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This Week in Apps: Coronavirus impacts app stores, Facebook sues mobile SDK maker, Apple kicks out a cloud gaming app

Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads in 2019 and $120 billion in consumer spending in 2019, according to App Annie’s recently released “State of Mobile” annual report. People are now spending 3 hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week, we’ll look at the coronavirus outbreak’s impact on the App Store, China’s demand for App Store removals — and soon-to-be-removals, it seems. We’re also talking about Facebook’s lawsuit over a data-grabbing SDK, Tinder’s new video series, the TSA ban on TikTok, Instagram’s explanation for its lack of an iPad app and how Democratic presidential primary candidates are performing on mobile and social, among other things.

Headlines

Coronavirus concerns send Chinese ride-hailing apps crashing, games surging

One of the many economic fallouts related to COVID-19 coronavirus concerns is a significant decline in the usage of Chinese ride-hailing applications. According to Sensor Tower data, downloads of the three most popular apps — Hello, Didi and Dida — were down 75% year-over-year during the week of February 10 compared with the same time frame in 2019. Meanwhile, people staying home have been ordering food and groceries more often. Overall downloads of the top 10 apps in the food-ordering category increased by 68% from January 13 to the week of February 3.

Also on the rise are mobile games. According to a recent report by the FT, users in China downloaded a record number of games and apps as the virus outbreak confined people to their homes. More than 22 million downloads were registered in Apple’s App Store in China during the week of February 2, according to App Annie, and average weekly downloads during the first two weeks of February were up 40% over the same time last year.

Meanwhile, Chinese tech giants, including Alibaba and Tencent, have been deploying health-rating systems to help authorities track the movements of millions of Chinese. Alibaba had been tapped to explore the rollout of a rating app to help the government control who can travel into and around the city. Along with Ant Financial, it worked to develop a smartphone-based rating system in conjunction with the government of Hangzhou. Tencent created a program for Shenzhen, reported The WSJ.

Top mobile game Plague Inc. pulled from China’s App Store amid coronavirus outbreak

Plague Inc., a simulation game with more than 130 million players, was pulled from the Chinese App Store this week, a move that appears to be linked to the coronavirus outbreak. The company behind the game, Ndemic, posted a statement announcing that the game’s content is now considered “illegal in China as determined by the Cyberspace Administration of China.” Ndemic says it’s trying to reach out to find out what, specifically, it could change in order to get the game back in China.

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Facebook Messenger ditches Discover, demotes chat bots

Chat bots were central to Facebook Messenger’s strategy three years ago. Now they’re being hidden from view in the app along with games and businesses. Facebook Messenger is now removing the Discover tab as it focuses on speed and simplicity instead of broad utility like China’s WeChat.

The changes are part of a larger Messenger redesign that reorients the People tab around Stories as Facebook continues to try to dominate the ephemeral social media format it copied from Snapchat. The People tab now defaults to a full-screen sub-tab of friends’ Stories, and requires a tap over to the Active sub tab to see which friends are online now.

The changes could push users to spend more time visually communicating with friends and consuming content than exploring chat bots for shopping, connecting with businesses and playing games. That in turn could help Facebook earn more money from Messenger as it’s now showing Stories ads.

TechCrunch was tipped off to the redesign by social media director Jeff Higgins, who provided us with extensive screenshots of the update. These show the absence of Discover tab, the switch to just Chat and People tabs and the People sub-tabs for Stories and Active. We poked around some more and noticed the Instant Games and Transportation options missing from the chat composer’s utility tray. That formerly offered quick Uber and Lyft hailing. Messenger’s M Suggestions also no longer recommend the Transportation feature.

When we asked Messenger about the changes, a spokesperson confirmed that this redesign will soon start rolling out, removing Discover and splitting the People tab. Some users already have the update, and more will likely get it this week. They noted that Facebook had announced last August that it planned to eventually axe Discover, and that the added emphasis on Stories was motivated by users’ affinity for the ephemeral social media format. They also told us that Transportation was removed in late 2017, and Instant Games’ removal from the composer is part of the migration to Facebook Gaming announced last July.

A look at the old Messenger Discover tab that’s being removed

Chat bots, businesses and games are being hidden, but not completely banished from Messenger. They’ll still be accessible if users purposefully seek them through the Messenger search bar, Pages and ads on Facebook, buttons to start conversations on businesses’ websites, and m.me URL that create QR codes which open to business accounts in Messenger. The spokesperson diplomatically claimed that businesses are still an important part of Messenger.

But without promotion via Discover, businesses will have to rely on their owned or paid marketing channels to gain traction for their chat bots. That could discourage them from building on the Messenger platform.

The rise and fall of Facebook chat bots

The update feels like the end of a four-year era for Facebook. Back in 2016, it saw artificially intelligent chat bots as a way for businesses to scalably communicate with people, deliver customer service and push e-commerce. But when it launched the chat bot platform at its F8 conference that year, it arrived half-baked.

The typing-based semantic user interfaces were confusing, the AI necessary to make chat bots seem human (or at least reliably understand their human conversation partners hadn’t evolved yet) and several of the launch partner bots like Poncho The Weather Cat were laughably useless. The public soured on the idea of chat bots, and attempts to improve them felt insufficient.

Messenger launched Discover in 2017 in hopes that free promotion and visibility might convince developers to invest in building better chatbots. Yet by early 2018, even Facebook was backpedaling, shelving its plan to build out a full-service AI personal assistant called M that you could ask to do anything. Instead, it’d merely make AI suggestions of different Messenger features to use, like Stickers or reminders based on what you typed. Then it announced last year that it would move Instant Games out of Messenger and into Facebook’s dedicated Gaming tab.

There is still an opportunity to use chat bots for gathering initial info from people with sales or customer service inquiries. Everyone hates dealing with this stuff over the phone, waiting on hold and wading through touch-tone menus. Using asynchronous messaging makes communicating with businesses much more convenient. I’d bet Facebook will still be pushing this as an enterprise use case for Messenger. But this still usually requires a human in the loop at some point, and these are better structured as reactive utilities users search for than as experience proactively promoted by a Discover tab.

A laughably bad interaction with old Messenger chat bot Poncho The Weather Cat

Now with Discover disappearing, Messenger seems to be surrendering the fight to become a WeChat-style monolithic utility. In China, WeCat serves not just as a messaging app but as a way to make payments, hail a taxi, book flights, top up your mobile data, get a loan, find housing or shop at businesses via mini programs.

But while that centralized all-in-one style fit Chinese culture, Western markets have experienced more of an unbundling with different apps emerging to handle each of these use cases. Facebook’s constant privacy scandals and increasing anti-trust scrutiny also inhibited this approach with Messenger. Users and the U.S. government weren’t ready to trust Facebook to handle so much of our daily lives. Facebook Messenger also has to jockey with competition like iMessage and Snapchat that could undercut it if it gets too bloated.

So now Messenger is going in the opposite direction. It’s becoming more WhatsApp-like — simple, speedy and centered around peer-to-peer communication. Visual communication through Stories, with replies to them delivered as messages, feels like a natural extension of this focus while conveniently offering a path to monetization. If Messenger can be the best-in-class place to chat, unencumbered by promotion of chat bots and businesses, users might stay locked into the Facebook ecosystem.

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Teen hit Yolo raises $8M to let you Snapchat anonymously

It wasn’t a fad. Yolo became the country’s No. 1 app just a week after launch by letting teens ask for anonymous replies to questions they posted on Snapchat. But nine months later, Yolo is still in the top 100 iOS apps and has 10 million active users. Now it’s safeguarding the app from predators while revealing a smart new feature for spinning up anonymous group chats, powered by $8 million in fresh funding.

“What we are trying to build is a new kind of network where there’s a fluidity to identity,” Yolo co-founder Greg Henrion tells me. “We weren’t sure if Yolo was here to stay, but we’re still ranking well and there seems to be a real opportunity in anonymity starting with Snapchat Q&A.”

Yolo is the first big win for Snapchat’s Snap Kit platform that lets developers piggyback on its login, Bitmoji avatars, stickers and Stories. This lets tiny development teams build apps that hundreds of millions of people, teens in particular, can instantly sign up for in just a few taps. Another Snap Kit app for meeting new people called Hoop recently spiked to No. 2 on the charts

We haven’t seen this kind of social platform success since Zynga’s empire rose atop Facebook. Spawning more blockbusters like Yolo could ensure that a Snapchat account is a must-have utility for the next generation.

Sleepless nights atop the charts

“For two weeks we basically didn’t sleep,” Henrion recalls about the chaos he and co-founder Clément Raffenoux endured after Yolo shot to No. 1 last May. “You’re trying to stay afloat. It was very, very wild.”

The basic premise of Yolo is that you write a question like, “Who’s my celebrity look alike?”, “What do people really think of me?” or “How could I be nicer?” You’re then switched over to Snapchat, where you can post the question in your Story or messages with a link back to Yolo. There, people can anonymously leave a response; you can post that and your reply with another post on Snapchat.

Yolo co-founder and CEO Greg Henrion, in real life and Bitmoji

The result is that friends and followers feel comfortable giving you real talk. They don’t have to sugarcoat their answers. And that makes people race to open Yolo each time they get a message. Yolo has seen 26 million downloads across iOS and Android globally, with nearly 70% in the U.S, according to Sensor Tower.

Other anonymous apps like tbh (acquired by Facebook) and Sarahah (kicked off the app stores) quickly faded, and others eventually imploded due to bullying, like Secret and YikYak. Although tbh hit No. 1 in September 2017, it was out of the top 500 by November. It seems a combination of inherent virality via Snapchat, easy user acquisition via Snap Kit and sharp product design has given Yolo some staying power. It still managed 2.2 million downloads last month versus a peak of 5.5 million in its first month back in May 2019.

That June, Yolo quietly raised a $2 million seed round thanks to its sudden success. The team had been grinding since 2017 on a video reactions app called Popshow funded by a small pre-seed round from SV Angel, Shrug Capital and Product Hunt’s Ryan Hoover. They’d previously built music video-making app Mindie that eventually sold to influencer collective Shots Studios. Popshow never caught on, so the team began experimenting on Snap Kit, building a more official Q&A feature for Snapchat than predecessors like Sarahah and Polly. Then, boom. Days after launch, Yolo’s usage exploded.

But to keep users interested, Yolo needed to evolve. That would require more funding for the eight-person team split between Snapchat’s home of Los Angeles and Henrion’s home of Paris.

An honest way to chat

The concept of a social app where users could shift between full anonymity and representation via avatar attracted its $8 million Series A to invest in product and engineering. The round was led by Thrive Capital, Ron Conway’s A.Capital, former TechCrunch editor Alexia Tsotsis’ Dream Machine (also in the seed round), Shrug, Day One, Goodwater, Knight VC, ex-Facebooker Bobby Goodlatte, Twitter co-founder Biz Stone and SV Angel’s Brian Pokorny.

That cash fueled the release of Yolo’s new group chat feature. You can set up a chat room, give it a name and generate an invite URL or sticker you can post on Snapchat, just like its previous question feature. Friends or friends of friends that are already in can join the group chat, represented by their Bitmoji instead of their name. Yolo suggests people join the more open “party mode” chats where their friends are active.

What makes this special is that once an hour, users can tap the Yolo Superpowers button to send  a totally anonymous message to the group. More Superpowers are coming, but there’s also an anonymous “Someone has a crush on [name]” message so you can secretly profess your affection to anyone or someone else in the chat.

“The limits of Q&A is that it doesn’t generate real conversation. It’s an ice breaker, but we also want conversations to happen,” Henrion stresses. “‘What do you think about this dress?’ The group chat is more about ‘let’s talk about the dress.’” The chats could be focused on people you actually know offline, or those you share interests with. The option to restrict group chats to either just your contacts or friends of friends “limits the amount of meeting strangers,” Henrion explains. “This is very different from the public communities like Reddit or the dating apps.”

Can “anonymous” be synonymous with “safe”?

Still, anonymous apps have consistently proven to be havens for cyberbullying and unsafe behavior. Without the accountability of having your name attached, people are free to say awful things. That can be even worse amongst teenagers who might get in trouble for being mean at school but not on an app.

Yolo first focused on messages blocking 10% of overall messages that contained offensive content. That meant blatant hate speech and trolling couldn’t spread through the app. “We’re strict on moderation. When looking at the reviews about bullying, it’s like nothing compared to any other anonymous app. I think we solved 90% of the problem.”

Now it’s working with Snapchat to safeguard the group chats feature. The goal is to ensure Yolo doesn’t actively recommend chat amongst adults to minors and vice-versa. Henrion says this update should roll out soon.

“It’s 2020 and we need to be very responsible” Henrion tells me. “Moderation and growth are the most difficult things to balance. It’s moderation first for sure. We don’t care about growth if it’s not healthy or sustainable.” The new funding also gives Yolo the luxury of pushing back monetization while it focuses on safely adding more users.

By making anonymity more private, Yolo has a chance to sidestep some of the worst elements of human behavior. Making fun of someone has less appeal if there’s no wider audience like trolls exploited in the feeds and comment reels of Secret and YikYak.

That could let the brighter side of anonymity shine through: vulnerability, honesty and deep connections that are enhanced by the absence of embarrassment. With all the change, uncertainty and anxiety that’s part of growing up, teens deserve a place where they can be open with each other and speak their minds. After all, you only live once.

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Tinder’s video series ‘Swipe Night’ gets a second season

Following a successful debut for Tinder’s first foray into original content, the company is giving its interactive video series “Swipe Night” another run. The company confirmed today it’s renewing “Swipe Night” for a second season, which will launch this summer (again) as an in-app experience within Tinder’s dating app.

Variety first reported the news of “Swipe Night’s” return. Tinder further confirmed the details to TechCrunch.

“Swipe Night,” as you may recall, first launched in October 2019 within Tinder. The experience introduced a first-person adventure played in-app, where users would make choices at key turning points to progress the narrative — like a choose-your-own-adventure story.

The series was designed to increase user engagement and help the app’s young users better connect.

Today, half of Tinder is Gen Z (ages 18-25) — a demographic that’s embracing their single lifestyle and more casual relationships compared with those on other dating apps, like Tinder parent company Match, for example, or its newer acquisition Hinge. These younger users connected with the idea of starting conversations based on a shared experience, says Tinder.

However, the reality is that “Swipe Night” had also arrived at a time when users were opening Tinder’s app less on a daily basis, even as monthly usage climbed. Though “Swipe Night” only ran on specific dates in October 2019, users’ choices within the interactive experience were added to their profiles. This allowed users to see who else agreed with their decisions and who took the opposite path. That made launching Tinder and swiping through profiles more compelling — even for those who may have been tiring of Tinder before the series’ arrival.

The experiment worked. Tinder said millions of users tuned in to “Swipe Night,” and matches and conversations increased by 26% and 12%, respectively. With “Swipe Night,” it seemed, Tinder finally gave users something to talk about.

The returning second season of “Swipe Night” will again be directed by Karena Evans, who directed Coldplay’s music video “Everyday Life” and Drake’s “In My Feelings” and “God’s Plan.” This time, it will be written by Jessica Stickles (“Portlandia,” “Another Period”) and Julie Sharbutt (“3 Days”).

“Working on Swipe Night was such a fulfilling experience for me. I got to do something that had never been done before and innovate with storytelling to bring a generation of people together. I’m in search of projects that impact, shift or curate a culture and couldn’t be more excited to return for more,” said Evans, in a statement.

“Swipe Night’s” second season may see Tinder tweaking the formula a bit, and may even introduce new mechanics to keep it feeling fresh.

In addition to the Season 2 launching in the U.S., Match previously confirmed that 10 international markets across Europe and Asia will get “Swipe Night” this year. Tinder said today that Season 1 would be launching internationally on March 14th, but declined to say when those users would receive Season 2.

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Vimeo’s new app helps small businesses create professional social videos

Vimeo signaled last year its plans to move further into the social video creation and editing space with its acquisition of short-form video editor Magisto. Today, the company is unveiling the results of its work in the months following the deal’s close with the debut of Vimeo Create. The new app includes a set of video creation tools aimed at small businesses and marketers looking to tell their stories using social video, but who lack the resources, time or budget to invest in video production at the scale they need to compete.

With Vimeo Create, available on both the desktop and as an app, businesses choose from pre-made, professionally designed video templates that can be customized to meet their needs. More advanced users could opt to start a new video from scratch, as an alternative.

The app includes a library of stock content to add to videos, including millions of HD video clips, photos and commercially licensed music tracks available for no extra fee, Vimeo says. Businesses also can customize their videos by selecting the colors, fonts, layouts, logos, text captions and calls-to-action they want to use.

The app then leverages AI-powered technology to turn the clips, photos, music and text into a high-quality social video in minutes.

Vimeo Create also simplifies the process of designing videos for different social platforms, where aspect ratios (e.g. square, vertical, horizontal) and format requirements vary. After the video is finalized, users are able to publish across the web — including to Facebook, YouTube, Instagram, Twitter and LinkedIn — as a part of the Vimeo Create workflow.

The move into social video creation is part of Vimeo’s larger strategy of becoming a one-stop shop for companies and individuals who publish videos online. The company has long since abandoned its plans to be a YouTube competitor, instead seeing the potential in the other side of the video market. Today, Vimeo makes money by offering tools and services to video creators both large and small. It has launched tools for uploading and live streaming across social sites and updated its mobile app to include more features previously available only to desktop users, among other things.

Vimeo’s decision to prioritize social video resulted from its own research. The company found that only 22% of small business owners felt they were using enough video. The businesses complained that issues around time, cost and complexity were keeping them from going further. Nearly all (96%) of small business owners said they would create more video if all those friction points were removed.

The service was built using parts of Magisto’s backend and its AI, but the overall app, feature set, content, user interface and integration into Vimeo’s tools were built from the ground up, the company says.

The company hopes Vimeo Create will help it to grow its subscription revenue, as the service is offered as a part of Vimeo’s Pro, Business and Premium membership plans, instead of as a standalone paid or freemium app.

“Video is the most impactful medium we have today for human expression at scale, and businesses
need an online video strategy to reach their customers. But the research is clear: small business owners
and entrepreneurs don’t have the tools, time or budgets to make videos at the volume and quality
needed to compete,” said Vimeo CEO Anjali Sud, in a statement about the launch. “Vimeo Create levels the playing field. It’s a radically simple tool that shortens the distance from idea to execution, so more businesses can have a successful video strategy.”

Vimeo isn’t alone in addressing the social video needs of small businesses. Last fall, Facetune maker Lightricks launched a full suite of apps for small businesses to use for their social media marketing campaigns. There also are dozens of tools for video editing on the market, including those from incumbents, like Adobe and Apple, as well as from others like Magisto, Canva, PicsArt and many more that offer features craved by small business owners like templates, easy editing tools, access to stock content and support for one-click multi-platform publishing, among other things.

Vimeo first launched Vimeo Create into beta back in January, but today it’s available to all across web, iOS and Android.

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Venmo prototypes a debit card for teenagers

Allowance is going digital. Venmo has been spotted prototyping a new feature that would allow adult users to create for their teenage children a debit card connected to their account. That could potentially let parents set spending notifications and limits while giving kids more flexibility in urgent situations than a few dollars stuffed in a pocket.

Delving into children’s banking could establish a new reason for adults to sign up for Venmo, get them saving more in Venmo debit accounts where the company can earn interest on the cash and drive purchase frequency that racks up interchange fees for Venmo’s owner PayPal .

But Venmo is arriving late to the teen debit card market. Startups like Greenlight and Step let parents manage teen spending on dedicated debit cards. More companies like Kard and neo banking giant Revolut have announced plans to launch their own versions. And Venmo’s prototype uses very similar terminology to that of Current, a frontrunner in the children’s banking space with over 500,000 accounts that raised a $20 million Series B late last year.

The first signs of Venmo’s debit card were spotted by reverse engineering specialist Jane Manchun Wong, who has provided slews of accurate tips to TechCrunch in the past. Hidden in Venmo’s Android app is code revealing a “delegate card” feature, designed to let users create a debit card that’s connected to their account but has limited privileges.

A screenshot generated from hidden code in Venmo’s app, via Jane Manchun Wong

A set-up screen Wong was able to generate from the code shows the option to “Enter your teen’s info,” because “We’ll use this to set up the debit card.” It asks parents to enter their child’s name, birth date and “What does your teen call you?” That’s almost identical to the “What does [your child’s name] call you?” set-up screen for Current’s teen debit card.

When TechCrunch asked about the teen debit feature and when it might launch, a Venmo spokesperson gave a cagey response that implies it’s indeed internally testing the option, writing “Venmo is constantly working to identify ways to refine and enhance the user experience. We frequently test product offerings to understand the value it could have for our users, and I don’t have anything further to share right now.”

Typically, the tech company product development flow sees them come up with ideas, mock them up, prototype them in their real apps as internal-only features, test them externally with small percentages of real users, then launch them officially if feedback and data is positive throughout. It’s unclear when Venmo might launch teen debit cards, though the product could always be scrapped. It’d need to move fast to beat Revolut and Kard to market.

Current’s teen debit card

The launch would build upon the June 2018 launch of Venmo’s branded Mastercard debit card that’s monetized through interchange fees and interest on savings. It offers payment receipts with options to split charges with friends within Venmo, free withdrawls at MoneyPass ATMs, rewards and in-app features for reseting your PIN or disabling a stolen card. Venmo also plans to launch a credit card issued by Synchrony this year.

Venmo might look to equip its teen debit card with popular features from competitors, like automatic weekly allowance deposits, notifications of all purchases or the ability to block spending at certain merchants. It’s unclear if it will charge a fee like the $36 per year subscription for Current.

Current offers these features for parents who set up a teen debit card

Tech startups are increasingly pushing to offer a broad range of financial services where margins are high. It’s an easy way to earn cheap money at a time when unit economics are coming under scrutiny in the wake of the WeWork implosion. Investors are pinning their hopes on efficient financial services too, pouring $34 billion into fintech startups during 2019.

Venmo’s already become a popular way for younger people to split the bill for Uber rides or dinner. Bringing social banking to a teen demographic probably should have been its plan all along.

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Lightspeed leads Laiye’s $42M round to bet on Chinese enterprise IT

Laiye, a Chinese startup that offers robotic process automation services to several major tech firms in the nation and government agencies, has raised $42 million in a new funding round as it looks to scale its business.

The new financing round, Series C, was co-led by Lightspeed Venture Partners and Lightspeed China Partners. Cathay Innovation, which led the startup’s Series B+ round and Wu Capital, which led the Series B round, also participated in the new round.

China has been the hub for some of the cheapest labor in the world. But in recent years, a number of companies and government agencies have started to improve their efficiency with the help of technology.

That’s where Laiye comes into play. Robotic process automation (RPA) allows software to mimic several human behaviors such as keyboard strokes and mouse clicks.

“For instance, a number of banks did not previously offer APIs, so humans had to sign in and fetch the data and then feed it into some other software. Processes like these could be automated by our platform,” said Arvid Wang, co-founder and co-chief executive of Laiye, in an interview with TechCrunch.

The four-and-a-half-year-old startup, which has raised more than $100 million to date, will use the fresh capital to hire talent from across the globe and expand its services. “We believe robotic process automation will achieve its full potential when it combines AI and the best human talent,” he said.

Laiye’s announcement today comes as the market for robotic automation process is still in nascent stage in China. There are a handful of startups looking into this space, but Laiye, which counts Microsoft as an investor, and Sequoia-backed UiPath are the two clear leaders in the market.

As my colleague Rita Liao wrote last year, it was only recently that some entrepreneurs and investors in China started to shift their attention from consumer-facing products to business applications.

Globally, RPA has emerged as the fastest growing market in enterprise space. A Gartner report found last year that RPA market grew over 63% in 2018. Recent surveys have shown that most enterprises in China today are also showing interest in enhancing their RPA projects and AI capabilities.

Laiye today has more than 200 partners and more than 200,000 developers have registered to use its multilingual UiBot RPA platform. UiBot enables integration with Laiye’s native and third-party AI capabilities such as natural language processing, optical character recognition, computer vision, chatbot and machine learning.

“We are very bullish on China, and the opportunities there are massive,” said Lightspeed partner Amy Wu in an interview. “Laiye is doing phenomenally there, and with this new fundraise, they can look to expand globally,” she said.

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This Week in Apps: HQ Trivia’s dramatic death, Android 11, Apple mulls a more open iOS

Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads in 2019 and $120 billion in consumer spending in 2019, according to App Annie’s recently released “State of Mobile” annual report. People are now spending 3 hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week we look at the sad, strange death of HQ Trivia, spying app ToTok getting booted from Google Play (again!), Android 11, an enticing Apple rumor about opening up iOS further to third-party apps, Google Stadia updates, the App Store book Apple wants banned, apps abusing subscriptions and much more.

Headlines

HQ Trivia burns to the ground

hq trivia app 1

Once-hot HQ Trivia believed it had invented a new kind of online gaming — live trivia played through your phone. Investors threw $15 million into the company hoping that was true. But the novelty wore off, cheaters came in, prize money dwindled and copycats emerged. Then co-founder Colin Kroll passed away and things at HQ Trivia got worse, including a failed internal mutiny, firings and layoffs. This week, HQ Trivia announced its demise. It then hosted one last, insane night of gaming featuring drunken and cursing hosts who sprayed champagne, called out trolls and begged for new jobs. (Sure, because they exited this one so professionally.)

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Quibi’s streaming service app launches in app stores for pre-order

Quibi, the mobile-only streaming service from Jeffrey Katzenberg, is now open for pre-orders. The company declined to fully show off its app only a month ago during demos of its “TurnStyle” technology at the Consumer Electronics Show in Las Vegas, but it appears the app is ready nonetheless. Quibi is listed on both Apple’s App Store and Google Play, where it’s been given a pre-order date of April 6, 2020 — the date Quibi’s new service goes live.

The app was actually published to the app stores in January, according to data from Sensor Tower and App Annie. Quibi confirmed the app actually opened up for pre-orders on January 30, but this hadn’t been reported yet by media. (Chrissy Teigen tweeted it, however.)

Apple first introduced pre-order functionality for apps and games in late 2017, allowing interested consumers to have a new app or game automatically download to their device on launch day. And in the case of paid apps, customers aren’t charged until the app becomes available.

Since launch, the pre-order system has largely been used with mobile games. Apple even devotes part of its iOS App Store to a “Coming Soon” section where you can find upcoming games for pre-order.

It’s far less common for non-games to utilize a pre-order system. By doing so, it’s a signal that the company plans to do a significant marketing push ahead of the app’s release, likely in hopes of achieving a higher number of day-one downloads than it would otherwise.

That’s important in Quibi’s case, given the competition that awaits it. Disney+, for example, blew past expectations to reach nearly 29 million subscribers in less than 3 months after its U.S. debut. Quibi, meanwhile, will arrive in the spring, just ahead of when WarnerMedia’s HBO Max and NBCU’s Peacock also begin rolling out. Quibi can’t wait until the market is even more crowded to start pushing users to download its app — it needs to capture users’ attention now.

With Quibi’s app store listings now live, we also have our first glimpse of the streaming service’s user interface.

Much has been made about Quibi’s potential to reimagine TV by taking advantage of mobile technology in new ways, but the app itself looks much like any other streaming service, save for its last screen showing off its TurnStyle technology.

The app appears to favor a dark theme common to streaming apps, like Netflix and Prime Video, with just four main navigation buttons at the bottom.

The first is a personalized For You page, where you’re presented a feed where you’ll discover new things Quibi thinks you’ll like.

A Search tab will point you toward trending shows and it will allow you to search by show titles, genre or even mood.

The Following tab helps you keep track of your favorite shows and a Downloads tab keeps track of those you’ve made available for offline viewing.

Otherwise, Quibi’s interface is fairly simple. Shows are displayed with big images that you flip through either vertically on your home feed or both horizontally and vertically as you move through the Browse section.

The company does promote its TurnStyle viewing technology in its app store description, though it doesn’t reference the technology by name. Instead, it describes it as a viewing experience that puts you in full control. “No matter how you hold your phone, everything is framed to fit your screen,” it says.

In vertical viewing mode, it also introduces controls that appear on either the left or right side the screen — you choose, based on whether you’re left or right-handed.

Quibi did not formally announce the app was open for pre-order.

The startup, founded by Jeffrey Katzenberg, is backed by more than a billion dollars — including a recently closed $400 million round.

Katzenberg explained at CES that every great innovation in Hollywood has been driven by new technology, but today’s streaming services haven’t fully capitalized on the way many people consume content — meaning, on their phone. Quibi plans to make its service mobile-first, with TurnStyle for better viewing. And later, by using the phone’s other sensors and features to create different types of stories, like a horror show you can only watch at night or interactive fitness programs that can track your steps, among other things.

But Quibi could easily come across as gimmicky if it doesn’t get the experience right with quality content, too. Even if Quibi doesn’t pan out as a standalone streamer, it could license its TurnStyle tech to others in the streaming space — that would make Quibi one of the most expensive demo apps of all time.

Updated 2/20/20, 6 PM ET to clarify the app was opened to pre-orders on Jan 30, according to Quibi, but it wasn’t publicly announced. Sensor Tower had earlier said the app was only made available for pre-order today. The app was updated today, however. 

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As Morgan Stanley buys E-Trade, Robinhood preps social trading

Before it was worth $7.6 billion, the original idea for Robinhood was a stock-trading social network. At my kitchen table in San Francisco in 2013, the founders envisioned an app for sharing hot tips to a feed complete with a leaderboard of whose predictions were most accurate. Once they had SEC approval, they pivoted toward the real money maker: letting people buy and sell stocks in the app, and pay to borrow cash to do so.

Now, seven years later, Robinhood is subtly taking the first steps back to its start. Today it’s launching Profiles. For now, they let users see analytics about their portfolio, like how concentrated they are in stocks versus options versus cryptocurrency, as well as across different business sectors. Complete with usernames and a photo, Profiles let you follow self-made or Robinhood-provided lists of stocks and other assets.

Profiles could give Robinhood’s customers the confidence to trade more, and create a sense of lock-in that stops them from straying to other brokerages that have dropped their per-trade fees to zero to match the startup, like Charles Schwab, Ameritrade and E-Trade, which was acquired for $13 billion today by Morgan Stanley, as reported by The Wall Street Journal.

The Profile features certainly sound helpful. They could reveal that your portfolio is too centered around tech, media and telecom stocks, or that you’re ignoring cryptocurrency or corporations from your home state. Lists also makes it easier to track specific business verticals, save stocks to buy when you have the cash or set aside some for deeper research. Robinhood pulls info from FactSet, Morningstar and other trusted sources to figure out which stocks and ETFs go into sector lists, or you can make and name your own. Profiles and lists begin to roll out to all users next week.

But what’s most interesting is how profiles lay the foundation for Robinhood as a social network. It’s easy to imagine letting users follow other accounts or lists they create. The original Robinhood app let users make predictions like “17% increase in Facebook share price over the next 11 weeks,” with comments to explain why. It showed users’ prediction accuracy, their average holding time for assets, a point score for smart foresight and community BUY or SELL ratings on stocks.

If Robinhood rebuilt some of these features, it might lessen the need for an expensive financial advisor or having enough cash to qualify for one with a different brokerage. Robinhood could let you crowdsource advice. “We understand the connotation of taking something from the rich and giving it to the poor. Robinhood is liberating information that’s locked up with professionals and giving it to the people,” Robinhood co-founder and co-CEO Vlad Tenev told me back in 2013.

Robinhood would certainly need to be careful about scammy tips going viral. Improper safeguards could lead to pump and dump schemes where those late to buy in get screwed when prices snap back to reality.

But embracing social could leverage some of its strongest assets: the youthfulness of its user base and the depth of connection to its users. The median age of a Robinhood customer is 30, and half say they’re first-time investors. Being able to turn to friends or experts within the app might convince them to pull the trigger on trades.

Most online brokerages are somewhat undifferentiated beyond differences in pricing, while their clunky, unstylized products don’t generate the same brand affinity as people have for Robinhood. Unsatisfied users could bail for a competitor at any time. Robinhood’s users are accustomed to social networking and the way it locks in users, because they don’t want to abandon their community.

When I asked Robinhood Profiles’ product manager Shanthi Shanmugam directly about whether this was the start of more social trading features, they suspiciously dodged the question, telling me, “When thinking about how to reflect who you are as an investor, we looked at how other apps represent you and it felt natural to leverage a design that felt more like a profile. When helping people group their investment ideas, it was easy to envision this as a playlist you might find on your favorite music app.”

That’s far from a denial. Offering social validation for trading could help Robinhood earn more from its customers despite their small total account balances. While Robinhood might have more than 10 million accounts versus E-Trade’s 5.2 million and Morgan Stanley’s 3 million, E-Trade’s average account size is $69,230 and Morgan Stanley’s is $900,000, while a survey found most of Robinhood’s held $1,000 to $5,000.

That all means that Robinhood earns less on interest sitting in users’ accounts than the old incumbents. But Robinhood earns the majority of its money on selling order flow and through its subscription Robinhood Gold feature that lets users pay monthly so they can borrow cash to trade with. Profiles and lists, and then eventually more social features, could get Robinhood’s users trading more so there’s more order flow to sell and more reason for them to buy subscriptions.

“Democratizing access is about lowering fees, minimums and other barriers people face — like confidence. Profiles and lists make finance easier to understand and more familiar for people,” says Shanmugam. More social features built safely, more reassurance, more trading, more revenue. Robinhood has raised $910 million. But to outgun larger competitors like the newly assembled Morgan Stanley/E-Trade that’s matched its zero-fee pricing, Robinhood will have to win with product.

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