China passed 250M 4G users in July, more than double the subscribers in the U.S.

Apple's CEO Tim Cook on a visit to China in 2014. Reuters / China Stringer Network

China’s 4G mobile users surpassed 250 million for the first time at the end of July, according to newly released data (link in Chinese) from China’s Ministry of Industry and Information Technology (hat tip to TechNode). If you throw 3G users into the mix, that number shoots up to a whopping 695 million users, with China’s total mobile user base now at 1.29 billion.

250 million is a milestone to be celebrated — it represents 4G penetration of nearly 20 percent, versus 40 percent (over 100 million) in the US at the end of 2014. Still, the figure belies a slightly shadier forecast: The report made clear that China’s mobile user growth rate so far this year has slowed to just a quarter of what it was over the same period in 2014.

Meanwhile, a separate report by the country’s state-run English-language newspaper China Daily over the weekend notes that the country has achieved this explosive growth in a mere 20 months since regulators first issued telcos 4G licenses. Though, somewhat confusingly, the article pegs the country’s 4G user base at 225 million, possibly in reference to June’s numbers rather than July’s.

Xinhua, the Chinese government’s official press agency, on Monday also had the 250 million number. The same report pointed out that the country’s three telecom giants — China Telecom, China Unicom, and China Mobile (currently the world’s largest telco) — “raked in a total of 75.3 billion yuan (about $11.8 billion) in the first half of 2015.” This was largely off the back of continued 4G growth.

Combined, 3G and 4G in the country now have a penetration of close to 54 percent among mobile users, according to the ministry’s report, and while the addition of new subscribers may be slowing, data consumption is through the roof. An average user in China now consumes around 330MB of data per month, almost twice as much (up 85 percent) as 12 months ago.

China’s International Telecommunication Union confirmed that it is actively developing 5G technology and industry, keeping up the blistering pace of development. But there has also been major reshuffling announced Monday at the very top levels of the country’s three telcos as Beijing aims to revamp state-owned firms.

4G growth aside, the broader challenges being faced by China’s volatile economy of late have rocked markets and tech stocks worldwide, leading Apple’s CEO Tim Cook to take the unusual step of issuing a statement to CNBC on Monday in an attempt to soothe investors. Apple, like an increasing number of smartphone makers, is heavily reliant (read: overexposed) on Chinese consumer demand to hit Wall Street’s targets.

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Ashley Madison Hackers have taken to the 36 million email list stolen during the Ashley Madison hack to attempt to extort folks who may or may not have used the app to cheat. Brian Krebs has spoken to an admin in Milwaukee named Rick Romero who has been actively blocking outdoing emails asking hacked users to send a single bitcoin to keep their accounts private. Hello, Unfortunately, your data was leaked… Read More

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After a multi-year bull cycle that raised the prices of domestic equities to levels that made value-focused investors squirm, the U.S. markets are suffering from a stiff correction , dropping in partial step with international shares and other assets. Apple opened dramatically lower this morning, mirroring broad index declines.

Alibaba’s Aliyun cloud launches DT PAI, an artificial intelligence service

Alibaba's headquarters in the Chinese city of Hangzhou.

Alibaba today announced the launch of DT PAI, a new service in its Aliyun public cloud that will be able to handle machine learning processes.

Aliyun will launch a free public trial of the service for a select group of early users in the next few weeks, DT PAI product manager Xiao Wei told VentureBeat in an email.

“DTPAI contains matured and advanced ML algorithms whose effectiveness are verified by Alibaba’s profound data scenarios in Taobao, Tmall or Alipay business,” Wei wrote. The service can deal with workloads such as classification, clustering, feature abstraction, and large-scale statistics, he wrote. The service will even be able to perform an increasingly popular type of artificial intelligence known as deep learning.

When it comes to logistic regression, a type of statistical model, DT PAI “can process data with 10 billion plus dimensions of features and 100 billion plus of records,” Wei wrote.

It’s not surprising to see Alibaba expand its cloud like this. Amazon Web Services and Microsoft Azure have both released cloud services for machine learning in the past year. And Alibaba is quickly revving up to match the capabilities of those public clouds. Last month Aliyun announced plans to add graphic processing units (GPUs) and solid state drives (SSDs), and Alibaba also committed to spending $1 billion to expand Aliyun in Japan, Europe and the Middle East.

Alibaba is indeed based in the Chinese city of Hangzhou, far away from the West Coast, where Amazon, Google, and Microsoft are based. But the company is obviously looking to expand its business outside of China.

“We are happy to serve users worldwide and we support English,” Wei wrote.

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Marc Benioff, Salesforce Takes A Different Philanthropic Tack Toward Backing SF’s K-12 Schools

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A lesson from Twice: How to completely fail a loyal user base

fail

It all started with a big announcement from Twice, a San Francisco based eCommerce marketplace for buying and selling secondhand apparel that has grown to more than one million users since its launch. According to the announcement, Ebay had acquired Twice to use its technology in eBay Valet. As a result, Twice ceased operations.

Twice tweet

Then Twice released a friendly, professional, well-written “break up letter.” Visibly edited by legal and communications professionals, the letter attempted to soften the blow to customers and portray Twice’s end of operations as a positive, even desired outcome. It, of course, thanked its loyal customers with an expected “we could not have done it without you” lip service line. The message even included pictures of bright accessories to appease fashionista customers’ eyes.

Twice followed its letter a series of liquidation sales that at its highest point reached 50% off. What could be more exciting than a good deal?! Nothing beats a good deal at the end of a relationship that a customer wasn’t ready to end.

Twice sale tweet

Despite this, Twice customers were not celebrating. Somehow their mood was more of a somber disappointment, in stark contrast to the hype that Twice was projecting through its social media and emails to its customers and followers. The closure of Twice felt a bit more like a letdown than a celebration, and no discount percentage could change that fact.

But Twice’s relationship with its customers didn’t start out this way!


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Startups, especially eCommerce startups such as Twice, often begin by trying to create a loyal customer movement, often from scratch. Once startups achieve that initial traction, they focus on quick (preferably exponential and large-scale) growth because their survival in this stage – early, vulnerable, and hyper-competitive for investment money – depends on it. To do this, startups often build a community of engaged product evangelists, championing their customers’ wants and needs in an effort to achieve wide-spread popularity. At this early stage the startups also attempt to deliver edgy product demonstrations, passionately arguing why their new service fulfills a deep need in order to spark buzz and attract loyal paying customers.

Early in the game, startups often focus on earning the customers’ trust because customers who trust are more likely to be loyal, paying customers in the long term. As Jack Ma, founder and executive chairman of Alibaba, the world’s largest eCommerce site, once astutely observed: “Because of e-commerce, we finish 60 million transactions daily. People don’t know each other. I don’t know you. I send products to you. You don’t know me. You wire the money to me. I don’t know you. I give a package to a person. I don’t know him. He took something across the ocean – across the river. This is the trust. We have at least 60 million trusts happening every day.” Clearly, every eCommerce startup must actively engage in trust building efforts in order to succeed in the long run.

The success of creating a movement early, often on a limited budget, by focusing on building exponential and large-scale growth and trust, is what separates successful startups from those we never hear about. As they mature and achieve a certain degree of popularity and vitality, they attract a sizable customer base, their reputation soars, and their brand grows “naturally.” And yet somehow, it’s during this successful stage that startups get distracted with growing pains. They increasingly focus on numerous other stakeholders, often those to whom they owe a legal duty such as their investors. During this stage, startups also get dazzled by the various exit opportunities on the table. It is at this dazzled stage that startups attribute their success to their own brilliance, discounting the important role their customers’ trust has played in their success and growth.

At some point closer to the acquisition, when life is filled with high expectations and professional advice, a startup either realizes that it owes no duty to its customers (at least legally speaking) or forgets about them altogether. This, of course, results in a disappointment usually played out publicly via social media. In the case of Twice, the disappointment was “a real bummer.”

As painful as this disappointment was to follow on social media, one can’t help but wonder whether it is an appropriate treatment of the customers who made Twice what it has become. The acquisition and closing may have been a perfectly legal way to handle Twice’s exit and give the founders a way to monetize their creation, but is it an ethical one? These customers took a risk on a no-name startup in its early days and trusted Twice enough to join their movement. Is letting these customers down an acceptable way to end this relationship? Is a cordial “we couldn’t have done it without you” line enough to thank them for the risk they took, or the disappointment and logistical inconvenience they have experienced?

It will take a few more high profile exit disappointments for customers to catch on and start demanding more from companies, including startups. Even when they eventually catch on, there is a possibility that customers may never be organized enough to take action. However, even though customers may not show it, these disappointments by current startups are making it more difficult for future startups to build their own movements and change the landscape of commerce.

In order to sustain customers’ trust and ensure future success, startups should integrate social responsibility into their exit strategies from day one. As soon as a startup begins their conversation with customers, a thoughtful, responsible exit strategy should be in mind. Customers, with their evolving values and needs, increasingly demand and expect such social responsibility during exits. We can only disappoint them so many times.

Moreover, building in a socially responsible exit from day one will create an ecosystem of trust that will make it easier for future startups to create movements and change the landscape of commerce. No, a socially responsible exit is not mandated by law; it is simply the right thing to do. After all, laws are often a floor, not a ceiling, of proper human conduct. And we should stop pretending that doing the minimum during an exit suffices.

Olga V. Mack (@OlgaVMack) is a startup lawyer who enjoys advising her clients to success and growth. Currently Head of Legal at ClearSlide, a San Francisco-based startup, she previously worked at Zoosk, Visa, Pacific Art League of Palo Alto, Wilson Sonsini Goodrich & Rosati, and Yahoo.


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India’s Ola thinks it can keep an edge over Uber with e-commerce partnerships

Reuters / Shailesh Andrade

In its bid to keep its taxi-hailing app offering as sticky as possible, India’s Ola announced on Monday that it is partnering with some of the country’s e-commerce giants to incentivise users away from encroaching rivals like Uber.

The Bangalore-headquartered startup, founded in 2010, recently raised an additional $400 million in April to expand its service into 100 new Indian cities by year end, taking the total to 200.

While cash payments are still rampant in emerging markets like India, Ola and other e-commerce players want to lock in users to its platforms by linking credit card details to those accounts wherever possible. The latest numbers floating around suggest that Ola has now well over 20 million Ola Money users, each with an average of about $15 in their accounts. (Ola Money is its e-wallet that can be easily topped up through traditional credit cards.)


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The Indian e-commerce outfits that Ola has partnered with at launch to provide “one touch” purchases include eyewear online portal Lenskart, budget hotel network Oyo Rooms, streaming service Saavn, hyperlocal mobile marketplace Zopper, online bus ticketing platform Busindia, and online photo service Zoomin. That seems a pretty good spread. Beyond these six, it promises to add more soon.

“The money you have on the OlaCabs app is fetched by the merchant app when you’re checking out,” Ola wrote in an official blog post. “Hit ‘pay’ to confirm, and you’re done! If one-touch payments weren’t enough, you also get exclusive discounts and privileges at our partner merchants when you choose to pay with Ola Money, e.g. 40 percent cashback on bookings at Oyo Rooms.”

The partnership in Lenskart’s case seems especially timely. The company just today announced plans to invest around $9.4 million to set up a manufacturing facility over the next three to six months to ramp up operations. New Delhi-based Oyo Rooms, meanwhile, was listed on Sunday as one of 50 companies that may be the next startup unicorns by The New York Times.

Ola Money mobile app on Android

Above: Ola Money mobile app on Android

It will be interesting to see if Ola can eventually score partnerships with India’s real heavyweight e-commerce titans, Flipkart and Snapdeal, which could now be collectively worth close to $20 billion based on the latest reports and industry murmurs — or even Amazon, which is investing $2 billion in its India operations. Either way, more cross-platform integration will be coming. And if Ola does ever break out conversions/revenues from these partnerships in future, those numbers will be telling.

“At Ola, we’ve always worked on making your lives simpler,” the company continued in its blog post. “We’d like to think that we’ve made a big difference in the way transportation, food and how your daily grocery comes to you and now we’re all set to make it just that simple for you to pay. As we get closer to our mission of mobility for a billion Indians, we want to make sure that we solve for the whole experience, in a way that will give you more choice and freedom.”

Meanwhile Uber is not exactly standing still in India. It recently began accepting credit card payments again in the country of 1.3 billion after legislators forced it to switch to an in-app e-wallet payment system last November. It also began testing cash payments in India in May, and took fresh funding from India’s Tata Capital last week estimated to be worth between $75 million and $100 million, according to Reuters.

More broadly, Ola claims it will clock one million rides per day by the end of August, while Uber is still reportedly somewhere around 200,000. But Uber plans to correct that — it says it will invest $1 billion in its India business over the next nine months. That is the same amount it is putting into China, though things haven’t been going entirely smoothly on that front.

We have reached out to both Ola and Uber for additional comments and will update you if we hear back. For now, check out the launch video below.

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Apple retail chief Ahrendts thinks covert Apple Watch use in the classroom is a good idea

apple-watch-141

Somebody must have forgotten to brief Apple’s (relatively) new retail chief Angela Ahrendts on her employer’s long-standing respect for education.

In a new sales training video shown to Apple Store employees today Ahrends reportedly says that students should use their Apple Watches in class before the teachers realize what the device can be used for.

Here’s Mark Gurman writing about the video in 9to5Mac:

Ahrendts told employees that the Apple Watch is “the greatest back to school item this year” as it can be used in the classroom without a teacher seeing, unlike with a larger iPhone. “I don’t think the teachers have caught on to the Watch yet,” Ahrendts said, adding that retail staff should tell students to “jump on it before the teachers do.”


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Gurman suggests that Ahrends meant this information to be used by sales staff as a way of moving Watches.

Bad idea.

It’s not hard to think of ways the Watch could be misused in the classroom setting. The Watch might be a very effective vehicle for cheat sheets to be used during exams. One student could send answers to multiple choice questions by drawing numbers and letters on the screen using the Digital Touch feature. With stealthy enough earphones, a student could listen to music all through class. Emoji messages might fly from Watch to Watch around the room.

Perhaps worst of all, the lecturer might look out in the room and see students constantly glancing at their wrists. Even if it’s just a quick glance the message message being sent is that the speaker is boring, or that the listener has something they’d rather be doing.

That’s not learning. That’s just more distraction. More noise. The classroom should be one place that shuts out the noise so that some thinking and learning might happen.

Some schools are already considering a ban on the Watches. Several British universities already have, Buzzfeed reports.

Ironically, Apple has long been a good friend to education. Education is one of just a handful of industries that has shown a decided preference for Apple products, and Apple has benefited from it during good times and bad. Apple has a special online store that offers “education prices” to college students and their parents, teachers, lecturers and staff.

So encouraging kids to f*ck around on their Apple Watch during class is very off-message. There must be better way to sell Watches to back-to-school buyers.

 


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