Start Up: Xiaomi preps giant IPO, tablet market (but not iPad) withers, the CIA cop on the streets, and more


GoPro made another loss. How long before its time runs out? Photo by Janeen on Flickr.

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A selection of 11 links for you. My Twitter password isn’t in here. I’m @charlesarthur on Twitter. Observations and links welcome.

The spy who came home • The New Yorker

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Though [Patrick] Skinner had completed his training just two months earlier, he already knew every road in the Third Precinct. On slow nights, he tried to memorize the locations of Savannah’s traffic lights and stop signs, so that he could visualize the quickest route to any call. Darren Bradley, who went through training with Skinner, said, “When they gave us the sheets with police signals and codes”—a list of nearly two hundred radio call signs—“he looked it over once and had it in his head.”

As Skinner approached Summerside, a white Camaro with tinted windows pulled out and came toward him. Cars registered in Georgia don’t have license plates on the front, but, as the Camaro zoomed past, Skinner glanced into his side mirror, memorized the rear-plate number from its backward reflection, and called it in.

Skinner sped north, picturing the Camaro’s likely escape route, and how to cut the driver off. “If he’s an idiot, he’ll turn right on Fifty-second Street and end up behind me at the next light,” Skinner said. Two minutes later, the Camaro rounded a bend and pulled up behind Skinner. He smiled.

In Savannah, several cars are stolen every day—often for use in other crimes. The Camaro driver made some evasive maneuvers, but, to Skinner, this behavior did not qualify as probable cause for a traffic stop. When the dispatcher ran a check on the license plate, it came back clean. Skinner continued on his patrol.

Georgia’s law-enforcement-training program does not teach recruits to memorize license plates backward in mirrors. Like many of Skinner’s abilities, that skill was honed in the C.I.A.

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This is a long, but great, read.
link to this extract


Facebook’s dating service is a chance to meet the catfisher, advertiser or scammer of your dreams • The Washington Post

Drew Harwell and Elizabeth Dwoskin:

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The love-seeking singles of Facebook’s new dating service, privacy experts say, may not be prepared for what they’ll encounter: sham profiles, expanded data gathering and a new wave of dating fraud.

Facebook — under fire for viral misinformation, fake accounts and breaches of trust — said this week it will soon offer a new dating service designed to help its users find love, giving the world’s largest social network a uniquely intimate vantage point on its users’ romantic desires and personal lives.

The service will allow people older than 18 to create a dating profile — separate from their main profile and invisible to their friends — that it shows to potential matches based on common interests, dating preferences, location and mutual friends, company officials said.

Using a button — not a swipe, as popularized by popular dating app Tinder — people will then be able to say whether they’re “interested” or would rather “pass” on those potential partners, officials said. Matches will be shown the other person’s first name, age, current city and photo, though users will also have the option of sharing their work, education and other biographical information. The service will begin testing in a few months.

Privacy watchdogs, advertising experts and industry rivals worry the service could expose users more acutely to the worst of the Web — scams, malicious strangers and other problems Facebook already has its hands full with.

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This was pretty much my point when I spoke to CNN about this earlier in the week. We know what the desired consequences are; but Facebook should try to think about the possible unintended consequences. (Of course the problem is it’s really, really hard to forecast them.) We’ve seen what happened with the news feed: fake news, and inflammatory behaviour creating social disruption. What happens with the “dating feed”?
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GoPro reports smaller-than-expected loss on lower costs • Reuters

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Action-camera maker GoPro Inc reported a smaller-than-expected first-quarter loss on Thursday as the company cut costs and sold more of its new entry-level cameras…

GoPro — whose cameras are used by surfers, skydivers and other action junkies — said revenue fell to $202.35 million from $218.61 million. Analysts had expected revenue of $184.2m. The company’s net loss narrowed to $76.3m in the quarter ended March 31, from $111.2m a year earlier. Total operating expenses fell to $119.7m from $156.8m.

The company – which exited its Karma drone business to stem losses- has been trying to attract users with its $199.99 entry-level HERO camera that was announced in March.

The company in April also announced huge discounts and trade-up programs for its premium products.

Demand for GoPro’s cameras have been waning as users move to cheaper options and smartphones with powerful cameras.

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As with Fitbit yesterday, the question has to be: how close to the ground is it going to get before it’s scooped up? There’s no reason for it to exist in its own right; it doesn’t have enough of an ecosystem. Hardware on its own is insufficient – something that Cisco (rightly, in retrospect) figured out when it abruptly closed its Flip camera division in 2011 as smartphones ate its business.

Likely buyer: Xiaomi, which should have some cash to spare soon. (Read on.)
link to this extract


How to live in San Francisco without spending any money • WSJ

Eliot Brown:

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Venture capital has barreled by the billions into startups aimed at urban millennials, hunting for hits in businesses meant to shake up food delivery, home cleaning and car sharing, typically starting in the tech-savvy Bay Area.

But with record levels of money lying around, investors don’t always have patience for slow growth. So companies juice demand with heavy discounts to first-time users—and generous referral bonuses for anyone who signs up a friend. Ideas that gain traction spawn competitors who tend to spend even heavier on marketing.

All the promotions make for a golden consumer age in San Francisco, so long as these businesses last.

Want a rental car? Getaround starts at $5 an hour, and the first $20 is free. A snickerdoodle cookie within 15 minutes? Doughbies offers $10 off your first delivery. Or $20 off your first $30 order of marijuana? Eaze will deliver in San Francisco within 20 minutes with a discount code.

Elad Ossadon and Noam Szpiro, who work in software engineering, have become referring pros. In 2016, they created a website called VC Fund My Life, which catalogs discounts and freebies. When a user signs up for the startups listed, they get a referral bonus, often alerted by a buzz of their phones.

Mr. Ossadon said before he started the site, he was pushing startups with bonuses on anyone he knew.

“Friends that visit here, move here—friends of friends, random people,” he said. His reward: free burgers and Thai food delivered by startup Postmates and “months over months” of free housecleanings from on-demand services company Handy.

In all, Mr. Ossadon and Mr. Szpiro estimate they have earned over $10,000 in referral credits, although many startups have started to put an expiration on the credits. “The challenge after a while became, can you use your credits before they expire?” said Mr. Szpiro, in a gray knit shirt acquired with the aid of referral credits from online retailer Everlane.

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But none for rent, are there?
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Player 3 has joined the game – Chrome OS detachables paint a brighter future while tablet market struggles • IDC

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Global tablet shipments in the first quarter of 2018 (1Q18) reached 31.7m, declining 11.7% from the prior year, according to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Tablet Tracker. However, the growing niche of detachable tablets like the Microsoft Surface and iPad Pro did experience more than 2.9% year-over-year growth and captured 15.3% share as newer models came into play. Meanwhile, the decline for traditional slate tablets continued as vendors managed to ship 26.8m units, down 13.9% from the prior year.

“Chrome OS’ entrance in the detachable market is a welcome change as Google is finally a serious contender from a platform perspective,” said Jitesh Ubrani, senior research analyst with IDC’s Worldwide Quarterly Mobile Device Trackers. “Google’s tighter control and integration of Chrome OS will allow brands to focus more on hardware design and additional services rather than spending resources reconfiguring Android to work in a detachable setting. Combined with Microsoft’s efforts to run Windows on ARM, the detachable market is poised for strong growth in the near term.”

“The timing of Chrome OS’ official entry into the tablet category is apt,” stated Linn Huang, research director, Devices and Displays. “Peak education buying season is approaching, and Chrome OS has resonated with administrators for its manageability where deployment is strong. Schools looking for that same environment but in tablet form – generally students aren’t provisioned a device with a keyboard until older – could find favor with these new devices.

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The detachables market seems to be (on those numbers) 4.85m. Apple sold 1.8m iPad Pros – making it leader in the detachables market. Lenovo managed 0.2m detachables, apparently. That leaves another 2.85m split between all the others.

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Sources: Facebook has fired multiple employees for snooping on users • Motherboard

Joseph Cox and Max Hoppenstedt:

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On Tuesday, Facebook fired an employee who had allegedly used their privileged data access to stalk women online. Now, multiple former Facebook employees and people familiar with the company describe to Motherboard parts of the social media giant’s data access policies. This includes how those in the security team, which the fired employee was allegedly a part of, have less oversight on their access than others.

The news emphasizes something that typical users may forget when scrolling through a Silicon Valley company’s service or site: although safeguards against abuse may be in place, there are people who have the power to see information you believe to be private, and sometimes they may look at that data.

Motherboard granted the sources in this story anonymity to speak more candidly about Facebook’s policies and procedures. One source specifically mentioned Facebook’s strict non-disclosure agreement.

One former Facebook worker said when they joined the company multiple people had been terminated for abusing access to user data, including for stalking exes.

Another former Facebook employee said that they know of three cases where people were fired because they mishandled data, one of which included stalking. Typically, these incidents are not publicly reported.

As with many other businesses, data access is distributed depending on an employee’s role in a company. One source familiar with Facebook employees’ data access told Motherboard that different teams have varying levels of access, and that they can request additional access if required. The person added that the security team is more trusted than other departments, and abuse there is more difficult to detect.

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link to this extract


Xiaomi shows off scorching growth ahead of $10bn IPO • Bloomberg

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The Chinese smartphone maker filed for an IPO in Hong Kong Thursday, kicking off a process that’s expected to raise at least $10bn and confer a value of $100bn on the eight-year-old company. That offered investors a glimpse into the inner workings of the company controlled by billionaire Lei Jun, and its ups-and-downs since almost dropping off the radar in 2016…

…Xiaomi, reporting detailed financials for the first time, posted a net loss of 43.9bn yuan in 2017, reversing from a meager profit a year earlier. Some of that however reflected one-time items such as share-based compensation and changes in the value of preferred shares, the company said in its filing. Excluding those, operating profit reached 12.2bn yuan.

The company is taking advantage of changes by Hong Kong that allowed companies with different share classes to list. The filing didn’t mention how much it’s looking to raise, with the number of shares and price among details redacted from the document. It’s a big win for Hong Kong Exchanges & Clearing Ltd., whose officials spent years pushing to scrap a ban on the weighted voting rights that give founders control even with minority ownership. Xiaomi’s decision, four years after Alibaba Group Holding Ltd. chose New York, signals a new phase for the city’s ambitions to rival the U.S. market.

“Investors will like Xiaomi’s business model because growing user numbers guarantee profits in the future,” said James Yan, an analyst at Counterpoint. “A bigger hardware user base will translate to stronger profitability from services and at the ecosystem end.”

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Lots of detail in this: 40% of its smartphone sales from outside China in 2017. (That will be mostly India.) It’s doing OK, especially given how it stumbled in 2016.
link to this extract


Xiaomi phones to be sold in UK, Italy, and other European markets • Android Authority

Oliver Cragg:

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The Beijing-based firm today announced that it has partnered with CK Hutchinson to bring Xiaomi products to Three Group Europe stores in Austria, Denmark, Italy, Ireland, Sweden, and the U.K.

Three — one of the four major carriers in the UK — has confirmed that Xiaomi phones will be sold in stores across the country in the near future. This marks the first time Xiaomi phones will be officially available to buy in the region without having to resort to importing websites.

“We have been watching Xiaomi’s success from afar and impressed with the huge range of connected devices that they currently offer,” said Tom Malleschitz, chief digital officer at Three’s U.K. division.

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Has Xiaomi managed to figure out how to get around the patent infringement claims that are sure to follow this?
link to this extract


Senior North Korean counterintelligence official believed to have defected • intelNews.org

Joseph Fitsanakis:

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One of North Korea’s most senior intelligence officials, who played a major role in building Pyongyang’s nuclear weapons program, has disappeared and is believed to have defected to France or Britain, according to sources. South Korean media identified the missing official as “Mr. Kang”, and said he is a colonel in North Korea’s State Security Department (SSD), also known as Ministry of State Security. Mr. Kang, who is in his mid-50s, enjoyed a life of privilege in North Korea, because he is related to Kang Pan-sok (1892-1932), a leading North Korean communist activist and mother to the country’s late founder, Kim Il-sung.

According to South Korean reports, Kang was in charge of North Korea’s counter-espionage operations in Russia and Southeast Asia, including China. He is also believed to have facilitated secret visits to Pyongyang by foreign nuclear scientists, who helped build North Korea’s nuclear weapons program. In recent years, Kang was reportedly based in Shenyang, the largest Chinese city near the North Korean border, which is home to a sizeable ethnic Korean population.

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This could make the summit a little more interesting. Reckoned to have defected to Britain or France some time in February; North Korea reckoned to have a manhunt going on. He’ll do well to evade the sort of VX nerve agent murder that Kim Jong-un used on his half-brother. (It’s not only Russians that do that sort of thing.)
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Businesses warned over GDPR privacy policies • Out-Law

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Many companies have issued new privacy terms to consumers ahead of the new General Data Protection Regulation (GDPR) taking effect on 25 May. However, European data protection supervisor Giovanni Buttarelli said some of the policies he has seen present a “take-it-or-leave-it proposition” that may not comply with the new laws.

“Too often privacy policies have seemed to be designed to provide legal cover for the companies themselves in the case of harm to a customer: non-negotiable, incredibly long, complicated, full of legal jargon which nobody reads …”, said Buttarelli. “Furthermore, the policies have tended to give an illusion of user control – while in reality you cannot see or control what the company does with information about you.”

“Companies whose business model depends on tracking are now asking their customers to say whether they agree to, for example, the use of sensitive data and data from outside sources. Just like with the notorious cookie pop-ups, people fell pushed towards clicking ‘I accept’ because the only apparent alternative on offer seems complicated, time-consuming and risks excluding them from digital society,” he said.

“We and other DPAs (data protection authorities) are therefore worried that even the biggest companies may not yet understand that with the GDPR these manipulative approaches must change. They must change, for instance, to satisfy Article 7(4) of the GDPR, which states that consent cannot be freely given if the provision of a service is made conditional on processing personal data not necessary for the performance of a contract,” he said.

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It’s going to be a mess. Twitter is likely in a few advocates’ sights: its system for data control is pretty rubbish.
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Google Pay is rolling out on the web for desktop and iOS • Android Police

Rita El Khoury:

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The move from Android Pay, Google Wallet, and Pay with Google to Google Pay hasn’t been completely smooth sailing, but the Mountain View giant is slowly getting its footing and transitioning everything from the old brandings to the new one. The latest to make the switch are web payments done either on desktop or on iOS.

Google is starting to roll out Pay on the web for iPhone, iPad, and desktop users so you should start seeing it when you’re trying to make a payment on a supported site, regardless of the browser or device you’re using.

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Why would you want to use Google Pay on iOS? If it wasn’t on desktop previously, then the only way would be if you had Google Pay on an Android and switched. But iOS encourages you to set up an Apple Pay account when you set up the device. And Google Pay would be less convenient than the built-in Apple Pay system.
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Errata, corrigenda and ai no corrida: none notified

3 thoughts on “Start Up: Xiaomi preps giant IPO, tablet market (but not iPad) withers, the CIA cop on the streets, and more

  1. I can’t say enough good things about Xiaomi phones. I’ve gone through many Android OEMs over the years. From now-overpriced Samsung stuff to ultra cheap Chinese stuff with bad hardware and bad software, via Huawei (they’re OK) and Moto (they were not ! bad HW, bad SW, 0 service). Xiaomi is the best of both world: very low prices and 1st-tier-quality stuff both in looks, hardware and software.
    Even their $100-ish phones don’t disappoint, and at around $200 you enter “delightful” territory, the Redmi Note 5 Pro will be my default recommendation this year when the international version comes out, and I’ll almost certainly be getting for myself a Mi Max 3 if it’s an overgrown Note 5 Pro as anticipated. They even keep the old-timey treats: jack, SD slot, IR blaster, and FM radio. No removable batteries though ^^

    Apart from their limited distribution, the main drawbacks have been weak cameras, which they’re fixing this year with their dual-cam, dual-pixel AF models (that gets them from mediocre to good-not-great); and their MIUI UI which made sense 5 years ago but no longer does…at least Android lets you swap in a sensible Launcher (I prefer Nova), though Xiaomi’s added crapware and mis-organized Settings remain.

    I’m not sure what IP they’re infringing. Maybe their older lines looked a lot like iPhones (though with the touchID in the back) but their current-gen 18:9 phones look neither like the bezelly iP8 nor the notchy iPX. I keep hearing about IP issues, yet have never heard about any specific IP issue. Do you have a source ? I aven’t seen any legal action in China, India, nor even Spain where they’ve been for a few months now. Begins to feel like FUD.

    • I haven’t got a source on the patents thing; it’s just the sort of topic that comes up a lot. Counterpoint Research, in its analysis of Xiaomi’s ambitions, says it “needs focus on IP and opportunities” (https://www.counterpointresearch.com/xiaomi-ipo-analysis-need-focus-intellectual-property-opportunities/). The reason for IP lawsuits is hardly ever obvious to the casual onlooker; it can arise from arcane stuff about modems or wireless connection – recall Motorola suing Microsoft over the use of Wi-Fi connectivity in the Xbox 360. It’s just my feeling, based on what’s gone before, that if Xiaomi looks like a threat to some of the bigger players outside China and India, they’ll use their IP stick to beat it. Recall that it was sued in India initially over IP and had to retreat.

      • You’re right. There was indeed a suit from Ericsson in India in 2014, which resulted in in Xiaomi having to use only Qualcomm chipsets. https://gbtimes.com/ericsson-has-sued-xiaomi-alleged-patent-infringements-india

        There are another bunch of “IP might be an issue” articles from around that time -2014/2015-, pointing out that Xiaomi’s designs ape Apple’s (now resolved, no notch and no bezels, there might be issues still with MIUI ?), and that Xiaomi has no defensive portfolio (I’d assume still mostly the case), and that more lawsuits are probably coming once Xiaomi enters more markets. Which they’ve done in the mean time, no lawsuits yet.

        Over the period, Xiaomi has had fewer IP issues than Apple ;-p We can’t extrapolate from that, but 4 years and quite a few countries on, none of the 2014 concerns have materialized.

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