Enterprise

OnePlus opens its largest R&D facility

Catering the world’s second-largest smartphone market

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OnePlus is a solid example of a well-managed brand that started from scratch and went to dominate the markets. Within a short span of five years, the Chinese company has managed to dethrone legends like Samsung and Apple in the premium segment.

It started out in the southeast Asian markets and slowly made in-roads to India. This one market has played a pivotal role in turning the company’s fortunes thanks to insane demand and a thirst for value products.

Taking a step further, OnePlus has now opened its largest research and development facility in the Indian city of Hyderabad. Located at a central location, the city is not very far from the country’s Silicon Valley, Bengaluru. In fact, the city caters to a range of other companies like Google and Amazon.

OnePlus plans to invest INR 1,000 crore (US$ 139 million) in the facility within the next three years. This center will work in tandem with the ones in Shenzhen and Taipei to develop India-specific OxygenOS features. This will also include OnePlus applications, designs, and more.

“In three years, we plan to grow the new R&D center in Hyderabad into our biggest globally. We plan to re-focus our R&D efforts on a large scale and drive innovations in India for the global product, especially on the software side with special emphasis on artificial intelligence, 5G, and IoT,” said Pete Lau, founder and CEO of OnePlus.

The facility will have house test labs for improving the camera, networking, and automation. It will also focus heavily on 5G testing, AI improvements, and performance testing.

The facility is spread across five floors with over 186,000 square feet of space. Further, the brand will be able to leverage easily accessible talent in and around Hyderabad. The inaugural event was also addressed by the working president of the elected government, K.T. Rama Rao.

Pete Lau with K.T Rama Rao

India is a developing economy and hence, a perfect market for premium phones. Adding to this, technology companies have doubled down on their investment in the country to avoid import duty and take advantage of government schemes like Make in India. While assembling is just the first step, long-term research and development are essential for a country to create its own industrial lobby.

With the on-going US-China Trade War, developing economies like India and Vietnam have a plethora of opportunities coming their way.

Enterprise

Qualcomm reportedly urged US to reverse the Huawei ban

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Yesterday, Huawei confirmed the inevitable end of the Kirin chip, owing to the heightening American ban. When it launches later this year, the Huawei Mate 40 series is the last phone to feature the iconic processor. Despite the terrible news, Huawei’s fate is still up in the air. For one, the Trump administration can still (unlikely) reverse everything, restoring Huawei’s former status on top of the industry. In another likelier scenario, a third-party chip supplier can provide some much-needed supply for the ailing Chinese company. Today, Qualcomm reportedly urged US to reverse the Huawei ban.

It’s still a shocking plot twist. Qualcomm has clashed with the Chinese company in the processor industry before. Naturally, when the bans rocked the smartphone industry, the company’s continued dominance flourished at the rival’s major losses. However, Qualcomm CEO Steve Mollenkopf soon announced long-term pursuits to court Huawei’s business. The supposed courting fell silent just as quickly.

Today, however, the Wall Street Journal has leaked a presentation detailing Qualcomm’s lobbying to reverse the ban. According to the document, the chip-making company wants to lift exporting restrictions so it can sell its chips to Huawei. With the export ban in place, the US will allegedly drive Huawei’s business away from America and into competitors from other countries like Samsung and Mediatek.

Of course, it’s also important to note that this is different from an operating license. Amidst the ban, a few American companies have applied for a license to sell components to Huawei. Qualcomm has not applied for such a license — at least, not yet. Instead, the company wants every export restriction lifted, allowing other companies to also do business with Huawei.

Lobbying is only one thing. It’s still up to the US government, ultimately. However, American companies are also fighting the extensive ban. Only time will tell if things will go back to how they were.

SEE ALSO: Mate 40 is the last Huawei phone to feature Kirin chips

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Enterprise

Everything you need to know about the congressional big tech hearing

Why are Apple, Amazon, Facebook, and Google in trouble?

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Congressional hearings are uniquely American, and you’ve surely seen them in a movie or show. It’s often the crux, dramatizing a room filled with politicians, media, and the country. Everyone’s attention is glued to the protagonist, who sits in front of the committee and answers their hard-hitting questions. If you really want to see a classic, I’d recommend seeing The Aviator.

Coming back to the point, a similar hearing has grabbed the world’s attention. Often referred to as “big tech”, American internet giants Apple, Amazon, Facebook, and Google are working hard to defend their enormous size, arguing that their dominating position in the market doesn’t stifle competition.

In simpler terms, “big tech” has a market capitalization of more than US$ 4.85 trillion. And, this gives them enough clout to discourage competition and continue their virtual monopoly. When companies become too big, the consequences can be radical since the government will find it harder to regulate them.

Data is the new oil

The American economy has witnessed similar situations before and there are precedents available to curtail a company’s influence. For instance, Standard Oil was among the world’s first and largest multinational companies. It started when oil was a fresh discovery and the world was slowly realizing the fuel’s potential. Officially started in 1870, it grew exponentially in the coming years by acquiring smaller companies, controlling market supply, and chasing maximum efficiency while ignoring antitrust regulations.

By 1890, Standard Oil controlled almost 90 percent of the refined oil business in the US. In the coming years, the company would restructure itself into a holding company that controls more than 40 smaller companies. While these smaller companies were separate entities, all profits went to one parent company. In turn, the parent ensured all the kids work in tandem to improve efficiency and control market dynamics.

Finally, in 1911, Standard Oil’s control came to an end after the US Justice Department prosecuted it via the Sherman Antitrust Act. Standard Oil was dismantled into smaller companies, again. But, they had an independent board of directors and each was left to fend for its own. It essentially meant that Standard Oil, as one entity, no longer existed and the market had dozens of autonomous companies. For consumers, this ensured healthy competition and innovation, while supply chains and associated trade partners were no longer dealing in a pseudo-mafia regime.

Standard Oil of New Jersey and Standard Oil of New York are predecessors of ExxonMobil, Standard Oil of Kentucky became Chevron, and South Penn Oil is known as Shell today. A similar breakup was enforced on telecom giant Bell Systems in 1982 when the parent AT&T, was split into regional companies. One of these sping-offs was Bell Atlantic, today called Verizon.

Big tech and its influence

Data is equivalent to oil or gold. The three together are fundamental pillars of the twenty-first century. Just like Standard Oil started out at the cusp oil discovery, Amazon and Google can be called the early pioneers of the consumer internet.

Equipped with instant connectivity, Amazon created online shopping as we know it today. The internet becomes a stressful place without Google helping us discover basic information. Facebook is quite literally our personal life and everyone around you uses it.

Lastly, Apple is the only significant hardware maker here, but it has surprisingly more control over software thanks to its closed eco-system. These companies are very similar to Standard Oil and can pose a serious threat to encouraging competition. Free market principles also go out the window when someone has majority control.

Apple and its greed for more

The Cupertino-based giant revolutionized music playback thanks to the iPod and iTunes. When Apple sold you the iPod, it made a profit. But you need music to utilize your purchase. So, you buy a track from iTunes, that’s also controlled by Apple. Ultimately, you end up paying more and more to the same company. Thankfully, the system is partially restricted and you can sideload MP3 files, but it’s a cumbersome and discouraging process.

Coming to 2020, apps are everywhere. Apple’s App Store comes pre-installed on iOS devices shipped in the last decade. Apple takes a 30 percent cut on whatever you sell via the App Store. Whether it’s an app or an in-app purchase, Apple will get its share of the revenue. Apple says the store acts as a perfect marketplace for developers as well as users. But, how can a newly started developer or company afford to give away 30 percent of its revenue to Apple as a “service charge?”

Keep in mind, this “big tech” has more than US$ 190 billion in cash. Spotify has publicly called-out Apple for this practice numerous times because it sells monthly streaming plans on its app and can’t afford to part a huge chunk of the payment to Apple. Instead of using Apple’s payment system, it manages its own subscription to save “Apple tax”, an informal slang for Apple’s revenue cut. Even Netflix follows a similar approach. The point is, bigger companies are capable of bypassing Apple’s ecosystem lock, albeit with considerable expenses. Then how can new competition come up from scratch?

It’s practically a monopoly because the developer has two options — take it or leave it. Now, if you’re in the market to sell your app, all iOS devices are out of scope if you don’t adhere to Apple’s demands. And, if you skip the App Store, you’re missing out on all the potential revenue. If you agree with Apple, by an optimistic outlook, you’ll at least get 70 percent of something as revenue? This is the basic working of a monopoly.

The operating system market is a duopoly controlled by Apple’s App Store and Google’s Play Store. While third-party app stores like Amazon App Store, AppGallery, and more exist, ask yourself when was the last time you downloaded something off them?

In Apple’s defense, the company feels it should be able to collect its 30 percent share because it created the current ecosystem. With the launch of the iPhone, the company created a virtual marketplace out of nothing. The company invested in building an ecosystem that has stood the test of time and brings both, the user as well as developer, on the same page.

The company announced earlier this year that it has paid US$ 155 billion to developers since 2008. That’s a lot of money. There’s no denying that Apple kickstarted the “app as a product” philosophy, creating a brand new arena in the digital age. But is it’s control justified after a decade?

Apple has always been conservative about its ecosystem, but it’s efforts to accomplish that are often far-fetched. Recently, the company barred Xbox Gamepass on iOS devices because it “it can’t review every game” that’s being offered by Microsoft. Going by this logic, Apple should also screen or review every show or album that debuts on OTT (over the top) players like Netflix, Prime Video, Spotify, and more.

It’s clear that Apple wants to defend its Apple Arcade subscription service and doesn’t want Microsoft to steal the show with Project xCloud. This means that Xbox Gamepass will be available on Android only. If Apple can strong-arm a giant like Microsoft, isn’t it very obvious that smaller players stand no chance against the brand?

Amazon and its influence on customers

Starting out with just books, today the site has millions of products listed, ranging from a unique screw to a full-fledged air conditioner. What started out as an online marketplace has grown into a tech giant that has dominance in cloud computing, voice assistants, and even video streaming.

Critics say Amazon has frequently used its funding to undercut the competition. It took some losses in the short-term by trying to retain users. Once the user was accustomed to Amazon, a process that lets them avoid visits to a store, the loss turned into profit. With a yearly Prime subscription, you’d get free delivery on the smallest of products. Eventually, the user has recovered its Prime subscription fee in terms of convenience and Amazon has processed more orders than ever.

This model ensured that Amazon has an edge over everyone else. The site closely monitors your movement on the site and can intelligently suggest new products to purchase. The more one buys, the more Amazon earns. And, so do the sellers. This seems like a fair game.

But then, sellers realized Amazon has started recognizing categories that can be directly dominated. The user data they collect shows them precisely how much demand a product has, the price vs sales comparisons, and more. It leveraged this rich and unique data to launch its own product brand called Amazon Basics. If you’d normally buy a USB-C wire for US$ 10, Amazon Basics provided that for a lesser price. And, the Amazon tag garnered trust, luring the buyer away from third-party sellers to Amazon’s in-house accounting.

Now, sellers realized that Amazon used its internal sales data to indirectly push out the competition. Amazon follows a similar strategy in other markets like India. Obviously, a seller can try to sell directly via their own platform using simpler tools like Shopify, but will that match the reachability of Amazon? Can any individual seller match Amazon’s marketing and brand recognition?

The company grew as an e-commerce website but is involved in much more than selling books today, the prime reason why it’s one of the “big tech.” The marketplace’s dominant position helped it start brand new investment streams like Kindle hardware, Alexa speakers, and AWS cloud computing. The e-commerce model had worked very well and investors were fine with the company diversifying, even if it meant losing some projects like the Fire Phone.

Today, the company is bigger than physical establishments like Walmart. It’s going up against eBay, Flipkart, Lazada, AliExpress, and Rakuten in the e-commerce space. AWS is challenging Microsoft Azure, Google Cloud, as well as Alibaba Cloud. Alexa is fighting against Google Assitant, Siri, and Cortana. And lastly, Prime subscription is taking on Netflix and Spotify in one go.

What’s common?

In this article, the most frequently mentioned companies are Apple, Amazon, Google, and Microsoft. Facebook sits in an entirely different vertical, filled with its own unique challenges. However, if you’re trying to do something on the internet, you’ll end up using one of their technology or platform in some way or the other.

And that’s the whole point of the “Big Tech” debate. These companies have grown too much, too quickly. They dominate the publicly known internet and have barely left any space for newcomers. Even if someone dares to do the unthinkable, they’ll be either acquired or pushed into infinite losses.


This is Part 1 of the series. We’ll be covering Facebook and Google’s involvement in Part 2.

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Enterprise

Apple is not interested in TikTok

TikTok is still up for grabs

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With TikTok virtually up for auction, everyone is getting in on the discussion for an acquisition. Last weekend, President Donald Trump announced a definitive ban against the popular video-sharing platform unless an acquisition deal is done before September 15. Around the same time, Microsoft rose to the fore as the likeliest suitor for the Chinese company. That said, other companies are still popping up in the discussion, one way or another. Today, for example, a source confirms that Apple is not interested in TikTok.

The strange confirmation isn’t unprecedented. Earlier, an Axios report hinted at Apple’s interest in TikTok, citing sources from outside Apple. Naturally, everyone wanted to know whether the American company genuinely wanted TikTok or not.

However, in response to the report, various spokespersons have taken to the media to express their company’s opinion on the matter. It’s definitive. Apple is not discussing a TikTok acquisition. The company doesn’t show interest in one either.

Compared to Microsoft, Apple doesn’t exactly have a lot of stake in the matter. The company has not entered the social media industry, making a TikTok-inspired entry unlikely. On the other hand, Microsoft owns LinkedIn, a comparatively smaller social media platform beside giants like Facebook and Twitter. The company can gain from a company of TikTok’s size.

Currently, the TikTok conundrum has a lot of moving parts. Outside of Trump and Microsoft, ByteDance, TikTok’s owner, has expressed interest in moving the platform’s headquarters to the UK, rather than the US. Also, China has weighed in, calling any plan “an open robbery.”

SEE ALSO: TikTok owner accuses Facebook of stealing and smearing

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