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Apple Smartphone Chinese Sales Saw a Sharp Decline in February

Shanghai-based Chinese financial news site East Money recently reported that, according to statistics that the China Academy of Information and Communication Technologies just released, the Chinese smartphone market declined by 54.7 percent, year-over-year. Apple iPhone sales in China saw a 61 percent decline during the same period of time. Apple announced its first quarter sales will miss its earlier projection, mainly due to the public health situation in China, which has impacted both manufacturing and market demand. Although Apple’s Chinese factories resumed their work, yet the pace of restoring capacity has been slower than expected. This will impact Apple’s global sales. Some Apple suppliers like Qorvo also reduced their forecasts. Also worth noting is that, the International Data Group (IDC) projects that the first quarter global smartphone sales will decline by 40 percent, year-over-year.

Source: East Money, March 9, 2020

HKET: iPhone XR Ranked Best Seller; Huawei Not in Top Ten

Hong Kong Economic Times (HKET), the leading financial daily in Hong Kong, recently reported that, according to market researcher Counterpoint, the Apple iPhone XR was ranked number one in the 2019 global top ten best seller of the smartphone market. In fact, six Apple iPhone models are in the top ten list. Samsung took three spots. Oppo is the only Chinese brand that won a spot. Well-known Chinese vendors like Huawei and Xiaomi had no product on the top ten list. iPhone XR is the only smartphone model, among all smartphones, that scored a double-digit market share in all important regional markets across the globe. The top five in North America are all Apple iPhones. The top five in Europe are either Samsung or Apple iPhones. The top five in China are all Chinese brands.

Source: HKET, March 2, 2020

Deutsche Welle: Internal Documents Showed Huawei Supplied Iran

Deutsche Welle Chinese Edition recently reported that newly obtained Huawei internal documents showed that the company did supply Iran with banned goods such as computer equipment that the U.S. company HP had made. The documents, dated February 2011, are packing lists of items shipped to Tehran, which were pending clearance through customs. These represent very strong hard evidence that supports the U.S. government’s charges against Huawei. The listed equipment involved millions of dollars’ worth of spending on Iranian communications projects. Also in the packing lists were details of servers and switches, as well as U.S. software products from Microsoft, Symantec, and Novell. The volume of the goods reflected in the documents reached 340 standard containers. Huawei refused to comment on this matter, citing on-going legal proceedings. However, Huawei insisted that the company had committed no wrong-doing and followed all of the requirements regarding sanctions from the UN, the EU and the United States. HP did confirm that all its contracts banned these products from being exported to Iran.

Source: DW Chinese, March 3, 2020

UDN: The U.S. Plans to Restrict China’s Use of Chip-Making Equipment

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that the U.S. Trump administration is considering a new trade restriction. This time it points to banning China from using U.S. chip-making equipment for manufacturing. The U.S. Department of Commerce is planning to amend its policies around Country of Origin, which means if it is national security related, there will be more restrictions on foreign vendors who want to use U.S. technology based equipment. This may result in a requirement to obtain prior U.S. permission for foreign manufacturers to produce chips to supply Huawei. Analysts expressed the belief that the new policy aims to slow down China’s speed of improving its technologies. However, the plan may also bring the risk of disrupting the global supply chain of the U.S. giants in the semiconductor industry. The plan is still under debate within the U.S. federal government.

Source: UDN, February 17, 2020

RFA Chinese: The U.S. Filed Suit against Huawei with 16 New Charges

Radio Free Asia (RFA) Chinese Edition recently reported that, while Europe gave Chinese telecommunications company Huawei multiple green lights, the United States did not rest. The U.S. Department of Justice filed another lawsuit against Huawei with 16 new charges, mainly focusing on stealing trade secrets. The new suit went against Huawei, four Huawei subsidiary companies, and Huawei CFO Meng Wanzhou. The prosecution alleged that Huawei has been stealing intellectual properties from six U.S. companies on the Internet router source code, cellular antennas, robotic testing technologies, and other issues. Huawei typically performed the stealing via breaching NDAs (non-disclosure Agreements), obtaining knowledge from former employees of competitors, penetrating via proxies like professors, and establishing awards to encourage its own employees to steal from competitors. Huawei also exports to Iran and North Korea, who are under sanctions from the U.S., Europe, and the United Nations. The White house is working with U.S. technology giants like Microsoft and Dell to establish a new 5G network without Huawei.

Source: RFA Chinese, February 14, 2020

Chinese Mobile Phone Manufacturers Jointly Build Google Play Competitor

Chinese technology news site My Drivers recently reported that four major Chinese mobile phone vendors, Huawei, Xiaomi, Oppo and Vivo, jointly formed a platform named Global Developer Service Alliance (GDSA). The new alliance was established with an aim to compete against Google Play, which is Google’s online flagship app store. GDSA is to combine services for app development, marketing, distribution, and monetization for markets outside China. So far, the alliance covers nine regions including India, Indonesia, Russia, and Malaysia. Huawei will utilize the new platform for the European market. The platform planned to go live in March. However, it has been postponed due to the Coronavirus situation. All four vendors refused to comment on the news. Since Google revoked Huawei’s Android license, Huawei mobile phones are not able to use Google Play. Huawei has been developing an App Gallery as a replacement, but it has been difficult for a single vendor to combat Google’s market dominance. By the end of 2019, Chinese mobile phone vendors held 40 percent of the global handset market.

Source: My Drivers, February 7, 2020

China’s Cyber Regulation Bans Information Endangering National Security

The Cyberspace Administration of China (CAC) recently issued the “Regulations on the Ecological Governance of Cyber Information Content,” which states that online content producers must not produce, copy, or publish contents that “endanger national security, leak state secrets, subvert state power, or disrupt national unity.” The regulation is to be implemented starting March 1, 2020.

The regulation encourages Internet content producers to generate, copy, and publish information that “promotes Xi Jinping thoughts, accurately and vividly interpret socialist roads, theories, systems, and culture with Chinese characteristics, and positive contents that “promote socialist core values, excellent moral culture and the spirit of the times, and fully display the Chinese nation’s upward spirit.”

In addition, the regulation states that online content producers must not produce, copy, or publish illegal information that contains contents that “endanger national security, leak state secrets, subvert state power, and disrupt national unity” and information that “damages national honor and interests.” They should take measures to prevent and resist the production, copying, and release of bad messages containing content that “uses exaggerated titles, is seriously inconsistent with the title” and contains information that “hypes scandals, love affairs, and misdeeds.”

Source: Central News Agency, December 20, 2019

China’s Domestic Software Push Is Hard to Implement

Taiwanese online news site Storm recently reported that China’s central government established a three-year plan to replace all foreign hardware and software in the entire government system. Although the Chinese government did not confirm the existence of such a plan, the news was verified via multiple channels. It is relatively easy for the Chinese government to switch entirely to Chinese vendors like Lenovo, which is a preferred supplier today anyway. However, nearly all software in use today in the government system was designed to run on either Microsoft Windows or Apple MacOS. It is expected to be very challenging to replace U.S. made operating systems and the day-to-day software packages that run on top of them. Chinese domestic operating systems attempted this in the past decade or two and failed multiple times. There are hardly any software developers who are willing to develop for the domestic operating systems. Analysts expressed the belief that the new policy will have a major impact on the Chinese IT industry. However, the private sector may not go along with the government to replace IT environments. Even in the hardware space, with strong domestic vendors’ support, it is very hard to overcome the fact that critical components like CPU and memory are almost all made outside of China.

Source: Storm, December 9, 2019

China to Ban Live Webcasts; Three Minutes Minimum Delay Required

The Chinese authorities issued a directive in August last year requiring real name registration for live webcasts. Recently, the Ministry of Culture and Tourism announced a series of regulations including a ban on live web broadcasts and other restrictions upon online video programs. The Notice said, “live Internet broadcasts should take the form of delayed broadcasts, with a minimum delay of three minutes. Performance organizers and online broadcast companies should formulate live broadcast management procedures and emergency contingency plans, and arrange special personnel to conduct real time review of the contents and of Internet users’ comments. Any problem should be dealt with in a timely manner and the video materials should to be kept for at least 60 days for inspection.”

Chinese authorities’ surveillance of online video programs has become increasingly harsh. It is believed that the new media has mostly exposed the major and small incidents that the authorities have attempted to cover up.

The consultation period for the aforementioned Notice will end on December 22. In August last year, six national level agencies in China, including the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of Culture and Tourism, and the State Administration of Radio and Television, issued a “Notice on Strengthening the Management of Webcasting Services.” The notice requires the implementation of the real-name registration system, stringent management of online program anchors, the establishment of a blacklist for anchors, and improvement of the monitoring, review, and disposal of illegal and harmful contents. The notice also requires the online live broadcasters to cooperate with the authorities and provide the necessary documents, materials, and data.

Source: Radio Free Asia, December 11, 2019

Facial Recognition: Anxiety among Chinese People

Starting in December, whenever the Chinese people had to register their new mobile phone numbers, they also had to undergo facial scanning. However, a survey showed that Chinese respondents were very concerned about the security of facial recognition. During October and November of this year, a research center affiliated with the Guangzhou based Southern Metropolis Daily conducted a survey on facial recognition. The center released an online questionnaire to investigate the problems and concerns of the public when using facial recognition. Among the respondents, 57 percent were worried that their personal whereabouts were recorded while nearly 50 percent were worried that criminals may use fake information to perform fraud or theft. Nearly 84 percent of the respondents want operators of the facial recognition system to provide them with a channel to view or delete facial data. 74 percent of respondents want to choose whether to use facial recognition or traditional methods. However, the survey also showed that about 60 percent to 70 percent of respondents believe that facial recognition makes public places safer.

An IT website, Comparitech, once conducted a study on the scope and depth of the use of biometrics and surveillance systems. China, the worst among the 50 surveyed countries, lacks public attention to the privacy of people’s biometric data. The study showed that China has no laws to protect the biometrics of citizens and emphasized “the lack of protection for employees in the workplace.”

According to Chinese media, the metro system in Zhengzhou city of Henan province started “riding with face” (using facial recognition in the metro system) in early December. China Daily reported that riders can use facial recognition to authorize payment automatically instead of scanning the QR code on their mobile phones. Currently, passengers can voluntarily choose whether to use facial recognition.

Source: BBC Chinese, December 6, 2019