Daily Tech Snippet: Thursday, July 26

• Amazon Expands Drone Testing in Britain:  Amazon has partnered with the British government to significantly expand drone testing, a move that could allow the devices to deliver packages to British homes far earlier than in the United States. Under the partnership, Britain’s aviation regulator will let Amazon test several aspects of drone technology — such as piloting the machines beyond the line of sight of its operators — that the Federal Aviation Administration in the United States has not permitted. The tests, which are an important sign of confidence in Britain after its historic vote last month to leave the European Union, are to begin immediately.The move puts pressure on the F.A.A., which had recently rebuffed requests by Amazon, Google and other drone makers to advance their delivery plans. The tech behemoths and other drone makers have aggressively lobbied the F.A.A. to authorize the devices to significantly reduce costs to transport goods by airplane, freight and trucks. Amazon said it hoped success with the drone trials in Britain would encourage more hesitant regulators in the United States and elsewhere to loosen restrictions. The trials will “help identify what operating rules and safety regulations will be needed to help move the drone industry forward,” the company said in a statement. Amazon will work with British regulators to test drones that fly beyond the line of sight of operators in rural and suburban areas. It will also test whether a single operator can safely command multiple drones at once, as well as technology that lets the machines automatically detect and avoid other planes, buildings and people.

• Analyst Downgrades Apple and Says It Has 'Peaked': With Apple Inc's earnings report just a day away, Wall Street analysts are more at oddsthan ever, and one of them in particular anticipates tough times for the tech giant. "Our opinion [is] that Apple has peaked under the leadership of CEO Tim Cook," Colin Gillis of BGC Financial L.P. said in a note this week. "Our view that that there is risk that the upgrade rate for the next iPhone may slow even more than the upgrade rate cycle of 6s, which has been materially lower than the upgrade rate of the iPhone 6 as per the company." However, others disagree and say that while things haven't been great as of late, things will get better next year. "Amid pervasive investor fear and negativity, we see results/guidance as not great but good enough to start swinging the tide from near-term fear to cautious optimism about the future," Timothy Arcuri of Cowen and Company LLC said in a note. "Given our installed base work, we see a "super-cycle" in '17 and iPhone 7 could even sell a little better than bearish expectations." Even Gillis acknowledges that shares could see a move higher after earnings due to the low expectations. After that bounce, though, his pessimism continues. "[W]hen we ask ourselves 'Do we see Apple gaining or losing its next $100 billion of value,' the answer is losing."

• Sprint says to be cash-flow positive next year, shares soar: Sprint Corp (S.N) reported better-than-expected first-quarter revenue as big discounts attracted more postpaid subscribers, and the No. 4 U.S. wireless carrier said it expected to be cash flow positive next fiscal year after breaking even this year. The company's shares surged more than 28 percent to $5.93 on Monday - their biggest intraday percentage gain ever - after it also said it had enough money to fund its business this year. Some analysts and investors had raised questions about Sprint's financial position after majority owner SoftBank Corp (9984.T) agreed earlier this month to buy UK chipmaker ARM Holdings for $32 billion. Sprint had negative cash flow of $3.17 billion in the financial year ended March 31. "We expect that we will have adequate sources to provide all the capital necessary to fund the business and repay the debt maturities due in FY 16," Chief Financial Officer Tarek Robbiati said on a conference call with analysts.Sprint, in which Japan's SoftBank holds a more than 80 percent stake, said its net operating revenue fell marginally to $8.01 billion. Up to Friday's close, Sprint's shares had risen 27.6 percent since the start of the year.

• Investors realize Nintendo didn’t develop Pokémon Go and shares plummet: Nintendo’s shares plunged after the company said late Friday that the worldwide success of Pokémon Go will not significantly impact its financial results. Nothing Nintendo disclosed about the ownership of the game was new information, but markets were shocked anyway. The stock sank 18 percent to 23,220 yen at the close in Tokyo, the maximum one-day move allowed by the exchange, noted Bloomberg. After the drop, Nintendo’s stock remained flat. In morning trading today, the Kyoto-based company’s shares were down $2.36, or 8.14 percent, at $26.64.On Friday, Nintendo put out a statement pointing out that it owns only 32 percent of the voting power of The Pokémon Company, an affiliated company that holds the ownership rights to Pokémon. Nintendo also owns 13 percent of Niantic, the San Francisco-based mobile developer spun out of Google last year who developed and distributed the game. “Because of this accounting scheme, the income reflected on the company’s consolidated business results is limited,” Nintendo wrote in a notice. Also, Nintendo said that “Pokémon Go Plus,” its peripheral device for use with the application, is scheduled for release and it’s already reflected in the financial forecast. Following Pokémon Go’s release in the U.S. at the beginning of July, Nintendo’s market valuation soared to more than $40 billion, passing Sony. 

Daily Tech Snippet: Tuesday, July 19

• Netflix Disappoints Wall Street as Subscriber Growth Slows: Netflix isn’t looking so invincible anymore. On Monday, the company disappointed Wall Street with the news that subscriber growth for its streaming video service had slowed significantly during the second quarter. Also disconcerting was that Netflix added far fewer subscribers over all during the period than expected, which the company blamed on news media coverage of its plans for price increases. Netflix added just 1.7 million new streaming members in the three months that ended June 30, about half the 3.3 million net additions from the same period the previous year. That anemic growth — for both United States and international subscribers — came in well below its forecast of 2.5 million new members. The development sent Netflix shares down as much as 16 percent in after-hours trading on Monday, representing the second earnings report in a row that has sparked a double-digit plunge in the company’s stock price. Mr. Hastings finds himself in a starkly different position from just six months ago, when he stood onstage at the big consumer electronics show in Las Vegas and declared that Netflix would conquer the global market for streaming television, adding more than 130 countries to its world service map. At the time, the company’s share had been soaring, surging 135 percent in 2015 as the top performer on the Standard & Poor’s 500-stock index. So far this year, Netflix’s share price has declined about 14 percent. Still, some analysts pointed to the company’s financials as proof that it would continue to deliver on its plans in the long term. Net income for the quarter was $41 million, up 58 percent from $26 million during the same period last year. Total revenue was $2.1 billion, up 27 percent from $1.6 billion in the same period last year.

• Yahoo Revenue Falls 15 Percent and Profit Drops 64 Percent: As Yahoo accepted the final bids for its core business on Monday, the internet company revealed just how badly that business was deteriorating. Yahoo said that its revenue in the second quarter fell 15 percent, after excluding accounting adjustments, and its operating profit fell 64 percent. Yahoo also acknowledged that Tumblr — its biggest acquisition under its current chief executive, Marissa Mayer — was now worth only one-third of the $1.1 billion that Yahoo paid for it in 2013. But investors were not focused on the quarterly numbers or Yahoo’s vast overpayment for Tumblr. They were far more interested in whether Yahoo’s web, email, news and other businesses will finally be sold — and at what price.Yahoo has been conducting a prolonged auction for those assets since February, and final bids were due on Monday. Yahoo’s board is expected to evaluate the offers over the next week or two and decide whether to proceed with a transaction that would end Yahoo’s 20-year run as an independent, publicly traded company.Analysts expect the final bids to come in at $3.5 billion to $6 billion, including Yahoo’s land and patents.The write-off of most of the value of the Tumblr blogging network is emblematic of the failure of Ms. Mayer’s strategy to expand Yahoo by luring the mobile young users who drive the business of its chief rivals, Google and Facebook.In the second quarter, Yahoo’s revenue was $1.31 billion, up from $1.24 billion in the same quarter a year ago. But the most recent quarter’s revenue rose only because of a change in how Yahoo accounts for revenue from its search partnership with Microsoft. Excluding those changes, revenue fell 15 percent, and both search ads and display ads posted significant drops. The company reported a net loss of $440 million, or 46 cents a share, for the quarter, compared with a loss $22 million, or 2 cents a share, in the same quarter a year ago. Excluding the Tumblr write-off and other adjustments, the company’s operating profit fell 64 percent. Shares of Yahoo were down slightly in after-hours trading Monday evening.

• IBM Rises After Sales Beat Estimates on Software Unit Gains: IBM second-quarter revenue beat analysts’ estimates, boosted by the unit that includes its Watson artificial intelligence platform, in an early indication that the company’s transition to cloud-based software and services is beginning to pay off. Sales were $20.2 billion, compared with the average analyst estimate of $20.1 billion, according to data compiled by Bloomberg. Revenue in cognitive solutions, which includes Watson, increased 3.5 percent to $4.7 billion. This is the first time since IBM reorganized its segments that the cognitive solutions portion has registered growth, after declining the previous five quarters in a row. Adjusted earnings, excluding some items, was $2.95 a share, beating the $2.89 average estimate of 19 analysts. The shares rose 3.2 percent in late trading to $165. They are up 16 percent this year through the end of Monday, compared with a 6 percent gain on the Standard & Poor’s 500 Index.

• What is ARM and why is SoftBank spending $32 billion on it? SoftBank’s $32 billion deal to buy chip designer ARM had many people scratching their heads Monday. It’s not that ARM isn’t important in tech. Indeed, its processor designs are used by nearly every chipmaker and, by extension, find a place inside nearly every piece of tech from cellphones to hard drives to networking gear. Rather, it is the fact that the chipmaker is so far removed from SoftBank’s other businesses. The Japanese conglomerate has a wide range of tech holdings, including a controlling interest in Sprint, its own mobile carrier business in Japan and investments in Alibaba, OlaCabs and Snapdeal. “SoftBank would have been one of the least likely I thought to buy ARM,” said longtime chip analyst Kevin Krewell of Tirias Research. “They are not in the semiconductor business in any significant way.” Krewell says he suspects that SoftBank looked hard at buying other companies in the chip business and decided that ARM was the strongest play, especially for the very long term.It’s worth taking a second to understand how ARM’s business works and what it does. ARM doesn’t make any products. Not only does it not manufacture chips, it doesn’t even design the ones that are eventually sold. Rather, it designs the core engines that get built into others’ chips — chips from companies like Qualcomm and Nvidia as well as processors like Apple’s A9 and Samsung’s Exynos. For its efforts, ARM gets a small license fee from every chip that uses its design. Because it is in so many products, that small license fee adds up to a pretty healthy business. Its 2015 revenue was nearly one billion British pounds. And its sphere of influence is growing, both in terms of the number of chips using its design as well as the kinds of products. Last year nearly 15 billion chips using its designs were sold, up from about six billion in 2010. Cars, servers and internet-of-things devices are all seen as big expansion areas for ARM chips.

Daily Tech Snippet: Monday, July 18

• SoftBank is bidding to buy ARM for $32 billion — because everything’s a computer now: apan’s SoftBank is buying U.K.-based chip design firm ARM Holdings for about $32 billion, according to the FT. Why? Everything is a computer now, and ARM has been one of the winners of the mobile revolution. ARM designs chips — but doesn’t actually make them — for a huge variety of devices. It dominates the market for smartphones — Apple is a big client, as is Samsung — and its chips shows up in other consumer gadgets, as well as more-industrial-like devices and “internet of things” sensors. The number of chips containing ARM processors reached almost 15 billion in 2015, up from about 6 billion in 2010.The move is a big one for SoftBank CEO Masa Son after his would-be successor, former Google executive Nikesh Arora, stepped away from the company last month. (Talks presumably started while Arora was still there.) One key question is whether other firms will let SoftBank purchase ARM or if there will be a bidding war. Apple, arguably ARM’s most important client, and Intel, which lost the mobile chip war to ARM, are both potential buyers.

• ATMs Spit Out Cash Without Cards as Smartphone Apps Take Over:  Forgot your bank card at home? No worries. Many ATMs will soon dispense cash with help from a smartphone and banking app. A growing number of banks are letting consumers arrange withdrawals via their mobile app and pick up the cash at a nearby automated teller machine. Customers authenticate the transaction by scanning a QR code with their phone, entering a one-time security code or tapping their device on the machine. The idea is to help customers who have forgotten their cards or worry about thieves stealing their card data via ATMs. While so-called cardless cash access is only available at about 2,000 of the half a million or so U.S. ATMs in use today, it’s expanding rapidly and will be at as many as 95,000 machines by year end, according to payments researcher Crone Consulting LLC. JPMorgan Chase & Co. plans to roll out the feature later this year. Bank of America Corp.said it will extend the technology to 5,000 ATMs by year end. And Wells Fargo & Co. is letting some users of mobile wallets like Apple Pay authenticate through their phone, and expects more than 40 percent of its ATMs to be enabled for this technology by year end. In possibly the largest deployment to date, Payment Alliance International, the nation’s largest closely held provider of ATM processing and maintenance services, plans to announce Friday that it will start rolling out the technology in August or September, and plans to have cardless cash access at 25,000 machines in stores and gas stations by the end of 2017.The technology has cut transaction times at ATMs to about 10 seconds from 45 seconds, he said, adding that more than 8 percent of the bank’s mobile customers use the service. Smartphone-based ATM transactions have also helped combat skimming, where criminals insert a device in an ATM that steals customers’ credentials and lets them make withdrawals later. Last year, the number of ATMs compromised by criminals in the U.S. jumped 546 percent, according to FICO Card Alert Service. Upgrading an ATM with software for such smartphone-based withdrawals cost about $800, Ormseth said.

• Artificial Intelligence Swarms Silicon Valley on Wings and Wheels: For more than a decade, Silicon Valley’s technology investors and entrepreneurs obsessed over social media and mobile apps that helped people do things like find new friends, fetch a ride home or crowdsource a review of a product or a movie. Now Silicon Valley has found its next shiny new thing. And it does not have a “Like” button. The new era in Silicon Valley centers on artificial intelligenceand robots, a transformation that many believe will have a payoff on the scale of the personal computing industry or the commercial internet, two previous generations that spread computing globally. Computers have begun to speak, listen and see, as well as sprout legs, wings and wheels to move unfettered in the world. The shift was evident in a Lowe’s home improvement store here this month, when a prototype inventory checker developed by Bossa Nova Robotics silently glided through the aisles using computer vision to automatically perform a task that humans have done manually for centuries. The robot, which was skilled enough to autonomously move out of the way of shoppers and avoid unexpected obstacles in the aisles, alerted people to its presence with soft birdsong chirps. Gliding down the middle of an aisle at a leisurely pace, it can recognize bar codes on shelves, and it uses a laser to detect which items are out of stock.

• Success of Pokemon GO adds impetus for change at Nintendo: The phenomenal success of Pokemon GO and the surge in Nintendo Co's (7974.T) market value by $17 billion in just over a week has been seized upon by one of its most vocal investors to press for a change of strategy at the company. Until Pokemon GO, a mobile game, was launched just over a week ago, Nintendo had taken every opportunity to say its main focus was still gaming consoles, and games for smartphones were just a means to lure more people to them. But the success of Pokemon GO - unforseen even by its creators - has shown the potential for augmented reality and for Nintendo to capitalize on a line-up of popular characters ranging from Zelda to Super Mario. Seth Fischer, founder and chief investment officer at Oasis Management, is one of Asia's best known hedge fund managers and has long been a small but loud shareholder. Encouraged by the success of mobile games like "Candy Crush", he has campaigned for years for the Japanese console maker to develop and sell games for platforms run by Apple and Google. "I hope they will now understand the power of smartphones," Fischer told Reuters. "And as a result, I hope this means there is a whole change in strategy." "My next focus with Nintendo is for them to focus on monetizing the rest of their 4,000 patents for mobile gaming, multi-player gaming, et cetera. I think they could be making 30 to 60 billion yen ($290 million to $570 million) annually from licensing."

Daily Tech Snippet: Wednesday, June 22

• Tesla offers $2.8 billion for SolarCity in 'no brainer' deal for Musk: Tesla’s stock drove off a cliff after the SolarCity bid was announced, and Elon Musk and his family could stand to gain $700 million in Tesla shares from SolarCity deal: Elon Musk on Tuesday sought to build a clean energy powerhouse as his electric car maker, Tesla Motors , made an offer to buy his solar installation firm SolarCity Corp in a stock deal worth as much as $2.8 billion. Tesla shares plunged more than 13 percent to $189.99 in extended trading - amounting to a loss in value of about $4.3 billion, or more than the value of the offer for the other company. Shares of SolarCity rose about 18 percent to $25.02. Musk, who is the chairman of SolarCity, CEO of Tesla and the largest shareholder of both companies, described the deal as a "no brainer" in a call with reporters. Tesla investors punished the company's shares, however.  Musk, who owns 19 percent of Tesla and 22 percent of SolarCity, said he would recuse himself from voting on the deal. He could not say how soon shareholders could vote on the deal, as due diligence needs to take place first. SolarCity CEO Lyndon Rive, Musk's first cousin, said he supported the deal but would also recuse himself from voting. Rive's brother, Peter, is also a founder of the company and its chief technology officer.

• SoftBank President Nikesh Arora Plans to Step Down: A former Google executive and Silicon Valley star was on course to be the next chief executive of SoftBank of Japan, one of the world’s most prominent technology conglomerates. Now he is leaving, in an abrupt shakeout that shows cracks in SoftBank’s global ambitions. When the executive, Nikesh Arora, was poached two years ago from a coveted role as Google’s head of business operations, the hire was widely considered a coup for SoftBank. Its billionaire founder and chief executive, Masayoshi Son, crowned Mr. Arora heir apparent. Mr. Arora was vaunted for his deal-making prowess and seen as an international executive who would help transform SoftBank with a flurry of investments. One of Mr. Son’s most cherished ambitions was to turn SoftBank, a Japanese business with some notable overseas names like the American carrier Sprint, into a truly global enterprise. The honeymoon did not last.Investors have criticized Mr. Arora recently for his record of managing SoftBank’s overseas deals. Investments in start-ups like DramaFever and Housing.com, these shareholders have said, appear to have soured as the companies have faltered. And the carefully orchestrated succession plan — or what appeared to be — has collapsed. Mr. Son decided he was not ready to give up the reins soon. Mr. Son, 58, said in a statement that he still wanted to “work on a few more crazy ideas” at SoftBank. Mr. Son cited differences over when Mr. Arora would take over as chief executive as the reason he had agreed to step down. Mr. Arora, who was born in India, holds the titles of president and chief operating officer. “This will require me to be C.E.O. for at least another five to 10 years — this is not a time frame for me to keep Nikesh waiting for the top job,” Mr. Son said. Mr. Arora, 48, also presented the parting as amicable. “Masa and I are still in love with each other,” he posted on Twitter. “I will support everyone I invested in, and they know that.”

Daily Tech Snippet: Tuesday, February 16

• Mattel Unveils ThingMaker, A $300 3D Printer That Lets Kids Make Their Own Toys: Autodesk was tasked with building this app which early testers, including those at Toyland, have already described as “fast,” “easy to navigate” and “ridiculously intuitive.”Called ThingMaker Design, the app includes a variety of built-in character templates and easy-to-use tutorials that help novices get started. But it also allows for designing characters from scratch, once kids get the hang of things. The toys can be customized with different colors and textures, and will bend and twist in the app so you can get a feel for how they’ll work after they’ve been printed. The creations can be saved as images to the mobile device’s Camera Roll, or uploaded to Google Drive or Dropbox. When a design is complete, the app lets you export the STL print files wirelessly to your at-home printer, whether Mattel’s or otherwise. The idea isn’t just to print an object and be done, however – instead, kids will print parts that can be assembled to form larger creations, like dolls, robots, dinosaurs, scorpions, skeletons, bracelets or necklaces, for example. What’s interesting here is the potential for Mattel to tie into other children’s’ brands it already owns or licenses and bring them to life through 3D printing. That’s something the company says is on the roadmap, saying it will launch “additional design content, including branded options” at a later date. No actual brand names were announced, however, but there were hints that brands like Barbie and Hot Wheels were already being planned. The physical parts are printed in batches then assembled through ball-and-socket joints that snap together. This process can take anywhere from 30 minutes for a small item, up to overnight (e.g. 6 6 to 8 hours) for a larger toy.Mattel says its ThingMaker 3D will use a hard PLA filament, but also hasn’t yet announced the colors that will be available. According to reports from the Toy Fair, though, there were some two dozen colors on display. A spokesperson said the company may release other materials in the future.

• India's Snapdeal raises $200 million led by Ontario Teachers' Pension Plan:Indian online marketplace Snapdeal has raised $200 million in a fresh funding round led by Canada's Ontario Teachers' Pension Plan, the company said. The latest fund-raising follows $500 million raised last August in a round led by Alibaba, SoftBank and Foxconn.

• SoftBank Rises the Most in Seven Years on Record Share Buyback: SoftBank climbed the most in more than seven years after the company said it will spend a record 500 billion yen ($4.4 billion) buying back stock. The stock rose as much as 15 percent to 5,040 yen as of 9:26 a.m. in Tokyo on Tuesday. SoftBank will purchase as many as 167 million shares, or 14.2 percent of its stock, using cash holdings and the proceeds of asset sales, the Tokyo-based company said in a statement Monday. The Japanese wireless carrier saw its shares drop to their lowest since buying Sprint Corp. in 2013 as Chairman Masayoshi Son struggled to persuade investors he can turn around the U.S. company. The shares were down 28 percent this year before the buyback announcement, putting SoftBank’s market value well below that of its own investments in companies including Sprint and Alibaba. “This is a good buyback, considering how low their valuation has fallen,” said Atul Goyal, an analyst at Jefferies Group LLC. “Nothing so bad happened with Sprint and Alibaba to justify the drop in SoftBank shares.”

Daily Tech Snippet: Monday, January 25

• A Personality Profile of Larry Page: How Larry Page’s Obsessions Became Google’s Business: Three years ago, Charles Chase, an engineer who manages Lockheed Martin’s nuclear fusion program, was sitting on a white leather couch at Google’s Solve for X conference when a man he had never met knelt down to talk to him. They spent 20 minutes discussing how much time, money and technology separated humanity from a sustainable fusion reaction — that is, how to produce clean energy by mimicking the sun’s power — before Mr. Chase thought to ask the man his name. “I’m Larry Page,” the man said. He realized he had been talking to Google’s billionaire co-founder and chief executive. “He didn’t have any sort of pretension like he shouldn’t be talking to me or ‘Don’t you know who you’re talking to?’” Mr. Chase said. “We just talked.” Larry Page is not a typical chief executive, and in many of the most visible ways, he is not a C.E.O. at all. Corporate leaders tend to spend a good deal of time talking at investor conferences or introducing new products on auditorium stages. Mr. Page, who is 42, has not been on an earnings call since 2013, and the best way to find him at Google I/O — an annual gathering where the company unveils new products — is to ignore the main stage and follow the scrum of fans and autograph seekers who mob him in the moments he steps outside closed doors. But just because he has faded from public view does not mean he is a recluse. He is a regular at robotics conferences and intellectual gatherings like TED. Scientists say he is a good bet to attend Google’s various academic gatherings, like Solve for X and Sci Foo Camp, where he can be found having casual conversations about technology or giving advice to entrepreneurs.

• SoftBank's Slide Leaves It Worth Less Than Stake in Alibaba: SoftBank tumbled below the value of its stake in Alibaba Group Holding Ltd. amid growing concerns about the Japanese company’s other assets, including struggling U.S. wireless carrier Sprint. SoftBank’s market capitalization stood at 5.89 trillion yen ($50 billion) Friday after its stock rebounded 8 percent after a four-day losing streak triggered by rising pessimism about Sprint’s ability to pay down debt. That still lags the $56 billion that its stake in Alibaba is worth, according to its own website.  Billionaire Masayoshi Son has struggled to turn around Sprint since buying a controlling stake in 2013 for SoftBank’s biggest acquisition ever. The wireless operator lost its place as the third-largest U.S. carrier to T-Mobile US Inc. and its stock this week fell to the lowest level in more than two years. Its bonds led declines among junk-rated debt Wednesday. “It’s symbolic because it tells you that investors feel SoftBank has been destroying value,” said Amir Anvarzadeh, a manager of Japanese equity sales at BGC Partners Inc. in Singapore. “Son’s pride has been another major issue, which pushed him to where he is now.” SoftBank lists the value of holdings in nine other public companies on its website, including Sprint and Yahoo Japan. The company calculated the total market value of those holdings as more than 8 trillion yen. 

• Big Exec Departures at Twitter: Media Head Stanton and Product Head Weil Leaving: In a major executive upheaval, two of Twitter’s top executives — media head Katie Jacobs Stanton and product head Kevin Weil — are departing the company, according to sources close to the situation. Neither has immediate plans to go to another company, added sources, but are expected to. Right now, the jobs of both Weil and Stanton will be filled with interim replacements. There have been rumblings of the changes for weeks now inside the San Francisco social communications company. Sources said Twitter is planning to announce the shuffle tomorrow, along with the hire of a prominent CMO.

Daily Tech Snippet: Tuesday, January 19, 2016

• Social media ‘buy buttons’ are n't off to a great start, but they might still be big: In the past year, there’s been a flurry of experimentation with “buy buttons,” a way for social-media sites to allow users to purchase cocktail dresses, throw blankets, candle-making kits and sundry other items from retailers without leaving the social network. Pinterest launched “buyable pins” in June, the same month Instagram released its similar “shop now” feature. Those offerings joined ongoing tests by Facebook and Twitter for similar ­functionality. The rush by tech giants and retailers to join the buy-button arms race would suggest that these businesses see money-making potential. And given how much time people spend on social media — an estimated 1 of every 5 minutes spent on a mobile phone in the United States is on Facebook or Instagram, for example — it would be logical to assume that these buy buttons are bringing retailers a blast of online sales. But this holiday season, social channels accounted for 1.8 percent of overall online sales, according to data from Custora, whose software platform is used by many retailers. That’s just a tiny sliver of purchases, and it’s not even growing: In 2014, Custora found that social media led to 1.9 percent of sales during the same time period. But even if buy buttons have not had an explosive launch, experts say they could prove to be a crucial solution to some of retailers’ biggest online shopping problems. Right now, stores are seeing a massive “conversion gap” on mobile devices, meaning that there has been a surge in the number of people browsing sites from mobile devices, but only a small share of them are actually making purchases. In studies, shoppers frequently say they don’t buy on their smartphones because it is a hassle to enter payment information and go through a checkout process on the small screen. Buy buttons could also help retailers re-create the idea of the impulse buy for the online era. On the web, a shoppers’ journey so often begins with a search in Amazon or Google for a specific item. That has made it hard for retailers to do what they’ve long done in stores with elaborate window displays and sweet treats near the checkout counter: Persuade you to buy something eye-catching on a whim.

• Son's SoftBank Vision at Risk as Sprint Goes From Bad to Worse: The acquisition of Sprint Corp. was supposed to help Masayoshi Son realize his vision of transforming SoftBank Group Corp. into the world’s most-valuable company. Instead, the 2013 deal has become his biggest setback so far, dragging down SoftBank shares and cutting into the billionaire’s wealth. SoftBank tumbled yesterday to its lowest level since the Sprint deal closed 2 1/2 years ago. Son’s fortune has shrunk by $3.2 billion over the past 12 months, according to the Bloomberg Billionaires Index, as the Japanese company’s stock plunged. SoftBank paid $22 billion for a controlling stake in the No. 3 U.S. wireless operator at the time. That investment has lost $7.3 billion in value, according to SoftBank, and Sprint is now the No. 4 carrier.  At the same time, a slowdown in China brought down shares of Alibaba Group Holding Ltd., SoftBank’s biggest holding, by 22 percent last year. “There will always be fans of SoftBank, it’s just at this moment in time, no one cares --it’s out of fashion,” said Andrew Clarke, director of trading at Mirabaud Asia Ltd. in Hong Kong. “They have too many concerns about Sprint and Alibaba because those shares are being crushed.”

• Upstarts Are Leading the Fintech Movement, and Banks Take Heed: Ryan Craine hates carrying cash and finds writing checks to be a headache. He doesn’t do much of either anymore — he mostly uses his smartphone to pay for things. Mr. Craine, a 28-year-old tech support worker in Washington, D.C., uses Apple Pay at the stores and restaurants that accept it. About 20 times a month, he turns to Venmo, a digital wallet for transferring money from one person to another, to pay his share of rent, meals, groceries and utility bills. To refinance his student loans last year, he went to an online lending start-up, Earnest. Mr. Craine’s money choices point to the millennial-led shift toward new digital financial services, a change in behavior that threatens to upend the consumer banking industry. The popularity of the services has left the major banks rushing to adapt, even as they have regained their footing after the financial crisis. Americans in their 20s and early 30s, analysts say, offer a glimpse of tomorrow’s banking market. “Their relationship with the financial system is very different — it’s an electronic one, on their smartphones,” said Mark Zandi, chief economist at Moody’s Analytics. “That can and will be very disruptive to the banking system.” Money is pouring into so-called fintech start-ups. And major technology companies — Apple, Google, Amazon, Facebook and Samsung — are all entering consumer banking, typically starting with digital payment apps. Investment worldwide in start-ups focused on retail banking markets rose to nearly $6.8 billion in 2015, according to CB Insights, a research firm. That is more than triple the $2.2 billion in 2014. In 2010, 40 percent of Americans with bank accounts visited a physical branch once a week, while only 9 percent made a mobile transaction weekly, according to survey research by Javelin Strategy and Research. By 2014, the percentage reporting weekly visits to bank branches fell to 28 percent, while the weekly mobile banking share tripled, to 27 percent.

• WhatsApp drops $1 subscription, studies making businesses pay: The world's most popular messaging service, WhatsApp, is dropping its token $1 fee still levied on some users as it experiments with making businesses pay to reach their customers, Chief Executive Jan Koum said on Monday. In addition, the Facebook-owned communications service expects in the coming months to offer complete encryption of messages, in a move to ensure the privacy of user conversations that is likely to draw further criticism from some governments. The authorities in the United States, Britain and elsewhere say the growing prevalence of encryption on services such as WhatsApp and Apple's iMessage, hamstring their ability to monitor criminal suspects or thwart militant plots and have threatened to pass new laws to block these changes. WhatsApp, the service that offers free text, picture and video messages, has been slowly working to develop end-to-end encrypted communications services for more than a year. It has already introduced full encryption for users on Android phones. "We are a couple of months away from calling it done," Koum said, noting that once completed, WhatsApp will represent the world's largest service offering completely private messaging. "Soon we will be able to talk more about this," he said. Once fully introduced, WhatsApp will be the largest encrypted communications service in the world, he noted.

Daily Tech Snippet: Thursday, November 25

• Xiaomi's $45 Billion Valuation Seen `Unfeasible' as Growth Cools: Things were going so well for Xiaomi Corp. Customers were lining up, investors were swooning and the Beijing-based startup closed funding at a $45 billion valuation. That was last year. Now the high-flying smartphone maker is stumbling. Founder Lei Jun’s latest business, one of China’s most exciting startup stories of the past few years, is likely to miss its own goal of selling 80 million smartphones this year, according to two people with knowledge of its production plans. Suppliers also cut their internal targets for Xiaomi in anticipation of the shortfall, they said. Xiaomi’s falter shows the startup’s challenge in trying to maintain momentum after a meteoric ascent past Apple Inc. and Samsung Electronics Co. in China. Investors bought into the company’s story of youthful disruption and online sales, yet the subsequent lowering of China’s growth target and the copying of its sales strategy by rivals have neutralized Xiaomi’s first-mover advantage, putting its high price tag in doubt. "All those expectations of growth aren’t being realized, which now makes that $45 billion valuation unfeasible," said Alberto Moel, an analyst at Sanford C Bernstein in Hong Kong. "The argument was that their business is kind of like Apple and they’re growing very fast, but they’re no longer growing so fast and they’re not as good as Apple." Domestic shipments of Xiaomi smartphones, including its premium Mi 4 and more economical Redmi series, dropped 8 percent in the third quarter from a year earlier, its first-ever decline, according to researcher Canalys. IHS, another research firm, estimates that Xiaomi shipments dropped 3.9 percent, barely maintaining the lead over Huawei Technologies Co. That’s a big change from the bold growth projections used to justify Xiaomi’s tag as one of the world’s most-valuable technology startups. In March of last year, Lei predicted selling 100 million smartphones in 2015. Through the first nine months of this year, Xiaomi shipped about 53 million smartphones. With its optimistic forecast, Xiaomi secured $1.1 billion in December from investors including GIC Pte., All-Stars Investment Ltd. and DST. Xiaomi drew comparisons to Alibaba, the Chinese e-commerce company that months earlier held the largest initial public offering ever.

• Black Friday Deal or Dud? How to Shop Smart This Holiday Season: Black Friday, which has traditionally been the moment to flock to stores for steep discounts, and which has evolved to also include major online sales events for retailers like Amazon, Best Buy and Walmart, is not all that it is billed to be. We asked J. D. Levite, the deals editor of the product recommendations website The Wirecutter, for some data on just how beneficial the deals are on Black Friday — and the answer was not encouraging. Year round, Mr. Levite and his team track product prices across the web to unearth discounts on goods of all types, from gadgets to kitchenware. They also look at whether the product is high quality and durable based on their own testing and other reviews, and whether the seller or brand has a reasonable return or warranty policy. By those measures, Mr. Levite said, only about 0.6 percent, or 200 out of the approximately 34,000 deals online, which typically carry the same price tags inside retailers’ physical stores, will be good ones on Black Friday. “There are just more deals on that day than any other day of the year,” he said. “But for the most part, the deals aren’t anything better than what you’d see throughout the rest of the year.” There’s a smarter way to shop than relying on Black Friday. With the plethora of web tools now available, consumers can research online and then use trackers to follow product pricing for drops throughout the year. While it’s a time-consuming effort, the method is more precise for understanding pricing trends, both online and in stores. One useful tracking tool is Camel Camel Camel, which is geared toward users of the online retail behemoth Amazon. Using the Camel Camel Camel website, people can view a product’s price history on Amazon.com and then create alerts to receive an email as soon as the item’s price falls to a certain threshold. Over time, interesting trends emerge. One is that some product prices are raised in October, a few weeks before Black Friday. The prices are reduced again on Black Friday. Camel Camel Camel’s database also shows some items have predictable pricing patterns over the course of a year. A pair of bookshelf speakers made by Pioneer are typically $127, but that tends to drop significantly in August — to $60 in August 2014 and to $88 in August 2015, timed to the back-to-school season. This week, the same pair of speakers was again $127. In other words, there are times of year when different types of products decline in price — and Black Friday isn’t one of them.

• All In: Why Nikesh Arora Bet $483 Million on SoftBank's Future: It began late one night this year when he and Son were talking about people’s tolerance for risk and how it tends to decline over time. Arora took a chance as a kid by leaving India for the U.S. with only $200 in cash, but he had since gone on to a lucrative career. So Son prodded him. “Masa said, ‘How much risk appetite do you have?”’ Arora says. “‘Do you believe you can transform SoftBank into a company two, three, five times its size? Now is the time to take the risk.”’ A week later, Arora came back with a plan to buy 60 billion yen ($483 million at the time) in SoftBank shares, more than any insider purchase by an executive in Japan in at least 12 years, according to Bloomberg data. He would become the company’s second-largest individual shareholder and borrow heavily to do it. Arora says investors don’t yet appreciate what SoftBank is becoming. The company has been battered recently because of struggles at two major holdings, the China e-commerce powerhouse Alibaba Group Holding Ltd. and the U.S. wireless operator Sprint Corp. SoftBank is still valued at less than the public shares it owns, meaning investors deem its operating businesses practically worthless.Arora professes not to be worried. He says investors will come around once the company makes progress in reviving Sprint, lets Alibaba recover and demonstrates that it’s more than a Japanese telecommunications company with a spotty investment record.“I’m very relaxed,” Arora said. “I’m here for at least the next 10 years.”  Arora was hired last year after a decade at Google Inc. and promoted to president in June. Since then, he has been quietly building his own operation within SoftBank, an investment arm that will take stakes in technology companies around the world. Though SoftBank put money into startups for decades, including a tumultuous foray during the dot-com bust, the effort had dwindled in recent years to what Son called a “hobby” next to his wireless and broadband businesses. Arora is reviving the venture push and making it much more ambitious. He is hiring a team of 15 to 20 outsiders and plans to put about $3 billion into startups each year. Arora’s recruits, from companies such as Google and LinkedIn Corp., are hand-picked for the expertise they can offer startups in key areas like personnel, product development and acquisitions. He says SoftBank will hold a competitive advantage by operating at a financial strata few can reach. He plans to make five to 10 investments a year of $100 million to $1 billion. The idea is to back startups that have proven products and need to expand -- the rapid phase of growth Arora helped manage at Google.

• Morgan Stanley Said Struggling to Sell EBay Enterprise Deal Loan: Morgan Stanley is struggling to unload $640 million of loans backing the private-equity buyout of EBay Inc.’s enterprise business after investors shunned the debt, according to people with knowledge of the deal. The bank has been trying to sell the loans since mid-October and continues to hold the debt even after EBay said on Nov. 2 that the sale was completed. Morgan Stanley has discussed a steeper discount to lure buyers and has been probing investors in recent days about the price at which they may be willing to buy the debt, said the people, who asked not to be identified because the talks are private. One concern investors have raised is that the company’s projected earnings may be too optimistic. Buyout targets often make adjustments to forecast earnings, called add-backs, that can reduce a borrower’s leverage.

• HP Inc plunges after printer business underwhelms: Shares of HP Inc, which houses former Hewlett-Packard Co's legacy hardware business, plunged 16.3 percent on Wednesday after the company's lackluster results fueled concerns about its ability to weather a slowdown in the printer and PC markets. HP Inc's revenue from both its printer and PC businesses fell 14 percent each in the fourth quarter, their worst performance in the year ended Oct. 31, and forecast current-quarter profit below market expectations."Things got worse. Not only did they not get better - they got worse," said Shebly Seyrafi, an analyst at FBN Securities.HP Inc Chief Executive Dion Weisler called the printing business a "much greater challenge" than the PC business.The company has been cutting printer prices to tackle stiff competition, particularly from Japanese printer makers Canon and Epson.However, the price cuts, coupled with the effect of a stronger dollar, have reduced the value of income from overseas markets.Revenue from HP Inc's printer supplies such as ink cartridges and laser toner fell 10 percent this quarter. Supplies account for most of the profits for HP Inc.HP Inc's PC unit has been suffering as sales have been falling worldwide for several quarters and the launch of Windows 10 has so far failed to rekindle the industry."Ultimately I think (HP Inc), the way it's structured, it's going to be more of a sort of dividend yield play," said Jeffrey Fidacaro, an analyst.HP Inc's sibling, Hewlett Packard Enterprise, saw its shares rise as much as 8.5 percent on Wednesday, after it maintained its profit forecast for fiscal 2016.

• Zenefits Under Investigation For Allegedly Allowing Unlicensed Brokers To Sell Health Insurance: Cloud HR platform Zenefits may have allowed salespeople to illegally act as insurance agents in at least seven states. According to a BuzzFeed investigative report, the startup let unlicensed brokers sell health insurance, leading to at least one commissioner to investigate in Washington State. Those unlicensed solicitations go back to at least the summer of 2014, and the Washington State office of the insurance commissioner started looking at the potential violations earlier this year, according to the report. This is not the first time Zenefits has faced legal scrutiny for possible insurance violations. The Utah Insurance Department took the startup to task over claims it was illegally giving insurance software away for free. Regulators at the time said that the company violated local laws and that it was unfair to traditional insurance brokers. Utah legislators threw out the complaint and let Zenefits get back to business after both the Utah House and Senate overwhelmingly voted to let the startup continue operations. The broker license violation looks a bit more serious and could be considered a Class B felony, under Washington State law. Violators may be subject to a prison sentence of up to 10 years as well as face a $20,000 fine. According to the report, Zenefits execs may have known about the violations and were aware of the consequences, but were prompted to get sales agents licensed in the state only after learning of the insurance commission’s investigation. State records show 22 agents became licensed brokers just days after the report said Zenefits realized there was a state inquiry. The startup has since launched a “license management system” to help track which sales agents are properly licensed.

• Facebook’s Internet.org Now Available Throughout India: Internet.org, Facebook’s initiative to provide free Internet services in developing countries, is now available to all Indians through the Free Basics app on Reliance Communication’s network. The project is meant to give people in emerging economies easy access to the Internet, but has been hit by a slew of criticism. Reliance Communications is India’s fourth-largest telecom operator, with about 110 million subscribers as of June. According to its site, Free Basics will enable users to use Facebook and Facebook Messenger and access sites like Wikipedia, BBC News, Bing Search, Dictionary.com, and local news services. Detractors say that by making a handful of services available on its platform, Internet.org gives preferential treatment to its partners, therefore violating the tenets of net neutrality. In response, Facebook founder and chief executive officer Mark Zuckerberg said Internet.org will focus on offering basic services for free (hence the branding of its app) and is not meant to limit access to other providers. The company has also taken steps to make joining Free Basics easier to join for developers and other potential partners. This has done little to ameliorate critics who are concerned about the potential drawbacks of having a company as large and powerful as Facebook control what millions of new Internet users see. In addition to India, Free Basics is available in 30 countries throughout Africa, South and Southeast Asia, and Latin America.

Daily Tech Snippet: Thursday, September 24

• Coming Soon to Checkouts: Microchip-Card Payment Systems: Starting next month, retailers that haven’t upgraded their payment systems to read E.M.V. microchips — the small, metallic rectangles that are increasingly prevalent on the front of American charge cards — will bear the financial liability for some fraudulent charges. (Gas stations have an extra two years to make the switch for charges from their fuel pumps.) E.M.V. stands for Europay, MasterCard and Visa, the companies that created the standard in the mid-1990s. The new technology is a significant change from the current system, under which card issuers absorb most of the losses for in-person transactions made with counterfeit or stolen cards. Banks and merchants lost an estimated $16.3 billion last year globally on fraudulent transactions, and America has been their biggest problem spot. The country accounts for nearly half of the global losses, despite generating only 21 percent of the worldwide transaction volume, according to the Nilson Report, an industry researcher.Visa drew a line in the sand four years ago: American merchants would have until October 2015 to update their systems or absorb the losses themselves. Other major card networks quickly adopted the same deadline. Just days before the deadline, few merchants are ready. A handful of national retailers — most prominently, Walmart and Target — have invested in E.M.V.-ready terminals and spoken publicly about the switch, but many others have stayed silent. Around 27 percent of American merchants will be ready to process E.M.V. cards next month, according to a survey conducted this month by the Strawhecker Group, a consulting firm for the payments industry. For small sellers, the readiness rate is even lower. Banks and industry groups estimate that one in five will have their new systems running by Oct. 1. Both systems will continue to be available during a lengthy transition period.

• SoftBank Drops on Decline in Alibaba Stake’s Market Value: SoftBank Group Corp. dropped to the lowest in two years as the market values of its biggest U.S. holdings, Alibaba and Sprint, plunged. Billionaire Masayoshi Son’s mobile carrier and Internet investment company fell as much as 6.9 percent to 5,835 yen, the lowest since July 2013. The slump came on the first Japanese trading day after the lockup on Alibaba shares was lifted one year after its initial public offering.SoftBank has more than 1,000 investments, and its three biggest shareholdings of Alibaba, Sprint and Yahoo Japan Corp. have dropped by 700 billion yen ($5.8 billion) over the past 10 days to 8.7 trillion yen. Japan’s third-largest wireless carrier also slumped with rivals on concerns that revenue may weaken after Prime Minister Shinzo Abe said the nation’s mobile-phone rates were too high. Alibaba fell for a fifth day Wednesday in New York, slumping to as low as $59.68, compared with its IPO price of $68.

• Pandora says has paid $500 million in artist royalties in past year: Internet radio service Pandora Media Inc said it paid nearly $500 million in artist royalties over the past 12 months, bringing the total to more than $1.5 billion in about 10 years. "It took us nearly nine years to generate the first billion dollars in royalties, and just over a year to increase that total by 50 percent," Chief Executive Brian McAndrews said in a statement on Wednesday. Pandora gets revenue from advertising and paid subscriptions.

Daily Tech Snippet: Tuesday, May 12

• Xiaomi’s rolls out a money market fund to take on Alibaba and Tencent: Like Baidu and Alibaba, Xiaomi is eyeing China’s finance industry and seeing dollar signs. Today the company is officially launching a money-market fund called Huoqibao inside a new standalone app called “Xiaomi Finance.” Like the Alibaba-affiliated Yu’ebao, Xiaomi’s Huoqibao lets consumers save excess cash and earn interest from it. After registering for a Xiaomi Finance account with one’s national ID, users can bind a bank card to the app can store as little as RMB 1 (about US$0.15). The fund is managed by China’s E Fund Management and currently offers an annual return rate of 4.26 percent. This marks Xiaomi’s first foray into serious finance, but it has dabbled in money in the past. Huoqibao was once available in beta for select users of Xiaomi Wallet, another standalone app that was primarily used to manage virtual currency known as Mi coins. Users from inside China could purchase Mi coins through bound bank cards or Alipay accounts, and redeem them for customized launcher themes, or media like e-books. Compared to China’s other internet giants, Xiaomi is slightly late to the money market game. As of late 2014, Yu’ebao had over 185 million users] and and a fund size of RMB 578.93 billion (about US$93 billion). Yu’ebao’s deep integration with Alipay Wallet, which is also tied to Alibaba’s mobile ecommerce properties like Tmall and Taobao, make it tough for new customers to miss. Tencent and Baidu also have mobile money-market funds of their own. Of these three companies, Xiaomi is arguably in the weakest position when it comes to promoting consumer finance products. Alibaba already owns the biggest pool of money online in China thanks to Alipay, and Tencent owns the best mobile real estate thanks to WeChat, China’s most popular messaging app. Messaging apps and ecommerce marketplaces both contain powerful network effects that help ensure longevity. Unlike these companies (and arguably any other company in the world), Xiaomi is extremely well positioned to benefit from the emergence of smart home devices. Since thousands of customers log onto Xiaomi’s website to buy a smartphones every week, it can leverage that focused attention by selling smart lightbulbs and smart cameras and taking a cut in the process. Many of the hardware startups it invests in go on to list their items on the company’s ecommerce platform. Documents discovered last year by the Wall Street Journal indicated that Xiaomi makes the majority of its revenue and profits from hardware sales. But the company continues to invest in “services” – broadly defined as all of the semi-tangibles one buys on the internet. The company claimed to earn more than US$1 billlion in revenues from services in 2014, marking 6 percent of its total revenues.

• Chinese Smartphone Makers Try to Make Inroads in India: The era of fast growth is coming to an end in China, where the research group IDC said on Monday that phone sales fell 4 percent in the first quarter from a year earlier, the first contraction in six years. IDC expects no growth in China’s smartphone market in 2015. India’s smartphone sales are just a fraction of China’s. But as one of the fastest-growing smartphone markets in the world, with hundreds of millions of potential new customers, India may indicate whether a new generation of Chinese hardware companies can grow beyond their country’s borders. It is intensely competitive, with more than 150 brands. Among the best-selling brands are several indigenous companies with an inside track on local phone habits. Another top seller is a multinational, Samsung, which has deep experience selling across different cultures. Xiaomi, the most successful Chinese company in India, owned only 4 percent of the market in the fourth quarter. But India is also the only place that has a scale like China’s. Indians are expected to buy 111 million smartphones this year, and 149 million in 2016. And China’s smartphone makers say Chinese and Indian customers have a lot in common: Both tend to obsess over arcane features and specs, and both are highly sensitive to cost. Many Chinese companies are trying to make their case directly to potential Indian buyers online. It is a technique pioneered by Xiaomi, which used e-commerce to overcome difficult-to-manage and expensive storefronts and distribution deals in China and now India. So-called flash sales, which offer limited batches of phones to drive up demand and build brand cachet, have rattled the current top sellers in India, the local company Micromax and the South Korean giant Samsung, according to analysts. The tactic is cheap and effective, said Mr. Sharma of Coolpad: “We don’t need to spend tens of millions of dollars on marketing or building distribution networks.” One of the most successful Chinese brands in India so far, Xiaomi has gone to great lengths to create products catering to customers there. Its new Mi 4i phone costs more than many rivals at about $200, but supports six Indian languages, with local engineers working to increase that number. The company has also built an online store that focuses on India’s passions of cricket and Bollywood, and has plans to open 100 stores around the country before the end of the year. “We want to become an Indian company,” Xiaomi’s chief executive, Lei Jun, told a local newspaper after the introduction of the Mi 4i.

• SoftBank names Nikesh Arora President and Son's Likely Successor: Japan's SoftBank Corp unveiled a management reshuffle on Monday, appointing investments head Nikesh Arora as president and naming him as a potential successor to CEO Masayoshi Son, as the telecoms conglomerate steps up its overseas expansion. The move comes as Son and SoftBank are battling to make their 2013 acquisition of U.S. carrier Sprint Corp for more than $20 billion profitable. A sluggish Japanese economy, though, has forced the company to increasingly look overseas for growth. Announcing Arora's appointment at SoftBank's earnings conference, billionaire Son, who is relinquishing the president's post, said the former Google Inc executive was a "strong candidate" to lead the company in future. "Yes. He's 10 years younger than me, and he has more abilities than me," Son told reporters, when asked if Arora was a potential candidate to succeed him. "The last nine months I've spent with him have made me sure of that, but I'm not going to retire soon," Son said. SoftBank has been weighed down by the costs of trying to turn around Sprint, which has been in intense competition with larger U.S. rivals AT&T Inc and Verizon Communications Inc. Sprint, in which SoftBank owns 80 percent, has undergone a long-haul revamping of its network, shedding thousands of jobs and triggering a mass exodus of subscribers. SoftBank has made a string of other investments in recent years, including $250 million in privately-held Hollywood movie studio Legendary Entertainment, and $600 million in Travice Inc, the operator of Chinese taxi hailing app Kuaidi Dache. As well as being the largest investor in Chinese e-commerce giant Alibaba Group Holding Ltd, SoftBank has plans to invest $10 billion in India's potentially huge but under-developed online retail market. "We expect more investments and acquisitions, even more so than now," Son said. "Going forward, the overseas market will be the main factor for SoftBank." SoftBank posted a 9 percent fall in operating profit for the year ended March to 982.7 billion yen ($8.2 billion), hurt by the absence of one-time gains enjoyed the year before.

• Rackspace Earnings: Revenue $480M (+14% Y/Y) Net Income $28M; Shares Fall 13% on Outlook: Rackspace Hosting Inc, a web hosting company, forecast revenue for the current quarter below market estimates and said a strong dollar hurt its revenue growth in the first quarter. Shares of the company, which faces tough competition from Amazon.com Inc (AMZN.O), Google Inc (GOOGL.O) and Microsoft Corp (MSFT.O) were down 13 percent in extended trading on Monday. Revenue from a contract with a "large" financial services company will be realized only in the third quarter, hurting revenue growth in the second quarter, Rackspace Chief Executive Taylor Rhodes said in a post-earnings call. Rackspace Hosting will also take a one-time charge in the quarter as a customer moved some of its "production elements" away from a Rackspace data center in the United Kingdom. Rackspace leases online storage space to companies and provides its clients management and support services for their cloud-based operations. It gets about a third of its revenue from outside the United States. The company said foreign currency exchange rates hurt its revenue growth. Revenue increased 14.1 percent to $480.2 million in the first quarter ended March 31. On a constant currency basis, revenue grew 16.6 percent. Analysts had expected revenue of $481.6 million. Net income rose to $28.4 million, or 20 cents per share, from $25.4 million, or 18 cents per share, a year earlier. Analysts expected a profit of 20 cents per share. Rackspace shares closed at $53.13 on the New York Stock Exchange on Monday. They have risen 89 percent in the past 12 months.

• In global first, Uber tests cash payments for cabs in India: Uber is testing cash payments in India as the online taxi-hailing company seeks a stronger foothold in a country where many fewer people have credit cards than internet connections. San Francisco-based Uber has grown rapidly in value to be worth around $40 billion. But in India it has lagged local rival Ola, which has about 80 percent of the organized cab market. Many analysts say that is because Uber has not adapted its business model enough to suit India's needs. Uber said on Tuesday it was piloting cash payments for cabs in the southern Indian city of Hyderabad, in a first for the company globally. Until now, Uber's mobile application around the world has charged customers through credit cards or other electronic payment methods. India has about 20 million credit cards for a population of 1.3 billion. Though the government is trying to change this, most purchases are done with cash. Ola and other Indian cab services accept cash for rides, while e-commerce giant Amazon introduced a cash on delivery option when it launched in India. "Tradition dictates that cash plays a big role for Indian consumers," said Siddharth Shanker, Uber's general manager in Hyderabad.

• In 1.7M miles of test drives over 6 years, Google's self-driving cars have been in only 11 accidents, and caused none: Internet search company Google Inc's self-driving cars have been involved in 11 accidents, but have not been the cause of any, over the last six years since the project began, the program's director said on Monday. A team of drivers that is testing the fleet of more than 20 vehicles have driven 1.7 million miles so far. "...Not once was the self-driving car the cause of the accident," Chris Urmson said in a post on technology news website Backchannel's blog Medium. (bit.ly/1GZciuW) No one was injured in the accidents, Urmson added. "If you spend enough time on the road, accidents will happen whether you're in a car or a self-driving car." The cars had been hit from behind seven times, mainly at traffic lights, with a majority of the accidents being on city streets rather than on freeways.

Daily Tech Snippet: Tuesday January 20

Hi,

Here are some interesting topical snippets culled from various sources. Archived snippets are here, and a large database of links is here.

• How can Xiaomi be so aggressive with its pricing? A small portfolio and longer average selling time. Many theories have been put forward, including claims that Xiaomi sells at cost and makes money from other services. Hugo Barra, the company’s VP of International, lifted the lid on some of the company’s secret sauce in an interview with TechCrunch in Beijing last week. Barra explained that Xiaomi is able to make price concessions thanks to the combination of a small portfolio and longer average selling time per device. Importantly, Xiaomi continues to sell older devices (and tweaked versions of them) at reduced prices even after it releases newer models. “A product that stays on the shelf for 18-24 months — which is most of our products — goes through three or four price cuts. The Mi2 and Mi2s are essentially the same device, for example,” Barra explained. “The Mi2/Mi2s were on sale for 26 months. The Redmi 1 was first launched in September 2013, and we just announced the Redmi 2 this month, that’s 16 months later.” That’s important because the longer runway for devices gives Xiaomi leverage to secure better component deals with its suppliers. “The reason we do these price cuts is because we’ve managed to negotiate component cost decreases [with our suppliers] over time, which ends up leaving us with a bigger margin than we’d like to have, so we do a price cut,” Barra added. “The vast majority of the components [in our devices] are still the same, so in terms of supply chain and component sourcing, we’re on the same supply contracts as Redmi 1, which means we’re still getting the same discounts on components,” he explained. “We can continue to ride the cost curve, so the importance of having a very small portfolio is significant — the fact that we only launch a few products each year, and (the fact that) we only have two product families.” There are other factors that contribute to the cost structure, including Xiaomi’s lean, online-only marketing focus and its location close to manufacturing plants in China , but the management of components and supply chain partnerships is a crucial element. The company sells its phone using an online-only model in most markets, but it has recently begun testing operator partnerships outside of China. It is running a limited trial with Airtel in India, and has found partners in Taiwan, Malaysia and Singapore. Barra explained that operator partnerships are difficult in markets where the majority of consumers are on pre-paid tariffs — such as India — but it seems clear that Xiaomi is looking into ways to expand its retail footprint. It sold one million devices in its first five months in India using its flash sales model. If it can move beyond that and better meet demand for its phones in India and other emerging markets, it could vastly increase its sales figures in 2015.

• Indian e-com marketplace ShopClues raises $100M in Series D led by Tiger Global; despite turbulent history,ShopClues is now valued $450-500M: Clues Network Inc, the US-based parent of Clues Network Pvt Ltd that runs the horizontal e-commerce marketplace ShopClues, has raised $100 million (Rs 620 crore) in Series D funding led by Tiger Global besides two of its existing investors, the firm said on Monday. This values the company at around $450-500 million, a company executive privy to the development said on the condition of anonymity. The money will be used in product development and roping in more merchants on board, the firm said. The company had previously raised money from Helion Venture Partners, Nexus Partners and Beenos (formerly Netprice, a Japanese incubation cum investment group). It scooped $10 million in Series B round in March 2013. Prior to that it had raised around $5 million in Series A. It also raised an undisclosed amount—which is believed to be around $15-20 million— in Series C in April-May 2014 from Nexus and Helion. “So far we have brought 100,000 sellers and 10 million products online and the next three years will be focused on bringing 10 million sellers and 1 billion products to the online domain. We will continue to build technologies and services to enable and empower retailers to participate in the e-commerce revolution that is happening in India,” said Sanjay Sethi, CEO and co-founder, ShopClues. Lee Fixel from Tiger Global said, “Shopclues has emerged as the leading marketplace of choice for the millions of small and local businesses seeking to reach mass consumers in India’s tier 2 and tier 3 cities. Sanjay, Radhika and the team have done a great job aggregating the country’s largest online catalogue of regional and local brands and we are excited to partner with ShopClues as it expands its offerings.” The Gurgaon-based startup was founded by former Wall Street tech analyst Sandeep Aggarwal and a former eBay executive Sanjay Sethi in July 2011. The company went through a tumultuous period over the last two years after Aggarwal (then CEO) was found to have indulged in insider trading in the US in his past job and he later pleaded guilty to the charges. He has disassociated himself with his executive role at ShopClues. His wife Radhika Ghai Aggarwal has taken over more a direct role and is handling marketing at the firm and listed as a co-founder now. Meanwhile, Sethi became CEO after Sandeep Aggarwal was arrested in the US. A few months back ShopClues was again in news when one of the merchants selling through its platform was found to be allegedly selling counterfeit products under the L’Oreal brand. The Delhi High Court had restrained it from using the name of L’Oreal to sell or supply any goods. Currently, ShopClues claims to be doing 1.5 million transactions per month with 70 per cent of it coming from tier II & III cities. It claims to have 40 million monthly visitors. The firm had clocked net revenues of around Rs 30 crore with net loss of Rs 38 crore for the year ended March 31, 2014.

• Amazon is going into the film production business: After winning acclaim for one of its original television productions, Amazon announced on Monday that it would produce and acquire films for theatrical release and early distribution on its Prime Instant Video service. Amazon original movies will be available for streaming in the United States four to eight weeks after they make their debut in theaters, a significant reduction of the window of 39 to 52 weeks that films normally play in theaters before becoming available for streaming. The development is another step in Amazon’s ambitious plan to increase its entertainment offering to consumers, and an escalation in Amazon’s rivalry with Netflix. It also signals both companies’ broader ambitions to revolutionize the so-called windowing system for television and movies in the traditional entertainment industry. Amazon said it was seeking to create 12 movies a year that “focus on unique stories, voices and characters from top and up-and-coming creators.” Production will start this year. In an email, Roy Price, vice president of Amazon Studios, described the projects as “indie” movies, with budgets between $5 million and $25 million. Analysts cautioned that if the films were low-budget and of low quality, it would be difficult for them to profoundly alter the conventional system for theatrical releases.

• Online insurance sales are squeezing agents in the US as Google, other tech firms find the insurance sector ripe for disruption: Technology start-ups, and companies from the insurance industry, are introducing websites that sell or promote a range of insurance including auto, homeowners and small commercial policies. These portals, which promise savings by showing consumers many price quotes so they do not have to shop site by site, are putting pressure on insurance agents, who collect 10 percent or more of their policyholders’ payments.Online insurance comparison is still a nascent business, and it has yet to make a dent in the armies of intermediaries that are the backbone of the trade. But people in the industry and Silicon Valley say it is only a matter of time. Even Google is getting involved.“There are 40,000 agencies in the U.S., and you could absolutely imagine them shrinking by a quarter, and the ones that are left will deal with more complicated needs and more affluent customers,” said Ellen Carney, an analyst who covers insurance for Forrester Research.The idea of selling insurance online is not new. Lately, though, the boring but lucrative trade has been attracting big names. The most recent is Google.Its Google Compare auto insurance site (basically a search engine for auto insurance prices) has been operating in Britain for two years, and Google is working on something similar for the United States. Google is licensed to sell insurance in about half of the states, according to research by Ms. Carney.Google has formed a partnership with Comparenow, an American auto insurance comparison site owned by Admiral Group, a British car insurance company that has operated a European price-comparison site for more than a decade. The venture will give Google access to insurers in Comparenow’s network.Admiral Group introduced Comparenow about a year ago. Not long after, Overstock.com, a retailer, started selling auto and other forms of insurance.Then there is Walmart, which does not sell insurance but recently formed a partnership with AutoInsurance.com. The insurer leases space in Walmarts, giving it access to the 140 million people who shop there each week. “A lot of people are waking up to the fact that it’s a massive industry, it’s old-fashioned, they still use human agents and the commissions are pretty big,” said Jennifer Fitzgerald, the founder and chief executive of PolicyGenius. “It’s ripe for — I hate to use the word — disruption.” Insurance is a fat target. In 2013, insurers wrote $481 billion in premiums for property and casualty insurance, which consists of mostly auto, home and commercial insurance, according to the Insurance Information Institute, an industry group. That would place a rough estimate of agents’ commissions — including commissions to small-time agents as well as to brokers who sell large commercial policies — at $50 billion. And while it might seem like an odd match for Google, whose projects include driverless cars, delivery drones and a pill to detect cancer, the key to insurance is having lots of data about people’s backgrounds and habits, which is perhaps the company’s greatest strength. “They have a ton of data on where people drive, how people drive,” said Jon McNeill, chief executive of Enservio, a Needham, Mass., company that makes claims-processing software. “It’s the holy grail of being able to price auto insurance correctly.”

• What's the deal? Softbank (and Alibaba) are heavily investing taxi apps that rival Uber the world over: SoftBank had no business in taxi-hailing apps until October 2014 when it led a $210 million investment in India’s Ola. That deal was announced as the first investment in SoftBank’s program to put $10 billion into startups in India. At the time, Ola appeared to be just one of a number of deals in India — while that is true, it also turned out to be the first of an expensive set of investments in companies rivals that rival Uber. SoftBank went on to invest $250 million in GrabTaxi in Southeast Asia, and last week it closed a third deal, leading a $600 million financing round for China’s Kuadi Dache. The operator, it seems is going all out for taxi apps but it may not stop in Asia. Alibaba led Lyft’s $250 million funding round in April 2014, which the U.S. company had earmarked for “international expansion”. At the time, the investment was a curious deal for Alibaba but, with the e-commerce giant backing range of other U.S. startups — including chat app Tango — it looked like an exploratory move to get some skin in promising companies in North America. However, SoftBank and Alibaba have a long history of collaboration — SoftBank is famously an early investor in Alibaba, and both companies put money into Kuadi Dache — and it could just be that Lyft forms a part of SoftBank’s taxi app focus. Perhaps the Japanese firm will put its own money in at a later date, or it will use its relationship with Alibaba to form a loose alliance to share information and tactics.

• A Korean urban logistics startup that aims to be "Uber for last-mile deliveries" is in the news and gaining traction: Seoul-based urban logistics startup Naldo is gaining some serious momentum in its home country. The company, which works sort of like an Uber for last-mile deliveries, now boasts over 500 corporate customers, tripling its client base in the last year. "We all buy more stuff online, but we are not aware that more online purchasing requires more offline delivery. That’s why this is an overseen goldrush for us," Ebner-Chung says. Among its clients are steel giant Posco, social commerce site Coupang, and investment bank Kyobo Securities. Naldo founder and CEO Ludolf Ebner-Chung says the company saw revenues grow 1,000 percent in 2014, with consistent double-digit growth every month since launching two years ago. Naldo works similar to other logistics-on-demand startups, like Gogovan and Easyvan in Hong Kong. With its mostly two-wheeled fleet, it promises delivery within 90 minutes in Seoul. The site connects clients directly to available nearby drivers with no middlemen involved. Next, Ebner-Chung says the startup will soon launch a native app and an open API, which has already been tested by popular ecommerce sites like Ticketmonster, WeMakePrice, and Ridibooks. He says this will be of significant value to online SMEs as it gives them delivery options to gain an edge on their competition. It also reduces dependency on the old call center-based logistics companies. Chung says South Korea’s B2B real-time delivery market is worth US$5 billion.

• Rocket Internet CEO: We build real companies; work for Google if you like sushi and comfy chairs: Silicon Valley hasn’t found much to love about Rocket Internet, the Berlin-based company that is often derided for simply copying everyone else’s ideas. Turns out, the disdain is mutual. Press-shy Oliver Samwer, chief executive and cofounder of Rocket, appeared on stage today at the Digital Life Design conference in Munich, Germany, for a rare interview. While he didn’t say much new about Rocket’s business, and seemed clearly uncomfortable with having to field questions, he did manage to get in a few shots at the folks in Silicon Valley. For instance, Samwer was asked about the idea that Rocket is an incubator, like the ones in a certain other high-tech regions. At first glance, that might appear reasonable. Rocket works with entrepreneurs to build Internet companies from scratch in areas like e-commerce and travel, scales them up, and then spins them out into stand-alone companies. Like an incubator, right? No, said Samwer. He said Rocket’s approach is a methodical process, repeated over and over. In what may be the greatest definition of incubators in history, Samwer explained why he thought Rocket was not an incubator. “I don’t like this word incubator. We are a platform,” he said. “An incubator sounds like you have some crazy chairs, and then there are fancy drinks and you eat free corn flakes.” Asked about the challenge of attracting talent and competing for hires against the likes of Google, Samwer sung a similar tune. He said someone could take a low-level job at Google, or they could come to Rocket where they could eventually build their own company. “The chairs might be more comfortable at Google,” he said. “And the drinks. I hear they have sushi. We are for the real people who want to build companies.”

• ZTE revenue up only 8% Y/Y in 2014, but profits up 94% Y/Y to $424M: Chinese telecom hardware company ZTE has had a banner year, according to a press release the company has issued prior to the release of its 2014 yearly report. While revenues have reportedly experienced only modest growth over 2014 (up just eight percent compared to the previous year) net profits year-on-year have grown 94.2 percent, from RMB 1.35 billion (US$217 million) in 2013 to RMB 2.64 billion (US$424 million) in 2014. ZTE’s profit growth over the past year is due to the fast growth in China’s 4G sector; ZTE has a hand in both TD-LTE and FDD-LTE hardware, so 4G growth has benefited the company. ZTE’s global 3G and 4G business, including hardware and handset sales, was also a contributor.