For years, the iPhone has carried a small etching on the back that says ‘Designed by Apple in California. Assembled in China.’

It’s fueled the stereotype that China is the world’s factory, but hasn’t had a flexible enough education system to produce R&D talent that can also design world-class products for a global audience.

But that’s a stereotype that isn’t exactly true anymore.

A small group of companies — both small, bootstrapped app startups and multi-billion dollar giants like Tencent — are showing that they can design apps or higher-end hardware with international appeal.

Tencent, one of the country’s gargantuan Internet powers with a market cap of $72 billion dollars, often likes to point out the international reach of its messaging app Weixin or WeChat. That app has blossomed to more than 190 million monthly active users over the past year and with about 40 million of registered users outside of China.

“I’m very glad to see the internationalization of Tencent,” said the company’s CEO Pony Ma this month at the GMIC conference in Beijing. He later added, “The manufacturing sector in China went globalized and the service industry can be internationalized as well…. It’s difficult, but if we can make it, it would be a revolution.”

Interestingly enough, WeChat’s growth abroad is being fueled by the Chinese diaspora — immigrants are taking WeChat with them to stay in touch with their families back home, according to app-tracking services like Onavo. They base this hypothesis on the correlation of WeChat active usage with that of other Chinese-language apps.

Younger Chinese startups are also building internationally as well. I met a Shanghai-based startup called Intsig two weeks ago that has a business card scanning app called Camcard with 50 million registered users and 10 million monthly actives, with half of them outside of China.

“A lot of people are surprised when they find out we’re a Chinese company,” said Louisa Cao, who heads marketing for the company. It helps that exchanging business cards is much more ritualized and formal in China and Japan than it is in the West, so that gives startups in Asia a competitive edge on understanding what consumers want in a product in this area. Similarly, messaging apps out of Asia like Line, Kakao and WeChat are leading the way, with Western startups like Path arguably borrowing some of their strategies like stickers.

Blux, another company out of Xian, the second-tier Chinese city that’s home to the famous army of Terra Cotta warriors, has built a higher-end photo app called Blux Camera that’s been featured by Apple more than 100 times on the iTunes homepage for global audiences. As the cost advantages that China has over Western markets narrows, the co-founder Jo Yin told me that it now can make economic sense to run global market-facing startups outside of the traditional hubs of Beijing and Shanghai (as they’ve become too expensive).

One of the reasons that all of these startups can built products for foreign audiences is because they’ve been trained either at Western universities or through working for multi-nationals. Some are run by “sea turtles” or Chinese who have returned home after years of working or studying abroad. Intsig’s CEO Michael Zhen spent years at Motorola where he picked up ideas on how to manage teams and think globally.

It’s also helped that the Chinese government has gone far in protecting and nurturing domestic technology companies and startups, a trend which continues with the government’s recent investment into a GPS alternative called Beidou and an Ubuntu-based OS that would help Chinese firms move off Western software platforms. Now that companies like Tencent have reached a certain prowess in domestic markets, they can look outwards.

To be fair, achieving global reach is something only a small fraction of local Chinese startups can do. It requires an international fluency; founders have to understand what kind of design and marketing attracts foreigners. Chinese web services can seem noisy and busy; they can be filled with more links and text as Mandarin characters are complicated to create on QWERTY keyboards.

There are even a few U.S. growth-stage companies that haven’t been dissuaded by Google’s very public about-face on the Chinese market and are hiring design and developer talent locally. Evernote recently launched a China-focused version of its enterprise service and they very intentionally took on local hires to develop product.

“It’s easy to sell your products everywhere. But when we say we want to be a global company, it’s because we want to make our products everywhere,” said Evernote CEO Phil Libin, when he launched Evernote for Business locally in China.

He went on to say that China’s copycat reputation is unfair.

“Chinese companies don’t have a good reputation for innovation in the West. The reputation that Chinese companies have is that they don’t really innovate. They just copy and I don’t think this reputation is right. It’s not a problem that Chinese companies copy. It’s that everyone copies. Chinese companies don’t just copy. They copy and improve. Copy and improve is what everyone does everywhere. That’s what Apple does. That’s what Microsoft does. That’s what Facebook does. Very few companies start with a first-of-a-kind idea.”

Indeed, probably the most interesting company to watch as it expands globally is Xiaomi, which did just that. They took Android and improved upon it.

They’re probably the best example of how China is moving up the value-chain from low-cost manufacturing into high-end design.

Just three years afters being founded, the company is on track to do $4.5 billion in handset and accessory sales. Some have made the metaphor that Xiaomi is the “Apple of Android” in that it’s an integrated hardware and software maker that has built its own special skin of Android and sells high-end hardware at or around the cost of materials. They compete head-to-head against Samsung in mainland China, and according to third-party mobile app analytic services like Umeng, they’re in second place.

Although Xiaomi will only publicly talk about its plans to sell handsets in Hong Kong and Taiwan, a source close to the company says it’s been on the lookout for a general manager that could bring their Android skin, the MIUI, to North American audiences.

They’ve been able to develop a rabid fan base locally in China because they allow people to participate in the designing of the phone by requesting features. Internally, they have small teams of engineers, product managers and designers that work alongside each other on a very fast cycle. They release a new version of the MIUI every week.  

But they don’t know if the model will translate abroad yet. Chinese consumers are very comfortable with paying for the full-cost of the phones upfront and buying devices online instead of through brick-and-mortar stores.

“We don’t know how developed regions like Taiwan and Hong Kong will accept products like Xiaomi,” said co-founder Lin Bin in an interview. “Greater China is just one step beyond mainland China.”

Article courtesy of TechCrunch

Last fall, fashion commerce startup Monogram launched an iPad app that was aiming to be kind of like a mobile, shoppable magazine for those hip to fashion. It had all the makings of a great mobile commerce app: It looked good, it was easy to use, and it allowed viewers to buy all the latest fashions really easily.

But it didn’t catch on the way that the team had hoped, according to founder Leo Chen. One of the reasons he believes the app didn’t resonate with users was that “the motivation to share individual products wasn’t strong enough.” And there just wasn’t enough content. With the launch of Monogram 2.0, the startup hopes to solve both of those problems. So the team went back to the drawing board.

Rather than position Monogram strictly as a platform for consuming content and maybe buying some stuff, the team decided to leverage the huge existing world of fashion bloggers to help create and share content through its platform.

As a result, the new Monogram provides a full web editing tool suite, which will allow bloggers to publish and share their favorite fashions with others. Bloggers can create posts, or full “magazines,” of all their favorite content, which readers can browse or subscribe to. Each post provides shoppable links to products either featured in, or similar to, the clothes and accessories that are being shown off on the page.

For bloggers, the simplicity of the Monogram platform comes primarily in the tools that it provides for enabling easy purchases through their pages. Not only is the publishing part of the tool beautiful and easy to use, but the ability to add clickable items for purchase is just drop-dead simple. Rather than having to scour the web for the items they want to add, and putting in affiliate links, the Monogram platform provides an integrated search functionality within the platform, which scours the web for the products bloggers wish to share.

On the viewing side, the new version of Monogram enables easy to read and share versions of bloggers’ posts and magazines. Monogram is built as a web app with responsive design that can be viewed on PC, tablet or mobile device. The startup has also built a native app with all the same viewing features. However, users who wish to publish need to do so from the web.

Individuals who are logged in can repost the content of others, kind of like you can do on Tumblr — but all links go back to the original post. The idea is to build a sense of community within the platform, but also to provide the original publisher with the credit for creating the post.

The company is working on adding more features for bloggers — like, for instance, advanced reporting. It’s also working on figuring out an affiliate model so that they can get paid for the products that are sold thanks to their magazines. Chen tells me that he’d like to see the bulk of affiliate revenues go to the bloggers, while the company will take a small cut.

Monogram can afford to do that, he says, because the company’s R&D team is based in Shanghai, which means a low burn rate. The company has raised about $1.25 million led by Quest Venture Partners, with participation from Great Oaks VC, Alexis Ohanian and Garry Tan’s Initialized Capital, 500 Startups, Chinese seed fund Innovation Camp, Yintai.com CEO Robin Liao, Rapportive CEO Rahul Vohra, Decide.com’s Brian Ma, and angel investors Jared Kopf Christina Brodbeck.

Article courtesy of TechCrunch

Jolla, a Finnish startup formed in response to Nokia’s decision to ditch MeeGo in favour of Windows Phone, has finally taken the wraps off the smartphone hardware that will be paired with its “unlike” Sailfish UI. Being a startup is challenging enough in any business sector but Jolla is seeking to compete in the fiercely competitive smartphone space, going up against giants Samsung and Apple who hold the majority of the market in a pincer grip. So it’s hard not to dismiss their efforts as too late. But it’s a lot harder to accuse them of doing too little.

Jolla’s strategy for fighting the mobile industry’s Goliaths is all about standing out by doing things different. Today’s hardware underlines how this startup is hoping to disrupt the concept of a single flagship device — such as the Samsung Galaxy S4 — that’s hankered after and owned by millions yet with only a little variation in case colourings to tell the difference between each one.

In seeking to break down software homogeneity with its Sailfish UI and a business model that encourages working with third parties to develop new types of smartphone experience that loop in others’ data, Jolla is also taking aim at hardware commoditisation via a cross-over feature in its debut device that it’s calling the Other Half. The Other Half refers to removable hardware shells that snap on to the back of the handset and can be changed and customised by the user. But the feature goes further than interchangeable shells — which is not at all new, dating back in spirit to early Nokia mobile phones of the 1990s with their removable facias, and more recently to a device like Nokia’s Lumia 820, which has a coloured and swappable backplate.

Jolla’s Other Half isn’t just decoration but links to the software on the handset — using an unconfirmed bridging technology that sounds to my ear like NFC — allowing content on the phone to be tied to the addition of a new shell, or even for new physical features to be incorporated and supported.

Jolla’s Marc Dillon, now head of software but until recently CEO, gave some examples of how the Other Half feature could be used — noting that this is about opening up the back of the device for others to come in and augment.

“You have the processor side of the device, the power side, the engine, and then the Other Half is about adding to that. This is a new kind of media where it could be anything from your favourite artist could release their latest album on the other half of the Jolla device, and then when the user buys this they have a physical thing from their favourite artist then when they snap it on to the other half of their Jolla device, then everyone can see it, that they support and love their artist and then on the inside they could get the content. They could get maybe special content, that could only be released in this format like videos or links to websites or tickets or special offers, things like that but because of this interface between the two halves,” he told TechCrunch.

“It can not only be media, it can be very simple things — so maybe you have a colour palette, so when you go out of an evening you might have a different colour depending on your outfit and that colour then carries through to the software updating the Ambience of the device. So you might have — if you have a green dress, you might have a green device and then you have green icons and green Ambience [Sailfish UI theme] on your phone. But it can also be more interesting — you can add features. Like the camera is a good example, the native camera of course has a flash but maybe you’re going to a party and you want to have a big flash so you can take pictures in the dark at a nightclub. So really the imagination is the only limit here.”

“Instead of having a device with some bulky things attached to it or some things sticking out the side of it to extend the capabilities of the device, or to add content, we’re giving a new way for users to actually design and co-create with us new ways of using the device,” Dillon added.

“Of course we will be offering a choice of Other Halves for the user to buy but this is a place where we want to see others get involved. Designers can design Other Halves for the device, engineers or hackers or techies can design new interfaces and maybe add physical hardware features that they wish they had on their device but might have a smaller market than to deserve having a whole entire device,” he said. “We talked about 3D printing them today. So it could be those kinds of things, but really we’re offering a new kind of interface for a device so that people can really take their imagination, and I believe there will be a lot of third parties and a lot of people who have a lot of great ideas in order to help you use the Other Half of the Jolla device.”

The Other Half may be a bit of a clumsy name but it’s a savvy move that taps into the custom hardware trend that’s growing off the back of the rising profile of 3D printing. That said, it does of course remain to be seen how much interest Jolla can spark for others to get involved in co-creation with only one device to its name and that device not launching for another six months. It will need enough traction to get the co-creation party started.

The idea to link the hardware and software has been part of Jolla company discussions and plans since the beginning, according to Dillon. “It’s been something that we’ve been planning and working towards the whole time. The Ambience was a hint of how this can come together,” he noted, adding: ”Hardware like many things, it’s become a commodity, so the problem with commodities is it generally forces things down — things become kind of lowest common denominator… We set out to make the greatest device that we could, and we understood that the software and the user experience is key because that’s where the value comes from in the device and the hardware is the realisation of that, it’s a productisation of the software.

“So we kind of took this tack, then of course the hardware has to be fantastic it has to support the software and support the user and be something the user can be proud of and my belief is that when people see the Jolla device they want to see what’s inside.”

“This iteration, the direct stuff here, has been about a year in development. It started getting really good for me about six months ago and I’ve been using the device for a while now, and it’s really started to feel fantastic, when the hardware and the software have come together. They were done by the same designers and the same people so it has been kept in mind that the two go together, that the two have a synergy the entire time. We’ve had a roadmap the entire time as well so we’ve had a set of hardware specifications to work with,” he added.

It’s worth flagging that Jolla is not the only mobile maker to take an interest in 3D printing and custom hardware, even if it’s taken that further by creating a link between custom hardware and phone content. 3D printing is something Nokia has done with the Lumia 820 shell, for instance. Dillon said Jolla may also look to open source the 3D design of the Other Half, telling TechCrunch “I could see that happening”.

Asked specifically about the bridging technology between the hardware shell and the software, Dillon declined to give specific details, saying: “There’s a number of options here but there is a connection between the Other Half and the software. And of course all of that needs to be open as well.”

Asked whether the device will launch in the U.S. he said Jolla is looking at other markets but opting for Europe and China first. ”We’re starting with Europe and China and we will be extending to other markets as we go. We’re in the delivery phase at the moment so we’re building the infrastructure, and the logistics in order to be able to deliver and care for the users of the device, and we’re of course going to look at other markets as we go.”

“It’s the target to get the Christmas market in Europe, Chinese New Year. That’s the big milestones,” he added. “The most important thing is we come out with a fantastic product… When we’re shipping at the end of the year if it’s a fantastic product then it’s really going to resonate and I think we’re really going to have a lot of demand.”

Article courtesy of TechCrunch

Lets say you’ve come up with a brilliant idea for some shiny new piece of hardware. You brush up your coding chops, scratch out a design, and set out to build a prototype.

First, you’ll need a programmable chip to act as the brain. Because of the relatively gentle learning curve and friendly community, you go with the Arduino. The problem: your hardware idea requires WiFi.

Until now, that’s actually been a pretty complicated issue.

It’s not that Arduinos couldn’t do WiFi before — it’s just always been a bit of a pain. You had two main options, neither of them perfect:

• You could buy a WiFi shield. “Shields” are optional attachments built for the Arduino to give them more functionality, like sound playback/recording, ethernet, or WiFi. The downside here: WiFi shields are expensive (2-3x the cost of the Arduino itself), bulky, and often tough to find in a pinch.
• You could buy a “clone” board with WiFi built-in. Clones are unofficial Arduinos built by third parties. The problem there: if something went wrong, you’d have to hope someone in the community was familiar with whatever clone board you opted to use.

At this weekend’s Maker Faire, the company announced the Arduino Yún (with Yún being Chinese for “cloud” and English for “Yeah, most people are probably just going to type Yun without the fancy ú.”), the first official Arduino to come with WiFi functionality built-in out of the box.

At its core, the Yún is actually part traditional Arduino and part Linux system. The Arduino handles all of the functionality it traditionally would — running your code, reading from sensors, etc — while an itty-bitty Linux-powered chip acts as both a WiFi receiver and transmitter, handling all of the HTTP gruntwork needed to get your hardware project online. Plus: you can reprogram the Arduino Yún over WiFi, no USB cable required.

Lost in geek-speak here? Wondering what all of this means to you? Basically, one of the most popular platforms for DIY hardware projects has just made it a whole lot easier to get said projects connected to the Internet. Want a coffee maker that starts brewing 30 minutes before Google Calendar says you’ve got guests coming over? Sure, why not. Want an alarm that automatically donates money from your PayPal when you hit the snooze button? Totally doable.

Just this week, a project focused on building a high-quality, WiFi-enabled, Arduino-compatible board raised over $300,000 on Kickstarter. That’s over 30x their initial goal of $10,000, and they’ve still got nearly 2 weeks left. There’s definitely a lot of interest in such a thing.

The Yún should start shipping at the end of June, and will cost about $69. That’s about twice the cost of the WiFi-less Arduinos available today, but still significantly cheaper (and more compact) than buying both an Arduino and an add-on WiFi-shield.

Article courtesy of TechCrunch

Despite rising costs and increasing competition from rivals like Tencent, Chinese Internet giant Sina narrowed its first-quarter net loss to $13.2 million from $13.7 million a year earlier, the company reported today. Sina’s net revenue increased 19 percent year-over-year to $126 million, strengthened by stronger-than-expected non-advertising revenue.

The company’s Sina Weibo is China’s largest microblogging service, with over 46 million daily users. Last month, e-commerce giant Alibaba Group bought a 18 percent stake in Sina Weibo for $586 million, a deal that valued the site at over $3 billion.

Sina hopes that the Alibaba deal will allow it to strengthen advertising revenue despite the slowdown in ad sales that has hit all major Chinese Internet companies, including Baidu and Tencent. Sina’s ad sales dropped 15 percent in the first quarter from the previous quarter to $94.3 million.

Adjusted non-advertising revenue, which includes revenue share from Web games and membership fees on Sina Weibo, increased 17 percent to $27 million, more than the range of $21 million to $23 million range forecast by the company.

“As we start 2013, we are making good progress in transitioning from a PC-centric to a mobile-centric Internet company with new product launches and improved monetization,” said Sina chairman and CEO Charles Chao in the earnings release. “In April, we formed a strategic alliance with Alibaba Group to catapult us into social commerce. By partnering with Alibaba, Weibo is well positioned to play a key role in the future of e-commerce, particularly in mobile commerce as we explore ways to search, share and buy the goods and services of the millions of merchants on Taobao and Tmall.”

Article courtesy of TechCrunch

Singapore’s largest telecoms provider, SingTel, plans to set aside $1.6 billion (S$2 billion) over the next three years for startup acquisitions, according to ZDNet. Like those it has made in recent years, these are expected to be in the digital media space.

All of these can be tracked back to the major restructuring of SingTel’s business arms last year, where it divided itself into three pillars called Consumer, ICT and Digital Life.

The first two focus on consumer and enterprise segments, respectively, but the Digital Life arm is most representative of the change. The division was set up as a reaction to over-the-top competition from third party content providers, and SingTel said Digital Life was going to compete head on, providing smart TV, digital magazines and local content.

Some of acquisitions so far include restaurant review sites, Hungrygowhere and Eatability, and photo app Pixable.

SingTel has also been bullish as a VC. In 2010, it set up a separate venture arm called Innov8 to specifically look at acquisitions that would boost its current play in the telecoms arena. Innov8 was set up with an initial fund size of $160 million (S$200 million), and has since acquired firms like mobile ad company Amobee.

Innov8 has also raised rounds in startups like mobile ad exchange Nexage and Chinese game publisher Yodo.

SingTel runs telecoms operations in other countries in the region, like Optus in Australia. It has significant stakes in other carriers like Globe in The Philippines (44 percent), Bharti in India (32 percent) and Telkomsel in Indonesia (35 percent). Altogether, its operations in the region cover about 400 million mobile subscribers.

Article courtesy of TechCrunch

Gartner has just released its Q1 figures for mobile handset sales, and the key takeaway is that Android continues to steal the show, led by handset maker Samsung. Google’s mobile platform now accounts for nearly 75% of all handset sales, a jump of almost 20 percentage points on a year ago, and equating to 156 million devices sold in the three-month period. Smartphones sales grew by 63 million units to 210 million for the quarter, making up nearly half of all mobile phone sales overall, at 425 million. With the number of mobile handset sales up by a mere 0.7% on a year ago, it’s clear that higher-end devices are very the much growth engine for the mobile industry at the moment.

Here’s a breakdown of some of the more interesting figures from Gartner.

Although Samsung does not release exact sales figures for its devices, Gartner estimates that the Korean giant is the biggest of them all: it accounted for almost 31% of all smartphones sold in the period, with Apple in number-two with 18%. It’s quite a change from last year, when the two were nearly level, with just 5 percentage points separating them. The widening gap, and Samsung’s growth, will continue into the quarter ahead, it seems, led by the popularity of the company’s newest flagship model. On the other hand, the fact remains that at least some appear to still be holding out for the next iPhone rather than going for the iPhone 5; and Apple meanwhile is still holding back from releasing new, low-cost models that might help it along more in emerging markets and compete more comprehensively against the huge range of Android devices out there.

“We expect the new Galaxy S4 to be very popular despite being more of an evolution than a truly revolutionary device compared to the S3,” writes Anshul Gupta, principal research analyst at Gartner.

The gap between the two biggest brands and number three continues to be a big one, with Samsung very much taking the lead here. “There are two clear leaders in the OS market and Android’s dominance in the OS market is unshakable,” Anshul writes.

Together, Apple and Samsung accounted for 49 million handset sales. This is down by 1.1 million from a year ago, and as the smartphone market continues to grow, the players who are vying to be the next big challengers continues to churn. LG swapped places with Huawei, and is currently at number-three at 4.8 million units (with a strong showing from some of its newer 4G handsets and its lower-cost smartphone range). Huawei’s 4.4 million, however, shows that it continues to press ahead, as does fellow Chinese handset maker ZTE, which rounds out the top-five:

Samsung, unsurprisingly, is also leading in the overall mobile category, which also counts sales of lower-end feature phones. Its share there is now 23.6%, topping 100 million units.

Just as Samsung is widening the gap against Apple in smartphones, it’s doing the same with Nokia in the overall rankings. The Finnish giant is still number-two but with a 14.8% share, a drop of 5 percentage points on last year.

Looking at mobile platform prominence in smartphones, Android’s current 74.4% market share is nothing short of astounding in terms of its increase, particularly considering that at this point there is no sign of it slowing down.

Gartner’s numbers, it should be noted, are some 10% higher than those from Kantar Worldpanel Comtech that were released at the end of April: a sign of the margin of error between different analysts’ estimates resulting from different counting methods. Here are yet more numbers from IDC, which claims that smartphones outshipped feature phones, and Canalys, which was also more bullish than Gartner on smartphone numbers at a 300 million estimate.

Back to Gartner: the 156 million units sold in the quarter is actually almost double what was sold in the same period a year ago. Android is without a doubt riding the very crest of the smartphone wave: Gartner points out that smartphones accounted for 49.3% of sales of mobile phones worldwide, up from 34.8% in Q1 of 2012, and 44% in the fourth quarter of 2012.

Apple continues to grow but at a slower pace, managing to increase its share by a “mere” 5 million. BlackBerry (still called RIM by Gartner: hello rebranding!) continues to drop, indicating that at least so far, its big BB10 attack has yet to bear significant fruit. Microsoft is showing a respectable doubling of growth to nearly 6 million units, but that is pretty tiny when you look back to Android and its 156 million. It shows that a significant amount of work remains to be done by Microsoft and partners like Nokia if it expects to get anywhere within spitting distance of Android, or even Apple.

Still, the cautionary tale of Symbian remains a sign of how fast a handset maker can fall from grace. It’s now at 0.3 percent of sales now that Nokia has discontinued its production of the once market-leading devices — although its share was falling fast even before that.

Gartner points out that Asia is currently the market driver for mobile phone sales worldwide, accounting for more than half of all sales, with China remaining the biggest single market.

“More than 226 million mobile phones were sold to end users in Asia/Pacific in the first quarter of 2013, which helped the region increase its share of global mobile phones to 53.1 per cent year-on-year,” writes Anshul Gupta, principal research analyst at Gartner. “In addition, China saw its mobile phone sales increase 7.5% in the first quarter of 2013, and its sales represented 25.7 per cent of global mobile phone sales, up nearly 2 percentage points year-on-year.”

Article courtesy of TechCrunch

The biggest difference from one year ago with China’s mobile startups is that the local market is actually viable.

China now has more active iOS and Android devices than the U.S., up from about 40-50 million in circulation the last time I visited in late 2011. What that means is local entrepreneurs can finally build real, scalable mobile software businesses.

iDreamSky, which started four years ago, is one of the companies riding this wave.

They started back in 2009 and have grown to about 200 people through publishing some of the West’s best-known mobile games like Halfbrick’s Fruit Ninja and Imangi’s Temple Run in China.

The Chinese market isn’t like the rest of the world. There are myriad Android app stores, run independently of Google. There are different social media channels through platforms like Tencent’s WeChat and Sina Weibo. Then there are different local tastes for music and art.

“Finding a partner that knows how to localize your game doesn’t mean just translating the game in Chinese,” said co-founder and executive vice president Jeff Lyndon. “It’s also about adding unique content.”

He said in Fruit Ninja, iDreamSky added Chinese blades for cutting the fruit and localized backgrounds.

They also changed the monetization strategy in Temple Run. The Western version of the game asks players to buy virtual gems to revive their character. But in the Chinese version, Temple Run will ask players to either buy virtual gems or directly pay 2 renminbi (about 33 cents) to revive their runner.

Lyndon said re-routing players through a separate interstitial to choose packs of gems deterred Chinese players. “It’s counterproductive to impulsive buying behavior,” he said.

While other top local developers like Chukong have revealed that they’ve been making between $6 million per month, mainly from the Chinese market, Lyndon said top foreign indie games could realistically gross $4 million to 5 million per year before iDreamSky’s take.

The company splits revenue 70-30 with the developer getting the bulk, but they graduate their take to 50-50 for better-performing games. Their network has grown to about 15 million daily actives in China.

They’ve raised roughly $10 million from Redpoint Ventures and Legend Capital and compete with companies like Chukong, which publishes games while developing its own first-party titles. Yodo1 is another publisher that recently took funding from Singtel.

“There’s a new batch of the competitors, but the market is big enough for all of us to survive,” Lyndon said.

But he said one advantage that iDreamSky has is that it doesn’t have a dual role. It only publishes games; it doesn’t make its own titles. Having a dual model can sometimes lead to conflicts of interest if a studio promotes its own games over a third-party title, or even borrows ideas liberally from a third-party studio, he said.

“We have a very strong mandate,” he said. “If we want to be a publisher, we should never be a developer.”

He added that the market is changing rapidly. Tencent’s WeChat, which blew up over the last year and grabbed 190 million monthly active users, is poised to be a major distributor of mobile games. South Korea’s Kakao has pioneered this model; games distributed by the Kakao messaging platform dominate the top-grossing charts in the country.

“WeChat is going to be one of the biggest trendsetting elements of 2013 for the Chinese market,” he said. “Once it opens up, as Kakao and Line being have already shown, WeChat will deliver the same results or even better.”

For foreigners, Lyndon said there’s a limited window to break into the Chinese mobile gaming market (which might be a bit of a self-serving thing to say.)

He said local developers are getting increasingly better at catering to the local market, and they already dominate the charts with the exception of titles like King’s Candy Crush Saga.

“The Chinese market has changed dramatically. It’s getting harder for Western developers to come in,” he said. “If you don’t come into China earlier, you might not be able to come in in after next 24 months.”

Article courtesy of TechCrunch

While there’s a perennial debate on the West Coast about whether and when business cards might become irrelevant, they continue to be at the center of business customs in China and Japan.

It’s just basic etiquette when meeting a new contact to offer your card with two hands and a slight bow.

That’s why it’s natural that a Chinese company — not an American one — might be able to dominate this market and behavior globally. LinkedIn’s Cardmunch had scanned 2 million business cards a year after their 2011 acquisition, and hasn’t released stats since.

But Shanghai’s CamCard boasts 10 million monthly active users, with 50 million registered in total. About half of them are outside of China.

The company is part of a new wave of Chinese startups that are either run by very internationalized Chinese founders or foreigners that are able to build and design consumer products and apps with global appeal.

Intsig, the company behind CamCard, originally launched the app back in 2009 and has quietly grown it since.

They use a freemium model that caters to both consumers and enterprises. On the consumer side, there’s a free version of the app. And then there’s a paid version, which costs about $2.99 in the West or $11.99 in Asia. It feels like price discrimination but Intsig justifies it by saying it’s more technically different to do optical character recognition for Chinese and Japanese and because Asian consumers may be willing to pay more for a business card service.

The paid version has a cloud syncing service that lets people save cards across all of their different devices.

On the enterprise side, companies pay for extra security features to make sure their client and business partner lists stay safe. In China, the vast majority of smartphones are Android devices and Chinese consumers are much more concerned about getting viruses.

As for the parent company itself, Intsig has raised roughly $10 million from investors including Matrix Partners in China and other local investors. The company’s CEO Michael Zhen had a long career at Motorola, where he says he picked up the skills and ideas necessary to start his own company.

I’ve seen one other regional competitor, Japan’s Sansan. They’re an older rival that is transitioning to a smartphone-centric world through a card-scanning app called Eight. Before that, they were actually leasing scanners to local Japanese businesses.

Article courtesy of TechCrunch

QFPay‘s card reader admittedly looks a bit clunkier than its U.S. or European equivalents Square or iZettle.

It looks like a wonky, old calculator. But that’s because Chinese consumers don’t trust merchants easily and a basic phonejack reader without a keypad makes them nervous, says COO Tim Lee. He says consumers are worried that their PINs will get stolen by unscrupulous merchants.

“Aesthetically, it’s not that beautiful,” he said. “Square is very Apple-like and we’d want to have good design, but we are practical for two reasons. We must have a PIN pad in China and secondly, we have limited money so we’d want to build a minimum viable product and then keep on improving.”

Because of these more practical modifications, QFPay is seeing traction that has it processing close to $400 million per year on an annualized basis.

They have 30,000 merchants all over China and recently picked up funding from Sequoia China, although the size of the round is still undisclosed.

Among their clients are better-known names like Groupon-like 55Tuan, which uses QFPay to collect fees from merchants all across China.

QFPay’s model is slightly different than Square’s. For one, they don’t give away their readers for free. They charge 899 renminbi or just under $150 for each one. Competitors like Lakala also charge for their readers at about 199 renminbi a pop.

QFPay’s transaction fees also legally have to be a lot lower than what U.S. and European companies can charge. They don’t charge more than 0.78 percent per transaction, which is one-third of the 2.75 percent that Square charges. That cuts the company’s margins on every swipe, although Lee says that R&D costs are substantially lower in China.  

QFPay also recently released an API that lets third-party developers create payment experiences. (Square does not currently offer an API.) It’s still early so there just 100 developers on the platform.

The Chinese market has myriad challenges, which could also be good opportunities for QFPay.

For one, penetration for point-of-sale terminals is still quite low. Lee says only about 5 million merchants out of China’s estimated 100 million have proper point-of-sale machines, so QFPay has to do a lot of education on why its products are valuable.

The country is also heterogeneous with different provinces having different business cultures.

“In the north, merchants just have a leisure life. They open the shop and go home at 5 of 6 p.m.,” he said. “But in the Southern provinces, they will stay open until midnight.” The Western provinces are also far less developed than the coasts, with many Chinese merchants still carrying feature phones.

Lee said they started working on the company about six months after Square launched. The company’s management team has experience working for Paypal, Mastercard, HSBC and Western Union; that breadth of experience spans the entire history of digital payments in the country.

They face internal competitors like Lakala and iBoxPay, but Lee says those are consumer-facing solutions. He says they basically target reader sales at consumers that want to pay for utilities and other services through their phones.

But QFPay is aimed at merchants and the company is working on all sorts of software tools to handle CRM, analytics and loyalty products.

Article courtesy of TechCrunch