Apple HomePod comes to China at $400 amid iPhone sales woes

Apple is finally launching HomePod in China, but the timing is tricky as the premium device will have to wrestle with local competitors and a slowing economy. The firm said over the weekend that its smart speaker will be available in Mainland China and Hong Kong starting January 18, adding to a list of countries where it has entered including US, UK, Australia, Canada, France, Germany, Mexico and Spain.

The Amazon Echo competitor, which launched in mid-2017, is already available to Chinese buyers through third-party channels like “daigou”, or shopping agents who bring overseas products into China. What separates the new model is that it supports Mandarin, the official language on Mainland China and Cantonese, which is spoken in Hong Kong and China’s most populated province Guangdong. Previously, Chinese-speaking users had to converse with HomePod in English until a system update in December that added Siri support for the two Chinese dialects.

A main selling point of HomePod is its focus on music, so the China version comes with Airplay support of a range of local music streaming apps like Tencent’s QQ Music for Mainland users and JOOX which is more popular in Hong Kong.

In its home market, HomePod remains an underdog with 5 percent market share while Amazon Echo and Google Home command 66 percent and 29 percent, respectively.

The question is how many Chinese shoppers are willing to shell out 2799 yuan, or $414, for the Siri-controlled speaker. A host of much cheaper options from local giants are available, such as Alibaba’s Tmall Genie, Xiaomi’s Mi AI and several models from Baidu.

Analysts have cited relatively high price — on top of a softening economy — as a major culprit for iPhones’ low sales in China, which have prompted Apple to lower its quarterly revenue forecast for the first time in over a decade and Chinese retailers to slash iPhone prices. It remains to see how Chinese shoppers react to HomePod, which is already about 17 percent higher than its normal $349 price in the US.

Correction: (January 14, 2018, 14:00 pm): The article has been updated to reflect that HomePod in non-China markets began supporting Chinese in December.

World’s most valuable AI startup SenseTime unveils self-driving center in Japan

The world’s highest-valued artificial intelligence startup SenseTime has set foot in Japan. The Beijing-based firm announced on Friday that it just opened a self-driving facility in Joso, a historic city 50 kilometers away from Tokyo where it plans to conduct R&D and road test driverless vehicles.

The initiative follows its agreement with Japanese auto giant Honda in 2017 to jointly work on autonomous driving technology. SenseTime, which is backed by Alibaba and last valued at more than $4.5 billion, is best known for object recognition technologies that have been deployed in China widely across retail, healthcare and public security. Bloomberg reported this week that the AI upstart is raising $2 billion in fresh funding,

Four-year-old SenseTime isn’t the only Chinese AI company finding opportunities in Japan. China’s biggest search engine provider Baidu is also bringing autonomous vehicles to its neighboring country, a move made possible through a partnership with SoftBank’s smart bus project SB Drive and Chinese automaker King Long.

Japan has in recent years made a big investment push in AI and autonomous driving, which could help it cope with an aging and declining workfoce. The government aims to put driverless cars on Tokyo’s public roads by 2020 when the Olympics takes place. The capital city said it already successfully trialled autonomous taxis last August.

SenseTime’s test park, which is situated near Japan’s famed innovation hub Tsukuba Science City, will be open to local residents who could check out the vehicles slated to transport them in a few years.

“We are glad to have the company setting up an R&D center for autonomous driving in our city,” said Mayor of Joso Takeshi Kandatsu in a statement. “I believe autonomous driving vehicles will bring not only revolutionary changes to our traffic system, but also solutions to regional traffic problems. With the help of SenseTime, I look forward to seeing autonomous cars running on the roads of Joso. We will give full support to make it happen.”

Baidu announces Apollo Enterprise, its new platform for mass-produced autonomous vehicles

Baidu made several big announcements about Apollo, its open-source autonomous vehicle technology platform, today at CES. The first is the launch of Apollo Enterprise for vehicles that will be put into mass production. The company claims that Apollo is already used by 130 partners around the world. One of its newest partners, Chinese electric vehicle startup WM Motors, plans to deploy level 3 autonomous vehicles by 2021.

Apollo Enterprise’s main product lines will include solutions for highway autonomous driving; autonomous valet parking; fully autonomous mini-buses; an intelligent map data service platform; and DuerOS (Baidu’s voice assistant) for cars.

Baidu also released Apollo 3.5, the latest version of its platform, which now supports “complex urban and suburban driving environments.” Apollo 3.5 is already used by customers including Udelv, an autonomous delivery van startup that recently partnered with Walmart to test grocery deliveries. Baidu says up to 100 self-driving vehicles based on Apollo 3.5 will be deployed in the San Francisco Bay Area and other regions in the United States.

In China, Baidu plans to launch 100 robo-taxis that will cover 130 miles of city roads in Changsha, the capital city of Hunan province. The robo-taxis will use Baidu’s V2X (i.e. vehicle-to-everything) technology, to enable them to communicate with road infrastructure, like traffic lights.

China’s Baidu says its answer to Alexa is now on 200M devices

A Chinese voice assistant has been rapidly gaining ground in recent months. DuerOS, Baidu’s answer to Amazon’s Alexa, reached over 200 million devices, China’s top search engine announced on its Weibo official account last Friday.

To put that number into context, more than 100 million devices pre-installed with Alexa have been sold, Amazon recently said. Google just announced it expected Assitant to be on 1 billion devices by the end of this month.

Voice interaction technology is part of Baidu’s strategy to reposition itself from a heavy reliance on search businesses towards artificial intelligence. The grand plan took a hit when the world-renown scientist Lu Qi stepped down as Baidu’s chief operating officer, though the segment appears to have scored healthy growth lately, with DuerOS more than doubling from a base of 90 million installs since last June.

When it comes to how many devices actually use DuerOS regularly, the number is much less significant: 35 million machines a month at the time Baidu’s general manager for smart home devices announced the figure last November.

Like Alexa, which has made its way into both Amazon-built Echo speakers and OEMs, DuerOS also takes a platform play to power both Baidu-built and third-party devices.

Interestingly, DuerOS has achieved all that with fewer capabilities and a narrower partnership network than its American counterpart. By the end of 2018, Alexa could perform more than 56,000 skills. Devices from over 4,500 brands can now be controlled with Alexa, says Amazon. By comparison, Baidu’s voice assistant had 800 different skills, its chief architect Zhong Lei revealed at the company’s November event. It was compatible with 85 brands at the time.

This may well imply that DuerOS’s allies include heavy-hitters with outsize user bases. Baidu itself could be one as it owns one of China’s biggest navigation app, which is second to Alibaba’s AutoNavi in terms of number of installs, according to data from iResearch. Baidu said in October that at least 140 million people had activated the voice assistant of its Maps service.

Furthermore, Baidu speakers have managed to crack a previously duopolistic market. A report from Canalys shows that Baidu clocked in a skyrocketing 711 percent quarter-to-quarter growth to become China’s third-biggest vendor of smart speakers during Q3 last year. Top players Alibaba and Xiaomi, on the other hand, both had a sluggish season.

While Baidu deploys DuerOS to get home appliances talking, it has doubled down on smart vehicles with Apollo . The system, which the company calls the Android for autonomous driving, counted 130 OEMs, parts suppliers and other forms of partners as of last October. It’s attracted global automakers Volvo and Ford who want a foothold in China’s self-driving movement. Outside China, Apollo has looked to Microsoft Azure Cloud as it hunts for international partnerships.

Baidu has yet to prove commercial success for its young AI segment, but its conversational data trove holds potential for a lucrative future. Baidu became China’s top advertising business in part by harnessing what people search on its engine. Down the road, its AI-focused incarnation could apply the same data-crunching process to what people say to their machines.

Tencent AI Lab loses key executive

Chinese internet giant Tencent just lost a leading artificial intelligence figure. Zhang Tong, who previously worked at Yahoo, IBM and Baidu, has stepped down after directing Tencent’s AI Lab for nearly two years.

The scientist will return to academia and continue research in the AI field, Tencent confirmed with TechCrunch on Thursday, adding that it hasn’t appointed a successor.

”We are grateful for [Zhang]’s contributions to Tencent AI Lab and continue to explore fundamental and applied research that can make the benefits of AI accessible to everyone, everywhere,” Tencent said in a statement.

Zhang’s departure is the latest in a handful of top AI scientists quitting large Chinese tech firms. In 2017, search giant Baidu lost its chief scientist Andrew Ng who started Google’s deep learning initiative. Last year, the firm suffered another blow as renown AI expert Lu Qi resigned as chief operating officer and moved onto spearheading Y Combinator’s newly minted China program.

Talent is key to a tech firm’s AI endeavor, for a revered leader not only inspires employees but also boosts investor confidence. Baidu stocks plunged following Lu’s exit as markets weighed on the talent gap inside the company, which had poured resources into autonomous driving, smart speakers among other AI efforts. Tencent itself had poached Zhang from Baidu’s Big Data Lab to ramp up its own AI division.

Tencent is best known for its billion-user WeChat messenger and being the world’s largest video game publisher, but it’s also been doubling down on machine learning R&D to serve users and enterprise clients. It launched the AI Lab in April 2016 and opened its first U.S. research center in Seattle a year later to work on speech recognition and natural language processing (NLP).

The AI Lab dives into machine learning, computer vision, speech recognition and NLP. Meanwhile, the social and entertainment giant also works to put fundamental research to practical use, applying AI to its key businesses — content, social, online games and cloud computing.

One beneficiary has been WeChat, which applies NLP to enable seamless dialogues between users speaking different languages. Another case in point is Tencent’s news aggregator Tiantian Kuaibao, which deploys deep learning to recommend content based on readers’ past preference. Kuaibao is a direct competitor to Jinri Toutiao, the popular AI-powered news app run by TikTok’s parent company ByteDance.

To date, Tencent’s AI Lab has a team of 70 research scientists and 300 engineers, according to information on its website. Tencent operates another AI initiative called the Youtu Lab, which focuses on image understanding, face recognition, audio recognition and optical character recognition. While its sister AI Lab falls under Tencent’s research-focus Technology Engineering Group, Youtu is the brainchild of the Cloud & Smart Industries Group, a new unit that Tencent set up during its major organizational reshuffle in October to place more emphasis on enterprise businesses.

Tencent-backed homework app jumps to $3B valuation after raising $300M

Academic exams are a big deal in China as they determine the kind of universities, high schools and elementary schools that students get into and to a degree, the future that awaits them.

Parents are thus willing to invest generously to help their children get ahead in school. One startup capitalizing on this need is Yuanfudao, a six-year-old startup that has attracted a line of big-name investors. The company announced this week that it has raised $300 million in a funding round led by existing investor Tencent, China’s largest social networking and gaming company.

Other participants from the round include Warburg Pincus, Matrix Partners China and IDG Capital . The fresh injection raised Yuanfudao’s valuation from around $1 billion at the time it pocketed $120 million in 2017 to exceed $3 billion.

China’s exam-oriented culture has given rise to a billion-dollar tutoring market. As affordable mobile internet becomes common, a lot of that teaching effort is happening online. A report by research firm iResearch shows that China’s online K-12 market will reach 44 billion yuan, or $6 billion, by the end of this year and will more than triple to 150 billion yuan by 2022.

Yuanfudao, which means “ape tutor” in Chinese, administers a suite of services including live courses, a database of exam problems and a popular homework help app. The latter scans homework problems and solves them instantly with the snap of a camera. The startup also operates a research institute for artificial intelligence, which could train its homework app to be smarter.

Yuanfudao claims to serve more than 200 million users, which include students and their parents who use the startup’s apps to check the learning progress of their kids.

Yuanfudao told TechCrunch that it derives the majority of its revenues from selling live courses. It plans to use the proceeds from the latest round to fund investments in research and development of AI as well as improve its apps’ user experience.

The startup is in a heated race to fight for Chinese students and parents. Other companies with similar homework help services include Zuoyebang, which is backed by Chinese search giant Baidu, Coatue Management, Sequoia Capital China and Goldman Sachs. Another one is Yiqizuoye, which counts Singapore sovereign fund Temasek as an investor. A wave of Chinese companies that started with a focus on adult education have also come into the K-12 fray, including New Oriental and 51Talk, which are both listed on the New York Stock Exchange.

TikTok parent ByteDance sues Chinese news site that exposed fake news problem

There’s worrying news from China’s online media world as ByteDance, the $75 billion company behind popular video app TikTok is taking a news site to court for alleged defamation after it published a story about ByteDance’s fake news problem in India.

U.S. tech firms have come to rely on media to help uncover issues, but Chinese tech news site Huxiu has become the latest litigation target of ByteDance, which reportedly surpassed Uber’s valuation after raising $3 billion. The company has sued internet giants Tencent and Baidu in the past year for alleged anti-competitive behavior.

This time around, ByteDance — which is backed by SoftBank’s Vision Fund, KKR and General Atlantic among others — has taken issue with an op-ed published earlier this month that spotlights a fake news problem on its Indian language news app, Helo.

Launched in July as part of ByteDance’s push in India, Helo competes with local media startups such as Xiaomi-backed ShareChat and DailyHunt as well as Facebook. ByteDance operates news app Jinri Toutiao with over 250 million monthly active users in China, according to data services provider QuestMobile. TikTok, branded as Douyin in China, has a reach well beyond its home front and claims 500 million MAUs worldwide with an additional 100 million users gleaned from its Musical.ly buyout.

“An insult and abuse”

On December 4, Huxiu published an opinion piece that condemned Helo and ShareChat for allowing misinformation to spread. One Helo post, for instance, falsely claimed that a Congress leader had suggested that India should help neighboring rival Pakistan clear its debt rather than invest in the State of Unity, a pricey local infrastructure project.

In response, ByteDane filed a lawsuit against Huxiu, saying that the Chinese news site made defamatory statements against it in translating an op-ed by contributor Elliott Zaagman. Tech blog TechNode — TechCrunch’s partner in China — ran an edited English version of the story but it is not part of the suit.

Zhang Yiming, founder of ByteDance, poses for a photograph at the company’s headquarters in Beijing, China. Photographer: Giulia Marchi/Bloomberg via Getty Images

“Technode edited the piece and removed some of my words. Huxiu was, and is with most of my articles, true to my original words,” Zaagman wrote on his WeChat timeline.

To adhere only to “facts” as part of its editorial process, TechNode removed “colorful” parts of Zaagman’s article, according to the blog’s editor-in-chief.

What goes missing on TechNode is what incensed ByteDance. Zaagman’s unfiltered statements on Huxiu “constitute an insult and abuse against ByteDance” by “claiming that Chinese companies have influence over the Indian election,” a ByteDance spokesperson told TechCrunch.

“The content on Huxiu is obviously a rumor and libel. It’s malicious slander. Whether it’s Chinese or foreign publications, Chinese or foreign authors, they must respect the truth, laws, and principles of journalism,” the spokesperson added.

The unedited English version is posted on Zaagman’s personal LinkedIn account here. Here is one paragraph that TechNode removed:

Maybe still Zhang is simply a victim of his own success. Few entrepreneurs start a company expecting it to be worth $75 billion. But what he has created may have far broader ramifications. As is demonstrated by Russia’s use of American social networking platforms to interfere in Western elections, misinformation campaigns can be a tool used by adversaries to disrupt a country’s internal politics. At this current moment when China faces greater international tensions, a pushback to their rising influence in Asia, and territorial disputes along their border with India, the last thing that Beijing needs is accusations from an opportunistic Indian politician sounding the alarm about how Beijing-based Chinese companies are spreading misinformation among the impressionable Indian electorate….

And this as well:

Although, on second thought, maybe it makes perfect sense that Zhang Yiming is peddling products that he himself would likely never use. After all, any good drug dealer knows not to get high on their own supply.

In a statement, Huxiu dismissed ByteDance’s accusation for being “wildly untrue” and bringing “major repercussions” for the online publication’s reputation. A spokesperson for Huxiu told TechCrunch that it hasn’t received any summons as the court is still processing the complaint.

In a peculiar twist to the incident, Huxiu actually pulled its Chinese version of Zaagman’s piece days leading to the ByteDance suit. The removal came as a result of “negotiations among multiple parties,” said the Huxiu representative who declined to share more details on the decision. In China, an online article can be subject to censorship for containing material considered illegal or inappropriate by the media platform itself or the government.

The problem of AI

douyin tiktok musically

The logo for ByteDance’s popular video app TikTok (called Douyin in China) at an electronic dance music festival. / Credit: ByteDance

In the U.S., Facebook has responded proactively to issues raised by the media — for example by banning accounts that stoke racial tension in Myanmar — while Twitter CEO Jack Dorsey went so far as to suggest that journalists sniffing out issues on his service is “critical” to the company. Beijing-based ByteDance hasn’t commented on the fake news problem highlighted in Zaagman’s article, but staff from its Indian regional app previously acknowledged the presence of misinformation.

“We work very closely with our local content review and moderation team in harnessing our algorithms to review and take down inappropriate content,” a Helo spokesperson told local newspaper Hindustan Times.

The concerns about Helo are the latest blow for ByteDance, which has marketed itself as an artificial intelligence company delivering what users want to see based on what their online interaction in the past. As has been the case with Western platforms, such as Google-owned YouTube which also uses an algorithm to feed users videos that they favor, the outcome can mean sensational and sometimes illegal content.

Along those lines, ByteDance’s focus on AI at the expense of significant “human-led” editorial oversight has come in for criticism.

In July, the Indonesian government banned TikTok because it contained “pornography, inappropriate content and blasphemy.” At home, Chinese media watchdogs have similarly slammed a number of the company’s other content platforms, and regulators in the country went so far as to shutter its humor app for serving “vulgar” content.

But ByteDance is hardly the only tech company entangled in China’s increased media scrutiny. Heavyweights including Tencent, Baidu, and ByteDance’s archrival Kuaishou have also come under attack at various degrees for hosting content deemed problematic by the authorities over the past year.

Lightspeed is raising its largest China fund yet

Lightspeed China Partners, the China-focused affiliate of Silicon Valley-based Lightspeed Venture Partners, has set a $360 million target for its fourth flagship venture fund, according to a document filed with the U.S. Securities and Exchange Commission today.

If the target is reached, the fund will be Lightspeed China’s largest yet, per PitchBook. Lightspeed China’s previous two funds each closed on $260 million. The VC raised $168 million for its debut China-focused fund in 2013.

Lightspeed China is led by David Mi (pictured). Mi, an investor in multiple billion-dollar Chinese companies, was previously the director of corporate development at Google, where he helped lead the search giant’s investment in Baidu. He joined Lightspeed in 2008 and established the firm’s China presence in 2011. Yan Han, a long-time Lightspeed investor and co-founder of the Chinese branch, is also listed on the filing.

Lightspeed China has backed e-commerce platform Pingduoduo and loan provider Rong360, a pair of Chinese “unicorns” that both completed U.S. initial public offerings since 2017. Typically, the firm makes early-stage investments in the internet, mobile and enterprise spaces. 

Earlier this year, Lightspeed Venture Partners filed to raise a record $1.8 billion in new capital commitments. This month, it tacked five new partners onto its consumer and enterprise investment teams, including Slack’s former head of growth and Twitter’s former vice president of global business development.

Lightspeed didn’t immediately respond to a request for comment.

LemonBox, which brings US vitamins to Chinese consumers, raises $2M

LemonBox, a Chinese e-commerce startup that imports vitamins and health products from the US, has raised $2 million to develop its business.

The company graduated from Y Combinator’s most recent program in the U.S. and, fuelled by the demo day, it has pulled in the new capital from 10 investors which include Partech, Tekton Ventures, Cathexis Ventures, Scrum Ventures and 122 West Ventures.

LemonBox started when co-founder and CEO Derek Weng, a former employee at Walmart in the U.S, saw an opportunity to organize the common practice of bringing health products back in China. Any Mainland Chinese person who has lived or even just visited the U.S. will be familiar with such requests from family and friends, and LemonBox aims to make it possible for anyone in China to get U.S-quality products without relying on a mule.

The service is primarily a WeChat app — which taps into China’s ubiquitous messaging platform — and a website, although Weng told TechCrunch in an interview this week that the company is contemplating a standalone app of its own. The benefit of that, beyond a potentially more engaging customer experience, could be to broaden LemonBox’s product selection and use data to offer a more customized selection of products. Related to that, LemonBox said it hopes to work with health and fitness-related services in the future to gather data, with permission, to help refine the personal approach.

LemonBox’s team has now grown to 20 people, with 12 full-time staff and 8 interns, and Weng said that the new funding will also go towards increased marketing, improvements to the WeChat app and upgrading the company’s supply chain. Business, he added, is growing at 35 percent per week as LemonBox has adopted a personal approach to its packaging, much like Amazon-owned PillPack.

“This is the first time people in China have ever seen this level of customization for their vitamins,” Weng told TechCrunch.

Members of the LemonBox team with Qi Lu, who heads up Y Combinator’s China business

Qi Lu, the former Microsoft and Baidu executive who leads YC’s new China unit, said he is “bullish” about the business.

“What LemonBox offers resonates with me and is serving a clear China market needs. Personally, I travel a lot between China and the U.S, and I often was asked by my relatives to help purchase and carry them similar products like vitamins,” he said in a prepared statement.

“More importantly, what LemonBox can do is to build an initial core user base and a growing brand. Over time, by serving their users well, it can reach and engage more users who want to better take care of their broader nutrition needs, use more data and take advantage of increasingly stronger AI technologies to customers and personalize, and become an essential service for more and more users and customers in China,” Lu added.

What China searched for in 2018: World Cup, trade war, Apple

Soon after Google unveiled the top trends in what people searched for in 2018, Baidu published what captivated the Chinese in a parallel online universe, where most of the West’s mainstream tech services including Google and Facebook are inaccessible.

China’s top search engine put together the report “based on trillions of trending queries” to present a “social collective memory” of internet users, said Baidu. 802 million people have come online in China as of August, and many of them use Baidu to look things up daily.

Overall, Chinese internet users were transfixed on a mix of sports events, natural disasters, politics, and entertainment, a pattern that also prevails in Google year-in-search. On Baidu, the most popular queries of the year are:

  1. World Cup: China shares its top search with the rest of the world. Despite China’s lackluster performance in the tournament, World Cup managed to capture a massive Chinese fan base who supported an array of foreign teams. People filled bars in big cities at night to watch the heart-thumping matches and many even trekked north to Russia to show their support.
  2. US-China trade war: The runner-up comes as a no surprise given the escalating conflict between the world’s two largest economies. A series of events have stoked more fears of the standoff, including the arrest of Huawei’s financial chief.

  3. Typhoon Mangkhut: The massive tropical cyclone swept across the Pacific Ocean in September, leaving the Philippines and South China in shambles. Shenzhen, the Chinese city dubbed the Silicon Valley for hardware, reportedly submitted more than $20.4 million in damage claims after the storm.

  4. Apple launch: The American smartphone giant is still getting a lot of attention in China even as local Android competitors like Huawei and Oppo chip away at its market share. Apple is also fighting a legal battle with chipmaker Qualcomm which wanted the former to stop selling certain smartphone models in China.

  5. The story of Yanxi Palace: The historical drama of backstabbing concubines drew record-breaking views for its streamer and producer iQiyi, China’s answer to Netflix that floated in the U.S. in February. The 70-episode show was watched not only in China but also across more than 70 countries around the world.

  6. Produce 101: The talent show in which 101 young women race to be the best performer is one of Tencent Video’s biggest hits of the year, but its reach has gone beyond its targeted young audience as it popularized a meme, which made it to No. 9 on this list.

  7. Skr: A buzzword courtesy to pop idol Kris Wu who extensively used it on a whim during iQiyi’s rap competition “Rap of China,” prompting his fans and internet users to bestow it with a myriad of interpretations.

  8. Li Yong passed away: The sudden death of the much-loved television host after he fought a 17-month battle with cancer stirred an outpouring of grief on social media.

  9. Koi: A colored variety of carps, the fish is associated with good luck in Chinese culture. Yang Chaoyue, a Produce 101 contestant who the audience believed to be below average surprisingly rose to fame and has since been compared to a koi.

  10. Esports: Professional gaming has emerged from the underground to become a source of national pride recently after a Chinese team championed the League of Legend finals, an event regarded as the Olympics for esports.

In addition to the overall ranking, Baidu also listed popular terms by category, with staple areas like domestic affairs alongside those with a local flavor such as events that inspire national pride or are tear-jerking.

This was also the first year that Baidu has added a category dedicated to AI-related keywords. The search giant, which itself has pivoted to go all in AI and has invested heavily in autonomous driving, said the technology “has not only become a nationwide buzzword but also a key engine in transforming lives across the globe.” In 2018, Chinese people were keen to learn about these AI terms:

Robots, chips, internet of things, smart speakers, autonomous driving, face recognition, quantum computing, unmanned vehicles, World Artificial Intelligence Conference, and quantum mechanics.