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The other smartphone business – TechCrunch

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With the smartphone operating system market sewn up by Google’s Android platform, which has a close to 90% share globally, leaving Apple’s iOS a slender (but lucrative) premium top-slice, a little company called Jolla and its Linux-based Sailfish OS is a rare sight indeed: A self-styled ‘independent alternative’ that’s still somehow in business.

The Finnish startup’s b2b licensing sales pitch is intended to appeal to corporates and governments that want to be able to control their own destiny where device software is concerned.

And in a world increasingly riven with geopolitical tensions that pitch is starting to look rather prescient.

Political uncertainties around trade, high tech espionage risks and data privacy are translating into “opportunities” for the independent platform player — and helping to put wind in Jolla’s sails long after the plucky Sailfish team quit their day jobs for startup life.

Building an alternative to Google Android

Jolla was founded back in 2011 by a band of Nokia staffers who left the company determined to carry on development of mobile Linux as the European tech giant abandoned its own experiments in favor of pivoting to Microsoft’s Windows Phone platform. (Fatally, as it would turn out.)

Nokia exited mobile entirely in 2013, selling the division to Microsoft. It only returned to the smartphone market in 2017, via a brand-licensing arrangement, offering made-in-China handsets running — you guessed it — Google’s Android OS.

If the lesson of the Jolla founders’ former employer is ‘resistance to Google is futile’ they weren’t about to swallow that. The Finns had other ideas.

Indeed, Jolla’s indie vision for Sailfish OS is to support a whole shoal of differently branded, regionally flavored and independently minded (non-Google-led) ecosystems all swimming around in parallel. Though getting there means not just surviving but thriving — and doing so in spite of the market being so thoroughly dominated by the U.S. tech giant.

TechCrunch spoke to Jolla ahead of this year’s Mobile World Congress tradeshow where co-founder and CEO, Sami Pienimäki, was taking meetings on the sidelines. He told us his hope is for Jolla to have a partner booth of its own next year — touting, in truly modest Finnish fashion, an MWC calendar “maybe fuller than ever” with meetings with “all sorts of entities and governmental representatives”.

Jolla co-founder, Sami Pienimaki, showing off a Jolla-branded handset in May 2013, back when the company was trying to attack the consumer smartphone space. 
(Photo credit: KIMMO MANTYLA/AFP/Getty Images)

Even a modestly upbeat tone signals major progress here because an alternative smartphone platform licensing business is — to put it equally mildly — an incredibly difficult tech business furrow to plough.

Jolla almost died at the end of 2015 when the company hit a funding crisis. But the plucky Finns kept paddling, jettisoning their early pursuit of consumer hardware (Pienimäki describes attempting to openly compete with Google in the consumer smartphone space as essentially “suicidal” at this point) to narrow their focus to a b2b licensing play.

The early b2b salespitch targeted BRIC markets, with Jolla hitting the road to seek buy in for a platform it said could be moulded to corporate or government needs while still retaining the option of Android app compatibility.

Then in late 2016 signs of a breakthrough: Sailfish gained certification in Russia for government and corporate use.

Its licensing partner in the Russian market was soon touting the ability to go “absolutely Google-free!“.

Buy in from Russia

Since then the platform has gained the backing of Russian telco Rostelecom, which acquired Jolla’s local licensing customer last year (as well as becoming a strategic investor in Jolla itself in March 2018 — “to ensure there is a mutual interest to drive the global Sailfish OS agenda”, as Pienimäki puts it).

Rostelecom is using the brand name ‘Aurora OS‘ for Sailfish in the market which Pienimäki says is “exactly our strategy” — likening it to how Google’s Android has been skinned with different user experiences by major OEMs such as Samsung and Huawei.

“What we offer for our customers is a fully independent, regional licence and a tool chain so that they can develop exactly this kind of solution,” he tells TechCrunch. “We have come to a maturity point together with Rostelecom in the Russia market, and it was natural move plan together, that they will take a local identity and proudly carry forward the Sailfish OS ecosystem development in Russia under their local identity.”

“It’s fully compatible with Sailfish operating system, it’s based on Sailfish OS and it’s our joint interest, of course, to make it fly,” he adds. “So that as we, hopefully, are able to extend this and come out to public with other similar set-ups in different countries those of course — eventually, if they come to such a fruition and maturity — will then likely as well have their own identities but still remain compatible with the global Sailfish OS.”

Jolla says the Russian government plans to switch all circa 8M state officials to the platform by the end of 2021 — under a project expected to cost RUB 160.2 billion (~$2.4BN). (A cut of which will go to Jolla in licensing fees.)

It also says Sailfish-powered smartphones will be “recommended to municipal administrations of various levels,” with the Russian state planning to allocate a further RUB 71.3 billion (~$1.1BN) from the federal budget for that. So there’s scope for deepening the state’s Sailfish uptake.

Russian Post is one early customer for Jolla’s locally licensed Sailfish flavor. Having piloted devices last year, Pienimäki says it’s now moving to a full commercial deployment across the whole organization — which has around 300,000 employees (to give a sense of how many Sailfish powered devices could end up in the hands of state postal workers in Russia).

A rugged Sailfish-powered device piloted by Russian post

Jolla is not yet breaking out end users for Sailfish OS per market but Pienimäki says that overall the company is now “clearly above” 100k (and below 500k) devices globally.

That’s still of course a fantastically tiny number if you compare it to the consumer devices market — top ranked Android smartphone maker Samsung sold around 70M handsets in last year’s holiday quarter, for instance — but Jolla is in the b2b OS licensing business, not the handset making business. So it doesn’t need hundreds of millions of Sailfish devices to ship annually to turn a profit.

Scaling a royalty licensing business to hundreds of thousands of users is sums to “good business”, , says Pienimäki, describing Jolla’s business model for Sailfish as “practically a royalty per device”.

“The success we have had in the Russian market has populated us a lot of interesting new opening elsewhere around the world,” he continues. “This experience and all the technology we have built together with Open Mobile Platform [Jolla’s Sailfish licensing partner in Russia which was acquired by Rostelecom] to enable that case — that enables a number of other cases. The deployment plan that Rostelecom has for this is very big. And this is now really happening and we are happy about it.”

Jolla’s “Russia operation” is now beginning “a mass deployment phase”, he adds, predicting it will “quickly ramp up the volume to very sizeable”. So Sailfish is poised to scale.

Step 3… profit?

While Jolla is still yet to turn a full-year profit Pienimäki says several standalone months of 2018 were profitable, and he’s no longer worried whether the business is sustainable — asserting: “We don’t have any more financial obstacles or threats anymore.”

It’s quite the turnaround of fortunes, given Jolla’s near-death experience a few years ago when it almost ran out of money, after failing to close a $10.6M Series C round, and had to let go of half its staff.

It did manage to claw in a little funding at the end of 2015 to keep going, albeit as much leaner fish. But bagging Russia as an early adopter of its ‘independent’ mobile Linux ecosystem looks to have been the key tipping point for Jolla to be able to deliver on the hard-graft ecosystem-building work it’s been doing all along the way. And Pienimäki now expresses easy confidence that profitability will flow “fairly quickly” from here on in.

“It’s not an easy road. It takes time,” he says of the ecosystem-building company Jolla hard-pivoted to at its point of acute financial distress. “The development of this kind of business — it requires patience and negotiation times, and setting up the ecosystem and ecosystem partners. It really requires patience and takes a lot of time. And now we have come to this point where actually there starts to be an ecosystem which will then extend and start to carry its own identity as well.”

In further signs of Jolla’s growing confidence he says it hired more than ten people last year and moved to new and slightly more spacious offices — a reflection of the business expanding.

“It’s looking very good and nice for us,” Pienimäki continues. “Let’s say we are not taking too much pressure, with our investors and board, that what is the day that we are profitable. It’s not so important anymore… It’s clear that that is soon coming — that very day. But at the same time the most important is that the business case behind is proven and it is under aggressive deployment by our customers.”

The main focus for the moment is on supporting deployments to ramp up in Russia, he says, emphasizing: “That’s where we have to focus.” (Literally he says “not screwing up” — and with so much at stake you can see why nailing the Russia case is Jolla’s top priority.)

While the Russian state has been the entity most keen to embrace an alternative (non-U.S.-led) mobile OS — perhaps unsurprisingly — it’s not the only place in the world where Jolla has irons in the fire.

Another licensing partner, Bolivian IT services company Jalasoft, has co-developed a Sailfish-powered smartphone called Accione.

Jalasoft’s ‘liberty’-touting Accione Sailfish smartphone

It slates the handset on its website as being “designed for Latinos by Latinos”. “The digitalization of the economy is inevitable and, if we do not control the foundation of this digitalization, we have no future,” it adds.

Jalasoft founder and CEO Jorge Lopez says the company’s decision to invest effort in kicking the tyres of Jolla’s alternative mobile ecosystem is about gaining control — or seeking “technological libration” as the website blurb puts it.

“With Sailfish OS we have control of the implementation, while with Android it is the opposite,” Lopez tells TechCrunch. “We are working on developing smart buildings and we need a private OS that is not Android or iOS. This is mainly because our product will allow the end user to control the whole building and doing this with Android or iOS a hackable OS will bring concerns on security.”

Lopez says Jalasoft is using Accione as its development platform — “to gather customer feedback and to further develop our solution” — so the project clearly remains in an early phase, and he says that no more devices are likely to be announced this year.

But Jolla can point to more seeds being sewn with the potential, with work, determination and patience, to sprout into another sizeable crop of Sailfish-powered devices down the line.

Complexity in China

Even more ambitiously Jolla is also targeting China, where investment has been taken in to form a local consortium to develop a Chinese Sailfish ecosystem.

Although Pienimäki cautions there’s still much work to be done to bring Sailfish to market in China.

“We completed a major pilot with our licensing customer, Sailfish China Consortium, in 2017-18,” he says, giving an update on progress to date. “The public in market solution is not there yet. That is something that we are working together with the customer — hopefully we can see it later this year on the market. But these things take time. And let’s say that we’ve been somewhat surprised at how complex this kind of decision-making can be.”

“It wasn’t easy in Russia — it took three years of tight collaboration together with our Russian partners to find a way. But somehow it feels that it’s going to take even more in China. And I’m not necessarily talking about calendar time — but complexity,” he adds.

While there’s no guarantee of success for Jolla in China, the potential win is so big given the size of the market that even if they can only carve out a tiny slice, such as a business or corporate sector, it’s still worth going after. And he points to the existence of a couple of native mobile Linux operating systems he reckons could make “very lucrative partners”.

That said, the get-to-market challenge for Jolla in China is clearly distinctly different vs the rest of the world. This is because Android has developed into an independent (i.e. rather than Google-led) ecosystem in China as a result of state restrictions on the Internet and Internet companies. So the question is what could Sailfish offer that forked Android doesn’t already?

An Oppo Android powered smartphone on show at MWC 2017

Again, Jolla is taking the long view that ultimately there will be appetite — and perhaps also state-led push — for a technology platform bolster against political uncertainty in U.S.-China relations.

“What has happened now, in particular last year, is — because of the open trade war between the nations — many of the technology vendors, and also I would say the Chinese government, has started to gradually tighten their perspective on the fact that ‘hey simply it cannot be a long term strategy to just keep forking Android’. Because in the end of the day it’s somebody else’s asset. So this is something that truly creates us the opportunity,” he suggests.

“Openly competing with the fact that there are very successful Android forks in China, that’s going to be extremely difficult. But — let’s say — tapping into the fact that there are powers in that nation that wish that there would be something else than forking Android, combined with the fact that there is already something homegrown in China which is not forking Android — I think that’s the recipe that can be successful.”

Not all Jolla’s Sailfish bets have paid off, of course. An earlier foray by an Indian licensing partner into the consumer handset market petered out. Albeit, it does reinforce their decision to zero in on government and corporate licensing.

“We got excellent business connections,” says Pienimäki of India, suggesting also that it’s still a ‘watch this space’ for Jolla. The company has a “second move” in train in the market that he’s hopeful to be talking about publicly later this year.

It’s also pitching Sailfish in Africa. And in markets where target customers might not have their own extensive in-house IT capability to plug into Sailfish co-development work Pienimäki says it’s offering a full solution — “a ready made package”, together with partners, including device management, VPN, secure messaging and secure email — which he argues “can be still very lucrative business cases”.

Looking ahead and beyond mobile, Pienimäki suggests the automotive industry could be an interesting target for Sailfish in the future — though not literally plugging the platform into cars; but rather licensing its technologies where appropriate — arguing car makers are also keen to control the tech that’s going into their cars.

“They really want to make sure that they own the cockpit. It’s their property, it’s their brand and they want to own it — and for a reason,” he suggests, pointing to the clutch of major investments from car companies in startups and technologies in recent years.

“This is definitely an interesting area. We are not directly there ourself — and we are not capable to extend ourself there but we are discussing with partners who are in that very business whether they could utilize our technologies there. That would then be more or less like a technology licensing arrangement.”

A trust balancing model

While Jolla looks to be approaching a tipping point as a business, in terms of being able to profit off of licensing an alternative mobile platform, it remains a tiny and some might say inconsequential player on the global mobile stage.

Yet its focus on building and maintaining trusted management and technology architectures also looks timely — again, given how geopolitical spats are intervening to disrupt technology business as usual.

Chinese giant Huawei used an MWC keynote speech last month to reject U.S.-led allegations that its 5G networking technology could be repurposed as a spying tool by the Chinese state. And just this week it opened a cybersecurity transparency center in Brussels, to try to bolster trust in its kit and services — urging industry players to work together on agreeing standards and structures that everyone can trust.

In recent years U.S.-led suspicions attached to Russia have also caused major headaches for security veteran Kaspersky — leading the company to announce its own trust and transparency program and decentralize some of its infrastructure, including by spinning up servers in Europe last year.

Businesses finding ways to maintain and deepen the digital economy in spite of a little — or even a lot — of cross-border mistrust may well prove to be the biggest technology challenge of all moving forward.

Especially as next-gen 5G networks get rolled out — and their touted ‘intelligent connectivity’ reaches out to transform many more types of industries, bringing new risks and regulatory complexity.

The geopolitical problem linked to all this boils down to how to trust increasing complex technologies without any one entity being able to own and control all the pieces. And Jolla’s business looks interesting in light of that because it’s selling the promise of neutral independence to all its customers, wherever they hail from — be it Russia, LatAm, China, Africa or elsewhere — which makes its ability to secure customer trust not just important but vital to its success.

Indeed, you could argue its customers are likely to rank above average on the ‘paranoid’ scale, given their dedicated search for an alternative (non-U.S.-led) mobile OS in the first place.

“It’s one of the number one questions we get,” admits Pienimäki, discussing Jolla’s trust balancing act — aka how it manages and maintains confidence in Sailfish’s independence, even as it takes business backing and code contributions from a state like Russia.

“We tell about our reference case in Russia and people quickly ask ‘hey okay, how can I trust that there is no blackbox inside’,” he continues, adding: “This is exactly the core question and this is exactly the problem we have been able to build a solution for.”

Jolla’s solution sums to one line: “We create a transparent platform and on top of fully transparent platform you can create secure solutions,” as Pienimäki puts it.

“The way it goes is that Jolla with Sailfish OS is always offering the transparent Sailfish operating system core, on source code level, all the time live, available for all the customers. So all the customers constantly, in real-time, have access to our source code. Most of it’s in public open source, and the proprietary parts are also constantly available from our internal infrastructure. For all the customers, at the same time in real-time,” he says, fleshing out how it keeps customers on board with a continually co-developing software platform.

“The contributions we take from these customers are always on source code level only. We don’t take any binary blobs inside our software. We take only source code level contributions which we ourselves authorize, integrate and then we make available for all the customers at the very same moment. So that loopback in a way creates us the transparency.

“So if you want to be suspicion of the contributions of the other guys, so to say, you can always read it on the source code. It’s real-time. Always available for all the customers at the same time. That’s the model we have created.”

“It’s honestly quite a unique model,” he adds. “Nobody is really offering such a co-development model in the operating system business.

“Practically how Android works is that Google, who’s leading the Android development, makes the next release of Android software, then releases it under Android Open Source and then people start to backboard it — so that’s like ‘source, open’ in a way, not ‘open source’.”

Sailfish’s community of users also have real-time access to and visibility of all the contributions — which he dubs “real democracy”.

“People can actually follow it from the code-line all the time,” he argues. “This is really the core of our existence and how we can offer it to Russia and other countries without creating like suspicion elements each side. And that is very important.

“That is the only way we can continue and extend this regional licensing and we can offer it independently from Finland and from our own company.”

With global trade and technology both looking increasingly vulnerable to cross-border mistrust, Jolla’s approach to collaborative transparency may offer something of a model if other businesses and industries find they need to adapt themselves  in order for trade and innovation to keep moving forward in uncertain political times.

Antitrust and privacy uplift

Last but not least there’s regulatory intervention to consider.

A European Commission antitrust decision against Google’s Android platform last year caused headlines around the world when the company was slapped with a $5BN fine.

More importantly for Android rivals Google was also ordered to change its practices — leading to amended licensing terms for the platform in Europe last fall. And Pienimäki says Jolla was a “key contributor” to the Commission case against Android.

European competition commissioner Margrethe Vestager, on April 15, 2015 in Brussels, as the Commission said it would open an antitrust investigation into Google’s Android operating system. (Photo credit: JOHN THYS/AFP/Getty Images)

The new Android licensing terms make it (at least theoretically) possible for new types of less-heavily-Google-flavored Android devices to be developed for Europe. Though there have been complaints the licensing tweaks don’t go far enough to reset Google’s competitive Android advantage.

Asked whether Jolla has seen any positive impacts on its business following the Commission’s antitrust decision, Pienimäki responds positively, recounting how — “one or two weeks after the ruling” — Jolla received an inbound enquiry from a company in France that had felt hamstrung by Google requiring its services to be bundled with Android but was now hoping “to realize a project in a special sector”.

The company, which he isn’t disclosing at this stage, is interested in “using Sailfish and then having selected Android applications running in Sailfish but no connection with the Google services”.

“We’ve been there for five years helping the European Union authorities [to build the case] and explain how difficult it is to create competitive solutions in the smartphone market in general,” he continues. “Be it consumer or be it anything else. That’s definitely important for us and I don’t see this at all limited to the consumer sector. The very same thing has been a problem for corporate clients, for companies who provide specialized mobile device solutions for different kind of corporations and even governments.”

While he couches the Android ruling as a “very important” moment for Jolla’s business last year, he also says he hopes the Commission will intervene further to level the smartphone playing field.

“What I’m after here, and what I would really love to see, is that within the European Union we utilize Linux-based, open platform solution which is made in Europe,” he says. “That’s why we’ve been pushing this [antitrust action]. This is part of that. But in bigger scheme this is very good.”

He is also very happy with Europe’s General Data Protection Regulation (GDPR) — which came into force last May, plugging in a long overdue update to the bloc’s privacy rules with a much beefed up enforcement regime.

GDPR has been good for Jolla’s business, according to Pienimäki, who says interest is flowing its way from customers who now perceive a risk to using Android if customer data flows outside Europe and they cannot guarantee adequate privacy protections are in place.

“Already last spring… we have had plenty of different customer discussions with European companies who are really afraid that ‘hey I cannot offer this solution to my government or to my corporate customer in my country because I cannot guarantee if I use Android that this data doesn’t go outside the European Union’,” he says.

“You can’t indemnify in a way that. And that’s been really good for us as well.”

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Tier scoots off with ‘first close’ of its $200M Series D – TechCrunch

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Berlin-based e-scooter rentals company Tier Mobility has announced what it’s billing as the “first close” of a $200 million Series D, as investors continue to plough money into urban micromobility.

Today’s announcement follows a $60M debt raise this summer, and a $250M Series C last November (led by SoftBank).

It’s not clear from its PR whether Tier is intending to raise a meatier sized Series D (and seeking to flush more investors out of the bushes with today’s announcement) — hence its talk of “first close” — or whether it’s taken just the first tranche of a planned $200M raise. We’ve asked for clarity and will update when we get it.

It’s also not entirely clear whether the Series D round contains any debt or is all equity (we’ve also asked).

Tier’s PR describes it as “part of a broader equity and debt raise” but the raise does follow on from the smaller debt round announced in June. And later in the PR the round is described as an “equity raise” — although there’s also mention of unlocking the “debt capacity”. Again, a representative for the company could not be reached at the time of writing but we’ll update when we have confirmation.

In a statement, Alex Gayer, chief financial officer at Tier Mobility, said: “This equity funding provides further firepower to scale our multimodal market presence globally, and pursue strategic investments & acquisitions. Our vehicle capex needs will be serviced with the debt capacity unlocked. Our goal is to build Tier into the European micro-mobility powerhouse, building on our current position as the number one player in the shared electric scooters market.”

Existing investor SoftBank Vision Fund 2 is co-leading the Series D with the UAE-based Mubadala Capital, which also backed Tier’s Series C last year, while other existing investors RTP Global, Novator, White Star Capital, Northzone, and Speedinvest also participating.

Mubadala’s increased backing for Tier follows it jumping into the UAE’s market last year — after it was selected by the local Roads & Transport Authority, following a lengthy trial of scooter rentals.

The funding also includes sees new investors joining — including the green impact fund M&G Investments and Mountain Partners, a diversified global investment holding.

Tier said its micromobility business is now valued at $2BN (which is up around double from the value being reported around the time of its Series C last year) — saying it’s raised a total of $660M in equity and debt funding to date.

The 2018 launched e-scooter, e-bike and e-moped startup competes in a highly competitive space with a myriad of players, including the likes of Bird, Dott, Lime, Voi and Wind (to name a few) — although authorities in cities around the world have sought to bring a little structure to the fast-developing micromobility market by setting limits on the number of operators allowed per city. That means that winning a slot as a city provider can help leapfrog competitors at a local level.

In the press release, Tier, for example, trumpets its recent win of a tender to provide e-scooters for rent in a trial in London (alongside Dott and Lime). Other new cities it touts are both in the Middle East: Manama (Bahrain) and Doha (Qatar).

It also operates in Paris — where city authorities have been making a big push to shift the urban transport mix away from cars to alternatives like bikes and public transport. So it can claim some major wins.

To-date, Tier says it’s deployed 135,000 e-scooters, e-bikes and e-mopeds across 150 cities in 16 countries — claiming to have established itself as “the European market leader through unrivalled capital efficiency and operational excellence”.

The Berlin-based startup’s plan for the new funding is for “acquisitions and strategic investments”, as well as for further international expansion — with Tier saying it will be targeting coverage across strategic growth markets, in Europe and the Middle East.

So it sounds like more consolidation is headed for the fast-paced e-scooter market as fresh dollars pour in. (And one way to circumvent city-imposed limits on the number of operators — to grab further scale — would be to buy up rivals that have won tenders in cities you haven’t… )

Tier also says it will be directing some of the investment into continuing to roll out its network of battery charging stations hosted by local businesses, aka the Tier Energy Network.

“With the launch of e-bikes in several European countries, Tier is expanding its growing range of multimodal options, making it the first European micro-mobility provider to offer users three different types of vehicles in one app,” it adds.

In a statement, Lawrence Leuschner, CEO and co-founder, said: “The funding provides Tier with additional resources to fulfil our mission to Change Mobility For Good. Clocking more than 80 million trips, replacing over 13 million car rides, in such a short amount of time exemplifies that cities around the world look for ways to make their transport networks safer and move towards a zero-emission future.”

“Lawrence, Matthias and Alex’s passion for change can be felt across the organisation — from Tier’s hub in Dubai to their HQ in Berlin,” added Amer Alaily, director at Mubadala Capital Ventures, Europe, in another supporting statement. “They have quickly emerged as not only a leader in the European micro-mobility space, but one whose commitment to sustainability sets them apart from their competitors. We are proud to have been part of their journey and look forward to remaining a partner to Lawrence and his team for years to come.”

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Google Play lowers commissions, Apple drops anti-steering rule, Pinterest clones TikTok, Android 12 arrives – TechCrunch

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Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.

The app industry continues to grow, with a record 218 billion downloads and $143 billion in global consumer spend in 2020. Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.

Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.

This Week in Apps offers a way to keep up with this fast-moving industry in one place with the latest from the world of apps, including news, updates, startup fundings, mergers and acquisitions, and suggestions about new apps and games to try, too.

Do you want This Week in Apps in your inbox every Saturday? Sign up here: techcrunch.com/newsletters

⭐️ Google lowers its Play Store commissions. In a significant move, Google announced it would lower commissions on subscription-based apps to 15% from day one, instead of 30% for the first year, which then drops to 15% in year two and beyond (like Apple offers). It also announced that apps participating in its new Play Media Experience Program could see their commissions adjusted to as low as 10%. This program includes apps where the content costs account for the majority of sales, including video streaming, music and e-books apps. Google also competes in some of these areas with its own services and is under increased threat of regulation globally, as well as engaged in lawsuits over app store fees, including one in the U.S. with Epic Games. The new fees will kick in on January 1, 2022 and follow Google’s previously announced reduction of commissions from 30% to 15% on the first $1 million of developer earnings. Google says 99% of developers will qualify for a service fee of 15% or less. Sensor Tower data indicates Google Play saw $38.8 billion in overall consumer spending in 2020, earning it $11.6 billion in in-app purchases.

⭐️ Apple introduced a new set of App Store Guidelines which include three key changes, including those to anti-steering rules. One of the changes is the result of a previously announced settlement agreement with a class of U.S. app developers. It clarifies that developers are allowed to communicate with their customers about other payment methods available outside their app. Related to this, another new guideline explains that apps may request customer information like name and email, but the request must be optional for the user and shouldn’t prevent them from using the app. The third guideline is unrelated to legal action, and simply details how developers can use a new App Store feature, called in-app events, which rolls out next week.

⭐️ Trump announced his plans to launch a new social networking app, which of course he’s calling Truth Social. The former president was banned from major social platforms following the January 6 attack on the Capitol, for using his account to incite violence. According to a press release this week, Trump Media and Technology Group will merge with a SPAC called Digital World Acquisition Group to launch Truth. But before you go thinking Trump has built his own Twitter, it turns out the new network is actually just a fork of the open-source Mastodon codebase. Mastodon is released under the AGPLv3 license, which requires the code and its modifications to be made public. Truth has not done so, even though screenshots and investigations clearly reference Mastodon. Instead, the Truth website falsely claims all its source code is proprietary. This means Truth is in violation of the Mastodon licensing agreement, and the organization is now seeking legal counsel. Ironically, Truth is starting off with a lie. Who would have guessed it!

⭐️ Android apps arrive on Windows 11. Microsoft this week began testing Android apps on Windows. The company brought around 50 Android apps to the Windows 11 Insider Program, allowing users to try apps including the Amazon Kindle app, The Washington Post app, Clash of Kings, Coin Master and Lego Duplo World, among others. The apps will run on both AMD and Intel devices with the apps running on the Windows Subsystem for Android (powered by Intel Bridge Technology). PCs will need to have virtualization enabled, run Windows 11 and you’ll need an Amazon account to access the Amazon Appstore. Now that the apps can run, next comes the real question: will anyone care to use them?

Image Credits: Google

⭐️ Google introduced new Pixel 6 smartphones and rolled out Android 12 to the public. Android 12 is a major update in terms of the look-and-feel of Android, as it introduces a themeable, personalized design language called Material You, which lets you quickly and easily change the entire look of your phone across the lock screen, settings, notifications, widgets, apps and more. It also adds better accessibility and privacy features, new widgets, improved enterprise features and other tools.

Platforms: Apple

Image Credits: Apple

  • Apple introduced Tech Talks 2021, a series of over 100 online sessions and 1,500 office hours designed to help developers building apps and games. The Tech Talks will run over the course of the next eight weeks and will be conducted across time zones. Office hours will focus on things like App Review, Evangelism, App Store Connect and Developer Technical Support, and will offer developers 30-minute conversations about their apps to help problem-solve and better understand guidelines and tools. The sessions are free of charge to members of the Apple Developer Program and the Apple Developer Enterprise Program.
  • Alongside its new Macs, Apple launched a $4.99/mo version of its Apple Music service which only operates by way of Siri. Likely designed primarily for use with HomePod (or perhaps AirPods), subscribers will only see an Apple Music interface that shows suggestions based on their preferences and their recently played tunes.
  • Apple will roll out software updates across all platforms next week. The company announced the news in a press release for AirPods (third gen.), noting iOS 15.1, iPadOS 15.1, watchOS 8.1, tvOS 15.1 and macOS Monterey were all on the way in the week ahead.

Image Credits: Apple

  • Along with the release of iOS 15.1, Apple said developers will be able to make their in-app events discoverable directly on the App Store. Developers can create their events in App Store Connect and schedule when they want them to appear. The feature will give app makers a better way to showcase things like game competitions, movie premieres and livestreamed experiences. The events will begin to appear starting on October 27.

Platforms: Google

Image Credits: Google

  • Google also announced Pixel Pass, an all-in-one subscription that combines a brand-new Pixel phone with access to Google’s premium services. The service is available at $45 per month for the Pixel 6 and $55 per month for the Pixel 6 Pro and includes YouTube Premium, YouTube Music Premium, 200 GB of cloud storage with Google One, Google Store discounts and a Google Play Pass subscription to free apps and games without ads or in-app purchases.
  • Among the new features coming to Pixel 6 first is an updated Phone app that will show callers the expected wait times for toll-free numbers, and which will help guide callers through businesses’ phone trees by having Google Assistant listen to the options and display them as text.
  • Pixel 6 will also include a new feature called Quick Tap that adds a camera-only version of Snapchat directly to the device’s lock screen. The feature will make it easier and faster to take photos to share on Snap and represents an interesting take on the typical app pre-load deal by making it seem more like a device feature, not bloatware.
  • Google Play now allows app developers to fill out their “Data Safety” info for the section that will come to the Play Store in February. Once live, users will be able to view details about the data collected by the app and how developers will use that data alongside the app’s listing.

E-commerce

Image Credits: WhatsApp

  • WhatsApp rolled out a new Collections feature to make it easier to shop through its app. Collections allow businesses to organize the items in their catalogs by category so customers won’t have to scroll through long lists of items to find what they’re looking for.
  • Spotify partnered with Shopify to allow artists to sell their merchandise through their profiles in the Spotify app. The integration will allow artists to sync their product catalogs to Spotify and choose three items to feature on their profiles. Spotify has a similar integration with Merchbar.
  • Walmart begins testing shopping via text. Walmart’s R&D group Store Nº8 begin testing a feature called Walmart Text to Shop with customers in select markets to better understand how conversational commerce could work for its customers.

Augmented Reality

Image Credits: Snap

  • Snap announced the launch of Arcadia, a global creative studio that will help brands deliver AR advertising and experiences that can be shared across web platforms and app-based AR environments beyond just Snapchat itself. The studio, which will function as a division of Snap, will partner with brands and creators, and is already working with Verizon, WWE, Shake Shack and P&G Beauty. As part of this launch, Snap took over a Shake Shack in NYC for a week to show of AR experiences.

Fintech

Facebook launched its digital wallet app Novi into a pilot program that enables users to start trading the Paxos Dollar (USDP), a stablecoin tied to USD created by Paxos. Coinbase will provide custody services for the program which will first be available in the U.S. and Guatemala to enable cross-border money transfers. However, Novi won’t initially take advantage of the Diem Association’s stablecoin Diem, as Facebook says it’s awaiting regulatory approval. The app is available on iOS and Android.

Social

Image Credits: Pinterest

  • Pinterest clones TikTok and announces $20 million in creator rewards. Pinterest has been trying to reposition its business as a home to creators, not just a shopping inspiration site. This week it expanded those efforts with new TikTok-inspired features, including a vertical video feed that features its video-powered “Idea Pins” and the ability to respond to videos with “Takes.” It also announced a plan to invest $20 million in “Creator Rewards,” a series of expanded creator tools, support for the Amazon Associates affiliate program, as well as the launch of its own original content.
  • Snap shares drop 22% after the app missed on revenue expectations in its Q3 earnings. Snap brought in $1.07 billion in revenue versus the $1.10 billion forecast by Refinitiv. The company said its advertising business was hit harder than expected by Apple’s privacy changes. DAUs were up to 306 million from 293 million in the prior quarter.

Image Credits: Instagram

  • Instagram adds “Collabs,” new music features, support for posting from the desktop web and new fundraiser features, in a series of updates. Collabs allow people to co-author both Feed posts and Reels. To do so, users can invite another account to be a collaborator from the tagging screen on Instagram. If the other person accepts, both accounts will appear in the post or the Reels header and content will be shared to both sets of followers. It also added new effects called Superbeat and Dynamic Lyrics. The former intelligently applies special effects to music to the beat of the user’s song and the latter displays 3D lyrics.
  • Facebook tests a new option for cross-posting Facebook Feed posts to Instagram. Users with the option will be able to cross-post to Instagram single photos, single videos or multi-photo albums up to 10 photos — the max that’s supported through Instagram’s carousels. Other formats, like GIFs, polls, photos albums with more than 10 photos, Feed reshares, text-only posts and any media that’s too tall for Instagram’s Feed are not eligible for cross-posting.
  • Twitter rolls out the ability for anyone to host a Space on iOS and Android. Previously, the company had limited access to hosting Spaces to accounts with at least 600 followers. Twitter says it’s still rolling out the dedicated Spaces tab, which was recently extended to more people in English on iOS, but is not yet available on Android. It also added the ability to subscribe to people’s Revue newsletters from the Timeline.
  • TikTok says its videos longer than 1 minute have received over 5 billion views globally, and videos span over 2 minutes, on average. The new format is most popular in Vietnam, Thailand and Japan, while TikTok users in the U.S., U.K. and Brazil engage with longer videos the most.

Messaging

  • Facebook Messenger added new AR experiences for group video calls. Unlike traditional AR effects, the new “Group Effects” apply to everyone in the call at the same time. At launch, over 70 group effects are available, including a game where you compete to build the best burger the fastest. Facebook says the feature will be coming to Instagram soon.
  • WhatsApp expanded its joinable calls feature to group chats. Joinable calls were first introduced in July and allow users to join an ongoing group call after it has begun.

Streaming & Entertainment

  • YouTube Music’s free tier will go audio-only starting next month as part of a major update to the YouTube Music app. The music, however, will now stream in the background when the app is minimized or the phone screen is off, as part of the free service, but videos will become a paid feature.
  • YouTube tops $3 billion in consumer spend on iOS as of October 17, 2021, according to App Annie data. YouTube ranked No. 3 among all non-gaming apps by global lifetime consumer spend as of October 2021, the firm said.
  • Amazon Music added support for spatial audio to more devices, including iOS and Android devices with their existing headphones and select devices that support Alexa Cast. Spatial audio was first introduced in 2019, but had not yet been available through mobile on headphones. The feature is offered to Amazon Music Unlimited subscribers only.
  • Spotify opened up access to a new tool for creators that will allow them to begin publishing their video podcasts to its service. The tool will be provided by the company’s podcast creation platform Anchor, and expands on the global launch of video podcasts last year, which encompassed only a select group of creators. Currently, the product involves a waitlist, but Spotify says users should expect to see an expanded selection of video soon.

Gaming

  • Google’s Stadia game-streaming service is going white label. The company had earlier said it would offer its services to partners, and now AT&T Wireless customers will be able to stream “Batman: Arkham Knight” from their browser…but on their desktop, not phone (oddly). This is the first in-the-wild example of Stadia’s white-labeling, however. More are likely to come.
  • App Annie updates its Game IQ market intelligence tool with enhancements including Feature Tagging, Genre Summary and Tag Trends.

Health & Fitness

  • Digital therapeutics company Limbix released data from a trial on its new product, SparkRx, a self-guided therapy program for teens run entirely on a phone. The app is designed to help teens manage depression, by encouraging teens to take note of their feelings, and schedule activities that leave them feeling better.

Travel & Transportation

  • Bolt Mobility launched in-app navigation for its shared e-scooters. The system is called MobilityOS and will be accessed via a smartphone that will be mounted to, and charged by, the scooter. The mounts will roll out to the next-gen scooters, the “Bolt Two.”
  • Lyft says it received over 4,000 reports of sexual assault, including 360 reports of rape, on its app from 2017-2019. The findings were revealed as part of the company’s first-ever safety report, arriving two years after Uber’s. 

Government & Policy

  • The Yahoo Finance iOS app was removed from China’s App Store. Neither Apple nor Yahoo commented on the matter, but it’s possible the app was pulled because it was being used as a way to read news stories from media outlets that are typically blocked by the Chinese government.
  • Apple also removed a popular Quran app in China after a request from local regulators. The app allowed users to read the Islamic religious text and other prayer-related information.
  • TikTok and Snap will testify before Congress for the first time next week as part of lawmakers’ investigation into how Big Tech platforms are impacting kids’ safety. (Snap will likely discuss its plans for a new family center in its app, which will offer some sort of parental insights and controls over minor children’s usage.)
  • Facebook was fined $70 million by U.K. regulators for deliberately withholding information related to the ongoing antitrust investigation of its Giphy acquisition.

Security & Privacy

  • Tencent says it fixed a vulnerability that made some WeChat content available to Google and Bing, both of which are blocked in China. Ahead of the news, there was speculation that Beijing regulators had won a victory in their push to stop tech firms from building walled gardens which blocked rivals from accessing data in each others’ services.
  • Google’s Play Protect service is split off into its own app with Android 12. The safety service scans for malware on your device, and could be now easier to update as a standalone application.

🤝 A report by Bloomberg that Pinterest could be acquired by PayPal for $39 billion drove Pinterest stock up 19%. Investors liked the idea of turning the inspirational shopping platform into a payments pipeline, it seems.

🤝 Twitter acquired London-based group chat app Sphere. The app was founded by Tomas Halgas and Nick D’Aloisio — who previously founded news summary app Summly, which he sold to Yahoo at the age of 17 for a reported $30 million. Deal terms were not disclosed, but Sphere’s team of 20 will join Twitter and the app will be shut down.

🤝 Pear Sports acquired the popular workout app Aaptiv, which has 13 million downloads and has seen more than 36 million classes taken. The app will continue to operate and Pear says it will further invest in the product by integrating it with Pear Training Intelligence and bringing it to employers. Deal terms weren’t shared.

💰 Customer engagement platform Batch raised $23 million in its first-ever round led by Expedition Growth Capital with Orange Ventures participating after years of bootstrapping. Batch comes from the same team behind AppGratis, and began as managed push notification platform for iOS, Android and the web. It then expanded to become a martech platform that works with existing data sources, including CRM, CDP and analytics products. The company now counts 300 enterprise clients as customers.

💰 Indian social media app Lokal raised $12 million in a Series A funding led by Tencent, according to a source. The hyperlocal app helps users connect, find jobs, keep up with local information and more.

💰 Venezuelan delivery super app Yummy raised $18 million in Series A funding led by Anthos Capital. The app combines food delivery and ridesharing, and now has over 200,000 registered users.

💰 Indian fintech CRED, which helps users improve their credit by paying their credit cards on time, raised $251 million in Series E funding. The round was led by existing investors Tiger Global and Falcon Edge. Marshall Wace, Steadfast DST Global, Insight Partners, Coatue, Sofina, RTP and Dragoneer Capital also participated. The round values the business at $4.01 billion.

💰 Neobank Zopa raised $300 million in what it calls a pre-IPO round led by SoftBank that values the business at $1 billion. The bank offers a savings account along with credit and loan products, and counts some 500,000 users in the U.K. The company’s current run rate is £85 million ($116 million), and expects to be profitable this year.

💰 Neobank N26 raised $900 million in Series E funding for its digital banking service that reaches 7 million clients in 25 countries. The round values the fintech startup at $9 billion.

💰 South Korean travel tech startup Yanolja acquired a 70% stake in a listed South Korean e-commerce company, Interpark, for about $250 million. Yanolja is hoping to compete with foreign travel tech platforms by building a “super app” that will include more lifestyle services along with hotel, car, tickets and other travel booking services. 

💰 Mobile wallet provider Citcon raised $30 million in Series C funding led by Norwest Venture Partners and Cota Capital. The company allows merchants to accept payments online, in-store or inside apps — the latter of which also includes chat integration and support for WeChat Pay, WhatsApp and others.

💰 Mobile data intelligence startup Embrace raised $45 million in Series B funding led by NEA. The company’s Data Intelligence product helps organizations make their mobile data accessible and actionable by their business intelligence and data science teams so that other departments can use the data when making decisions about new products and marketing campaigns.

📈 Kakao Pay, South Korea’s largest payments app, raised 1.53 trillion won ($1.3 billion) in its IPO after pricing shares at the top of a marketed range. The company sold its shares at 90,000 won apiece, after originally marketing 17 million shares for 60,000 to 90,000 won each.

🤝  Mobile games company Scopely announced it’s acquiring GSN Games, a division of Game Show Network, LLC, a wholly owned subsidiary of Sony Pictures Entertainment, for approximately $1 billion. The deal is being paid half in cash and half in preferred equity. GSN Games operates a portfolio of free-to-play mobile and online games, including Solitaire TriPeaks, Bingo Bash and others. It has 400 employees worldwide.

💰 Game development studio Kazoo Games, which focuses on casual and midcore mobile games, closed on $12 million in Series A funding led by Garena. The funds will be used to advance development, hire new talent and prepare for the release of future titles for iOS and Google Play.

Image Credits: Artiphon

Artiphon debuted an app called Orbacam that allows you to create “Musical Selfies.” The app is meant to serve as a companion to the Orba, a music sequencer device aimed at amateur music makers. With the new app, users can sing or beatbox along with the music they’re creating, import videos and photos from their camera roll and add visual effects to their videos, which can then be shared across social media platforms, like TikTok. The iOS app itself is free to use but the Orba is $100. (Read the full review on TechCrunch)

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Apple updates its App Store Guidelines to permit developers to contact customers about other payment methods – TechCrunch

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Apple today introduced a new set of App Store Guidelines which include three key changes. One of the changes is the result of a previously announced settlement agreement with a class of U.S. app developers. It clarifies that developers are allowed to communicate with their customers about other payment methods available outside their app. Related to this, another new guideline explains that apps may request customer information like name and email, but the request must be optional for the user and shouldn’t prevent them from using the app.

The third guideline is unrelated to legal action, and simply details how developers can use a new App Store feature, called in-app events, which rolls out next week.

In August, Apple first announced it had reached a proposed settlement in a class-action lawsuit filed against it in 2019 by a group of U.S. app developers. The agreement included a few items, but the biggest was that developers would be able to share information with their users about how to pay for purchases outside their iOS app and the App Store. At the time, Apple said the changes would clarify that developers “can use communications, such as emails, to share information about payment methods outside of their iOS app.”

“As always, developers will not pay Apple a commission on any purchases taking place outside of their app or the App Stores,” Apple had also said.

Now those proposed changes are officially part of the App Store Guidelines.

Specifically, Apple deleted a clause from guideline 3.1.3 which had previously said developers were not permitted to use information obtained within their app to target individual users outside of the app to use purchasing methods other than Apple’s own in-app purchases. The old rule had also said this would include sending out emails to the address on file obtained when the customer signed up for the app.

With this clause gone, developers are no longer barred from those sorts of communications.

Apple also added a new section to guideline 5.1.1 (x) which explains further how developers may go about requesting user contact information. It says:

“Apps may request basic contact information (such as name and email address) so long as the request is optional for the user, features and services are not conditional on providing the information, and it complies with all other provisions of these guidelines, including limitations on collecting information from kids.”

The rules against contacting customers, or what is referred to as “anti-steering” guidelines, is an area that has become the subject of much regulatory scrutiny in recent months. Lawmakers around the world have been working to determine if Apple is acting as a monopolist by limiting how developers can run their own businesses in terms of customer outreach, marketing, and payment systems choice.

Already, Apple was being forced to adjust its App Store rules due to various settlements in specific markets.

South Korea, for instance, recently passed new legislation that bans Apple and Google from requiring that developers use their respective payment systems. In Japan, Apple last month reached a settlement with regulators over “reader” apps that now allows them to link to their own websites from within their apps.

In the U.S., meanwhile, Apple is engaged in a lawsuit with Fortnite maker Epic Games. Though the case is now under appeal, the judge’s original ruling would have required Apple to allow developers to point to their own websites within their apps, where customers could then pay directly for its services or subscriptions, bypassing Apple’s payment systems in the process.

Today’s changes don’t go so far as to allow alternative payment systems to be embedded directly in their apps, however.

The anti-steering updates are only one area where regulatory pressure has been playing a role in pushing the tech giants to adopt new policies.

Apple and Google have both also adjusted their commission structures to lower their cut of developers’ revenues in different ways, including for smaller businesses, apps that provide access to media, and apps run by news publishers. Google this week lowered its fees to 15% for subscription-based apps from day 1, instead of 30% during the first year which lowered to 15% in year two. It also lowered commissions to as much as 10% for specific media apps.

Image Credits: Apple

The other new rule arriving today is related to in-app events and simply guidance as to how the new feature can be used.

Announced at WWDC, in-app events give app makers a better way to showcase things taking place inside their apps, like game competitions, movie premieres, livestreamed experiences, and more. The events will begin to appear on the App Store starting on October 27 with the release of the iOS 15.1 update.

Apple advises developers to ensure the metadata is accurate and related to the event specifically when entered in App Store Connect and that the events must run on the dates selected, including across multiple storefronts. It also specifies the deeplink must launch the event directly when tapped, and notes events can be monetizable.

All three rule changes are live as of today.

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