Daily Tech Snippet: Monday January 5

• Xiaomi 2014 revenue ~$12B (+135% Y/Y), smartphone shipments up 227% Y/Y; Huawei 2014 revenue $46B (+15% Y/Y), smartphone shipments up 40% Y/Y Xiaomi booked 74.3 billion yuan ($11.97 billion) in pre-tax sales last year, up 135 percent from 2013, the firm's chief executive Lei Jun said on his official microblog account on Sunday. Xiaomi sold a total of just over 61 million phones in 2014, up 227 percent from a year earlier, Lei added in a post on his Sina Weibo microblog account. The post did not give a related profit figure, although a filing last month showed that the firm was grappling with razor thin margins as it rapidly expands. A part of the business made around 347.5 million yuan net profit last year on revenue of 26.6 billion yuan and an operating margin of just 1.8 percent. Huawei: China's Huawei says 2014 sales revenue to rise 15 percent to $46 billion. Huawei's smartphone shipments rose by more than 40 percent last year, according to an internal memo seen by Reuters, failing to match its own target and the performance of faster-growing rivals such as Xiaomi.

• Separately, Xiaomi announces the Redmi 2, an improved version of its sub-$150 smartphone: The company’s flagship Mi devices may attract all the attention, but the sub-$150 Redmi family is its biggest seller. Back in July of last year, Xiaomi revealed it had sold 18 million Redmi (/Hongmi as it is known in China) phones and 3.56 million Redmi Note phablets. The Redmi alone accounted for one-third of total sales at the time. The Redmi 2 keeps much of the original model’s ingredients. It has the same 4.7-inch, 1280 x 720 display, but under the hood there’s an upgraded 64-bit Qualcomm 410 quad-core processor. The device sports an 8-megapixel rear camera, improved 2-megapixel front camera, 1GB RAM and 8GB on-device storage. There is now dual 4G SIM support too. The Redmi 2 — which runs Xiaomi’s own MIUI version of Android — also gives a few more options for color-loving customers. ‘Lime green’ and ‘powder yellow’ are the new additions to the palette. The phone will cost 699 CNY, which is around $112, when it goes on sale on January 9. There’s no word on when it will be released outside of China, but you can be sure that the Redmi 2 will make its way to India, Indonesia and Xiaomi’s other overseas markets soon.

• IBM's stock is in a funk, and analysts call for the firm to invest in R&D rather than do share buy-backs: IBM requires an atypical activist fix. The company’s strategy of cost cuts and debt-fueled buybacks is no longer working – even though the company keeps trying. A tarnished balance sheet, lean staffing and a history of disposals rule out typical activist wheezes. Encouraging Virginia M. Rometty, the chairwoman and chief executive, to invest in IBM’s core businesses could pay off. IBM has run the same playbook for two decades. It sells low-margin businesses, cuts expenses, buys some profitable software companies and returns a lot of cash to investors. Over the last four quarters, the $152 billion company has spent more than $23 billion on dividends and buybacks. The problem is that IBM is investing too little. It has spent only about $11 billion over the last four quarters in total on research and development, capital expenditure and acquisitions. That’s a problem in technology, where old products soon become obsolete. Google spends about 16 percent of its sales on R.&D., but IBM spends 6 percent. The effect is becoming clear on the top line. Revenue has shrunk for 10 consecutive quarters. Costs have been cut to the bone, sending customers fleeing to better service providers. In a good year for stocks, IBM’s shares have fallen more than 15 percent. That means IBM has overpaid on its last three years of buybacks.

• Big data firms are starting to focus on 'unstructured data' that resides in presentations, memos and reports: data analysis is great if your information is in formats that are easy for computers to read, such as spreadsheets with numbers, or responses on a scale from one to five. But a lot of information isn't organized like that. Instead, it's in presentations, memos, reports, comments or just plain e-mail. Analysis of that kind of information -- often called "unstructured" or "dark" data -- is really tough to do by computer, and companies including Intel, SAP and HP are looking for a more reliable way to do it. Another firm, uReveal, thinks that it's cracked the code. Charles "Bucky" Clarkson, uReveal's chairman and CEO, said that software such as his makes it easier to to parse all those government reports and organize the data so that analysts can get more out of it, and more quickly. He also claims that the software is so simple to use that (gasp!) even liberal arts majors can use it.

• Tech patents are increasingly in the news: Story #1: Priceline.com's founder attempts a marketplace for tech patents, and China announces plans to triple the number of patents filed by 2020: In 1997, Jay Walker founded Priceline.com — the Web site many people use to get cheaper airfare by "naming your own price." Patenting the solution, and allowing others to use the patents for a fee, helped drive Walker's success. But, Walker argues in an interview, many patents remain underused. Now, the man who smoothed transactions for buyers and sellers of airplane tickets wants to do something similar for a key part of the nation's information economy. Walker is developing something called the United States Patent Utility. "We're going to form a utility, which works as a neutral party for both inventors of technology and users of technology. So you would be listing your patents as available for use. Then the next thing we're going to do is, we're going to say to people who are small to medium sized companies, get on the phone with us and talk to us for about 10 or 15, 20 minutes and tell us about your products and services. Send us PDFs of your sales manuals, your technical literature we can ingest, and we'll build a model of the technologies and products you use. If you're a shoe manufacturer, we can take all your specifications, all your sales materials, and we can read it all into the system. And then what we do is use a set of Big Data algorithms to take your specifications of all your products and services and run it up against the entire U.S. database of patents, which is about 2-plus million active patents. We run it against all the inactive patents, all the expired patents. Think of it as a natural-language kind of way. You don't need to be a programmer any more for it to run up against the entire database.

• Tech patents are increasingly in the news: Story #2: China announces plans to triple the number of patents filed by 2020: China is aiming to triple the number of patents it files by 2020 as Beijing looks to boost the country's high-tech economy in areas from agriculture to pharmaceuticals, according to a notice from the central government on Sunday. China is targeting 14 invention patents per 10,000 habitants by 2020 compared to four in 2013. It published 629,612 patents in 2013, over 200,000 more than the United States, according to a Thomson Reuters study in December. Beijing is also looking to reduce the length of the review process for patent and trademark applications. Patent reviews will decline to 20.2 months in 2020 from 22.3 months in 2013, while trademark reviews will fall to 9 months from 10 months. "Intellectual property (IP) is increasingly becoming a vital component of China's strategic resources and competitive ability," the statement posted on the Central People's Government website said.