WhatsApp CEO Jan Koum quits Facebook due to privacy intrusions

“It is time for me to move on . . . I’m taking some time off to do things I enjoy outside of technology, such as collecting rare air-cooled Porsches, working on my cars and playing ultimate frisbee” WhatsApp co-founder, CEO, and Facebook board member Jan Koum wrote today. The announcement followed shortly after The Washington Post reported that Koum would leave due to disagreements with Facebook management about WhatsApp user data privacy and weakened encryption. Koum obscured that motive in his note that says “I’ll still be cheering WhatsApp on – just from the outside.”

Facebook CEO Mark Zuckerberg quickly commented on Koum’s Facebook post about his departure, writing “Jan: I will miss working so closely with you. I’m grateful for everything you’ve done to help connect the world, and for everything you’ve taught me, including about encryption and its ability to take power from centralized systems and put it back in people’s hands. Those values will always be at the heart of WhatsApp.” That comment further tries to downplay the idea that Facebook pushed Koum away by trying to erode encryption.

It’s currently unclear who will replace Koum as WhatsApp’s CEO, and what will happen to his Facebook board seat.

Values Misaligned

Koum sold WhatsApp to Facebook for in 2014 for a jaw-dropping $19 billion. But since then it’s more than tripled its user count to 1.5 billion, making the price to turn messaging into a one-horse race seem like a steal. But at the time, Koum and co-founder Brian Acton were assured that WhatsApp wouldn’t have to run ads or merge its data with Facebook’s. So were regulators in Europe where WhatsApp is most popular.

A year and a half later, though, Facebook pressured WhatsApp to change its terms of service and give users’ phone numbers to its parent company. That let Facebook target those users with more precise advertising, such as by letting businesses upload list of phone numbers to hit those people with promotions. Facebook was eventually fined $122 million by the European Union in 2017 — a paltrey sum for a company earning over $4 billion in profit per quarter.

But the perceived invasion of WhatsApp user privacy drove a wedge between Koum and the parent company. Acton left Facebook in November, and has publicly supported the #DeleteFacebook movement since.

WashPo writes that Koum was also angered by Facebook executives pushing for a weakening of WhatsApp’s end-to-end encryption in order to facilitate its new WhatsApp For Business program. It’s possible that letting multiple team members from a business all interact with its WhatsApp account could be incompatible with strong encryption. Facebook plans to finally make money off WhatsApp by offering bonus services to big companies like airlines, e-commerce sites, and banks that want to conduct commerce over the chat app.

Jan Koum, the CEO and co-founder of WhatsApp speaks at the Digital Life Design conference on January 18, 2016, in Munich, south Germany.
On the Innovation Conference high-profile guests discuss for three days on trends and developments relating to the digitization. (Photo: TOBIAS HASE/AFP/Getty Images)

Koum was heavily critical of advertising in apps, once teling Forbes that “Dealing with ads is depressing . . . You don’t make anyone’s life better by making advertisements work better.” He vowed to keep them out of WhatsApp. But over the past year, Facebook has rolled out display ads in the Messenger inbox. Without Koum around, Facebook might push to expand those obtrusive ads to WhatsApp as well.

The high-profile departure comes at a vulnerable time for Facebook, with its big F8 developer conference starting tomorrow despite Facebook simultaneously shutting down parts of its dev platform as penance for the Cambridge Analytica scandal. Meanwhile, Google is trying to fix its fragmented messaging strategy, ditching apps like Allo to focus on a mobile carrier-backed alternative to SMS it’s building into Android Messages.

While the News Feed made Facebook rich, it also made it the villain. Messaging has become its strongest suit thanks to the dual dominance of Messenger and WhatsApp. Considering many users surely don’t even realize WhatsApp is own by Facebook, Koum’s departure over policy concerns isn’t likely to change that. But it’s one more point in what’s becoming a thick line connecting Facebook’s business ambitions to its cavalier approach to privacy.

You can read Koum’s full post below.

It's been almost a decade since Brian and I started WhatsApp, and it's been an amazing journey with some of the best…

Posted by Jan Koum on Monday, April 30, 2018

Chinese government admits collection of deleted WeChat messages

Chinese authorities revealed over the weekend that they have the capability of retrieving deleted messages from the almost universally used WeChat app. The admission doesn’t come as a surprise to many, but it’s rare for this type of questionable data collection tactic to be acknowledged publicly.

As noted by the South China Morning Post, an anti-corruption commission in Hefei province posted Saturday to social media that it has “retrieved a series of deleted WeChat conversations from a subject” as part of an investigation.

The post was deleted Sunday, but not before many had seen it and understood the ramifications. TenCent, which operates the WeChat service used by nearly a billion people (including myself), explained in a statement that “WeChat does not store any chat histories — they are only stored on users’ phones and computers.”

The technical details of this storage were not disclosed, but it seems clear from the commission’s post that they are accessible in some way to interested authorities, as many have suspected for years. The app does, of course, comply with other government requirements, such as censoring certain topics.

There are still plenty questions, the answers to which would help explain user vulnerability: Are messages effectively encrypted at rest? Does retrieval require the user’s password and login, or can it be forced with a “master key” or backdoor? Can users permanently and totally delete messages on the WeChat platform at all?

Fears over Chinese government access to data held or handled by Chinese companies has led to a global backlash against those companies, including some countries (including the U.S.) banning Chinese-made devices and services from sensitive applications or official use altogether.

T-Mobile is reportedly much closer to a merger deal with Sprint

It looks like a potential merger deal between T-Mobile and Sprint, two of the major telecom companies in the U.S., is getting closer and now has set valuation terms, according to a report by Bloomberg.

The deal could be announced as soon as Sunday, according to a report by CNBC. The proposed tie-up of the two companies was called off in November last year, but now that deal appears to be coming closer, with T-Mobile’s backer valuing Sprint at around $24 billion, according to Bloomberg. As part of the deal, Deutsche Telekom AG will get a 69% voting interest on a 42% stake in the company, according to that report. (Both reports, however, disagree on the valuation — with CNBC citing a $26 billion valuation.)

This deal seems to have been a long time coming, and consolidates two of the four major telecom providers in the U.S. into one larger entity. That could, in theory, offer it some more flexibility as they expand into 5G networks. Still, a deal of this scale could still fall apart and would be subject to regulation — with significant international ownership of both companies (Softbank for Sprint, and Deutsche Telekom for T-Mobile).

Sprint shares fell more than 8% in extended trading to under $6, while T-Mobile shares were largely unchanged. Shares of Sprint were up around 8% on the day up to $6.50 in early trading.

A representative from Sprint declined to comment. A representative from T-Mobile did not immediately respond to a request for comment.

Essential’s first handset is coming to more markets

It’s hard launching a phone company — something Essential was pretty candid about from the start. Andy Rubin’s latest endeavor got off to something of a slow start, according to outside accounts, but today the well-funded hardware startup is getting ready to add a whole bunch of new markets to its online store.

On Twitter today, the company announced a handful of key additions to its coverage map, including Canada, France, Japan and UK. As Engadget notes, availability in some of those markets already exists, but not through the company’s own shop, most notably Canada, where users can pick the handset up via Amazon or Telus.

Starting today, we’re opening the https://t.co/5XqZeQu9cW store to orders from more countries, including Canada, France, Japan and UK. Special terms and conditions apply to these orders, so please read the information carefully: https://t.co/uZK8sLvUA5 pic.twitter.com/QXEWf8OEnE

— Essential (@essential) April 27, 2018

There are also some country specific caveats here. Those can be found through the company’s Terms of Service, which notes that the handset is now also available in Germany.

It’s been a slow roll out for the company, but understandably so. It’s not easy starting this kind of endevour from scratch, even with the $300 million in funding the company managed to drum up. Essential spent its first year primarily focused on its home market, delivering Amazon and Best Buy availability, along with a Sprint deal.

Building distribution channels this time out should ease some of the burden of launching when time comes to deliver version 2.0.

Nintendo is releasing a mobile RPG this summer

The maker of Shadowverse and Granblue Fantasy is teaming up with Nintendo for a new mobile RPG. Called Dragalia Lost, the Japanese-style action RPG will be a free-to-play game though likely loaded with Loot Box-style mechanics that will result in a financial windfall for Nintendo and developer Cygames.

The trailer doesn’t reveal many details about the game’s story. I assume from the title that someone called Dragalia is lost and a team of unlikely heros will have to fight monsters along their journey to find this Dragalia. I guess.

Nintendo turned to Cygames to make this new title instead of retooling Zelda or Xenoblade for the mobile screen. The game reportedly use Cygame’s system that randomly unlocks characters and upgrades. It’s like loot boxes but not called loot boxes. This is how the game will make money as players are encouraged to pay to buy more unlocks.

As part of the deal, Nintendo is acquiring 5-percent of Cygrames. Nintendo also has a stake in mobile phone platform maker DeNA, which also holds 25-percent of Cygrames showing how Nintendo is slowing spreading throughout the mobile game world.

The 5G wireless revolution will come, if your city council doesn’t block it first

The excitement around 5G is palpable at the Brooklyn 5G Summit this week, and for good reason. Once the province of academic engineers, there is increasingly a consensus emerging among technology leaders that millimeter-wave technology is ready for prime time.

Yet, there remain large barriers to a successful rollout, particularly at the local government level. Those challenges could prevent the U.S. from aggressively competing with other nations like China, who are investing massive resources to lead this next generation of wireless technology.

The Summit, now in its fifth year and organized by New York University’s Wireless Center, Nokia, and IEEE, is designed to showcase New York’s technology leadership in the space. New York has been at the forefront of wireless for many years, with the first mobile phone call taking place in Midtown Manhattan.

That was 45 years ago though. This month, New York learned that it had been selected as one of two initial sites for a 5G testbed by the Platforms for Advanced Wireless Research program, which is managed by the National Science Foundation in concert with a consortium of wireless companies.

Through a program called COSMOS, researchers will deploy a total of 249 large, medium, and mostly small cell nodes to West Harlem (including Columbia University’s Morningside Heights main campus) in order to investigate the performance of 5G in an urban setting. New York was awarded an initial grant of $3.6 million to execute the initiative.

This sort of testbed model is quite progressive in the wireless industry. While the notion of a minimum viable product and constant test feedback is a hallmark of software startups, that mentality has not been translated well into the wireless world. The hope for this testbed is that as new equipment is invented in the coming years, the West Harlem network can be continuously upgraded, serving as a model for potential deployments onto operators’ networks across the country.

It’s also critical because the network architecture of wireless is expected to change drastically in the years ahead. More computing will be done at the “edge” in order to reduce network latency and power the internet of things. In order to handle that traffic, new machine learning algorithms are going to have to be deployed that can actively manage traffic and ensure that applications have reliable performance. A realistic testbed provides key training data and analytics that can improve those algorithms and ultimately deliver better services to customers.

The good news is that the U.S. has conceived and launched this test program. The bad news is that we may still be too slow to win the competition for this generation of wireless tech.

The wireless industry’s trade association, the CTIA, has declared the rollout of 5G a “race” between the United States and the Asian nations of China, Korea, and Japan. The U.S. widely won the competition for 4G technologies, but the rise of Huawei as a dominant force in the wireless equipment space means that competition for technological leadership has never been more keen.

The White House and the federal government have made a 5G rollout a national security priority, but getting 5G wireless into the hands of consumers is likely to be stymied by opposition from local city councils and mayors around the issue of site access.

In order to provide reliable cell service, operators need to deploy cell sites near consumers. While they don’t need direct line of sight for the spectrum used in 4G, buildings and other objects can interfere with signals, making it critical to have a dense mesh of sites in urban environments.

Concerns about cancer, historical preservation, and fees for renting space have slowed the expansion of wireless services to communities across the country. Permits for erecting a new cell site can easily take a year or more.

In the 4G world, that was somewhat manageable, since the network architecture was built with large cell sites as the core of the network. With 5G though, technologists are pushing for greater decentralization through deployment of microcells that would be closer to street-level, improving quality of service while lowering power requirements. The fear is that if permits continue to take so long for every new site, the burden of that process could kill 5G in the United States.

The FCC is investigating how to reduce the burden of siting requirements, and one option is to exempt from review the kinds of small cells that are at the heart of 5G. That plan though has faced significant pushback from environmental and historical preservation activists, who don’t want the federal government overruling local government decisions on wireless rollouts.

One attendee of the Summit this morning joked that “It takes eighteen months to review a permit, and one hour to install” a small cell. Others noted that it takes just a few short weeks to deploy cell sites in South Korea and China, one reason those countries are in many ways leading the race for 5G.

As with any summit, there were buzzwords galore, but the reality is that the U.S. has an incredible opportunity to win this critical space. But we will need to fight in jurisdictions across the country if we ever want to see this technology actually arrive in our hands.

Dropbox rolls out a templates tool for its Paper online document service

As Dropbox looks to woo larger and larger businesses with its strategy of building simpler collaboration tools than what’s on the market, it’s making some moves in its online document tool Paper to further reduce that friction today.

Dropbox said it was rolling out a new tool for Dropbox Paper that allows users to get a paper document up and running through a set of templates. It may seem like something that would be table stakes for a company looking to create an online document tool like Google Docs, but figuring out what Paper’s core use cases look like can take a lot of thinking and user research before finally pulling the trigger. Dropbox at its heart hopes to have a consumer feel for its products, so preserving that as it looks to build more robust tools presents a bigger challenge for the freshly-public company.

The templates tool behaves pretty much like other tools out there: you open Dropbox Paper, and you’ll get the option to create a document from a number of templates. Some common use cases for Dropbox Paper include continuous product development timelines and design specs, but it seems the company hopes to broaden that by continuing to integrate new features like document previews. Dropbox Paper started off as a blank slate, but given the number of options out there, it has to figure out a way to differentiate itself eventually.

The company said it’s also rolling out a number of other small features. That includes a way to pin documents, launch presentations, format text and insert docs and stickers. There’s also a new meeting widget and increased formatting options in the comments section in Paper. Finally, it’s adding a number of small quality-of-life updates like viewing recent Paper docs by alphabetical order and the ability to unsubscribe to comment notifications and archive docs on iOS, as well as aggregating to-do lists across docs.

Dropbox went public earlier this year to dramatic success, immediately getting that desired “pop” and more or less holding it throughout the past month or so as one of the first blockbuster IPOs of 2018. There have been a wave that have followed since, including DocuSign, and it’s one of a batch of several enterprise companies looking to get out the door now that it appears the window is open for investor demand for fresh IPOs.

Paper, to that end, appears to be a key piece of the puzzle for Dropbox. The company has always sought to be a company centered around simple collaboration tools, coming from its roots as a consumer company to start. It’s an approach that has served it — and others, like Slack — well as the company looks to expand more and more into larger enterprises. While it’s been able to snap up users thanks to its simpler approach, those enterprise deals are always more lucrative and serve as a stronger business line for Dropbox.

Dropbox will have to continue to not only differentiate itself from Google Docs and other tools, but also an emerging class of startups that’s looking to figure out ways to snap up some of the core use cases of online document tools. Slite, for example, hopes to capture the internal wiki and note-taking portion of an online doc system like Google Docs. That startup raised $4.4 million earlier this month. There’s also Coda, a startup that’s looking to rethink what a document looks altogether, which raised $60 million. Templates are one way of reducing that friction and keeping it feeling like a simple document tool and hopefully getting larger businesses excited about its products.

Samsung tempers record earnings with pessimistic smartphone outlook

Samsung’s latest earnings report is a succinct lesson in hoping for the best and preparing for the worst. The actual news here is pretty positive, as the company reports a record operating profit, courtesy of high demand for its components and flagship handsets.

But a statement tied to the news mentions “slow demand” no fewer than seven times, as the company looks to temper investor expectations, Those warnings largely revolve around the company’s display panel offerings and a perceived stagnations in the mobile sector in general.

“For the second quarter,” the company writes in a statement, “Samsung expects the Memory Business to maintain its strong performance, but generating overall earnings growth across the company will be a challenge due to weakness in the Display Panel segment and a decline in profitability in the Mobile Business amid rising competition in the high-end segment.”

The slow down, it seems, has already had an impact on the display side, though Samsung’s weathered much worse than this already. Keep in mind how the whole Note 7 debacle didn’t make a dent on the company’s profitability. Samsung is the consumer electronics poster child from the importance of product diversity.

There’s some Apple shade implied here as well. After all, Samsung provides the OLED panel for its chief competitor’s ultra premium handset, leaving Wall Street to infer that less than stellar iPhone X sales was a contributor here. Samsung’s forecast also includes warnings around slowed demand for its own handsets in the next quarter.

“In the Mobile Business,” Samsung writes, “profitability is expected to decline QoQ due to stagnant sales of flagship models amid weak demand and an increase in marketing expenses.” That’s due, at least in part, to a natural cycle as the initial hype dies down — though there also appears to be a larger global smartphone slow down at play here as well. But the company says it believes that will be buoyed in part by increased summer demand for TVs and air conditioners. People might not be buying as many new smartphones in the future, but hey, climate change will make sure we always need ACs. 

Snapchat launches Spectacles V2, camera glasses you’ll actually wear

Photos, not just video. No yellow ring alerting people to the camera. Underwater-capable. Classier colors with lighter lenses. Prescription options. Faster syncing. And a much slimmer frame and charging case. Snapchat fixed the biggest pain points of its Spectacles camera sunglasses with V2, which launch today for $150. The company only sold 220,000 pairs of V1, with their limited functionality, tricky exports, and goofy style. But V2 is stylish, convenient, and useful enough to keep handy. They’re not revolutionary. They’re a wearable camera for everybody. 

You can check out our snazzy hands-on demo video below:

The new Spectacles go on sale today in the US, Canada, UK, and France, then in 13 more European countries on May 3rd. The $150 V2s are $20 more than the old version and only available on Snap’s app and site — no Amazon, pop-up stores or vending SnapBots. And V1 owners will get a firmware update that lets them take photos.

After two days of use, I think Spectacles v2 cross the threshold from clumsy novelty to creative tool accessible to the mainstream. And amidst user growth struggles, that’s what Snap needs right now. 

V1 Was To Get People Comfortable

What it doesn’t need is a privacy scandal, and that risk is the tradeoff Snap is making with its more discrete Spectacles design. They still display a little circle of white lights while recording, but without the permanent yellow ring on the corner you otherwise might not notice there’s a camera lens there. That could make people a little nervous and creeped out.

But the company’s VP of hardware Mark Randall tells me he thinks the true purpose of V1 was to get people comfortable wearing and being recorded by a face computer. It certainly wasn’t a consumer success, with less than half of owners using them after the first month. He said he feels pretty good about shipping 220,000 pairs. Yet Snapchat was roundly mocked for taking a $40 million write-off after making hundreds of thousands too many. Randall attributes that to having fragmented sales channels, which Snap is fixing by only selling V2 itself.

[gallery columns="4" type="slideshow" ids="1628988,1628989,1628987,1628990"]

Snap did learn that users wanted to take photos, get them in less flashy coral colors, bring Spectacles to the beach, pair them quicker with better resolution exports, and hear less wind noise when moving. And most importantly, they wanted something they didn’t feel weird wearing. So his team essentially scrapped the yellow warning ring, style, architecture, chipset, and electronics to build a better V2 from the ground up. The result rises high above its predecessor.

What’s Special About Spectacles V2

Snapchat isn’t making a spectacle out of the Spectacles V2 launch. There’s no hidden vending machines with cryptic clues leading to long lines. They’re openly for sale today in Snap’s four top markets, with IE, BE, NL, SE, NO, DK, FI, DE, AT, CH, PL, ES, and IT coming nex week. This might make sure everyone who wants them can have them before they inevitably stop being trendy and will have to rely on their true value.

As soon as you slide them out of their tennis ball tube package, you’ll notice a higher build quality in Spectacles V2. The yellow case is about 1/3 smaller, so you could squeeze it in some pants pockets or easily throw it in a jacket or purse. The old version you basically required a backpack. The charging port has also been moved to the side so it doesn’t fall out so easily. Even with the better hardware, Spectacles are supposed to have enough battery and memory to record 10 videos a day for a week on normal on a charge, plus carry four extra charges in the case.

The Spectacles themselves feel sleeker and less like chunky plastic. They come in onyx black, ruby red, and sapphire blue and you can choose between a more mirrored or natural lens color too. Users in the US can order them with prescription lenses through a partnership with Lensabl. Those colors are a lot more mature than the childish coral pink and teal of V1. More transparent lenses make them easier to use in lower light, so you won’t be restricted to just the sunniest days. I could even get by inside to some degree, whereas I was bumping into things indoors with V1.

The box holding the hardware on the hinges is now much smaller, making them lighter overall. An extra microphone helps Spectacles reduce wind noise and balance out conversations so the wearer doesn’t sound way louder.

It’s easy to long-press for a photo or tap for 10-second video, with extra taps extending the clip up to 30 seconds. Either fires up the light ring to let people know you’re recording, but this is much more subtle than the permanent yellow ring that was there as well on V1.

Snap Inc actually reduced the field of vision for Spectacles from 115 to 105 degrees to cut off some of the fish-eye warping that happened to the edges of clips shot on V1. Videos now record in 1216 x 1216 pixels, while photos are 1642 x 1642. What’s fun is that Spectacles can record under water. Randall doesn’t recommend diving to 200 feet with them, but jumping in the pool or getting caught in the rain will be no problem. In fact it can make for some pretty trippy visuals. Cheddar’s Alex Heath nailed most of these features in a scoop about V2 last month.

Syncing goes much faster with Spectacles V2

Syncing to your phone now just requires Bluetooth and a seven-second press of the shutter button, rather than a shoddy QR code scan. Exports always happens in HD now, and transfers go four times quicker than the old process that required you to sync standard definition (low quality) versions of videos first, then pick your favorites, then download them in HD. Randall says that led lots of people to accidentally or impatiently settle for SD content, which made Spectacles’ capture resolution seem much lower than its potential.

Annoyingly, you can only sync your Spectacles to Snapchat Memories first before exporting videos individually or as one big Story to your camera roll. That makes it a pain to share them elsewhere. You can only add stickers and drawings after you shoot and export your Spectacles Snaps, so that means there’s no adding augmented reality face filters or dancing hot dogs to what you see first-person.

Still, what really matters is the how the incremental improvements all add up to something much more liveable.

Snapchat may have finally found a way to make Spectacles carryable and wearable enough that people use them as their default sunglasses. That could lead to way more content being produced from Spectacles, which in turn could make Snapchat more interesting at a time when it’s desperate to differentiate from Instagram.

Randall says Snap is just starting to reach out to professional creators, who could prove to people how fun Spectacles could be. Snap neglected them last time around and ended up with few pieces of flagship Spectacles content. This time, though, Snap will focus on showing off what Spectacles can shoot rather than just how they look on your face.

Snap Inc calls itself a camera company, but beyond software, that wasn’t really true until now. It could be a half-decade before we have AR goggles for the masses, and Snap can’t wait around for that. V2 is a solid step forward, and Randall says Snap is committed to a long road of hardware releases.

Getting tons of its cash-strapped teens to buy the gadget may prove difficult again, but I at least expect V2s won’t end up dying alone in a drawer as often. These glasses aren’t going to turn around Snapchat’s business, which lost $443 million last quarter. And they probably won’t win over any Instagram loyalists. But Spectacles V2 could rekindle the interest of lapsed users while producing unique perspectives to entertain those who never left.

 

Report: Chinese smartphone shipments drop 21% to reach lowest level since 2013

Analysts have long-warned of a growth crunch in China’s smartphone space, and it’s looking like that’s very much the case right now.

China’s smartphone growth has been the feel-good story for domestic OEMs who have clocked impressive figures as the billion-plus population has rushed online via mobile devices. However, the market reached saturation point in 2017 — when sales stopped growing for the first time — and the first quarter of this year is already showing savage results.

In a report released today, Canalys claimed that shipments across the industry fell by 21 percent year-on-year in Q1.

The total number of mobile devices shipped in China dropped below the 100 million market in a quarter for the first time since late 2013, the firm added.

“Eight of the top 10 smartphone vendors were hit by annual declines, with Gionee, Meizu and Samsung shrinking to less than half of their respective Q1 2017 numbers,” the report read.

Ouch.

Of the field, only Xiaomi — the firm tipped for an IPO at a $100 billion valuation — was able to post positive momentum as its numbers grew by 37 percent to reach 12 million. That was enough to see it overtake Apple into fourth place, but Xiaomi numbers are still heavily reliant on its $150 Redmi range, which isn’t as lucrative as its higher-end products.

Huawei, Oppo and Vivo led the market. Somewhat incredibly, those three firms plus Xiaomi now account for a very dominant 73 percent of all shipments, which Canalys believes is bad for consumers and smartphone aficionados in China.

“The level of competition has forced every vendor to imitate the others’ product portfolios and go-to-market strategies,” analyst Mo Jia said in a statement. “While Huawei, Oppo, Vivo and Xiaomi must contend with a shrinking Chinese market, they can take comfort from the fact that it will continue to consolidate, and that their size will help them last longer than other smaller players.”

There might be a bright spark coming soon. Canalys anticipates growth in the second quarter as Oppo, Vivo and Huawei trot out new flagship devices. But China’s once-booming industry is now having to contend with the same issue as the U.S.: consumers don’t upgrade their phone as frequently as carriers would like.

Facebook beats in Q1 and boosts daily user growth to 1.45B amidst backlash

Amongst massive criticism over data privacy, Facebook showed the resiliency of its advertising machine by beating Wall Street’s $11.41 billion revenue estimate in its Q1 2018 earnings report by raking in $11.97 billion in revenue with $1.69 EPS compared to the $1.35 estimate.

Facebook added 48 million daily active users to hit 1.449 billion, up 3.42 percent to revive Facebook’s growth after slower 2.18 percent growth last quarter. But Facebook only added 70 million monthly active users to reach 2.196 billion, a 3.14 percent growth rate that was a little slower than last quarter’s 3.39 percent growth. Both daily and monthly users are up 13 percent year-over-year, showing Facebook’s troubles haven’t paralyzed its growth.

This was perhaps the most tumultuous quarter since Facebook went public. Facebook faced intense criticism regarding the Cambridge Analytica scandal and its data privacy practices, leading a massive pull-back of developer capabilities as Zuckerberg headed to testify before congress. Last quarter saw Facebook’s first ever decline in users in a market, with a 700,000 user drop in the US & Canada market following changes to promote well being that reduced the prevalence of viral videos.

Facebook was able to revive its US & Canada user growth this quarter, perking back up to 185 million, from 184 million last quarter — though that’s just a return to where it was in Q3 2017. Monthly active user count in the market went from 239 to 241 million. That shows that while people might disagree with Facebook’s approach to privacy, they aren’t about to give up their News Feeds.

Demonstrating Facebook’s declining web presence, mobile made up $10.7 billion, or 91 percent of all ad revenue, up from 89 percent last quarter. Facebook reached $4.98 billion in profit, up from a weak $4.26 billion last quarter. Average Revenue Per User reached $5.53, up 30 percent year-over-year thanks to strong gains this quarter in Europe and Asia-Pacific. Facebook’s headcount has swelled 48 percent year-over-year as it’s now half-way to its promise of doubling its security and content moderation staff from 10,000 to 20,000 in 2018.

The recent scandals’ have put a lot of downward pressure on its share price, but apparently the company think it’s a good buy. It’s increased the amount authorized under a share repurchase program by an additional $9 billion, on top of an original $6 billion plan. Wall Street apparently liked the earnings report as shares are up over 4.38 percent to $166.68 in after-hours trading.

CEO Mark Zuckerberg wrote that “Despite facing important challenges, our community and business are off to a strong start in 2018. We are taking a broader view of our responsibility and investing to make sure our services are used for good. But we also need to keep building new tools to help people connect, strengthen our communities, and bring the world closer together.” We’ll get to hear more from him at 2pm Pacific during the earnings call, so stay tuned here.

Dolo delivers on the Foursquare prophecy of hyper-local tips

Dolo is the kindness of strangers as an app. Where’s the prettiest place in the park? What’s the best thing on the menu? How do I skip the line? Dolo lets you leave helpful suggestions for anyone nearby. The new social app launches out of beta today to augment the world with serendipitous tips from strangers. Built by two ex-Apple employees and backed with pre-seed funding from Floodgate, Dolo could reveal the secrets and potential friends hidden in the ether around us.

Like any new social app, Dolo will have a steep uphill climb to user growth. There are also apps like Foursquare, guide books like Lonely Planet, and social networks like Facebook and its Recommendations feature to compete with. But they’re often bloated, outdated, or unfocused. Dolo hopes to build a new community around turning the whole world into a bulletin board.

“If you take the construct of a cocktail party or a neighborhood bar, people feel more naturally ‘allowed’ to just mingle, eavesdrop, start a conversation, or even meet someone new” says Dolo co-founder and CEO Raja Haddad. “In larger spaces (a park, a neighborhood, a city), there are no vehicles today that allow such frictionless, comfortable, fun socializing.” That means a local expert’s knowledge ends up trapped while tourists and first-timers wander aimlessly.

Haddad and co-founder Benjamin Vigier met when they joined Apple in 2010 and worked on its Apple Store App before Haddad move on to Apple Watch marketing and Vigier helped develop Apple Pay. They later met Andy Mai at Coachella, who grew the Men’s Fashion Advice subreddit to over a million users. Together they set out “to enable serendipitous ways for people to socialize with other people around them, regardless of their pre-existing social bubbles.”

Dolo’s iOS and Android apps are now open everywhere, but it’s currently focusing on the San Francisco Bay Area where it centered its 4000 user beta. The app start with a feed of the closest tips that automatically re-sort as you move around. Anyone can post that “I need some info or a favor”, “folks need to know this!”, “I’m proposing an event”, or “just chatter and banter”. For example, my first contribution was that you can skip the line at famously overpopulated ice cream shop Bi-Rite Creamery by walking down the block to its soft-serve froyo window near SF’s Dolores Park.

That popular hipster picnic spot is actually where Dolo gets its name. And no, it’s not the same as the now defunct “bespoke app” called Dolo from 2013 that just helped you locate your friends in that park.

I was impressed by Dolo’s approach to safety and moderation that other anonymous and hyper-local apps like Yik Yak and Secret neglected until bullying led to their demise. You can use your real name or a pseudonym on Dolo, and choose a pixelated filter or mask sticker to obscure your face from the public. But then if you connect as friends with someone on the app, “the masks come off” Haddad says, and your profile’s bio is revealed. Meanwhile, users are empowered to moderate comments on their own posts by getting alerted to flags that Dolo reviews too. And all photos get reviewed by a crowdsourced moderation service.

Dolo smartly plans to “focus on achieving density vs. going directly for top-line scale” Haddad explains. That mirrors Facebook’s growth strategy that tried to get lots of users at specific colleges or locations so they don’t enter a ghost town, rather than immediately striving for global scale. It’s already raised $680,000 in a pre-seed round a year ago, but will try to raise a seed round early this summer. It hopes to put that cash into product development, and marketing activations at colleges and public places in the fall. 

Advertisers might be keen to reach potential customers when they’re super close-by and looking for local information. But that will require plenty of users as well as a tough-to-scale local ads sales team. Haddad admits “It’s obviously very challenging to get a social platform off the ground, particularly one that relies on location and density.”

NextDoor has at least proven that people are interested in local info, given it’s active in 160,000 neighborhoods. The question is if an app designed to alert you to what’s around you anywhere, rather than just close to home, will have the same legs. Dolo will also have to outlast specialized apps like Wildfire for celebrity sightings and safety alerts, Citizen for crime mapping, and Hive Social for interest-based communities.

It’s somewhat depressing, but an app like Facebook that already has ubiquity, frequent use, and local ad relationships might be better equipped to build this product than a startup. Dolo will have to figure out how to make adding and observing tips a constant enough behavior that users don’t forget about it.

But at least Dolo isn’t burdened by a hundred other features crowding out the local recommendations for attention, nor is it constrained by relying on your existing friend graph. A dedicated app for the insights of passersby holds the promise of not only illuminating what’s around us, but also mending our polarized society.