Users go for cheaper phones in the pandemic

Global smartphone sales declined in the April-June quarter, when much of the world was in full-scale lockdowns.

Facebook CEO Mark Zuckerberg. Picture: AFP

Welcome to The Download, The Australian’s technology blog for the latest breaking tech news.

Chris Griffith 10.50am: Consumers go down market in pandemic

Global smartphone sales declined in the April-June quarter, when much of the world was in full-scale lockdowns to counter coronavirus.

Market research released by Kantar revealed a disproportionate shift to consumers buying smartphones online. Globally, Apple iPhone and China’s Xiaomi grew their market shares while Huawei sales continued to haemorrhage.

Kantar says smartphone purchasing shifted online in most reported markets, and accounted for nearly two-thirds of sales in the quarter. Sales were up by at least 11pc in the EU5, USA and Japan, compared to the same quarter last year. (The EU5 comprises France, Germany, Italy, Spain and the UK.)

Apple’s second generation cheaper phone the iPhone SE, and Phone 11 were winners in the quarter, and iPhone sales even toppled those of the embattled Huawei in China. Samsung’s cheaper mid-range A series phones also sold well.

“Both iPhone SE and iPhone 11 interchangeably take the top 1 and 2 model seller spots in EU5, USA, Australia, Japan and even in China, where Huawei is almost half of smartphone sales, iPhone 11 is the number 1 model sold,” says Jennifer Chan, insight director for Kantar.

“Samsung A series sales performance continues in positive strides, with 2019 A series out-performing sales of A series 2020 launches. The appeal of A series has left a tough act for Samsung S20 flagship to follow,” she says. “Of the EU5 markets, S20 flagships only appear in the top 10 model sellers in Great Britain.”

She says Kantar has been tracking the rise of cheaper smartphones by premium manufacturers such as Samsung A series and iPhone SE. “The emphasis on high quality smartphones, at a fraction of flagship prices, couldn’t be more relevant at a time when many consumers are feeling financial pressures as a result of COVID-19.”

She says since Google announced it was pulling Huawei’s Android license, Huawei sales hade been diminishing across Europe, Australia and Japan. “ Meanwhile, support for the local brand in China prevails, accounting for 48pc of sales, up 5pc year-on-year.”

She says Huawei’s association with being a national security concern was creating not only physical barriers for the brand’s future launches, but also mental barriers for consumers.

10.00am: US police mass “geo-scanning” under fire

US police use of a type of warrant to monitor Google users’ locations en masse is staring down its first legal and political challenges as scrutiny of law enforcement tactics grows.

Criminal defendants in Virginia and San Francisco are disputing “geofence” warrants, which authorities can use to scan geographic areas and time periods for suspects through user location histories stored by technology companies. As these motions await arguments and potential decisions as soon as August, New York lawmakers are pushing legislation to ban the practice.

Police turned in both cases to Alphabet, Google, which says the number of such requests grew 1,500 per cent from 2017 to 2018, and an additional 500 per cent from 2018 to 2019. The search and advertising giant created a special process to fulfil the warrants but has raised concerns that the demands made by law enforcement invade privacy.

Privacy advocates fear that compliance by Google could lead authorities to seek similar data from fitness trackers, ride-share apps and other companies if more of those businesses begin to store users’ granular location histories to hone their products and services.

“We’re going to see this ever-expanding universe of geolocation warrants that will be tracking huge numbers of people if we don’t outlaw the practice,” said Albert Fox Cahn, executive director of the Surveillance Technology Oversight Project, a non-profit advocacy group.

The pushback coincidentally comes amid a drumbeat of criticism of law enforcement after the killing of George Floyd in Minneapolis police custody in May.

The Wall Street Journal.

9.25am: Facebook sues EU

Facebook is suing EU antitrust regulators for seeking information beyond what is necessary, including highly personal details, for their investigations into the company’s data and marketplace, the U.S. social media group says.

Facebook has been under EU competition enforcers’ scrutiny since last year, with one investigation focused on its trove of data and the other on its online marketplace launched in 2016 and used by 800 million Facebook users in 70 countries to buy and sell items.

The company has since then provided 315,000 documents equivalent to 1.7 million pages to the Commission.

“The exceptionally broad nature of the Commission’s requests means we would be required to turn over predominantly irrelevant documents that have nothing to do with the Commission’s investigations, including highly sensitive personal information such as employees’ medical information, personal financial documents, and private information about family members of employees,” Facebook associate general counsel Tim Lamb said in a statement.

“We think such requests should be reviewed by the EU Courts.”

The Commission said it would defend its case in court.

EU regulators comb through documents looking for about 2,500 search phrases which include “big question”, “shut down” and “not good for us”, said a person familiar with the matter.

The person said such search terms could be found in employees’ health information, performance evaluation and even job applications to the company which are not relevant to the EU investigations.

In addition to the two lawsuits against the Commission, Facebook is also seeking interim measures at the Luxembourg-based General Court, Europe’s second-highest, to halt such data requests until judges rule, according to a court filing.

Reuters

David Swan 9.05am: Big tech’s mandatory code coming

Fresh off a blockbuster day in which he announced Federal Court action against Google, ACCC boss Rod Sims is expected to hand down his mandatory bargaining code between media companies and the tech giants today.

The parties were initially told to negotiate a voluntary bargaining code earlier this year, before talks broke down.

The code will dictate to what extent the tech giants will be forced to pay media companies for use of their content.

The mandatory code will apply at least to Facebook’s News Feed and Google Search, as well as potentially Instagram and WhatsApp — both owned by Facebook — and hardware services like Google Assistant and Android TV.

Payment could be made to publishers through a number of options, including that publishers negotiate individually with the tech giants, or that they collectively bargain to reach a more favourable outcome.

Mr Sims told The Australian in May it became clear early on during the discussions that the goalposts were too far apart for the parties to be able to reach an agreement.

“The question the government put to us in April was not ‘how pleasant are the meetings and how much discussion is going on’; the question the government put to us is ‘Do you really think, as you see it now, that we’ll get there?’, and the best, honest answer was that the revenue share particularly was going to be something they would not agree on,” Mr Sims told The Australian.

“We got that mainly from seeing how that issue was being dealt with and what the various responses were. A lot of talk was going on, very pleasant talk, but there wasn’t much progress, so really you have to exercise the compulsory option. Given the very different positions of the parties, with all the best will in the world … ultimately this is going to have to be imposed.

“This is a big regulatory step to take. Yes, you can ask should it have been done some time ago, but big steps often need quite a build-up and this has had one.”