Tag Archive : technology

Xiaomi spins off POCO

Xiaomi  said today it is spinning off POCO, a sub-smartphone brand it created in 2018, as a standalone company that will now run independently of the Chinese electronics giant and make its own market strategy.

The move comes months after a top POCO executive — Jai Mani, a former Googler — and some other founding and core members left the sub-brand. The company today insisted that POCO F1, the only smartphone to be launched under the POCO brand, remains a “successful” handset. The POCO F1, a $300 smartphone, was launched in 50 markets.

Manu Kumar Jain, VP of Xiaomi, said POCO had grown into its own identity in a short span of time. “POCO F1 is an extremely popular phone across user groups, and remains a top contender in its category even in 2020. We feel the time is right to let POCO operate on its own now, which is why we’re excited to announce that POCO will spin off as an independent brand,” he said in a statement.

A Xiaomi spokesperson confirmed to TechCrunch that POCO is now an independent company, but did not share how it would be structured.

Xiaomi created the POCO brand to launch high-end, premium smartphones that would compete directly with flagship smartphones of OnePlus and Samsung. In an interview with yours truly in 2018, Alvin Tse, the head of POCO, and Mani, said that they were working on a number of smartphones and were also thinking about other gadget categories.

At the time, the company had 300 people working on POCO, and they “shared resources” with the parent firm.

“The hope is that we can open up this new consumer need …. If we can offer them something compelling enough at a price point that they have never imagined before, suddenly a lot of people will show interest in availing the top technologies,” Tse said in that interview.

It is unclear, however, why Xiaomi never launched more smartphones under the POCO brand — despite the claimed success.

In the years since, Xiaomi, which is known to produce low-end and mid-range smartphones, itself launched a number of high-end smartphones, such as the K20 Pro. Indeed, earlier this week, Xiaomi announced it was planning to launch a number of premium smartphones in India, its most important market and where it is the top handset vendor.

“These launches will be across categories which we think will help ‘Mi’ maintain consumer interest in 2020. We also intend to bring the premium smartphones from the Mi line-up, which has recorded a substantial interest since we entered the market,” said Raghu Reddy, head of Categories at Xiaomi India, in a statement.

That sounds like an explanation. As my colleague Rita pointed out last year, Chinese smartphone makers have launched sub-brands in recent years to launch handsets that deviate from their company’s brand image. Xiaomi needed POCO because its Mi and Redmi smartphone brands are known for their mid-range and low-tier smartphones. But when the company itself begins to launch premium smartphones — and gain traction — the sub-brand might not be the best marketing tool.

Tarun Pathak, a senior analyst at research firm Counterpoint, told TechCrunch that the move would allow the Mi brand to flourish in the premium smartphone tier as the company begins to seriously look at 5G adoption.

“POCO can continue to make flagship-class devices, but at lower price points and 4G connectivity. 5G as a strategy requires a premium series which has consistent message across geographies…and Mi makes that cut in a more efficient way than POCO,” he said.

Technology is anthropology

The interesting thing about the technology business is that, most of the time, it’s not the technology that matters. What matters is how people react to it, and what new social norms they form. This is especially true in today’s era, well past the midpoint of the deployment age of smartphones and the internet.

People — smart, thoughtful people, with relevant backgrounds and domain knowledge — thought that Airbnb  and Uber  were doomed to failure, because obviously no one would want to stay in a stranger’s home or ride in a stranger’s car. People thought the iPhone would flop, because users would “detest the touch screen interface.” People thought enterprise software-as-a-service would never fly, because executives would insist on keeping servers in-house at all costs.

These people were so, so, so wrong; but note that they weren’t wrong about the technology. (Nobody really argued about the technology.) Instead they were dead wrong about other people, and how their own society and culture would respond to this new stimulus. They were anthropologically incorrect.

This, of course, is why every major VC firm, and every large tech company, keeps a crack team of elite anthropologists busy at all times, with big budgets and carte blanche, reporting directly to the leadership team, right? (Looks around.) Oh. Instead they’re doing focus groups and user interviews, asking people in deeply artificial settings to project their usage of an alien technology in an unknown context, and calling that their anthropological, I’m sorry, their market research? Oh.

I kid, I kid. Sort of, at least, in that I’m not sure a crack team of elite anthropologists would be all that much more effective. It’s hard enough getting an accurate answer of how a person would use a new technology when that’s the only variable. When they live in a constantly shifting and evolving world of other new technologies, when the ones which take root and spread have a positive-feedback-loop effect on the culture and mindset toward new technologies, and when every one of your first 20 interactions with new tech changes your feelings about it … it’s basically impossible.

And so: painful trial and error, on all sides. Uber and Lyft  didn’t think people would happily ride in strangers’ cars either; that’s why Uber started as what is now Uber Black, basically limos-via-app, and Lyft used to have that painfully cringeworthy “ride in the front seat, fist-bump your driver” policy. Those are the success stories. The graveyard of companies whose anthropological guesses were too wrong to pivot to rightness, or who couldn’t / wouldn’t do so fast enough, is full to bursting with tombstones.

That’s why VCs and Y Combinator  have been much more secure businesses than startups; they get to run dozens or hundreds of anthropological experiments in parallel, while startups get to run one, maybe two, three if they’re really fast and flexible, and then they die.

This applies to enterprise businesses too, of course. Zoom was an anthropological bet that corporate cultures would make video conferencing big and successful if it actually worked. It’s easy to imagine the mood among CEOs instead being “we need in-person meetings to encourage those Moments of Serendipity,” which you’ll notice is the same argument that biased so many big companies against remote work and in favor of huge corporate campuses … an attitude that looks quaint, old-fashioned and outmoded, now.

This doesn’t just apply to the deployment phase of technologies. The irruption phase has its own anthropology. But irruption affects smaller sectors of the economy, whose participants are mostly technologists themselves, so it’s more anthropologically reasonable for techies to extrapolate from their own views and project how that society will change.

The meta-anthropological theory held by many is that what the highly technical do today, the less technical will do tomorrow. That’s a belief held throughout the tiny, wildly non-representative cryptocurrency community, for instance. But even if it was true once, is it still? Or is a shift away from that pattern to another, larger social change? I don’t know, but I can tell you how we’re going to find out: painful trial and error.

Can Technology Solve Economic Disparity?

THE EFFECT OF technology on economic inequality has long been debated, with experts pointing out the numerous benefits of regions and populations getting acquainted with tech tools, but also the downside of too much technology heavily impacting employment and human lives. In Latin America, a series of measures, including new technology tools, are trying to improve economic mobility.

When Ignacio Martinez was 22 years old, he noticed the recruiting process in low-wage industries in Latin America was tedious and inefficient. The turnover was high, people jumped from one job to another, and attracting employees was pricey, time-consuming and guided solely by candidates’ salary expectations.

“These are industries where the labor market functions as a commoditized market,” says Martinez, who adds that people are selected for jobs not necessarily based on qualifications, but rather on the cost of labor.

Fast forward, Martinez and two other associates now own Alana, a Tinder-like platform for the job market in Mexico where recruiters get access to filtered qualified workers who match employers’ required skills. Through the same service, workers obtain career guidance and ideas for what skills they need to develop, while companies’ human resource departments limit the time spent on recruiting and keep better track of overall employees’ satisfaction rates.

“There are a lot more tools out there (in the high-skilled corporate world) — applicant tracking systems and filters — but they haven’t gone down to these blue-collar, typically offline and informal markets, because these are harder to execute on,” says Martinez, who lives in Mexico City. “But there is a huge opportunity and that’s where the real problem of mobility and differentiation is.”

Alana has more than 60,000 users in Mexico City, was part of the fall cohort of the Y Combinator, one of the highest-ranked business accelerators in the world, and is considering expanding into other parts of Latin America.

“Our mission is to give opportunities,” Martinez adds. “What we are building is essentially tools through which people can grow, both the candidates and employers.”

Apps such as Alana may provide a boost to Mexico, a country where one recent study estimated nearly 3 in 5 jobs are in the informal sector, constituting nearly a quarter of the nation’s economy. Latin America’s second-largest economy shrank in 2019, the first time in a decade, the country’s national statistics office reported in January. That slowdown likely will extend into this year, according to analysts at Deloitte.

Technology and Economic Inequality

The world economy would reach “digital supremacy” by 2023 and the information technology industry in Latin America will see increases in 2020 despite a drop in economic growth and regional political uncertainty, shows data from the International Data Corporation, a global market research company based in Massachusetts.

Economic inequality remains high in many areas of the world, in particular in Latin America. Twelve out of the 18 Latin American nations struggle with high levels of income inequality, while corruption, youth unemployment and government ineffectiveness are still regional issues.

Latin America and the Caribbean ranks as the fourth-largest market in the world for internet usage, behind Asia, Europe and Africa. Yet there is room for growth, say experts, with the Japanese SoftBank Group announcing last year they would be investing up to $5 billion in a regional innovation fund in the area.[ 

MORE: Increasing Number of People in Central America Say Their Lives are Thriving ]

“Latin America is on the cusp of becoming one of the most important economic regions in the world, and we anticipate significant growth in the decades ahead,” says Masayoshi Son, chairman and chief executive officer of SoftBank Group, in a press release.

Technologies such as Alana have the ability to create strong bridges among social classes, such as other services in sub-Saharan Africa where farmers can better plan their work with more accurate weather prediction tools, or in Latin America where they facilitate access to financial services.

Yet technology alone can’t boost economies, say experts, since any innovation requires an adequate policy framework to be deployed.

“You need to have some kind of institution that is corresponding to the technology,” says Christoffer O. Hernæs, chief digital officer of Sbanken, Norway’s first digital-only bank. “So bad news for a lot of the hardcore technology evangelists out there — the technology alone will not solve this stuff if we don’t have the mechanism allowing us to actually utilize the technology in the right context.”

According to Hernæs, who is based in Oslo, technology could dramatically improve working conditions for people around the world when it can improve translation services and mediate communication between cultures, so that workers in one country could perform tasks they understand in another country.

Yet technology also threatens job security with automation and algorithms getting ready to replace millions of positions in the upcoming decades, increasing economic inequality worldwide.

“Fifty percent of current work activities are technically automatable by adapting currently demonstrated technologies,” say experts from McKinsey & Company. “Six of 10 current occupations have more than 30% of activities that are technically automatable.”