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| Here are today's top stories: - Apple to overhaul its iOS App Store in the EU.
- Microsoft cuts 9% of its gaming workforce.
- FTC subpoenas Big Tech companies over AI deals.
- Apple led China's smartphone market share in 2023.
- Amazon Ring ends police video-sharing program.
Beth
p/beth-duckett | |
| 1 | | Apple announced it will allow European users to download apps and software from outside its own App Store. Apple is opening up parts of its "walled garden" to comply with the EU's new tech competition law, which takes effect March 7. More: - Under the changes, developers will be able to take payments and distribute their apps in the EU outside of the App Store for the first time, bypassing Apple's cut.
- Users will be able to download app marketplaces, subject to Apple's approval process. Once approved, they can download apps, including those violating Apple guidelines, and even set a non-App Store marketplace as the default on their devices.
- Apple will incorporate the changes as part of iOS 17.4 coming in March.
- Apple has historically balked at sideloading, saying it poses major threats to privacy and security through malware and other risks.
- The company is now "putting in place technologies and policies to try and minimize that risk," Apple's Phil Schiller said.
New fees: - Apple is also rolling out a new fee structure for developers in the EU, which will generally lead to developers paying the company less than what they currently do.
- Developers will have to pay a "core tech fee" of €0.50 for each first annual install per year. It only applies to developers whose apps surpass 1 million downloads per year, charged once for each Apple account.
- The App Store commission will also decrease from 30% to 17%, with a reduced rate of 10% from 15% for certain developers.
- Apple is also introducing a new 3% "payment processing" fee for transactions processed through its store.
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| 2 | | Microsoft is reducing its workforce by 1,900 positions across its Activision Blizzard, Xbox, and ZeniMax teams. The layoffs, affecting 9% of Microsoft gaming employees, come three months after Microsoft finalized its $69B acquisition of Activision Blizzard. More: - The majority of the cuts will occur at Activision Blizzard, the studio behind "Call of Duty" and "Diablo," according to an internal memo from Microsoft gaming head Phil Spencer.
- Spencer said the layoffs are part of a broader "execution plan" aimed at minimizing "overlapping areas."
- In addition, Blizzard President Mike Ybarra and Chief Design Officer Allen Adham are leaving Microsoft.
- Blizzard has also canceled a survival game that was previously announced.
Zoom out: - With the acquisition of Activision, Microsoft gained over 10,000 employees.
- Other video game companies have announced layoffs over the past year.
- More recently, Discord cut 17% of its staff, Unity Software reduced its workforce by 25%, and Amazon's Twitch eliminated around 500 roles.
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| 3 | | In 2023, Apple became the top smartphone company in China for the first time, reaching a record market share of 17.3%, according to tracker IDC. However, overall smartphone sales in China hit a decade low last year, attributed to sluggish economic recovery and weak consumer demand. 
What the numbers show: In 2023, Apple's market share in China rose to a record 17.3% from 16.8% a year earlier, surpassing local rival vivo for the first time. The iPhone led in shipments to China both in the fourth quarter and throughout 2023. (Shipments to third-party sellers reflect demand but aren't direct sales for Apple.) Overall, smartphone shipments in China fell 5% to 271.3 million units last year. What brands should care: In the fourth quarter, Apple rival Huawei rose to become China's fourth largest smartphone vendor with a market share of 13.9%, up from 10.3% a year earlier. Huawei's shipments jumped 36.2% in the quarter, boosted by the September launch of its Mate 60 Pro smartphone, a rival to the iPhone. Meanwhile, Apple's smartphone shipments in China dropped by 2.1% in Q4, with its market share decreasing to 20% from 20.6% compared to the previous year What it means: While Apple faces renewed competition from Huawei, the company still secured the top spot in China thanks to strategic price promotions that spurred demand, said IDC research analyst Arthur Gao. IDC expects the competition to only intensify as brands strive to maintain their top 5 status in the world's largest smartphone market. | | | |
| 4 | | The U.S. Federal Trade Commission has subpoenaed Amazon, Microsoft, and Alphabet for details on their AI development and dealings with AI startups Anthropic PBC and OpenAI. FTC Chair Lina Khan described it as a "market inquiry" into investments and partnerships between top cloud service providers and AI developers. More: - Khan, speaking at a public workshop today, said the FTC is monitoring the AI industry, cautioning that companies in the space "cannot use claims of innovation as cover for law breaking."
- Under Section 6(b) of the FTC Act, the agency can issue civil investigative demands that are separate from its law enforcement activities.
- AI is not exempt from the laws, and the FTC is "looking closely at the ways companies may be using their power to thwart competition or trick the public," Khan noted.
Zoom out: - The companies have yet to comment on the inquiry.
- Microsoft has invested over $13B in OpenAI, the creator of ChatGPT.
- Anthropic, founded by former OpenAI employees, has received a $2B commitment from Alphabet's Google and up to $4B from Amazon. Anthropic developed the Claude AI chatbot powered by its large language model.
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| 5 | | Amazon's Ring is discontinuing its "Request for Assistance" tool, which lets police request users' doorbell video footage via the company's Neighbors app. Police now need a search warrant or subpoena to access footage from Ring doorbell cameras. More: - Starting 31, police cannot create new posts on the Neighbors app, asking users to submit video footage for cases.
- Police and fire departments can continue using the app to share safety tips, updates, and community event information, Ring said.
- Amazon-owned Ring changed its policy in 2021 to make police requests for footage public on its Neighbors app.
- Before that, law enforcement had to send private messages to Ring users for footage.
Zoom out: - Groups like the Electronic Frontier Foundation (EFF), along with Senator Ed Markey (D-Mass.), have long criticized this policy as a major privacy concern.
- On Thursday, the EFF called the move by Ring "a step in the right direction," but noted that it comes after "years of cozy relationships with police and irresponsible handling of data," which led to Ring's $5.8M FTC settlement last year.
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| 6 | German software giant SAP is restructuring 8,000 jobs and investing $2.2B in a program focused on incorporating more AI into its business operations. The 8,000 employees will either undergo AI skills retraining or leave SAP under a voluntary buyout program. More: - SAP plans to intensify its focus on critical strategic growth areas, especially Business AI, in 2024, the company said in a news release.
- The company is changing its operations to support "organizational synergies, AI-driven efficiencies, and to prepare the company for highly scalable future revenue growth," according to the release.
- The restructuring is projected to cost €2B ($2.2B) but yield €500M ($545M) in efficiency savings in 2025.
- SAP expects to end the year with a headcount similar to what it has now. The company had 107,602 employees as of late 2023.
Zoom out: - Following the announcement, SAP's American Depositary Receipts (ADRs) soared to an all-time high on Wednesday, rising more than 7% during intraday trading.
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 | AI and technology writer | | Beth is a contributing editor and writer of Inside's AI and Tech newsletters. She has written for notable publications like USA Today and the Arizona Business Gazette. During her time as a public policy reporter at The Arizona Republic, she received recognition with a Pulitzer Prize nomination and a First Amendment Award for her collaborative reporting on pension cost increases. Beth also authored a book on the solar photovoltaic industry in 2016. You can reach her at Beth.Duckett@yahoo.com. | | This newsletter was edited by Eduardo Garcia | |
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