Category: UNCATEGORIZED

After a dozen years of riding high, the iPhone is showing signs of weakness in a struggling smartphone market where Apple is still managing to be the biggest loser.

Here’s a snapshot of where things are at…

Apple hasn’t been broadcasting its quarterly unit sales the past few quarters so we’ll have to lean on external researchers, but even the rosiest portrayal from Canalys suggests that the Cupertino giant saw a 23% drop in year-over-year iPhone unit sales, selling 40.2 million iPhones in Q2 of this year compared to 52.2 million iPhones a year ago.

That egregious drop takes Apple to its lowest Q2 unit sales since 2013, though the company has been solidly been bumping up the average selling price in a move that has largely been working, though iPhone revenue was down 15% year-over-year as well.

It’s not Apple’s cross to bear alone, the broader smartphone market has been in decline, down 6.8% year-over-year, according to the same report. But the iPhone’s decline contributed to roughly half of the global market’s missing units while China’s smartphone triumvirate of Huawei, Oppo and Xiaomi managed to buoy the broader sector from diving even lower.

Huawei’s unit sales shot up over 50%.

Apple wasn’t the only non-Chinese phone maker wallowing in misery. Google cited a rough market for smartphones after delivering disappointing earnings, while Samsung saw a 10 percent decline in unit sales this quarter according to Canalys.

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The smartphone market has had 6 straight quarters of year-over-year sales declines. This was the lowest quarter of smartphone unit sales in nearly 5 years. Whether Apple can better perform might be a question of how they can seek to differentiate themselves in China while still managing to squeeze consistent revenues from markets where it leads.

More doom-and-gloom from my buddy Brian Heater here:

iPhone hard hit as global smartphone shipments nosedive

Onto the cheerier topic of dead robots…

Trends of the week

Here are a few big news items from big companies, with green links to all the sweet, sweet added context.

• Zuckerberg tries again
  Facebook is dead as you know it, or at least that what CEO Mark Zuckerberg wants you to think after his audacious relaunch of the company as a lover of privacy. The company gave its Facebook app and desktop site a major facelift and spoke at length about being better. Sitting in the audience, I couldn’t help but think that Zuckerberg was spinning for extra credit with decisions that had long been made. More from my colleague Josh Constine.
• SpaceX cops to an explosion
  Elon Musk’s space company may have to push back its timeline for a manned launch after the company confirmed that its Dragon crew capsule exploded during testing. The disappointing development suggests SpaceX has some more work ahead of it before it’s ready to safely transport humans into space.
• Another dead robot
  Cozmo won’t be scooting into any new homes, the startup behind the cute little robot is dead after the dissolution of a new funding round. Anki had raised a staggering $182 million over the course of its life and had sold 1.5 million of the curious, little wheeled bots, but now it seems to face the same lonely death as Jibo, which similarly perished a couple months ago.
• Palantir not so nice after all
  Peter Thiel’s Palantir has long held onto this very nefarious reputation as an evil company that’s working with government agencies and screwing over progressive ideals in the process. It wasn’t always super clear how true this was because it kind of seemed like Alex Karp and company was just scrambling to get private sector customers so it could justify its private valuation ahead of an IPO. Well, turns out the company is shitty after all.
• Headset hullabaloo
  The VR market may be dead, but don’t tell that to the companies making VR headsets. Yes, the new headsets still all bulky and weird but they are undoubtedly better. Oculus’ introduction of the Quest (reviewed here by me) and Rift S (review from me, again) next month might just add a little life to the dead VR dreams, and if that doesn’t work Valve has a $1,000 option it’s now hocking.

Forward-looking statement

What’s coming up next week? Well, you can expect a bunch of Microsoft news at its Build developer conference and there will also assuredly be a lot emerging from Google I/O where I’ll be spending a couple days next week. Here’s what we think is coming…

What to expect from Google I/O 2019

“…It’s shaping up to be a biggie, too, if this week’s Google earnings call was any indication. Sundar Pichai teased out a number of upcoming offerings from the company that we can expect to see on full display at the show…”

GAFA Gaffes

How did the top tech companies screw-up this week? This clearly needs its own section, in order of awfulness: (This week was admittedly a little light on the gaffes, but don’t be too disappointed, that’s good!)

1. Googlers aren’t happy about workplace retaliation:
   [Google employees are staging a sit-in to protest reported retaliation]
2. Researchers studying Facebook’s ad platform aren’t getting the access, they say they need:
   [Facebook accused of blocking wider efforts to study its ad platform]
3. Apple wades into anti-competitive criticism with latest app bans:
   [Apple defends its takedown of some apps monitoring screen-time]

Extra Crunch

Our premium subscription service roars ahead. We had a fascinating piece go up this week diving into Slack’s financial filings that discovered some discrepancies in the VC funding that was reported versus what was actually raised:

The curious case of Slack’s missing $162 million

“…Given that most of the stories covering Slack derived from the company’s own announcements, you would expect that those stories and the data in the S-1 would match. In short: they do, somewhat…”

Here are some of our other top reads this week for premium subscribers — you should catch up with our full Niantic deep-dive if you have’t already, this list is a nice primer though…

• Nine lessons on how Niantic reached a $4B valuation
• What we want to know in the We Company (We Work) S-1
• Key secrets to building extraordinary teams

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“The future is private,” said Mark Zuckerberg of Facebook’s roadmap, after conceding “we don’t exactly have the strongest reputation on privacy right now, to put it lightly.” But it’s easy to see why he would genuinely want that … now. Facebook’s seemingly endless series of privacy debacles have been disastrous for the company’s reputation.

Not its revenue, mind you; but revenue is famously a lagging indicator in the tech industry. Companies which, like Facebook, effectively become utilities, tend to maximize their income just as their use becomes ubiquitous — not because people especially like them any more, but because there seems to be no better alternative. (See also: Craigslist. PayPal. An obscure little company called MySpace which you may have heard of once.)

But “the future is private,” the vision of Facebook as a platform for groups and individuals sharing end-to-end-encrypted messages, the content of which it cannot be criticized for because it is literally incapable of knowing, sounds like a pretty gargantuan shift in business model, too. “Senator, we sell ads,” is another famous Zuckerberg quote. Won’t end-to-end encryption, and the de-emphasis of the continuously scrollable News Feed in favor of more discrete communications, strip Facebook of both valuable ad space and valuable ad-targeting information?

Probably. But it’s already painfully clear that Facebook wants to do far more than just sell ads against News Feed attention to make money. That got them where they are, but it has its limits, and of late, it’s also attracted a volcano of furious attention, and a fake-news firestorm. So don’t look where their puck is; look where it’s going. Look at Facebook Marketplace; look at Facebook’s cryptocurrency plans; look at their purchase of WhatsApp and how Facebook Messenger was broken out into its own app.

It seems clear that what Facebook really wants next is for Messenger to become WeChat for the rest of the world. An impregnable walled garden, used for business communications as well as personal. One which dominates not just messaging but commerce. A platform capable of transcending — and replacing — credit cards.

That would be enormously lucrative. That would also immensely reduce public and regulatory scrutiny and outrage: when outrages and atrocities are plotted and performed over Messenger, as they inevitably will be, Facebook will point out, quite correctly, that it is mathematically impossible for them to monitor and censor those messages, and that by keeping it mathematically impossible they are preserving their users’ privacy.

Does that sound hypocritical? What a narrow, short-sighted view. The irony is that it’s now entirely possible to envision a thriving future for Facebook which does not really include — well — Facebook. One in which Instagram is the king of all social media, while Messenger/WhatsApp rule messaging, occupy the half-trillion dollar international-remittances space, and also take basis points from millions of daily transactions performed on them …

…while what we used to know as “Facebook,” that once-famous app and web site, languishes as a neglected relic, used by a diminishing and increasingly middle-aged audience for event planning and sporadic life updates, yet another zombie social medium like LiveJournal and MySpace and so many others before. But one which birthed new, stronger, more evolved, corporate titans before it withered away: online gardens not merely “walled” but “domed like Wakanda,” more resistant to regulation, less prone to unpleasant emergent properties and summons to testify to the Senate. Love or hate this idea, you have to concede that it would be, if it succeeded, the mother of all pivots.

3 key secrets to building extraordinary teams

David Cancel, the CEO and founder of Drift, wrote a deep dive on how to think about finding and recruiting the kinds of people who build incredible startups. Among the factors he looks at:

Scrappiness (Importance: 35%)

The four most telling words a new hire can say: “I’ll figure it out.” If you find someone who says that (and can follow through on it), you know you’ve found someone with drive — someone who will plunge headfirst into any challenge and help move the company forward. But to clarify, the type of drive I look for in new hires is different from traditional ambition. Because traditionally ambitious people, while hard workers, tend to obsess over their own personal rise up the corporate ladder. They always have an eye on that next title change, from manager to director, director to VP, or VP to C-suite, and that influences how they perform. That’s why a decade ago, while running my previous company Performable, I added a new requirement to our job descriptions: “Scrappiness.” Today, it’s one of our leadership principles at Drift.

Scrappy people don’t rely on titles or defined sets of responsibilities. Instead, they do whatever it takes to get the job done, even when no one is looking, and even if the tasks they’re performing could be considered “beneath their title.”

Takeaways from F8 and Facebook’s next phase

We had a greatly informative conference call with our very own Josh Constine and Frederic Lardinois, who were checking in from Facebook’s F8 conference in San Jose this week. In case you weren’t able to join us, the transcript and audio have been posted for Extra Crunch members:

This post and podcast contain spoilers for “Game of Thrones” and  “Avengers: Endgame.”

“The Long Night,” the much-anticipated “Game of Thrones” episode where the living and the dead meet in a desperate, epic battle, wasn’t entirely embraced by the show’s fans. Instead, many have complained about the episode’s (literal) darkness, while others were disappointed by the apparent disappearance of the show’s old ruthlessness.

But your hosts at the Original Content podcast (joined this week by our original co-host Darrell Etherington) were pretty happy with the episode, as revealed in an appropriately super-sized discussion.

Yes, the darkness was an issue, but the creative team used that darkness to eerily beautiful effect. On the right screen, everything in the episode was a grand and terrifying spectacle. And while we quibbled with some of the storytelling choices, we also screamed with surprise at the episode’s ending.

The other big question is what the death of the Night King means for the final three episodes of the show. Time will tell, but for now we’re hoping for a return to the initial focus on political scheming and moral compromise.

As if that wasn’t enough for one podcast, we also review the other big pop cultural event of the past week “Avengers: Endgame” — and in doing so, we capture the exact moment when Jordan realized that “Endgame” won’t be the last Marvel movie.

You can listen in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also send us feedback directly. (Or suggest shows and movies for us to review!)

Former Youtube star Austin Jones has been sentenced to ten years in a US federal prison after pleading guilty to persuading underage girls to send him explicit videos of themselves.

Jones, who made a name for himself online singing covers of songs, was arrested and charged in 2017 with two counts of producing child pornography.

He later pled guilty to one charge of receiving child pornography — admitting in a plea agreement that in 2016 and 2017 he enticed six girls to to produce and send explicit videos to “prove” they were his “biggest fan”, per Buzzfeed.

“Production and receipt of child pornography are extraordinarily serious offenses that threaten the safety of our children and communities,” it quotes assistant U.S. Attorney Katherine Neff Welsh writing in a sentencing memo. “Jones’s actions took something from his victims and their families that they will never be able to get back.”

At the height of his YouTube fame Jones had around 540,000 subscribers to his channel and more than 20M video views.

In a 2015 apology vlog, after reports emerged of Jones asking young fans to send him twerking videos, he claimed it never went further than that. “There were never any nudes, never any physical contact, it never happened,” he said then.

But in his plea agreement Jones admitted to attempting to persuade more than thirty underage fans to send him explicit photos or videos.

YouTube removed Jones’ channel after he pled guilty in February — saying it had violated its community guidelines. But the Google -owned company initially refused to shutter it, telling the BBC a few days earlier that while it does have a policy of removing content when a person is convicted of a crime “in some cases” it does so only if the content is closely related to the crime committed.

Describing her experience in a vlog also posted to YouTube, one former fan she had received messages from Jones asking her for twerking videos prior to his 2015 apology video when she was 14-years-old.

“I just don’t understand how these people can let the fame get to their heads that much that they think it’s alright to do something to people like this,” she said. “It’s so messed up. But the fact that his fanbase was these vulnerable, insecure young girls makes it so much worse than it already is… He knew that that was his fanbase and he took advantage of that.”

Greetings from Seattle, the land of Amazon, Microsoft, two of the world’s richest men and some startups.

I’m always surprised the Seattle startup ecosystem hasn’t grown to compete with the likes of Silicon Valley — or at least Boston and New York City — since the dot-com boom. Today, it’s the strongest it’s has been due to the successes of companies like the newly minted unicorn Outreach, trucking business Convoy and, of course, the dog walking startup Rover. But the city still lags behind, failing to adopt the culture of entrepreneurship that defines San Francisco.

I spent a lot of time wondering why it hasn’t reached its full potential. Is it because Microsoft and Amazon pay their employees so well they don’t have the same urge to build something from the ground up? Is it a lack of access to capital? Is the city not attracting top talent? If you have thoughts, send them my way.

Despite its shortcomings, there is still some action in the city I want to highlight this week. A same-day delivery business, Dolly, is on the rise. The startup told me on Thursday it had raised a $7.5 million round from Unlock Venture Partners, Maveron and Jeff Wilke, the chief executive officer of Amazon Worldwide Consumer. Maveron, if you remember, is the VC fund co-founded by Starbucks founder Howard Schultz.

In other Seattle news, Madrona Venture Group, a well-regarded fund, raised an additional $100 million this week. Typically, Madrona focuses on companies based in the Pacific Northwest, but this fund will deploy capital throughout the entire U.S. Hmmm, that’s not necessarily a good sign for Seattle founders, but great progress for the ecosystem nonetheless.

If you’re interested in learning more about Seattle tech, I’ve covered it a bit because it’s my hometown! Start with this story, which dives deep into a Seattle accelerator that’s working hard to encourage entrepreneurship in the city. Alright, on to other news.

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IPO corner!

WeWork: The co-working giant now known as The We Company submitted confidential IPO documents to the SEC, the company confirmed in a press release Monday. Is this the next massive startup win or a house of cards waiting to be toppled by the glare of the public markets? TechCrunch’s Danny Crichton investigates.

Slack: The business is in its final steps toward a much-anticipated direct listing, with one source telling TechCrunch the listing will be complete within 45 days. The WSJ reported this week that Slack will make an online presentation to potential shareholders on May 13. This week, we dug deep into Slack’s S-1 and decided to evaluate just how well the tech press, us included, did in covering the company. For the most part, the tech press did decently well, except for one curious, $162 million gap.

Uber: Finally! That ride-hailing company is going public next week. That latest news? Uber co-founder Travis Kalanick won’t be ringing the opening bell. Uber would not be where it is today without Kalanick, but him being there would surely be a reminder of Uber’s rocky past.

Beyond Meat: Shares of the company surged up 135 percent in their market opener last week, valuing the company as high as $3.52 billion. Volatility was so high on the company’s stock that the Nasdaq had to pause trading of “BYND” shares.

Micro-mobility instability:

Ofo has run into its fair share of issues, laying off hundreds of workers, shutting down its international division and more. Now, you can buy a piece of the startup’s history.

In other micro-mobility news, Lyft’s head of scooter & bikes Liam O’Connor, who was hired to help transportation company Lyft build its bike and scooter operations, has left after seven months with the newly-public company. TechCrunch’s Ingrid Lunden has the scoop. Plus, Bird, the electric scooter unicorn doing its best to overcome regulatory barriers, has made its way back to San Francisco. Bird is using its business license in San Francisco to introduce monthly personal rentals in the city. The program enables people to rent a scooter for $24.99 a month with no cap on the number of rides. We’ll how that goes.

WTF?

For some reason, people are giving Magic Leap more money. The company has secured another $280 million in a deal with Japan’s largest mobile operator, Docomo. Do you know what that means? The developer fo AR/VR headsets has raised a total of $2.6 billion. We’re just as confused as you.

Brand new venture capital funds:

Unshackled Ventures raised $20 million. 

Jungle Ventures closed on $175 million.

And Toyota AI Ventures launched a $100 million fund.

Startup Capital

• UiPath nabs $568M at a $7B valuation
• Utah’s Divvy raises another $200M to eliminate expense reports
• Glovo, the on-demand app, raises $169M Series D
• Awair raises $10M to help companies like WeWork monitor their office environments

Uber investors exit

I have the inside story on Menlo Ventures early Uber stake and TechCrunch’s Connie Loizos goes deep with early Uber backer Bradley Tusk.

Extra Crunch!

This week, we offer TechCrunch Extra Crunch subscribers exclusive tips on building extraordinary teams. Plus, the final piece in TechCrunch’s Greg Kumparak’s series on Niantic, the fast-growing developer of Pokemon Go. If you recall, we’ve captured much of Niantic’s ongoing story in the first three parts of our EC-1, from its beginnings as an “entrepreneurial lab” within Google, to its spin-out as an independent company and the launch of Pokémon GO, to its ongoing focus on becoming a platform for others to build augmented reality products upon.

As it gears up to go public Uber is facing legacy baggage down under: A class action lawsuit has been filed in Australia on behalf of around 6,000 taxi and hire car drivers and license owners, Reuters reported Friday.

The suit was filed Friday at the Victoria Supreme Court by personal injury and compensation law firm, Maurice Blackburn. It’s seeking compensation on behalf of thousands of taxi and hire car drivers and operators who believe they lost income or saw a fall in the value of their licence as a result of what it dubs “Uber’s unlawful conduct”.

The firm is still registering additional participants online — specifically those who were licensed to operate in four states, Victoria, Western Australian, New South Wales and Queensland, between a selection of dates spanning 2014 to 2017.

The argument behind the case is that Uber started operating illegally in the four states in 2014, by offering its UberX service which used vehicles and drivers without “the proper licences, accreditations and authorizations”, as it puts it — thereby leading to a drop in income and licence value for the plaintiffs in the class action. 

State laws were subsequently changed to put ride-hailing on a lawful footing so the case is focused on Uber’s past business conduct, with Maurice Blackburn alleging it operated unlawfully in each of the states for a period of time — hence the varying dates for registering participants. 

In a press release the firm writes that the case has been about 18 months in the making, noting too that the ‘no win, no fee’ class action is being underwritten by “one of the world’s largest litigation funders, Harbour”.

“Make no mistake, this will be a landmark case regarding the alleged illegal operations of Uber in Australia and the devastating impact that has had on the lives of hard-working and law-abiding citizens here,” said Maurice Blackburn’s national head of class actions, Andrew Watson, in a statement.

“It is not acceptable for a business to place itself above the law and operate illegally to the disadvantage of others. We’ve got a strong case, a strong team and substantial support from thousands of drivers, operators and licence owners nationwide,” he added.

The firm takes the view it has a better chance of winning compensation for plaintiffs by suing Uber, rather than the government for failing to enforce relevant regulations — pointing, for example, to Uber’s use of the controversial ‘Greyball’ software, which it describes as a “devious program”.

In 2017 the New York Times reported that Uber was using the software to identify members of code enforcement authorities or city officials trying to gather data about it offering service in areas where it’s prohibited and block their access to prevent their ability to enforce local rules.

“Uber sells the idea that it does things differently, but in reality and as we allege, this has meant operating unlawfully, using devious programs like ‘Greyball’. All of this caused extensive loss and damage to law-abiding taxi and hire car drivers, operators and licence holders across the country,” said senior associate at Maurice Blackburn, Elizabeth O’Shea, in another supporting statement.

“Uber came in and exploited people by operating outside of regulations and it was Uber’s conduct that led to horrible losses being suffered by our group members. For those reasons, we are targeting the multi-billion dollar company Uber and its associated entities to provide redress to those affected.”

The firm’s PR also includes a statement from lead plaintiff, Nick Andrianakis, a taxi driver, operator and licence owner from Brunswick, Melbourne, describing the impact of “a life’s work being stripped away from you”.

We’ve reached out to Uber for comment on the class action suit.

In a statement given to Reuters the company denied it operated illegally, telling the news agency: “Uber denies this allegation and, if a claim is served making it, the claim will be vigorously defended.”

The law firm told the news agency that the level of damages being sought could run into “hundreds of millions of dollars” — while emphasizing that any compensation would be determined as part of the case or via settlement negotiations.

While Uber’s statement to Reuters implies it has no intention of seeking a settlement to make this latest legacy legal headache go away, two months ago it did just that in the case of a separate US class-action focused on driver pay and benefits.

In that case Uber agreed to pay $20 million to settle a suit, brought six years ago, which had claimed Uber classified its drivers as contractors to avoid paying them a minimum wage and providing benefits.

Though $20M is considerably less than Uber might have been on the hook for had an appeals court not overturned an earlier decision to grant class-action status to hundreds of thousands of drivers in California and Massachusetts — ruling instead that its arbitration agreements were valid and enforceable.

That decision reduced the number of drivers in the suit to around 13,600.

No one does brand synergy quite like Lego. The company’s been one of the biggest Star Wars licensers over the years, and for the first time, it’s applying one of the most valuable pieces of IP to its own line of STEM kits, Lego Boost.

For this year’s Star Wars Day, the Danish company is announcing the arrival of the Lego Star Wars Boost Droid Commander set, which uses the underlying educational property as a jumping off point to build a trio of classic robots from the series.

Kids can use the kit to build R2-D2, Gonk and the Mouse Droid, commanding them on 40 different missions, while learning to build and code in the process. It looks like an effective way to disguise the whole learning bit behind one of history’s most beloved film series. It’s similar to the approach taken by littleBits’ Droid Inventor Kit a few years back — though Lego’s got a pretty remarkable track record of using Star Wars IP.

The set includes 1,177 pieces coupled with color and distance sensors and an interactive motor to get the robots moving. All of that works with a new Boost Star Wars app, which will be available for Android, iOS and Fire devices, featuring such missions as assisting an X-wing flight and seeking those sneaky rebels.

The system arrives on September 1, timed for the release of Star Wars: The Rise of Skywalker, the final film in the sequel trilogy.

Coinbase, the $8 billion-valued crypto exchange, has lost its CTO after Balaji Srinivasan announced his departure from the company.

Srinivasan became the U.S. company’s first CTO one year ago after it acquired Earn.com, where he was CEO and co-founder. Given the tenure — one year and one day — it looks like Srinivasan’s departure comes after he served the minimum agreed period with Coinbase.

A high-profile figure in the crypto space who has also spent time with Coinbase and Earn investor A16z, Srinivasan announced his move on Twitter. He declined to go into specifics but told TechCrunch that he plans to take time off to get fit, among other things, before launching into his next product.

Coinbase CEO Brian Armstrong paid tribute to Srinivasan’s “incredible contributions” to the company.

Srinivasan’s time at Coinbase saw the company ramp up its expansion efforts. Those include the launch of its own USDC stablecoin, the expansion (and planned expansion) of assets sold to consumers and ‘pro’ traders, and a wider global push. Away from consumers, it launched a slew of services for retail investors and today its services also include staking and over-the-counter trading.

There’s also Coinbase’s own VC arm for doing deals with promising startups and, also on the M&A side, the firm has continued making acquisitions and acquihires. This year, it has snapped up Y Combinator graduate Blockspring and Neutrino, whose founders controversially once worked for surveillance firm Hacking Team, in what were its eleventh and twelfth acquisitions to date.

Talent retention appears to be becoming a bit of an issue at Coinbase.

Srinivasan’s exit comes a month after Dan Romero, the company’s head of international, left after a five-year stint. According to Coindesk, the company has seen at least a dozen senior or mid-level executives leave since October when it raised $300 million led by Tiger Global.

Did you just open Firefox only to find all of your extensions disabled and/or otherwise not working?

You’re not alone, and it’s nothing you did.

Reports are pouring in of a glitch that has spontaneously disabled effectively all Firefox extensions.

Each extension is now being listed as a “legacy” extension, alongside a warning that it “could not be verified for use in Firefox and has been disabled”.

A ticket submitted to Mozilla’s Bugzilla bug tracker first hit at around 5:40 PM Pacific, and pins the sudden failure on a code signing certificate built into the browser that expired just after 5 PM (or midnight on May 4th in UTC time).

Story developing…