Xiaomi’s latest products for Russia include its smart TVs and flagship Mi 9T

Xiaomi, best known for its smartphones, is making serious inroads into Russia as it launched a collection of products in the country where some 145 million people live. That includes its smart TVs featuring 700,000 hours of content, smart wristbands, wireless earbuds, and flagship phone Mi 9T, which is identical to its recently announced Redmi K20 for China under a different identifier.

Customers can find these products online on Xiaomi’s website and offline at its 31 authorized retail stores across the country. The hardware giant aims to open 100 new Mi Stores in Russia this year, a company spokesperson told TechCrunch. Russian news outlet Kommersant reported the plan last week.

Xiaomi began shipping to Russia back in 2017 by introducing three handset models and its offering has since broadened. Russia marks the third international country following India and Indonesia — its biggest markets outside China — where it has rolled out smart TVs, a new area of growth for the Hong Kong-listed company.

The three Mi TV models will be available from June 25th with prices ranging from 11,990 rubles ($186.56) to 33,990 rubles ($528.88).

The TV push comes as Xiaomi copes with a global slowdown in smartphone shipment. TVs, like phones, can be an important channel for Xiaomi — which has long billed its software as a differentiator from conventional hardware companies — to sell app services and ads. It came as no surprise that Xiaomi recently bought a small stake in TCL, the world’s third-largest LCD TV maker, to ramp up its production capability in building next-gen connected TVs.

The expansion in Russia also reflects Xiaomi’s ambition to grow its overseas markets, which in the first quarter made up 38% of its overall revenue. Huawei, its main domestic rival, is tipped to see a 40% decline in international smartphone sales as U.S. export bans deal a blow to its business.

The three TV models it rolled out in the country “are a symbol of our sincere devotion to Russian consumers,” said Janet Zeng, vice president of international development at Xiaomi Mi TV. “I’m sure you all see how much we worked to combine our technical development and localized content. By [doing] this we emphasize our devotion to the Russian market and its priority for us.”

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Huawei says US ban will cost it $30B in lost revenue

Following a string of trade restrictions from the U.S., China’s telecoms equipment and smartphone maker Huawei expects its revenues to drop $30 billion below forecast over the next two years, founder and chief executive Ren Zhengfei said Monday during a panel discussion at the company’s Shenzhen headquarters.

Huawei’s production will slow down in the next two years while revenues will hover around $100 billion this and next year, according to the executive. The firm’s overseas smartphone shipment is tipped to drop 40%, he said, confirming an earlier report from Bloomberg.

That said, Ren assured that Huawei’s output will be “rejuvenated” by the year 2021 after a period of adjustment.

Huawei’s challenges are multifaceted as the U.S. “entity list” bars it from procuring from American chip makers and using certain Android services among a list of other restrictions. In response, the Chinese behemoth recently announced it has been preparing for years its own backup chips and an alternative smartphone operating system.

“We didn’t expect the U.S. to attack Huawei with such intense and determined effort. We are not only banned from providing targeted components but also from joining a lot of international organizations, collaborating with many universities, using anything with American components or even connecting to networks that use American parts,” said Ren at the panel.

The founder said these adverse circumstances, though greater than what he expected, would not prevent the company from making strides. “We are like a damaged plane that protected only its heart and fuel tank but not its appendages. Huawei will get tested by the adjustment period and through time. We will grow stronger as we make this step.”

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“Heroes in any times go through great challenges,” reads a placard left on a table at a Huawei campus cafe, featuring the image of a damaged World War II aircraft. / Photo: TechCrunch

That image of the beaten aircraft holding out during hard times is sticking to employees’ minds through little motivational placards distributed across the Huawei campus. TechCrunch was among a small group of journalists who spoke to Huawei staff about the current U.S.-China situation, and many of them shared Ren’s upbeat, resilient attitude.

“I’m very confident about the current situation,” said an employee who has been working at Huawei for five years and who couldn’t reveal his name as he wasn’t authorized to speak to the press. “And my confidence stems from the way our boss understands and anticipates the future.”

More collaboration

74-year-old Ren had kept a quiet profile ever since founding Huawei, but he has recently appeared more in front of media as his company is thrown under growing scrutiny from the west. That includes efforts like the Monday panel, which was dubbed “A Coffee with Ren” and known to be Ren’s first such fireside chat.

Speaking alongside George Gilder, an American writer and speaker on technology, and Nicholas Negroponte, co-founder of the MIT Media Lab, Ren said he believed in a more collaborative and open economy, which can result in greater mutual gains between countries.

“The west was the first to bring up the concept of economic globalization. It’s the right move. But there will be big waves rising from the process, and we must handle them with correct rather than radical measures,” said Ren.

“It’s the U.S. that will suffer from any effort to decouple,” argued Gilder. “I believe that we have a wonderful entrepreneurial energy, wonderful creativity and wonderful technology, but it’s always thrived with collaboration with other countries.”

“The U.S. is making a terrible mistake, first of all, picking on a company,” snapped Negroponte. “I come from a world where the interest isn’t so much about the trade, commerce or stock. We value knowledge and we want to build on the people before us. The only way this works is that people are open at the beginning… It’s not a competitive world in the early stages of science. [The world] benefits from collaboration.”

“This is an age for win-win games,” said one of the anonymous employees TechCrunch spoke to. He drew the example of network operator China Mobile, which recently announced to buy not just from Huawei but also from non-Chinese suppliers Nokia and Ericsson after it secured one of the first commercial licenses to deploy 5G networks in the country.

“I think the most important thing is that we focus on our work,” said Ocean Sun, who is tasked with integrating network services for Huawei clients. He argued that as employees, their job is to “be professional and provide the best solutions” to customers.

“I think the commercial war between China and the U.S. damages both,” suggested Zheng Xining, an engineer working on Huawei’s network services for Switzerland. “Donald Trump should think twice [about his decisions].”

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Report: Huawei expects international smartphone shipments to plummet

A month after being placed on a trade blacklist by the Trump administration, Huawei is reportedly steadying itself for international shipments of its smartphones to decline by 40% to 60%. According to a report in Bloomberg, Huawei may end up pulling shipments of the Honor 20, its flagship phone for overseas markets, if sales are poor.

The U.S. Department of Commerce barred Huawei in May from purchasing parts from U.S. companies without prior approval from Washington, claiming that Huawei is a possible threat to national security. After the ban, Huawei founder and CEO Ren Zhengfei said the blacklist may slow the company’s growth, but “only slightly.”

But Bloomberg reports that the company is now steeling itself for international shipments to plummet, with Huawei sales and marketing manager internally forecasting a drop in shipment volumes between 40 million to 60 million smartphones. The Honor 20 will go on sale in parts of Europe, including France and the U.K., on June 21, but Huawei may stop shipments if it sells poorly.

In order to offset the anticipated decline in international shipments, Huawei wants to grab half of China’s smartphone market this year. According to Canalys, Huawei was the only company among China’s top five smartphone vendors to report growth as the rest of the market declined last year, achieving a 34% market share, but nonetheless it needs to ward off competition from Oppo and Vivo, which are both refreshing their product strategies in order to cover more consumer segments. Bloomberg reports that Huawei wants to increase shipments by spending more on marketing and expanding its distribution channels, but some executives have said its target is too high.

Meanwhile in the U.S., the trade blacklist is also impacting some of Huawei’s most important chip suppliers, including Qualcomm, Intel and Xilinx. Reuters reports that representatives from some companies have met with the Commerce Department to lift restrictions on parts for common devices that they say do not present security concerns, like smartphone chips.

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China’s housing unicorn Danke appoints ex-Baidu exec as new COO

A few months after nabbing a handsome $500 million funding round, China’s shared housing startup Danke Apartment got a talent boost.

On Monday, Danke announced the appointment of Gu Guodong as its new chief operating officer to ramp up the company’s offline operational crew. Gu, whose nickname is Michael, stepped down from Baidu after five years as one of the key figures in search, historically the company’s biggest revenue-generating division. He’s known to have managed several tens of thousands of marketing staff and helped generate sales of close to 100 billion yuan ($14.44 billion) for Baidu annually.

Gu’s arrival followed a period of explosive expansion at Danke, which is now managing almost 500,000 units of rooms across 10 Chinese cities after founding four years ago. The startup takes the co-living approach akin to that of WeWork’s Welive and rents out fully furnished apartments targeted at young professionals who can’t afford a full suite. Backed by Tiger Global and Alibaba’s financial affiliate Ant Financial, Danke’s valuation crossed $2 billion in its funding round in February.

Gu is one of the former Baidu executives who resigned during a recent top-level exodus (report in Chinese) that involved at least five leaders, including the search division boss Xiang Hailong, to whom Gu reported. There were speculations that Xiang’s exit might have triggered his lieutenants to leave, though TechCrunch has learned from a person close to Gu that he had left “one to two weeks” prior to Xiang’s departure.

For Gu, joining Danke would almost feel like returning home. “We welcome our comrade and good friend Michael,” said Danke chief executive Gao Jing, who previously worked alongside Gu at Nuomi, the local services startup that was sold to Baidu for $3.2 billion and became integral to the internet giant’s online-to-offline business. Derek Shen, an investor and current chairman of Danke, co-founded Nuomi in 2010 before heading up LinkedIn China between 2014 and 2017. Several other core members of Danke have also hailed from Nuomi.

Danke is confident that Gu’s addition will be a boon to its operational capacity. “Gu has abundant experience in operational management, sharp business insights, outstanding leadership, and a deep understanding of the internet sector and user needs,” said Gao. “Under his direction, Danke will enter a new phase of refined operation.”

By that, Gao means Gu will be tasked with rolling out more targeted marketing, more efficient housing renovation, more precise acquisition of apartment space, among other quality-control measures to drive sustainable growth at the company.

Update: Spelling of Gu’s name was corrected.

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Spies may have used an AI-generated face to infiltrate US politics

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AI-generated faces might be more than just novelties — they could also be used as espionage tools. Experts talking to the AP believe that spies used AI to create a ‘photo’ of Katie Jones, a non-existent person used in an attempt to infiltrate the American political scene. While the snapshot may have looked plausible with a cursory look, there were telltale clues like a blurry earring and hetero-chromatic eyes that didn’t quite line up. And crucially, that AI fakery might have been enough to fool some important political figures.

The imaginary Jones had LinkedIn connections to a number of American officials or political influencers, including economist Paul Winfree (considered for a Federal Reserve seat), a deputy assistant secretary of state and a senator’s senior aide. She also had links to think tank activists at the Brookings Institution and Heritage Foundation.

There are no immediate indications that the people behind Jones have successfully compromised political targets, and it’s not clear just who’s behind the campaign. Jones’ account disappeared soon after the AP asked LinkedIn for comment, with the site saying that it regularly cracked down on fake accounts. China is known to use LinkedIn to recruit spies, however, and establishing political connections both expands the list of potential targets and gives credibility to any attempts to elicit data.

The discovery is a reminder that you can’t trust a social network profile simply because it has a unique-looking photo. At the same time, though, it’s also an indication that sites may need to step up their efforts to detect image manipulation. Even if few people will fall for an AI-created photo, it could only take one vulnerable official to leak sensitive data.

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