Benign brother has got your back: China launches coronavirus app

China’s government bodies and businesses have jointly launched a mobile app to help detect if people have been in close contact with those suspected of carrying the novel coronavirus.

The app has access to multiple official holders of private data. By registering with his or her name and Chinese ID number, a smartphone user can use the app, called “Close Contact Detector” to check if he or she has been in proximity of those who are later either confirmed or suspected to have the virus. Such close contacts include travelling in the same train carriage or sitting within three rows on the same flight with those carrying the virus.

One registered user can check the status of up to three users by inputting their ID numbers and names. One ID number is limited to one check per day. The app will then return an assessment of which category the individual in question falls into: Confirmed case, Suspected case, Close contact, Normal. Xinhua, one of the major official propaganda outlets, reported that over 105 million checks have been made by users three days after the app was launched.

The app development was led by the government organisations responsible for health which was joined by China Electronics Technology Group, one of the country’s largest state-owned enterprises, as well as the leading smartphone makers Huawei, Xiaomi, OPPO, and Vivo. The backend data comes out of the National Health Commission, the Ministry of Transport, China State Railway Group Company, the state owned enterprise that operates all the rail transport in China, and the Civil Aviation Administration, the aviation regulator.

The fact that private travel data is made readily available to business entities without explicit consent from the individuals involved may raise plenty of eyebrows in places like Europe, but the attitude in China is different. “From a Chinese perspective this is a really useful service for people… It’s a really powerful tool that really shows the power of data being used for good,” Carolyn Bigg, a Hong Kong-based lawyer, told the BBC.

“Close Contact Detector” has been pushed out by the smartphone brands as a priority app to their users in China. It is unclear how or if promoting to users of other smartphone brands, iOS users, or non-smartphone users, will be conducted. Nor is it clear if there are plans to extend the coverage to residents without a Chinese ID number, such as foreign nationals staying in China.

Telecoms.com has learned that over the last few weeks there have been other online tools to help concerned users check if they had unknowingly come into contact with confirmed victims of the new coronavirus. The key difference from the new contact detector is that, in the earlier attempts, backend data was crowdsourced from publicly available information including the flight and train numbers of the confirmed cases published in the media.

Neither is contact detector the only use case where user data is playing a role. A recent video clip making rounds on social media shows a drone flying a blown-up QR code that drivers can scan to register before they enter Shenzhen after the long Chinese New Year break. The method is deployed presumably to prevent cars and drivers registered to the major disease hit regions from going through, as well as reduce human-to-human interaction. Xinhua reported that the Shenzhen Police, which is responsible for managing the local traffic and owns the automobile and driver data, is behind this measure.

Xiaomi makes big noises with $7bn 5G, AI and IOT plan

In an open letter from its CEO, Xiaomi has promised to increase its R&D investments in 5G, AI and IOT to $7.18 billion.

In years gone, Xiaomi was a backwater Chinese brand which hoovered up the scraps of mid- and low-tier smartphone shipments. But such is the momentum the Chinese technology industry is generating, Xiaomi is now a major force across the world, and this investment is further evidence of the success.

“2019 was significant year for our global expansion, our overseas revenue now accounts for almost half of our total group revenue,” CEO Lei Jun said in the letter.

“Xiaomi is now truly global technology leader. Our internet business also became more diversified and our AIoT business retained its global leadership. Xiaomi is now widely known as a ‘true AIoT leader’ in the industry.”

The Xiaomi strategy has been focused acutely on the convergence of 5G, AI and IOT. All of the components mean something important to somebody individually, but with Xiaomi’s broad portfolio of consumer products, it is in an interesting position. From smartphones, to home appliances, security products and scooters, if Xiaomi can nail the ‘AIoT’ proposition it can enter into an entirely new world, moving into the ‘software and services’ segments.

For many, AI and IOT are two technologies which work hand-in-hand. They can of course work separately, but the greatest value is achieved together. The consumer world is where Xiaomi can slip into naturally, but the emerging segment of Industry 4.0 is also open to the ambitious Chinese OEM.

What is worth noting is this is not a new investment but supercharging an existing one. Xiaomi had already committed $1.43 billion over the next five years, though this has now been aggressively pushed up to the $7.18 billion over the same period. Throwing cash at an opportunity is no guarantee of success, but it does certainly shift the odds.

Xiaomi, Oppo and Vivo create ‘Peer-to-Peer Transmission Alliance’

Three Chinese smartphone vendors have created a cross-brand alliance to enable wireless file transfer without needing the internet.

The tie-up between the three brands will ensure WiFi Direct is supported on all devices moving forward, effectively allowed smartphones to pair to enable the transfer of files, including photos, videos and music, without being online.

“This expansion of the Peer-to-Peer Transmission Alliance to global users all the more underlines Xiaomi’s longstanding commitment of bringing innovation to everyone,” said Chew Shou Zi, SVP of Xiaomi.

“By joining hands with Vivo and Oppo, two industry leaders that have a strong user base, we are expecting to benefit smartphone users globally. Xiaomi will continue to bring more strategic partnerships of this sort to our users and Mi Fans.”

The idea of WiFi Direct is relatively simple. Two compatible devices simply connect to each other, creating an ‘ad hoc network’ and cutting out the middle-man; the internet. Users can simply turn on the feature, select the desired device, before transferring whatever content they want. This could be useful down the pub, but equally when transferring documents to a printer or displaying a video on a TV screen.

This is not necessarily a new idea, but it is a useful one. Numerous companies, including Xiaomi, have introduced such features though they are contained within their own ecosystem. Xiaomi devices could link-up to other Xiaomi devices, though this alliance between the three OEMs is a positive step towards expanding the ecosystem and usefulness of the feature.

Xiaomi still growing as Christmas spending sprees approach

Chinese smartphone vendor Xiaomi has reported another quarter of year-on-year growth, and while it might not be as aggressive as previous quarters, the Holiday season is upon us.

The Christmas period might be profitable time of year for many, but Xiaomi might have more reason to cheer than many. 5G networks are being switched-on, and its smartphones are adorning the shelves. Huawei might be stealing market share in the Chinese domestic market, but Xiaomi has a significant advantage in the international markets; it doesn’t have a White House propaganda campaign of hate to counter.

Revenues over the last three months accounted for approximately $7.64 billion, a year-on-year increase of 5.5%. This might be down on previous quarters, though it always worth bearing in mind the company is still growing, thanks mainly to diversification. Xiaomi is primarily known as a smartphone manufacturer, but the team is sweating the brand into numerous different market segments.

That said, the smartphone business still accounts for the lion’s share of revenues.

Chinese market share European market share
Company Market share Company Market share
Huawei 42.4% Samsung 35.7%
Vivo 17.5% Huawei 22.2%
Oppo 17.4% Apple 18.6%
Xiaomi 9% Xiaomi 10.5%
Apple 5.2% HMD Global 1.8%

Q3 2019 Market share statistics courtesy of Canalys

The on-going US aggression has had two very contradictory impacts on the Huawei business, which are having contradictory impacts on Xiaomi. In Europe, Huawei devices are becoming less attractive to the consumer, which benefits Xiaomi sales, but there seems to be a doubling-down of efforts in China, which is eroding Xiaomi market share.

Revenues for the Xiaomi smartphone business were recorded at roughly $4.6 billion, down 7.8% year-on-year, though in shipping 32.1 million units (down 3%) across the period it is sat in fourth position for market share rankings, with 9.2%.

The next financial earnings from Xiaomi will certainly be more telling on the success of the Xiaomi smartphone business, as this three-month period will include the Christmas spending sprees; a solid performance from Xiaomi could see the brand be cemented as a mainstay in the Western markets. However, it will have to fund some aggressive marketing campaigns if it is to reverse the year-on-year shipments decline for this period.

Ultimately, the Xiaomi smartphone business is not in a bad position, though when you look at the wider portfolio there are some ambitious plans underway.

Alongside the smartphones and laptops, Xiaomi has an IOT business which incorporates the team’s virtual assistant, it has now sold 213 million units to date, while there are also various different smart home appliances. Xiaomi’s TV shipments in mainland China during the period led the market, while it also sells air conditioners, refrigerators and washing machines.

Outside the hardware segments of the technology world, Xiaomi is also nurturing an Internet services business. This unit includes advertising and gaming from mainland China smartphones, as well smart TV and Mi Box subscriptions, bringing in approximately $750 million for the quarter.

The smartphone business is the core business for Xiaomi, but the team is doing a very good job at sweating the brand in associated hardware and software segments. This is a Chinese company which is flying under the White House’s radar, but it does seem to be making the right moves.

Xiaomi goes Suomi for camera research

The Chinese smartphone maker Xiaomi has set up in Finland its largest R&D centre outside of China for imaging technologies.

Xiaomi announced today that it has opened an R&D centre in Tampere, west Finland, to focus on smartphone camera technologies, including camera algorithms, machine learning, signal processing, and image and video processing. This will be Xiaomi’s largest Camera R&D team outside of China, the company says.

“The setup of this R&D team in Finnish city Tampere is a milestone in our global expansion journey. In this journey, not only do we consolidate ourselves in operations and business, but also work with local talents to further improve our products with highly innovative technologies,” said Wang Xiang, Senior Vice President of Xiaomi, adding that “this move all the more highlights our longstanding commitment of ‘innovation for everyone’.”

First reported by the website Suomimobiili.fi, Xiaomi’s local business entity, Xiaomi Finland Oy, was incorporated in May, and has rented an office space for around two-dozen employees at the Hermia Technology Park (Hermia-teknologiapuisto), not far from the University of Tampere’s technology campus, which is rated as one of the leading facilities in imaging related research.

Tampere used to be a key R&D centre for Nokia, giving the Finnish phone maker the leadership in camera phones. As Xiaomi’s press releases acknowledged, Tampere “has been greatly contributing to camera and imaging related innovations of leading smartphone brands since the 1990s.” That legacy is not lost. According to an earlier report by the local newspaper, Aamulehit, Nokia entered into a significant patent licensing agreement with Xiaomi two years ago.

Jarno Nikkanen, one of Xiaomi’s first Finnish employees and the Head of Xiaomi Finland R&D, was a Nokia veteran, with a PhD in signal processing from the Tampere University of Technology (now merged with the University of Tampere). He started his current role in June, according to his LinkedIn profile. “Xiaomi’s philosophy has been innovative and highly engaging. It’s all about empowering the teams and individuals to find solutions on their own. What we’re developing in Tampere will end up in the hands of hundreds of millions of users and Mi Fans around the world. That is really motivating,” said Nikkanen in the press release.

Xiaomi was not the first smartphone company to tap into local talents in Finland following the capitulation of Nokia’s phone business. Huawei set up its first R&D centre in Helsinki in 2012, to conduct new technology research for mobile devices, then a new facility in Tampere in 2016, to focus on camera, audio and imaging technologies for consumer electronics.

Xiaomi’s new device is a ‘butter-fingers’ nightmare

For those who are prone to dropping their smartphone, the Xiaomi Mi MIX Alpha is not, and we repeat, not for you.

Innovation in form-factor has been largely non-existent over the last few years, though Xiaomi is really pushing the boat out with its latest smartphone. The device has a screen-to-body ratio of 180.6%, thanks to a surround screen, offering no hope of relief for those who drop their phones.

It will attract headlines and the engineering might gain applause, but you really have to wonder what the point actually is. How many times have you been using your smartphone and thought ‘if only there was a screen which I can’t see, that would complete my mobile experience’.

“Carrying the original Mi MIX exploration spirit, when Mi MIX Alpha lights up – the front, side, and back of the phone are almost entirely display,” Xiaomi wrote on its blog.

“The Surround Display allows Mi MIX Alpha to achieve a screen-to-body ratio that reaches an astonishing 180.6%.”

Now we’re all for ‘concept’ models to test the boundaries of the future, but these exploratory prototypes have to be based in reality. This is not.

The Mi MIX Alpha features a 108MP camera with the highest resolution, highest pixel count, and the largest sensor found on any smartphone available (Xiaomi claims), while inside the device you will find the Snapdragon 855+ mobile SoC, supporting all 5G bands of the three major carriers on Mainland China.

Although the device is only available in China for the moment, let’s look at what this is in all honesty. It is a gimmick which likely has no financial ambition to rake in profits. We suspect the outcome is simply to demonstrate how smart the designers and engineers are at Xiaomi, and to attract PR points. And we have fallen into the trap…

Is Xiaomi filling a Huawei-shaped hole in the smartphone market?

Huawei might be suffering in today’s political climate, but every action gets a positive and negative reaction and could Xiaomi be benefitting from its rival’s misery?

The Chinese challenger brand might have missed on market expectations for revenue, but it is not the worst set of financial results you have ever seen. Looking at the most simplistic measure of a company, it made more money than last year, brought in more profits and sold more products; not too bad.

“Thanks to the Xiaomi relentless efforts, we have managed to achieve solid growth in our businesses, posting a consensus-beating profit and becoming the youngest Fortune Global 500 company in 2019, despite global economic challenges,” said Xiaomi CEO Lei Jun.

“Our performance is testament to the success of our ‘Smartphone + AIoT’ dual-engine strategy and the Xiaomi business model. Looking ahead, we will continue to strengthen our R&D capabilities and investments so as to capture the great opportunities brought by 5G and AIoT markets and strive towards ongoing achievements for the company.”

Financial analysts will be pouring over the spreadsheets to understand why Xiaomi seemingly missed market expectations, but let’s not forget, the smartphone market is in a notable slump right now. Sales are slowing and the 5G euphoria is yet to hit home to compensate. No-one is immune from overarching global trends.

However, there is a glimmer of hope on the horizon for the majority of smartphone manufacturers; there are gains to be made from the Huawei misery.

According to the latest smartphone shipment numbers from Canalys, Huawei’s smartphone shipments in Europe have declined year-on-year by 16%, while Samsung and Xiaomi have grown their numbers by 20% and 48% respectively. Other factors will contribute to the increase, though there will be former-Huawei customers who are seeking alternatives brands at the end of their replacement cycle.

Huawei is in a bit of a sticky situation right now. Firstly, its credibility has been called into question, thanks to President Trump’s trade war, while its supply chain is suffering due to the tariffs from the aforementioned trade war. The supply of critical components is under threat, as are security updates from Google’s Android operating system. Both of these concerns will impact consumer buying decisions.

Looking at Huawei’s financial figures, the consumer business unit is still on the rise, revenues were up 23%, though when you take into consideration the analyst estimates, it would seem these gains are from the domestic market. If Xiaomi can avoid collateral damage, it could benefit from Huawei’s alleged downturn in the international markets.

This does seem to be the case. For the first half of 2019, Xiaomi’s revenues increased 20.2% year-on-year to roughly $13.55 billion. The international markets, an area of significant potential for Xiaomi, accounted for 42.1% of the total, compared to a 36.3% proportion in the same period of 2018.

The gains in Europe have been highlighted above, though the Indian market is looking like a very profitable one. IDC estimates suggest Xiaomi is still leading smartphone shipments in India and has done for the last eight consecutive quarters. Estimates from eMarketer state smartphone penetration will grow to 29% of the Indian population in 2019, year-on-year growth of 12.5%. There is still a massive amount of growth potential in this market which is undergoing its own digital revolution.

Another area which has been highlighted for gains by the Xiaomi management team is the increasing diversity of the product portfolio.

Aside from the Mi 9 series and Redmi Note 7 series, the team launched the new K20 flagship during the second quarter, with shipments exceeding one million in the first month. The CC Series has also seemingly gained traction with female audiences, while the Mi MIX 3 5G was one of the first 5G compatible devices to hit the market. Numerous telcos have partnered with Xiaomi for this device, suggested the team is taking the shotgun approach as opposed to signing exclusive partnerships.

What is clear, Xiaomi is a smartphone manufacturer which is heading in the right direction. However, the gains could be increased should the misery continue for Huawei.

Samsung and Xiaomi benefit from Huawei misery

US aggression towards Huawei seems to be paying-off as smartphone shipments in Europe swing away from the Chinese vendor, towards Samsung and Xiaomi.

Although Huawei is still a profitable and growing company, some might fear this growth is too concentrated on the Chinese market thanks to US attempts to damage credibility internationally. According to Canalys estimates, this could be the case, with European smartphone purchases shifting away from the previously surging Huawei brand and towards rivals Samsung and Xiaomi.

“For years, a focus on operating profit has stifled its product strategy,” said Analyst Ben Stanton. “But this year, the shackles are off, and winning back market share is its clear priority. But its success is not solely due to product strategy.

“Samsung has been quick to capitalize on Huawei’s US Entity List problems, working behind the scenes to position itself as a stable alternative in conversations with important retailers and operators.

“A lack of brand loyalty among users of low-end and mid-range Android smartphones, which has blighted Samsung for so long, has become the catalyst for its best performance in years. Europe keeps its reputation as one of the most brand-volatile smartphone markets in the world, rife with danger, but also opportunity.”

As you can see from the table below, the instability of the European market is living up to its reputation.

Brand Q2 2019 Shipments (millions) Q2 2019 market share Annual change
Samsung 18.3 40.6% +20%
Huawei 8.5 18.8% -16%
Apple 6.4 14.1% -17%
Xiaomi 4.3 9.6% +48%
HMD 1.2 2.7% -18%
Others 6.4 7.7% -17%
Total 45.1

Looking at the shift, there is clearly homage being paid to the troubles of the Chinese vendor.

Last month, Huawei unveiled its financial results for the first six months of 2019 with a 23% year-on-year increase. It did appear many of the gains, including in the fast-growing consumer business unit, were in its domestic Chinese market and this research from Canalys backs-up the assumption, at least for smartphones.

Perhaps this also demonstrates the smartphone has become merely a vessel for bigger and better things. With marginal differentiation between flagship devices nowadays, Huawei made gains with products which met consumer expectations but undercut rivals on price. This pricing strategy was paired with an aggressive above-the-line advertising campaign through football sponsorship and traditional advertising to build brand credibility.

However, the White House endorsed propaganda campaign seems to be hitting home. The only difference between now and 2018 is the dents to Huawei’s credibility. It appears European consumers are much more Android-loyal than they are to the smartphone brand.

The beneficiaries of this fall from favour has been Samsung and Xiaomi. Canalys claims three of the top five selling devices in the European market were Samsung, reasserting its dominance, though Xiaomi has continued its impressive rise through the ranks. This might be down to two reasons.

Firstly, Xiaomi’s reputation as a more price-aware brand is clearly catching-on. The Chinese challenger has been making promising gains in some of the developing markets, India is a prime example, though it has managed to position itself as a cheap but reliable alternative for cash-conscious consumers in the European market also. A 48% year-on-year gain is impressive in anyone’s eyes.

Secondly, telcos and distributors might be pushing Xiaomi and alternative Android devices more heavily through advertising campaigns. The more Android fanboys who are turned-off by Huawei, the more prominent Samsung becomes. The more prominent Samsung becomes, the greater its weight during negotiations with channel partners. A market dominant smartphone brand is not good for any of the telcos or the distributors.

The Apple decline is certainly an interesting one also. This is traditionally a quiet quarter for the iLeader, with flagship devices usually launched in September, though a 17% decline is a worrying sign for executives. With the fall in smartphone shipments significantly below the global total decline, either the iCultists are becoming much more price-sensitive, or they are being tempted by Android rivals. Neither is good news.

The global smartphone market is in decline currently, which is perhaps down to two factors more than anything else. Firstly, the current 5G hype might have consumers delaying the purchase of a new device, and secondly, the high-prices of largely uninspiring smartphones might be encouraging longer replacement cycles.

There will of course be numerous other factors to consider, but one thing is clear, some brands are negotiating the baron times much more successfully than others.

Xiaomi is meeting Huawei domestic aggression head on

Smartphone manufacturer Xiaomi plans to increase the investment in channel and retail development in the Chinese market by $725 million, to improve its position and to counter the expected aggression from market leader Huawei.

Bloomberg cited its source at Xiaomi that the Chinese smartphone company has decided to invest CNY 5 billion ($725 million) over the next three years to shore up its channel and retail position in China’s contracting smartphone market. This will come on top of its current budget and will be spent on channel expansion, partner incentive, and sales force financing, according to the report.

The decision is also made in anticipation of Huawei’s aggressive channel and retail movements in China in the near future, the source told Bloomberg. Huawei, the smartphone market leader in China admitted recently that its business will suffer from the US sanctions and the severance of business relations by companies like Google. In the consumer segment, which now accounts for more than half of Huawei’s total revenue, the impact will mainly in the overseas market with the disappearance of Google services from its smartphones posing the biggest impediments to consumers’ purchasing decision. This will drive Huawei to further strengthen its grip on the Chinese market, where it is already supplying one out of ten of the smartphones being sold.

Xiaomi has reaped the benefits after investing heavily in the overseas markets in recent years, having broken into the top five in a number of European markets while also well received in growth markets like India. It has the ambition to become the market leader in its home market too, but so far, the company has been vying for the fourth position with Apple, trailing Huawei, OPPO, and Vivo.

Huawei and Xiaomi also adopt different retail strategies. In addition to smartphones, Huawei also sells its full line of consumer products in the retail outlets including PCs, tablets, and other consumer devices.  Xiaomi, on the other hand, has carried the “ecosystem” concept from online, which used to its exclusively channel, to offline retail. In addition to its own branded products, centred around the smartphones, partner products on its IoT ecosystem are also offered in the retail outlets, in line with its strategies.

Wearables are on the up – IDC

Global shipments of wearable devices are increasingly healthily increasing, according to IDC estimates, up 55% to 49.6 million over the first three months of 2019.

Wearables are a tricky segment for the technology and telco world. So much is promised, a new revolution in digital society, but for years it has failed to deliver on the potential. That said, the last couple of quarters have looked a lot more promising.

“The elimination of headphone jacks and the increased usage of smart assistants both inside and outside the home have been driving factors in the growth of ear-worn wearables,” said Jitesh Ubrani Research Manager for IDC Mobile Device Trackers.

“Looking ahead, this will become an increasingly important category as major platform and device makers use ear-worn devices as an on-ramp to entice consumers into an ecosystem of wearable devices that complement the smartphone but also offer the ability to leave the phone behind when necessary.”

This was perhaps the watershed moment for wearables; standalone connectivity. Smart watches, the flagbearer for the segment on the whole, struggled to gain traction due to a lack of standalone connectivity. These certainly weren’t fashion accessories in the early days and tethering the devices to a smartphone largely undermined the selling points.

With standalone connectivity there is now attention on the devices, and the increasing adoption of voice user interface, the devices more appealing for a wider range of applications. That said, the fitness niche is still proving to be a profitable one.

“Shipments of wristwear – including watches and wristbands – grew 31.6% year over year, and continue to dominate the wearables landscape,” said Ramon Llamas, Research Director for Wearables at IDC.

“While the functionalities and capabilities have grown and changed, the one common thread is the relentless focus on health and fitness. This has resonated strongly with users and health insurance companies alike, and new health and fitness insights attract a larger audience.”

Brand Shipments (million) Market share Year-on-year growth
Apple 12.8 25.8% 49.5%
Xiaomi 6.6 13.3% 68.2%
Huawei 5 10% 282.2%
Samsung 4.3 8.7% 151.6%
Fitbit 2.9 5.9% 35.7%
Others 18 36.3% 26%

Interestingly enough, over the last few quarters the top five manufacturers have been consolidating their position in the market, with the ‘others’ category claiming less and less. Like the smartphone space, this is increasingly looking like a market which will be tough for new-comers to crack, with market preferences shifting towards those who have an established brand in the space.