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Huawei Reports Sales Recover From Coronavirus Slump

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By Agence France-Presse | Updated: 14 July 2020

Telecom giant Huawei reported double-digit revenue growth for the first half of the year on Monday as it appeared to have recovered from a sales slump seen after the coronavirus pandemic broke out in its home country China.

The sales figures came just as the British government was poised to make a crucial decision on Huawei’s involvement in the UK’s future 5G telecoms network.

The CNY 454 billion (roughly Rs. 4.88 lakh crores) first half revenue figure — up 13.1 percent year-on-year — pointed to a sharp uptick in sales for the second quarter, after first-quarter revenue came in at just 182.2 billion yuan, a mere 1.4 percent increase year-on-year.

Analysts had blamed the slowdown in the first three months of 2020 on the virus fallout on business, and on US-led efforts to contain the company’s involvement in foreign telecom networks.

Washington has lobbied allies to shun Huawei over suspicions that its telecoms gear could contain security loopholes that allow China to spy on global communications traffic.

The COVID-19 pandemic emerged in China in December before spreading globally.

Also reporting a net profit margin of 9.2 percent for the first half, Huawei said communications technologies were both a tool for combatting the coronavirus and an engine for recovery of the world’s battered economies.

The net profit margin for the first half also marked an improvement over the first quarter, when it was 7.3 percent, as well as over the first half of 2019, when it was 8.7.

But despite the improvement in the latest figures, Huawei’s sales growth of 23.2 percent was still well below that seen a year earlier.
‘Crucial tool’

Huawei is the world’s top supplier of telecom networking equipment and number-two smartphone maker behind Samsung.

“As countries around the globe are grappling with the COVID-19 pandemic, information and communications technologies (ICT) have become not only a crucial tool for combatting the virus, but also an engine for economic recovery,” Huawei said in Monday’s statement.

The company said it “reiterated its commitment to working with carriers and industry partners to maintain stable network operations, accelerate digital transformation, and support efforts to contain local outbreaks and reopen local economies”.

Allegations that Huawei has both the capacity and willingness to spy on users of its telecom networks on behalf of China have placed the company at the centre of a global controversy about how much access is should get as many countries prepare to roll out super-fast 5G technology.

Analysts say Huawei’s 5G equipment is both more advanced and cheaper than anything the competition can bring to the table.

British Prime Minister Boris Johnson will reportedly decide this week whether to phase out the Chinese tech giant’s equipment from the UK’s 5G network.

The government had already pledged to cut the firm out of the most sensitive “core” elements of 5G that access personal data.

Reports say Johnson has received a damning security agency reassessment about the long-term safety of Huawei.
‘Impossible’ to remove

The British review was triggered by new US sanctions that blocked Huawei’s access to US chips and semi-conductors at the heart of 5G networks.

On Monday, the head of British telecom operator BT said it would be “impossible” to remove Huawei’s equipment from Britain’s current infrastructure in under 10 years.

BT chief executive Philip Jansen warned that Britain could suffer “outages” and potential security risks if the sector was forced to stop dealing with the Chinese firm.

Huawei, which denies all spying charges, urged Britain last week not to rush into taking any costly decision to phase out its equipment because of US sanctions.

Also last week, China urged France to guarantee a “fair and just” environment for its companies after Paris decided to restrict licenses for telecom operators using 5G technology from Huawei.

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Games

Angry Birds Maker Rovio Happy as Stay-at-Home Gaming Boosts Profit

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By Reuters | Updated: 14 August 2020

Rovio Entertainment, maker of the 10-year-old Angry Birds mobile game series, on Friday reported a 160 percent jump in second-quarter adjusted operating profit, helped by increased player engagement amid COVID-19 lockdowns.

“We reached record high games revenue driven by the strong performance of our key games,” CEO Kati Levoranta said in a statement.

Adjusted operating profit rose to EUR 13.8 million (roughly Rs. 121 crores) from EUR 5.3 million (roughly Rs. 46 crores) while revenue fell 3.6 percent to EUR 69.2 million (roughly Rs. 610 crores) due to lower movie revenue, said the Finnish company, which listed its shares in 2017.

The company attributed the improved performance to “increased player engagement due to COVID-19” as well as lower marketing costs.

“The overall impact of COVID-19, which was visible in a higher level of downloads, daily active users and player engagement, peaked in late April,” Levoranta said.

In August 2019, Rovio released a sequel to its successful Angry Birds movie but its movie revenue declined in the second quarter of 2020.

However, Rovio said Angry Birds Movie 2 was among the most watched movies on Netflix during the spring.

© Thomson Reuters 2020

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Internet

Amazon India to Launch Online Drug Store, Starting With Bengaluru

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By Reuters | Updated: 14 August 2020

Amazon said on Friday it will launch an online pharmacy in India that will serve the city of Bengaluru, the latest move by the e-commerce giant to widen its reach in a key growth market.

The service, “Amazon Pharmacy”, will offer both over-the-counter and prescription-based drugs, basic health devices and traditional Indian herbal medicines, the company said in a statement, without giving a timeline for the launch.

The move comes amid increasing competition in India with rivals Walmart-owned Flipkart, billionaire Mukesh Ambani’s upstart online grocery service JioMart and a range of other smaller players.

Last month, the company decided to open 10 new warehouses in India and start offering auto insurance. Amazon had also secured clearance for alcohol delivery in one Indian state, Reuters reported in June.

India is yet to finalise regulations for online drug sales, or e-pharmacies, but the growth of several online sellers such as Medlife, Netmeds, Temasek-backed PharmEasy, and Sequoia Capital-backed 1mg has threatened traditional drug stores.

The companies have said they comply with all Indian laws even as many trader groups continue to protest against e-pharmacies, saying that would lead to sale of medicines without proper verification.

“Amazon’s customer base is very high, so we are bound to lose business. There are 5 million families dependent on this (offline) trade,” Yash Aggarwal, legal head of South Chemists and Distributors Association in New Delhi, said on Friday.

The group will raise objections against Amazon’s move with the government, he said.

© Thomson Reuters 2020

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Apps

WeChat, Signal US Downloads Spike After Trump Threatens Ban: Sensor Tower

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By Reuters | Updated: 14 August 2020

More users in the United States downloaded chat app WeChat and its encrypted alternative Signal, after President Donald Trump threatened to ban WeChat, owned by Chinese company Tencent, according to Sensor Tower data shared with Reuters on Thursday.

WeChat users in the United States rushed to install the app before it could disappear from the app stores. Others, especially in China, sought alternatives like the encrypted Signal, owned by non-profit Signal Foundation.

WeChat app downloads in the United States rose 41 percent in a six-day average from the week prior to the US ban announced last Thursday, according to Sensor Tower. Signal app downloads in US and China app stores separately jumped by 30 percent and 90 percent.

“Not only are alternatives like WhatsApp and Telegram officially blocked in China, but Signal has an inherent advantage in that it’s well known for being strongly encrypted,” Stephanie Chan, Mobile Insights Strategist at Sensor Tower told Reuters. Signal did not immediately respond to request for comment.

WeChat users have also turned to another Tencent-owned chat app, QQ, as the ban did not specifically cover this product. Its downloads in the United States have tripled in the past week, Sensor Tower data showed.

Some Chinese immigrants and expats worry losing access to the popular WeChat could cut off contact with family and friends in China, where most popular US instant messaging apps including Facebook, Whatsapp, and Telegram have been blocked by the Chinese government’s Great Firewall.

It was unclear how the administration could implement the ban on WeChat in mid-September. It could order Apple and Alphabet’s Google to remove WeChat from their app store, or order the apps to stop offering access or updates to US users.

Some users said they planned to access WeChat in the United States using a virtual private network (VPN), a common tool people in China use to hide IP address to evade government restrictions.

© Thomson Reuters 2020

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Science

Computer Scientist, Pixel Inventor Russel Kirsch Dies Aged 91

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By Associated Press | Updated: 14 August 2020

Russell Kirsch, a computer scientist credited with inventing the pixel and scanning the world’s first digital photograph, died August 11 at his home in Portland, Oregon, The Oregonian reported. He was 91.

Pixels, the digital dots used to display photos, video and more on phone and computer screens, weren’t an obvious innovation in 1957, when Kirsch created a small, 2-by-2-inch black-and-white digital image of his son, Walden, as an infant. That was among the first images ever scanned into a computer, using a device created by his research team at the US National Bureau of Standards (now the National Institutes of Science and Technology).

This work “laid the foundations for satellite imagery, CT scans, virtual reality, and Facebook,” said a 2010 Science News article about Kirsch, subsequently republished by Wired. That first square image, that article said, measured a mere 176 pixels on a side — just shy of 31,000 pixels in total. Today, the digital camera on the iPhone 11 can capture roughly 12 million pixels per image.

Though computers have become exponentially more powerful and can now fit in our pockets, science has ever since been coming to terms with the fact that Kirsch made his pixels square. The square shape of the pixels meant that image elements can look blocky, clunky or jagged — just generally not as smooth as real life. There’s even a word for this effect: “pixelated.”

“Squares was the logical thing to do,” Kirsch told the magazine in 2010. “Of course, the logical thing was not the only possibility … but we used squares. It was something very foolish that everyone in the world has been suffering from ever since.”

Kirsch later developed a method to smooth out images by using pixels with variable shapes instead of the squares.

Born in Manhattan in 1929, Kirsch was the son of Jewish immigrants from Russia and Hungary. He was educated at the Bronx High School of Science, New York University, Harvard and MIT and worked for five decades as a research scientist at the US National Bureau of Standards.

Russell Kirsch is survived by his wife of 65 years, Joan; by children Walden, Peter, Lindsey and Kara; and by four grandchildren.
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Apps

TikTok and Its Employees Prepare to Fight Trump Over App Ban

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By Associated Press | Updated: 14 August 2020

TikTok and its US employees are planning to take President Donald Trump’s administration to court over his sweeping order to ban the popular video app, according to a lawyer preparing one of the lawsuits.

The employees’ legal challenge to Trump’s executive order will be separate from a pending lawsuit from the company that owns the app, though both will argue that the order is unconstitutional, said Mike Godwin, an internet policy lawyer representing the employees.

Trump last week ordered sweeping but vague bans on dealings with the Chinese owners of TikTok and messaging app WeChat, saying they are a threat to US national security, foreign policy and the economy. The TikTok order would take effect in September, but it remains unclear what it will mean for the apps’ 100 million US users, many of them teenagers or young adults who use it to post and watch short-form videos.

It’s also unclear if it will make it illegal for TikTok to pay its roughly 1,500 workers in the US, which is why some of them came to Godwin for help, he said. The order would prohibit “any transaction by any person” with TikTok and its Chinese parent company ByteDance.

“Employees correctly recognize that their jobs are in danger and their payment is in danger right now,” Godwin said.

TikTok said in a statement last week that it was “shocked by the recent Executive Order, which was issued without any due process.” It declined to comment Thursday on whether it is pursuing its own lawsuit.

“We have no involvement with and are not coordinating on” the employee-led initiative, said TikTok spokeswoman Hilary McQuaide said via email. “We respect the rights of employees to engage in concerted activity to seek due process of law.”

The Fifth and 14th Amendments to the US Constitution safeguard life, liberty and property from arbitrary government action lacking “due process of law.”

Microsoft is in talks to buy parts of TikTok, in a potential sale that’s being forced under Trump’s threat of a ban.

White House press secretary Kayleigh McEnany defended Trump’s TikTok and WeChat orders Thursday, telling reporters he was exercising his emergency authority under a 1977 law enabling the president to regulate international commerce to address unusual threats.

“The administration is committed to protecting the American people from all cyber threats and these apps collect significant amounts of private data on users,” said McEnany, adding that the Chinese government can access and use such data.

TikTok said it spent nearly a year trying to engage in “good faith” with the US government to address these concerns.

“What we encountered instead was that the Administration paid no attention to facts, dictated terms of an agreement without going through standard legal processes, and tried to insert itself into negotiations between private businesses,” the company’s statement said.

Godwin said he was retained by Patrick Ryan, who joined TikTok from Google earlier this year as a technical program manager. Ryan posted a public fundraising pitch on GoFundMe this week to raise money for attorneys who can “fight this unconstitutional taking.”

“This is unprecedented,” Ryan wrote. “And it’s frankly really uncool.”

Unlike other Chinese tech companies targeted by Trump, such as telecom giant Huawei, TikTok’s widespread popularity among Americans adds a layer of complexity to its legal and political challenges. The looming ban has annoyed TikTok users, some of them Trump supporters like Pam Graef of Metairie, Louisiana.

The 53-year-old fitness instructor found nearly instant TikTok fame after downloading the app this summer and posting a video of herself dancing frenetically in a kitchen as someone pretending to be her embarrassed daughter shouts that she’s doing it wrong. The video has nearly 3.5 million views.

“I don’t want it to be banned. It’s just a blast,” Graef said. “It’s a way for me to promote my virtual training and virtual classes.”

She said Trump won’t lose her vote over this, but she doesn’t understand all the fuss about the app’s Chinese ownership. “What are they gaining by spying on us?” Graef said. “We’re just doing stupid videos and having fun.”

The Wall Street Journal reported on Tuesday that, until late last year, the TikTok app was able to track users of Android phones without their consent by collecting unique phone identifiers in a way that skirted privacy safeguards set by Google. TikTok responded that the technique it used is a common way to prevent fraud and said it no longer collects the unique identifier.

The company has repeatedly said that the way it collects data is typical for thousands of mobile apps. “We have made clear that TikTok has never shared user data with the Chinese government, nor censored content at its request,” said its statement last week.

Trump’s actions follow the lead of India, which has expressed similar security concerns and earlier this summer banned TikTok and dozens of other Chinese apps amid a military standoff between the two countries.

Godwin said the employees’ legal challenge will be focused on worker rights, not on the national security claims underlying Trump’s order.

The civil rights lawyer, known in early internet culture for coining “Godwin’s law,” which posits that all online debates will eventually devolve into the use of Nazi analogies, said employees can’t afford to wait.

“We have to proceed very quickly,” he said Thursday. “If we wait around for the order to be enforced, which it will be on September 20, then the workers will lose their chances to be paid.”

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Fortnite Maker Epic Games Sues Apple, Google After Removal of Game From App Stores

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By Reuters | Updated: 14 August 2020

Apple and Alphabet’s Google on Thursday removed popular video game Fortnite from their app stores for violating the companies’ in-app payment guidelines, prompting developer Epic Games to file federal antitrust lawsuits challenging the two companies’ rules.

Apple and Google cited a direct payment feature rolled out on the Fortnite app earlier on Thursday as the violation.

Epic sued in US court seeking no money from Apple or Google but rather injunctions that would end many of the companies’ practices related to their app stores.

“Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear,” Epic said in its lawsuit, filed in the Northern District of California.

Epic also attacked Apple on social media, launching a campaign with the hashtag #FreeFortnite, urging players to seek refunds from Apple if they lose access to the game, and creating a parody of Apple’s famous “1984” television ad.

In the parody, which quickly garnered hundreds of thousands of views, a female Fortnite fighter hurls a unicorn-shaped club to smash a screen on which an Apple-headed character speaks of “the anniversary of the platform unification directives.”

Apple takes a cut of between 15 percent and 30 percent for most app subscriptions and payments made inside apps, though there are some exceptions for companies that already have a credit card on file for iPhone customers if they also offer an in-app payment that would benefit Apple. Analysts believe games are the biggest contributor to spending inside the App Store, which is in turn the largest component of Apple’s $46.3 billion-per-year (roughly Rs. 3.46 lakh crores) services segment.

In a statement, Apple said Fortnite had been removed because Epic had launched the payment feature with the “express intent of violating the App Store guidelines” after having had apps in the store for a decade.

“The fact that their (Epic) business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users,” Apple said in a statement.

Google also removed Fortnite from its Play Store, but did not immediately respond to a request for comment on the lawsuit. “However, we welcome the opportunity to continue our discussions with Epic and bring Fortnite back to Google Play,” Google spokesman Dan Jackson said in a statement. Jackson said Epic had violated a rule requiring developers to use Google’s in-app billing system for products within video games.

Apple and Google were among the major American technology companies to come under anti-competition scrutiny in a hearing before lawmakers last month. During the hearing, Apple Chief Executive Tim Cook argued that Apple is not anti-competitive because it does not have majority market share in any markets where it operates, including mobile phones, where devices powered by Alphabet’s Android have greater market share.

Epic’s lawsuit, however, argues that app distribution and in-app payments for Apple devices constitute their own distinct market for anti-competition purposes because Apple users rarely leave its “sticky” ecosystem, according to Epic’s filing. Epic’s free-to-play battle-royal videogame Fortnite has reached massive popularity among young gamers since its launch in 2017, and competes with Tencent Holdings’ PlayerUnknown’s Battlegrounds. The title’s removal from the App Store means that new players will not be able to download it and that exiting players cannot receive updates, but the game should continue to work on devices where it is already installed.

Epic Games does not disclose how many iOS users Fortnite has. Many fans play the game primarily on PCs or gaming consoles while using their mobile phones as a backup, but iPhone users generate far more revenue for Epic.

In both Apple’s App Store and Google’s Play Store, Fortnite had about 2 million downloads in July 2020, according to mobile analytics firm SensorTower. But Apple users spent about $34 million (roughly Rs. 254 crores) while Android users spent only $2 million (roughly Rs. 14.96 crores), according to SensorTower data.

Because Android functions differently from iOS, users can still download Fortnite from Epic’s website and other non-Google stores such as the one run by Samsung and install it on their devices, Epic said in a blog post earlier on Thursday.

“Epic is not seeking any monetary relief, but rather only an order enjoining Google from continuing to impose its anti-competitive conduct on the Android ecosystem,” it said in its lawsuit.

In a statement, Spotify, a streaming music rival to Apple that has filed an antitrust complaint against the iPhone maker in Europe, applauded Epic’s move.

“Apple’s unfair practices have disadvantaged competitors and deprived consumers for far too long,” Spotify said.

© Thomson Reuters 2020

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