Daily Tech Snippet: Wednesday, June 24

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• Gloves Off in China as Banks, Alibaba Invade Each Other’s Turf: This week, Alibaba is launching MYbank, an online lender that will tap into Chinese savers’ record $7.8 trillion of deposits and a banking revenue stream that’s forecast to double by 2020. Banks have been striking back by pushing into the business Ma pioneered in China, online malls. The moves are blurring the lines between banking and e-commerce as China’s government continues encouraging competition in the finance industry and as Chinese increasingly use computers and mobile phones to bank and shop. “China’s banks have woken up and realized that the challenge from Alibaba’s entry into banking is for real,” said David He, a Hong Kong-based partner and managing director at Boston Consulting Group Inc. “For them, doing e-commerce is a defense as well as a counterattack.” Banking giant ICBC, which as the world’s most profitable company dwarfs Alibaba’s net income by more than 10 times, set up a platform allowing retailers to sell the bank’s customers wine, shampoo, appliances and more. China Construction Bank, Agricultural Bank of China and others are also getting into the action. ICBC’s site, called Easy to Buy, is forecasting sales of 300 billion yuan this year, after tallying 130 billion yuan so far since January. By comparison at Alibaba, its Tmall logged 763 billion yuan in sales last year. JD.com ranked second at 260 billion yuan.


• Google launches free streaming service ahead of Apple Music debut: Google launched a free version of its music streaming service on Tuesday, as it sought to upstage the debut of Apple's rival service next week. Google Play Music has offered a $9.99 per month subscription service for two years but Tuesday's launch is the first free version of the streaming service. It is available online and will be available on Android and iOS by the end of the week, Elias Roman, Google product manager, said. Apple said earlier this month it would launch a music streaming service on June 30 for $9.99 per month along with a $14.99 per month family plan, with a free three-month trial. As with other streaming services, such as Spotify and Rhapsody, Google Play Music curates playlists. Users can tailor playlists based on genre, artist or even activity, such as hosting a pool party or "having fun at work. Unlike Google's subscription music service, the free service will carry ads, be unavailable offline and exclude certain songs.


• Instagram Overhauls Search Feature to Surface More Trending News: Instagram unveiled a massive overhaul to its search feature on Tuesday in an effort to bring users into the app more often, particularly during breaking news events. The new feature lets users search for images by location and includes a section for trending places and hashtags, none of which was available before. The trending places feature will surface both local and national trends so topics will differ based on your location. Instagram is also getting into the curation game that has become popular with other social networks like Snapchat and Twitter over the past few months. Instagram will feature two themed, rotating categories at a time with titles like “Extreme Athletes” or “Towering Rocks.” The images in these feeds will be selected based on a mix of computer algorithm and human curation by the company’s community team. Instagram is often lauded for its simplicity. But in the case of Instagram’s old search feature, simplicity may have actually been holding the app back. The old version of the app allowed for hashtag and people searches, but required different tabs for each. The new search feature will return hashtags, people and locations all from the same search bar in addition to the new trending sections. A useful search tab should benefit Instagram in multiple ways. For starters, it’ll help people find more content they want to see and make the app more useful in the process. More importantly may be the trending places and hashtags feature. Systrom says that Instagram can be a place for news, where people go to learn about and follow along with the day’s important trending topics.


• Report suggests millions of Uber rides in China are fakes reported by drivers in order to collect Uber’s high driver subsidies.: A new report on Chinese tech site Tencent Tech suggests that millions of Uber’s booked rides in the country are fakes – fraudulent fares reported by drivers in order to collect Uber’s high driver subsidies. Faking fares – which some drivers refer to as “acupuncture” – works like this: first, you buy an Uber driver account. There are plenty available for sale on sites like Taobao, and many even come with helpful “how to fake rides” guides. Once you’ve got your account, you partner up with a passenger using the consumer Uber app. With location services turned off, the passenger submits a fare from point A to point B. You drive the fare with no passenger, return the money paid by the passenger, and then split the driver subsidies Uber will pay you – which may be several times the price of the fare itself. This “acupuncture” phenomenon it doesn’t only affect Uber. But drivers told Tencent Tech that because Uber’s subsidies are the highest, virtually all of the faking right now is taking place on Uber’s platform because it is the most profitable. Uber reportedly does have the technological capability to shut down fake rides entirely, but is concerned that doing so would slow its genuine organic growth because being overly strict could result in false positives, banning real drivers and passengers who aren’t cheating the system.


• Qualcomm in Venture With Chinese Chip Maker: China’s largest maker of chips has a new plan to help it close a wide gap with rivals, and the company has found some unlikely partners to help. The company, the Semiconductor Manufacturing International Corporation, also known as S.M.I.C., said on Tuesday that it would form a new company with a leading Belgian microelectronics research center and Qualcomm, the American chip giant, to help it develop and produce new generations of advanced semiconductors that work as the brains of numerous electronics products, like smartphones and servers. Four months ago, China imposed a $975 million fine on Qualcomm, saying it violated anti-monopoly law, and forced it to reduce sharply the licensing fees it charges Chinese smartphone makers for its communications chips. This really is Qualcomm playing nice with the Chinese government,” said Mark Hung, a semiconductor analyst with Gartner. Chinese companies like SMIC. have greatly lagged behind rivals like Samsung Electronics and Intel, partly because of export restrictions on the sophisticated tools and machines required to produce the most advanced chips. In 2013, China imported $232 billion worth of semiconductor materials, more than it spent on petroleum. To close the gap, Beijing has pledged a huge amount of resources. “The Chinese government has been very persistent and insistent in their policies. They want local chip manufacturing there, and this is another leak in the dike. It’s another part of the steady progress on their side.”