Hi everyone, Mercedes here from Singapore bringing you the last #techAsia newsletter for 2020. It feels like most of the biggest tech stories this year had an Asia angle, from Ant Group’s derailed IPO to Beijing’s Great Chip Leap Forward, and India’s broadside against Chinese apps to the great Asian supply chain shift. And how can we forget the ongoing TikTok saga? Thanks for sticking with us on what has been a wild ride this year. I expect next year will be even more interesting for the region’s tech watchers.
This week, we lead on Apple’s plans to upsize its iPhone manufacturing early next year for the Big Story. Apple’s Made-in-India handset, however may be looking shaky (Mercedes’ top 10). Meanwhile, China’s SMIC is poaching talent from rivals to shore up its defences against US sanctions, while Amazon is betting on cricket to boost its India aspirations (top 10). Don’t miss an excellent Merics analysis on European carmakers shifting R&D operations to China (When sages speak). Finally, a tomato that lowers your blood pressure? It could be just the ticket ahead of a Covid-19 Christmas season. Happy holidays and see you in the new year.
The Big Story — Exclusive
Apple plans to produce up to 96m iPhones in the first half of 2021, a nearly 30 per cent year-on-year increase, after demand for its first-ever 5G handsets surged during the coronavirus pandemic, according to a Nikkei Asia scoop.
The tentative full-year forecast that Apple shared with its suppliers suggests the company plans to build up to 230m iPhones in 2021, including both old and new models, big Apple suppliers said. This would mark a 20 per cent rise from 2019, though the target will be regularly reviewed and revised in response to any changes in consumer demand, they added.
Key implications: Apple's robust iPhone orders come as the smartphone industry faces two upheavals: a serious component shortage and fierce competition for Huawei’s market share. Not to mention that the Silicon Valley company has tried to stockpile as many processor chips as possible to avoid any coronavirus-related supply chain disruptions.
Upshot: The outlook is bright for Apple. But analysts still don’t expect the company to be the real winner from Huawei’s woes. “Apple's iPhone shipment will definitely see a recovery for next year, but overall it will not benefit from Huawei’s loss of market share as much as other players like Samsung, Xiaomi and Oppo,” said one expert.
Mercedes’ Top 10
An Apple contractor in India has been hit by worker unrest. Could it derail the production timeline of the new Made-in-India iPhone?
Japan’s digitisation crusade is going into overdrive.
SoftBank-backed Ola has made a big bet on e-scooters in India.
Amazon Prime Video is pursuing a sure-fire ploy to boost its profile in India: streaming cricket.
Bridgetown, a Spac backed by billionaire Peter Thiel, is reportedly mulling a $10bn merger with Tokopedia, one of Indonesia’s biggest start-ups.
China’s online health platforms are booming during Covid-19 — especially their share prices.
A tomato that lowers your blood pressure? Japan has approved genome-edited food.
When sages speak
Very important short analysis here by Gregor Sebastian at Merics, a Berlin-based think-tank, on how European carmakers are shifting their R&D operations to China, spurring the country’s efforts to become a manufacturing superpower.
Are India’s tech platforms prepared for the challenge of online extremism? Kabir Taneja and Trisha Ray ask in this piece for ORF.
Slow start to this episode of Straight Talk with Hank Paulson, but if you skip to around 5.20 it starts to get going. Jen Zhu Scott and Paul Triolo discuss the state of the US-China tech competition.
Best of comment
India’s ban of TikTok, the Chinese short-video app, is igniting a boom of homegrown alternatives, writes Ken Koyanagi, Nikkei Asia editor-at-large.
“Short-form videos are so easy to make, and users love it, as it is so easy to consume,” said Ruhi Singh, a former Miss India, actress and fashion model who had roughly 2m followers on TikTok. “So, honestly, I felt very relieved when Josh came out and I found it can be a good replacement of TikTok,” she said in an online event.
Josh, launched in July by Bangalore-based media start-up Dailyhunt, is now regarded as a leader among Indian short video-sharing apps. Today, Singh has roughly 1m fans on Josh — still a long way from the level she enjoyed on TikTok.
According to consultancy RedSeer, the short video-sharing app market grew ninefold in terms of the average number of monthly active users, from 20m in 2016 to 180m in the first six months of 2020. This outpaced the growth of broader social media, where monthly active users increased from 200m to 300m over the same period, and YouTube, which is used mainly to share longer videos, and where monthly active users increased from 150m to 325m.
Other Asian tech leaders have grabbed more headlines in 2020 — think Jack Ma of Alibaba or Masayoshi Son of SoftBank — but Forrest Li, CEO of Sea, the Singaporean digital powerhouse, has a strong claim to have been the region’s most successful tech entrepreneur of the year.
Sea’s shares have risen fivefold this year, at one point reaching a valuation of $100bn. This surge has come as its core businesses — gaming, ecommerce and digital payments — have all benefited from changes in consumer behaviour during the pandemic.
The company’s revenue for the three months ending in September was up 99 per cent compared with the same quarter last year, at $1.21bn, driven mainly by its ecommerce service Shopee.
Sea’s success is also having a palpable effect elsewhere. Gojek and Grab, the next two biggest tech companies in the region, have been in merger talks for nearly a year. The rivals have walked away several times, only to be coaxed back at the strong request of their investors. Now, thanks to Sea’s rise to stardom, the pressure is greater than ever to join forces.
Art of the deal
The maker of the four-legged robot “Spot”, which won YouTube fame by encouraging passers-by in Singapore parks to maintain social distancing, has been sold.
Its creator, Boston Dynamics has been offloaded by SoftBank, the Japanese conglomerate, to Hyundai, the South Korean carmaker, for $1.1bn. Under the agreement, SoftBank will retain a 20 per cent stake. The deal also means that the bipedal “Atlas” — which can do handstands, forward rolls and jumping twists without losing its balance — has a new owner.
The deal comes as Hyundai has been expanding its footprint in robotics, part of a transition into a broader range of mobility services. Euisun Chung, Hyundai’s chairman, has pledged to reduce the company’s reliance on traditional carmaking and develop growth drivers including robotics and urban air mobility.
Hyundai plans to reduce the proportion of its revenues from car manufacturing to 50 per cent, with robotics and urban air mobility making up 20 per cent and 30 per cent, respectively.
Singapore has finalised the award of digital banking licenses to four operators this month. In picking Sea, Ant Group and a consortium between Grab and Singapore Telecommunications as three of the license winners, Singapore is harnessing some of the region’s biggest tech names.
“We expect the speed of innovation of the new digital banks to strengthen Singapore’s position as a leading financial hub in the region,” said Paul Ng, financial services lead for south-east Asia at Accenture.
The move could help boost digital financial services in south-east Asia (see chart). Online lending is expected to grow fourfold between 2020 and 2025, to $92bn, while online investment assets are set to increase to $84bn from $21bn over the same period.
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