streaming made $1.87 billion last year, and overtook CD sales for the first time. As the biggest retailer of music, Apple remains a crucial marketing partner for the music industry. Yet its absence from streaming has let others get a head start. Spotify, which started in Sweden in 2008 and came to the United States in 2011, said in January that it has 15 million paying subscribers around the world, as well as 45 million more who listen free, with advertising. (Apple’s iTunes has more than 800 million customer accounts.)

• Questions arise as bankrupt RadioShack seeks to sell trove of customer data. After filing for bankruptcy in early February, RadioShack is currently making its way through the painful process of  figuring out how creditors will be paid back -- auctioning off real estate and trademarks. Also on the list is more than 13 million e-mail addresses and 65 million customer names and physical addresses -- as well as potential information about customers shopping habits. How much that data could be worth to a buyer is still unclear, but the proposed sale is drawing protests from consumer advocates and raising potentially disturbing questions about how data about shoppers is handled. In the Internet Age, people leave a near constant trail of digital bread crumbs about their lives. And it's clear that data has value: The entire online advertising industry is based on collecting it. But what happens if a company that has amassed a huge trove of data on nearly every aspect of a person's life gets sold off for parts? Radio Shack declined to comment about its bankruptcy's process. The company was a pioneer in collecting customer data, said Marc Rotenberg, president of the Electronic Privacy Information Center. "Radio Shack was the first company that routinely asked for phone numbers. The privacy policy was critical to maintain consumer confidence," he said. And in its privacy policy, RadioShack told customers that it wouldn't sell or rent their personally identifiable information to third parties -- which should make this a pretty clear issue, Rotenberg said. But as Bloomberg News noted, a Web site for Hilco Streambank, a company serving as an intermediary for RadioShack in the bankruptcy process, listed the retailer's "customer databases" as among the assets for sale. Hedge fund and RadioShack creditor Standard General won an auction for the company's assets, according to Bloomberg. But the deal must still be approved by a bankruptcy court in Delaware and is facing several challenges. Back in 2000, after the dot-com bubble burst, the FTC sued to stop Toysmart.com from selling off customer data in violation of its privacy policy. In that case, the FTC said that data in question included names, addresses, billing information, shopping preferences and family profiles,  including the names and birth dates of children. The data was eventually destroyed. The FTC has also sent letters about proposed data sales in the bankruptcies of other companies, including Borders, XY Magazine, and ConnectEDU.

• Alibaba's money-market fund ended 2014 with $93B in AUM, but its phase of explosive growth might be over: Ant Financial, Alibaba’s affiliated financial branch, revealed a few benchmark numbers for Yu’ebao, the company’s consumer-facing money-market fund. By the end of 2014, Yu’ebao’s user count hit 185 million, up more than four times the previous year’s count of 43 million. The fund’s worth in assets reached RMB 578.93 billion (about US$93 billion) by the year’s end, marking a 200 percent annual increase. Ant financial also claims that Yu’ebao’s funds generated RMB 24 billion (about US$3.8 billion) in value by year’s end, amounting to RMB 139 per person. While these numbers appear massive from a birds-eye view, not all is peachy keen for Yu’ebao. The fund’s size shrunk to about US$87 million last autumn, and while these latest numbers appear to show a rebound, its days of rocket growth seem to be over. Yu’ebao is the shell and banner for a money market fund run by Tianhong Asset Management. Alibaba’s Ant Financial purchased a majority stake in Tianhong in late 2013 for a reported US$192 million. Yu’ebao is accessible directly in Alipay Wallet, the mobile app for Alipay, Alibaba’s third-party payment software. Yu’ebao marks Alibaba founder Jack Ma’s attempt to enter consumer banking. In the past, the ecommerce mogul has been vocal about his disdain for China’s banking industry, wherein banks typically give consumers low interest rates for opening savings accounts. China’s tech giants don’t like to get one-upped, and other leading internet firms have also opened money-market funds similar to Yu’ebao. Tencent operates Licaitong, an analogous money market fund, and recently opened what has been described as China’s first “internet bank.” Baidu also has its hat in the ring, as does Xiaomi, which recently launched a money-market fund in beta.