Start Up No.895: social media for good, how do you break up Facebook?, Xiaomi grows, Onavo’s no-go, cracking app stores, and more

AirPods: the new way to say Do Not Disturb. Photo by Doug Kaye on Flickr.

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A selection of 9 links for you. Insomnia, fine. I’m @charlesarthur on Twitter. Observations and links welcome.

Breaking up Facebook won’t work • Yahoo Finance

Rob Pegoraro:


Siva Vaidhyanathan, director of the Center for Media and Citizenship at the University of Virginia and a long-time critic of Facebook’s power, agreed on the virtues of forcing Facebook to separate Instagram and WhatsApp.

“It’s really important that user behavior data from Instagram and WhatsApp don’t get mixed up with Facebook user data,” said Vaidhyanathan, who also wrote the book “Antisocial Media.” “No company should have that kind of predictive and targeting power over billions of people.”

Vaidhyanathan added that he’s professionally bound to remain among those billions: “I have to be on Facebook because I write about Facebook.”

Many Instagram users either use that network as if it were Anti-Facebook—I know far more about some friends from their “Insta” photos than their scant Facebook updates—or outright think Facebook doesn’t own it. But in the advertising sense, Instagram is tightly integrated with Facebook.

“Its advertising system is powered by a massive collection of data with algorithms that deliver very targeted advertising across all platforms,” emailed Lynette Luna, a principal analyst for the research firm GlobalData. “That means behavior from Facebook users can be applied to ads on Instagram and vice versa.”

She wrote that a forced split-up would make online ads more expensive and less efficient for businesses: “I can’t imagine that advertisers would be happy.”

As for making life harder for disinformation campaigns, a security expert doubted that a Facebook-Instagram divorce would help.

“This wasn’t just accounts on Facebook and Instagram; it was on other social media platforms as well,” said Lee Foster, manager for information operations analysis at FireEye, which recently identified 652 accounts, pages, and groups tied to Iranian and Russian influence campaigns.


Do we care that advertisers might not be happy? That’s not really my definition of a social concern.
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Facebook removes data-security app from Apple Store • WSJ

Deepa Seetharaman:


Facebook pulled its data-security app from Apple’s app store after the iPhone maker ruled that the service violated its data-collection policies, according to a person familiar with the matter.

Apple’s decision widens the schism between the two tech giants over privacy and is a blow to Facebook, which has used data gathered through the app to track rivals and scope out new product categories, The Wall Street Journal reported last year. The app, called Onavo Protect, has been available as a free download through Apple’s app store for years, with updates regularly approved by Apple’s app-review board.

Onavo allows users to create a virtual private network that redirects internet traffic to a private server managed by Facebook. The app, which bills itself as a way to “keep you and your data safe,” also alerts users when they visit potentially malicious sites. Facebook is able to collect and analyze Onavo users’ activity to get a picture of how people use their phones beyond Facebook’s apps.

Earlier this month, Apple officials informed Facebook that the app violated new rules outlined in June designed to limit data collection by app developers, the person familiar with the situation said.


What puzzles me a little here is that I thought it had been known for absolutely ages that Facebook uses Onavo as an early warning system to see up-and-coming apps or features so it can copy them. The WSJ noted exactly this in August 2017. (That article was written by Seetharaman and Betsy Morris.) What’s been holding Apple back?

More generally, it’s a reminder that any VPN gets to see all the traffic that goes over your network, unless you use an encrypted connection within that. And many VPN services have been found selling user information.
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The 30% Tax • AVC

Venture capitalist Fred Wilson on the row around the app stores’ 30% cut of sales and (some) subscriptions:


I was interested to see that Netflix is currently testing a bypass strategy [of making people pay for subscriptions outside Apple’s App Store]. Certainly the biggest brands like Netflix and Spotify have the market power to at least consider this approach.

If the biggest brands can condition users to bypass the app stores maybe we are seeing the beginning of a crack in the armor. It may also be possible for these big brands to bundle subscription offerings and take a piece of the action themselves.

Imagine if Netflix let you subscribe to a bunch of other services via your Netflix account which you pay for directly on the web outside of the app stores. Or imagine if Amazon offered something similar.

The economics of that relationship for a smaller company could be more attractive than the economics of the current Apple and Google channels. And most companies would likely participate in multiple channels, including the app stores, as well as sell direct.

It seems inevitable that subscription bundling is going to happen. It already does via the Apple and Google app stores but that’s a crude version of what I’m thinking is on the horizon.

Consumers have demonstrated a willingness to pay for the apps and the content they value most. The subscription business model is a terrific one that aligns the interests of a company and it’s customers. But managing dozens of subscriptions via multiple payment systems is annoying. And there should be attractive economics for both bundlers and bundled apps.

So while I’m not predicting the end of the 30% tax anytime soon, I do think we will see Apple and Google’s largest competitors build significant bypass user bases and potentially start competing with Apple and Google in the subscription bundling business.


So you’d go to Netflix, where you’d also sign up for… Spotify? Deezer? Hulu? Disney? Or would you buy an app directly? How’s that going to load on your phone or tablet? Ben Thompson linked to this article from his Stratechery article on Thursday, and he thinks it points to some potential for a crack in how Apple and Google manage their app stores. But for the app vendor, it shifts the problem: now they have to go through Amazon or Netflix, who have to vet their app, and yet they still want to be on Apple’s phones, or on a Google or other app store. How do they get there?

More likely to be a challenge for Google: the EC decision means it has to open up to alternate app stores. Amazon might like that opportunity.
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Social media’s not all bad – it’s saving lives in disaster zones • The Conversation

Paul Reilly and Ioanna Tantanasi:


Social media was recently credited with reducing the number of casualties caused by air strikes in the Syrian civil war. The early warning system, developed by tech startup Hala Systems, uses remote sensors to detect aircraft flying over the opposition-held northern province of Idlib. Alerts are then sent via Facebook and instant messaging apps such as WhatsApp to civilians and aid workers in affected areas. These messages give relevant information such as the areas likely to come under heavy bombardment and the duration of these raids.

Since its launch in 2016, the system has reportedly reduced the number of casualties in the region caused by air strikes by as much as 27%. The system also triggers traditional air raid sirens that might actually be more effective than social media in reaching key demographics in affected areas. Nevertheless, this example shows why social media has become big news for emergency managers seeking to provide accurate and timely information to people affected by disasters.

Incidents such as Hurricane Sandy in September 2012 have shown how disaster response teams can leverage the “power of collective intelligence” given by social media. Members of the public use these platforms to share critical information that helps build a bigger picture of the situation. They also play a key role in correcting misinformation and dispelling rumours that have the potential to hinder efforts to restore critical services in affected areas.


I link to a lot of stories about negative effects of social media here, so it’s good to link to something more positive. The Conversation is a terrific site if you want an antidote to some of the madness in general news sites; it’s content by specialists in the topic. Paul Reilly is senior lecturer in Social Media and Digital Society, and Ioanna Tantanasi is a research associate at the University of Sheffield.
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Australia bans China’s Huawei from 5G mobile network, angers Beijing • Reuters

Tom Westbrook and Byron Kaye:


Australia has banned Chinese telecoms firm Huawei Technologies from supplying equipment for a 5G mobile network, citing risks of foreign interference and hacking which Beijing dismissed as an “excuse” to tilt the playing field against a Chinese firm.

The move, following advice from security agencies, signals a hardening of Australia’s stance toward its biggest trading partner as relations have soured over Canberra’s allegations of Chinese meddling in Australian politics.

It also brings Australia in line with the United States, which has restricted Huawei and compatriot ZTE Corp from its lucrative market for similar reasons.

The government said in an emailed statement on Thursday that national security regulations typically applied to telecom carriers would now be extended to equipment suppliers.

Firms “who are likely to be subject to extrajudicial directions from a foreign government” would leave the nation’s network vulnerable to unauthorized access or interference, and presented a security risk, the statement said.


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Sorry, pal, i don’t want to talk: the other reason people wear AirPods • WSJ

Rebecca Dolan:


Zach Miles learned a valuable lesson shortly before graduating this year from Oral Roberts University in Oklahoma. Walking across campus while wearing his AirPods earphones kept people at a distance. “If you’re not in the mood to talk to somebody, or if you’re in a hurry, it gives someone a visual signal,” he said.

Mr. Miles brought that knowledge to his working life in Colorado Springs, Colo., where his AirPods remain a shield against awkward small talk. “It’s a crutch,” admitted the 22-year-old app developer.

Apple AirPods, those white wireless earbuds, do so much more than transmit music and phone calls. Even when muted, or off, they declare: Stay away.

“It makes you look like you’re really consumed in your work,” said Hughston May, creative resident at Moxie, an advertising agency in Atlanta.

AirPods do part-time duty as a personal secretary, screening calls and potential interruptions. Ms. May says co-workers bold enough to approach her while they dangle from her ears “probably have something important to say.”

…The rules of etiquette are still evolving. Amber Rosario, a barista at Starbucks in Midtown Manhattan, finds it rude when customers wear AirPods while ordering drinks, sometimes resulting in mix-ups over their order or name.

“It’s just ridiculous,” she said. “If you weren’t on your AirPods, it probably would have been correct!”


If we accept this premise, is the advantage of the AirPods that they’re very visible yet also approachable – whereas other wireless ones aren’t as visible? And that over-the-ear headphones make you unapproachable? The grammar of headphones is an interesting one.
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The Pixel 3 will be the first Pixel to get wireless charging • BGR

Chris Smith:


We haven’t had wireless charging on Google phones in years, with the 2014 Nexus 6 being the last Nexus phone to support it. At the time Google said that fast USB-C charging would more than make up for the lack of wireless charging.

But now, we finally have confirmation that the Pixel 3’s battery can be recharged wirelessly.

Why the sudden change of heart? Google will probably explain it all during the Pixel event later this year. But let’s remember that, last year, Apple launched the first iPhone models that do wireless charging out of the box. So it was not surprising to see rumors saying that Pixel 3 phones would also support wireless charging. After all, the Pixel 3 XL does copy the iPhone X notch, and Google copied the iPhone X navigation gestures as well in Android Pie.

After providing Pixel 3 camera samples earlier, the same @khoroshev posted on Twitter a video in which he’s placing the Pixel 3 XL on a wireless charging device.


Used to have wireless charging, then dropped it, now rediscovered it – even though you can argue that one was “Nexus” and the other is “Pixel” (but they’re all Google’s only phones), it’s that sort of chopping and changing that makes people switch between brands if they like a feature. Only introduce it if you’re going to keep it, unless you replace it with something better.
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Xiaomi sold 32m smartphones in Q2 2018 • China Internet Watch


In Q2 2018, Xiaomi reported a high growth of 58.7% in smartphone revenues to 30.5bn yuan (US$4.61 bn), accounting for roughly two-thirds of the total revenues. Smartphone sales volume reached 32.0m units, up by 43.9% year-on-year. IoT and lifestyle products grew 104.3% year-on-year in revenues, while the global sales volume of smart TVs grew over 350% year-on-year.

Xiaomi [the full company] achieved 45.2bn yuan (US$6.82bn) in revenue, representing a growth of 68.3% year-on-year. Adjusted profit grew 25.1% to 2.1bn yuan (US$317.1m) year-on-year, according to its first results as a public company since its IPO in July.

The smartphones segment… revenues [had] year-on-year growth of 58.7%. This growth was driven by an increase in both sales volume and the average selling price (“ASP”)… Xiaomi is the fastest growing amongst the top five mobile phone companies globally, according to IDC.


So… that’s an ASP of US$144 on 32.0m units compared to 22.2m at $130.62 ASP in the year-before quarter. Quite successful at raising the ASP, and now substantially bigger than many erstwhile rivals (notably Lenovo, which bought its way into the wider mobile phone business by purchasing Motorola, which continues to make losses – now up to six straight years, or 24 quarters).

Three of the top five phone makers are now Chinese – Huawei, oppo/vivo (which is connected with OnePlus – they’re financial cousins), Xiaomi.
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Michael Cohen paid a mysterious tech company $50,000 ‘in connection with’ Trump’s campaign • CNBC

Christina Wilkie:


Buried in the legal documents released Tuesday as part of Cohen’s guilty plea on eight felony counts, there was a new, previously unreported payment Cohen made in 2016 to help Trump: $50,000 for work that prosecutors say Cohen “solicited from a technology company during and in connection with the campaign.”

The documents do not identify which tech company Cohen paid the money to, or what, exactly, the company did for him. But the mere existence of the previously unknown payment suggests that Cohen may have been doing more for Trump, and for the Trump campaign, than simply paying off women.

Furthermore, the way that Cohen reported the $50,000 expense to the Trump Organization in January 2017 suggests the money may not have been paid out through traditional financial channels.

According to prosecutors, Cohen presented Trump executives with bank records for several of the expenses he incurred on Trump’s behalf. But for his $50,000 payment to a tech company, Cohen provided no paperwork, just a handwritten sum at the top of one of the other bank documents.

The Trump Organization would later say that the $50,000 was a “payment for tech services.” However, prosecutors say the $50,000 “was in fact related to work Cohen had solicited from a technology company during and in connection with the campaign.”

A spokesman for the Trump Organization did not respond to questions from CNBC Wednesday about the payment. Trump’s campaign, likewise, did not answer questions about whether it knew Cohen had paid a tech company $50,000 to aid in Trump’s election bid.


Delighted to note that we now have a Trump-Cohen-tech nexus. Cambridge Analytica or one of its offshoots, perhaps? Also: if it’s to do with the campaign, shouldn’t it have come out of the campaign finances? On that, everyone’s unclear at present.
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Errata, corrigenda and ai no corrida: none notified

4 thoughts on “Start Up No.895: social media for good, how do you break up Facebook?, Xiaomi grows, Onavo’s no-go, cracking app stores, and more

  1. “More likely to be a challenge for Google: the EC decision means it has to open up to alternate app stores. Amazon might like that opportunity.”

    Android has always been open to alternate app stores. You can download and install Amazon’s here: Other stores listed here:

    I don’t recommend it though. Google are very laissez-faire (they allow alternate browsers, browser plug-ins, ….) so don’t ban nearly as many apps as Apple, and when they do ban apps it’s mostly for good reason: malware or questionable privacy. The one iffy reason for a ban is that apps are not allowed to modify the operation of other apps, but that’s really a rare case. Or Youtube downloaders ;-p Unless you’re a hacker fluent in xda-dev, leave it alône ! leave it alône !

  2. re. China, what’s crazy is the concentration in the Mobile segment: only 16% of sales are left to the non-top-5, down from 23% a year ago, and that top 5 is weirdly determined: Huawei is consolidated with Honor, but BBK brands (oppo, vivo, oneplus) are not consolidated; if you consolidate those too for consistency, it’s even less than 16%, probably 10-12%. And even w/o that consolidation, the top 5 are 90% of online sales.

    Not only that, but the market share winners are also announcing rising profits, meaning they aren’t buying market share while strongly growing.

    ROW has a few more strong brands (Samsung, LG, Nokia, Motorola in the US) dampening that concentration, but is going the same way.: “others” down from 40% to 33% over a year. Minor OEMs, local OEMs, and legacy OEMs (Sony, HTC, Lenvovo/Moto, Blackberry) are getting trounced, soon decimated ? Local OEMs especially are not faring well in India and Europe.

    That doesn’t quite fit with the popular analyst narrative that Android intrinsically makes it impossible to solidify a market position. It certainly removes the ecosystem part of the equation, and puts the onus on marketing, logistics, and execution. It’s also worth mentioning that innovation hasn’t let up, with a more diverse catalog now than ever: gamer phones, borderless ceramics phones and other looks-focused stuff, phones with a pop-up camera, external expansion modules, dockable PC-phones, 7″ monsters (yay !)…

    I’m surprised none of the Chinese OEM have bought a non-Chinese brand as a way to get into the US. BLU is probably not strong enough, Moto is already Chinese, and Blackberry not ready to sell BB nor RIM ? And HTC not American enough ? Get ready for a Vizio phone ?

  3. One thing that tickles me is that Mobile OEMs have been entering the PC market. Huawei, Xiaomi (not BBK to my knowledge) have worthy laptops on offer (this guy has good, in-depth, balanced reviews of a lot of them: ).

    Are any legacy PC brands for sale ? I’d love to see a Commodore or DEC phone and PC ^^

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