Saturday, March 2, 2019

business insider

business insider

Here's why the US is terrified of one Chinese company controlling the world's 5G networks - Business Insider

Posted: 02 Mar 2019 12:00 AM PST

US lobbying against Chinese firm Huawei, one of the biggest phone makers and telecommunications kit providers in the world, hit a new level this week during the phone industry's big annual conference.

Around 100,000 technology vendors, carriers, and device makers head to Mobile World Congress in Barcelona every year both to strike deals and to showcase emerging technologies. This year, the conversation was dominated almost exclusively by 5G, as carriers look to introduce next-generation, superfast mobile networks.

The conference was heavily sponsored by Huawei, as the firm made its big pitch about its 5G capabilities.

But looming in the background were the months of negative press about whether Huawei's equipment might provide a backdoor that would allow the Chinese government to spy on people.

The firm's chief financial officer, Meng Wanzhou, is awaiting Canada's decision on whether to extradite her to the US, after alleged sanctions violations. And the company was also indicted by the US for alleged theft of trade secrets.

Rotating chairman Guo Ping took to the stage on Tuesday morning to talk up Huawei's 5G business to a cavernous auditorium filled with telecoms executives and journalists.

His speech took an unexpected turn about halfway through, when he fired a shot at the US government, turning claims that Huawei spies on behalf of China back on America.

Huawei's rotating chairman, Guo Ping, told an audience at MWC 2019 that the company didn't spy on its customers.
Shona Ghosh/Business Insider

"PRISM, PRISM on the wall, who is the most trustworthy of them all?" Guo said onstage, in reference to the PRISM surveillance system used by America's intelligence agency. "Huawei has a strong track record in security in three decades. Three billion people around the world. The US security accusations of our 5G has no evidence, nothing."

Behind him, a slide appeared in his presentation with the statement: "Huawei has not and will never plant backdoors." There was even some muted laughter from the audience.

Elsewhere around the conference centre, Huawei's logo adorned lanyards of thousands of attendees, while ads for its Mate X foldable phone greeted visitors as they entered the building.

Visitors walk next to Huawei's booth at the Mobile World Congress 2019 in Barcelona.

Just five hours after Guo's swipe, US government officials held a small press conference to make their position on Huawei clear. Up until that point, there had been no visible sign of the US government delegation, which had quietly turned up to Mobile World Congress to lobby its European allies not to use Huawei's equipment in their networks.

Reading from a printed statement, with no microphone or slides, top US cyber official Robert Strayer said: "The United States is asking other governments and the private sector to consider the threat posed by Huawei and other Chinese information technology companies."

Read more: Huawei said it built a folding phone similar to Samsung's Galaxy Fold — but killed it because it was so bad

When pressed by reporters, Strayer refused to say whether the US had proof that Huawei might have built backdoors into its telecommunications equipment.

And asked if the US might simply be worried about leaning too heavily on a foreign tech company, Strayer said: "Really I think the question is this: Do you want to have a system that is potentially compromised by the Chinese government or would you rather go with a more secure alternative?"

The US will be hoping that Strayer's comments, and its behind-the-scenes lobbying, will land more effectively with its allies than Huawei's attack on the big stage at MWC.

Former FBI official: The US is worried about China's rising military and economic power

Chinese President Xi Jinping.

Security experts with ties to the US government said America's lobbying efforts are about more than just protecting the West's nascent 5G networks from potential Chinese spies.

Joseph Campbell, a director in the global investigations and compliance practice at Navigant Consulting and formerly assistant director of criminal investigations at the FBI, says the Huawei fight is a proxy for bigger US fears about China's ambition.

"We don't know as private citizens all the intelligence information the US and its allies have gathered relative to China and Huawei," Campbell told Business Insider during a phone interview. "But... there's no doubt China is a significant threat for the United States, they are committed to becoming a lead economic and military power in the world."

"Data is power," he added. "Eventually Huawei could be in the position where it could interfere with data traffic, sharing usage, or even engaging in proactive activity to extract that information and use it for their own benefit."

Ang Cui, CEO of security firm Red Balloon, added that whoever dominated 5G would potentially have access to billions of additional connected devices expected to be enabled by the faster network. According to Ericsson, there will be a total of 29 billion connected devices by 2022.

"Whoever gets to dominate 5G infrastructure will become the owner of the next generation of the world's telecoms infrastructure," he said. "If you look back 30 years, [the US Defense Department] funded... what became the internet. US companies provided a lot of the technology and infrastructure."

Cui added: "The internet turned out not to be perfect, but the world doesn't suspect that the US runs a pervasive surveillance mechanism."

Still, Huawei did play on fears that the US does carry out wide-ranging surveillance with its reference to the PRISM system, and the newly introduced Cloud Act, which would force Amazon, Microsoft, and other tech providers to hand over data.

Campbell, the former FBI staffer, said it came down to differences in the legal approach by the two countries.

Actually obtaining data under a law like the Cloud Act, he said, involves many layers of authorisation and back-and-forth between the FBI, the Attorney General, and a further judicial process.

And such laws in the US are intended to help criminal investigations and national security investigations, Campbell said. He added that China's approach to data-gathering was more self-serving.

"Their usage of laws is much more towards benefiting the state in general and the ability to drive its own economic and military capabilities," he said.

Huawei's business is much bigger in Europe, the Middle East, and African than it is in the US

It would be a major victory if the US does manage to persuade more European governments to ban Huawei, simply because its business in EMEA is so much bigger than in the US.

The Americas account for only a small portion of Huawei's business, according to its most recently available financial report from 2017. Just 6.5% of its $90 billion in revenue came from the Americas that year, while Europe accounted for more than a quarter. Its strongest-performing division was its carrier business — the arm that would be providing 5G equipment to telecommunications providers.

Here's how much revenue Huawei makes across its different businesses, and what percentage comes from different regions. The figures are in Chinese yuan:

Huawei makes most of its money from its carrier business, and it doesn't hugely rely on the US market.

One problem for US lobbying efforts is that Huawei is already deeply embedded in European telecoms networks, and is already helping to test 5G networks in the UK.

"They are a trusted vendor, a trusted provider," one senior UK telecoms executive involved in 5G testing told Business Insider at Mobile World Congress. The person added that operators would come to their own decisions about Huawei, but would listen to advice issued by UK intelligence.

Detecting whether there are vulnerabilities in a piece of equipment or the software that runs on it is difficult, Cui said. "If someone puts in a backdoor, they're going to hide it. So this is not going to be on a spec sheet, it's not going to be an obvious thing they give access to."

He likened a backdoor to the hidden blocks in a Super Mario game which remain invisible to the player.

"You jump, you don't see anything, but something happens," Cui said. "It's a cheat in the system that no one knows about, and that changes the entire security system. It could be in the hardware or the firmware, and perhaps not even a full bug, but a small vulnerability somewhere in the code that only you know about."

UK intelligence is due to publish a report on Huawei in the coming weeks, and early indications suggest that the authorities will conclude they can mitigate the risk from using the Chinese firm's kit.

For the US though, the risk is just too high.

"Certainly Germany, the UK, have independent abilities to assess the threat posed by Huawei, and determine if they can put in the right mitigations," said former FBI exec Campbell. "Obviously the US doesn't feel mitigation techniques would be effective... they would prefer to eliminate that threat."

YouTube TV reportedly has more than 1 million paying subscribers - Business Insider

Posted: 01 Mar 2019 05:07 PM PST

YouTube TV now has more than 1 million subscribers, Bloomberg reported Friday, citing people familiar with the matter.

The streaming media giant has never officially reported its subscriber numbers. The new figure from Bloomberg is the first update on the service's subscribers since last July, when The Information reported YouTube TV had nearly 800,000 paying users.

News of the service reaching the 1-million-subscriber milepost comes just a few weeks after the Super Bowl, which likely boosted its numbers. Popular sporting events such as the Super Bowl and the World Series tend to lure in new users, many of whom take advantage of YouTube TV's 30-day free trial, Christian Oestlien, who helped launched the live TV streaming service in 2017, told Business Insider last month. Many decide to stick around after that, though, he said.

"Sports helps bring people in and then programming [such as 'The Big Bang Theory,' 'The Voice,' and other shows] is stuff that people still care about and love to watch every day," said Oestlien, a director of product management at YouTube.

Following an expansion into new markets in January, YouTube TV is now available to 98% of people living in the US. The cable alternative costs $40 per month and comes with access to broadcast networks ABC, CBS, FOX, and NBC and to popular cable networks, including TNT, TBS, CNN, and ESPN.

Hulu is also gaining ground

YouTube TV isn't the only online pay TV alternative to have topped 1 milion subscribers. Hulu's live streaming service, which also launched in 2017, has attracted more than 2 million paying users, Bloomberg reported.

Read more: Hulu and YouTube are on track to win the battle for streaming live TV, and it's terrible news for AT&T

Even if YouTube TV trails Hulu, it stands out from YouTube's other paid offerings for doing as well as it has. The Google-owned company, which has long dominated the ad-supported streaming video market, has repeatedly flailed at trying to create successful paid services.

In November, the company appeared to sign the death warrant for YouTube Premium, its short-lived attempt to create a kind of subscription-based competitor to Netflix and Amazon Prime. YouTube announced then that starting next year, consumers would be able to watch the original shows it developed for the service for free with advertisements instead of having to pay a subscription to view them.

YouTube Premium is a rebranded version of YouTube Red, an earlier subscription offering from the company, but with a confusing grab bag of services. The offering, which costs $11.99 per month, includes everything from the company's Spotify-like streaming music service to an ad-free video service for kids.

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The best retinol eye cream you can buy - Business Insider

Posted: 01 Mar 2019 10:01 AM PST

Why you'll love it: The Kiehl's Youth Dose Eye Treatment gives you an instantaneous lift along with long term anti-aging results.

Retinol tends to be a bit of a slow-burn, as far as results go. You can use it for weeks, months, or even years without necessarily seeing the effects, especially if you start before you have many wrinkles a preventative measure. If you want a quick boost, try Kiehl's Youth Dose Eye Treatment.

This product has a slight, universal tint to it that brightens the under eye and smooths the appearance of fine lines, wrinkles, and dark circles. It doesn't have coverage like a concealer, just a natural luminosity that may make you look youthful and awake. For this reason, it's a great option to use underneath makeup — but make sure you follow up with SPF if it's daytime.

But the Kiehl's eye cream will also give you powerful results over time, thanks to pro retinol, red grape seed extract, and vitamin C. For a relatively new launch — it came out in August 2018 — this product has already garnered plenty of great reviews from the likes of Health, Allure, and Refinery29.

One Nordstrom shopper writes, "[This eye cream] has not been irritating as some anti aging products are. I can absolutely tell a difference in the overall hydration under my eyes. I also appreciate the slight tint so I can wear just this on days where I want to have more minimal makeup."

Pros: Instantly minimizes dark circles and fine lines, tint, works under makeup

Cons: Only one shade

Buy Kiehl's Youth Dose Eye Treatment at Nordstrom for $39

Oscar Health full year 2018 financial results from Obamacare - Business Insider

Posted: 01 Mar 2019 02:20 PM PST

Oscar Health has officially cracked $1 billion in premium revenue.

The health insurance startup mainly sells insurance on the individual exchanges set up by the Affordable Care Act, and took in $1.2 billion in gross premium revenue in 2018. Oscar's financial losses narrowed to $57 million, from $131 million in 2017, according to state financial filings.

Yet Oscar is facing slow growth, a big problem for a startup valued at $3.2 billion. The company nearly doubled its footprint for 2019, expanding into six new markets. Membership, though, increased by just 18,000 between 2018 and 2019, to a total of 257,000 people. That's thanks in part to tough competition in some of the company's new markets: Oscar signed up just 2,000 people in Arizona and 1,000 in Michigan in the individual market.

Samantha Lee/Business Insider

Prepping for the Medicare Advantage market

The financials and enrollment figures make it clear why Oscar is expanding its reach into a lucrative new market: Medicare Advantage. The Affordable Care Act's exchanges have been challenging for health insurers, with a number leaving the business altogether. In the ACA, which is often called Obamacare, enrollees tend to buy cheaper plans, making it difficult for companies like Oscar to offer more expensive options.

In 2020, Oscar will start offering private health-insurance plans to seniors, which are known as Medicare Advantage plans. The company hasn't yet said where it will sell those plans.

Read more: We got a look at the slide deck that buzzy startup Devoted Health used to hit a $1.8 billion valuation before it signed up any customers

It's an area startups and big insurers alike have been flocking to. For instance, Devoted Health launched its first plans in 2019 in Florida after raising more than $300 million from investors. Clover Health, a startup founded in 2014, now offers Medicare Advantage plans in seven states. The startups are competing with big, entrenched insurers like Humana, UnitedHealth Group, and CVS Health.

Oscar in August 2018 raised $375 million from Google's parent company Alphabet, and said it would use the funds to bring its tech-backed health insurance plans to more people, including in Medicare Advantage. In total, the company has now raised more than $1 billion.

Oscar's new chief financial officer, Sid Sankaran, said expanding into Medicare Advantage will be a focus of Oscar's energy over 2020 and 2021.

"We know that that is a space with a lot of players, he said. "We're thinking about how to scale and build that business."

In 2018, Oscar offered health-insurance plans on the Obamacare marketplaces in New York, New Jersey, California, Ohio, Texas, and Tennessee. It also sells plans for small employers. For this year, the company expanded into six new markets across three states: Arizona, Michigan, and Florida.

The health insurer's 2018 financials show its operations are improving. The company said it has managed to get medical costs under control, spending about 80.5% of the premium revenue it takes in from its members on medical care, down from about 95% the year before. That resulted in a net underwriting profit of $141 million in 2018, up from $10 million in 2017, Oscar told Business Insider.

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Those figures don't include spending on investment the company is making in hiring new people or building out its technology, nor its marketing costs to get the word out about the plans.

Oscar's financial results are affected by a reinsurance deal that the company entered into with the massive French insurer Axa. A portion of the premiums that Oscar collects are sent to Axa, and in return Axa agrees to share a portion of Oscar's profits or losses.

When factoring in the money that was sent to Axa, Oscar took in about $725 million in premiums across its states in 2018, according the company's filings.

In February, Oscar hired Sankaran, a former executive at the insurer American International Group, as its chief financial officer. Sankaran most recently served as the global insurance giant's CFO and was chief risk officer as the company recovered from the financial crisis, when it was bailed out by the US government.

"I was raised in captivity in insurance and financial services," Sankaran told Business Insider he likes to joke.

Sankaran officially starts March 1, but he's been hanging out at the offices in Soho for the past month after dropping his kids off at school to get a feel for the place. He said what's stood out to him about Oscar is the company's focus on tech and making health insurance and medical care easier for members to access, particularly through programs like telemedicine.

Sankaran has a saying: "In insurance, you can trade off three things: profitability, growth, risk." His goal at Oscar is to balance those three things to create a long term company. And given his experience at a larger company like AIG, his plan is to use his expertise to help scale Oscar.

Tim Cook says conservative Apple employees who feel shunned should 'come talk to me' - Business Insider

Posted: 01 Mar 2019 01:49 PM PST

CUPERTINO, California — Apple welcomes employees with "all" political viewpoints, CEO Tim Cook said Friday, adding that employees that felt ostracized because of their political views should talk to him.

Cook's comments came in response to a question at the company's annual shareholder meeting at its headquarters here. The questioner said she had a friend who worked at the company who doesn't "share the left-wing view" and suggested that the friend felt uncomfortable or even hated because of her views. She asked Cook how he would advise her friend.

One of Apple's most deeply held values is its openness to people of all different sorts, Cook said. It's open to people of different ethnicities, religions, sexual orientations, and political beliefs, he said.

"I would encourage them to come talk to me if they have an issue," Cook told the questioner. Adding that the person could also speak with Deirdre O'Brien, Apple's human resources head, he continued, "I would really encourage them to say something."

Silicon Valley companies have drawn increasing fire recently for their progressive political stances, the liberal affiliations of many of their workers, and for allegedly discriminating against conservative employees and points of view. The criticism has particularly hit Facebook and Google, but Apple hasn't been immune to it.

Prior to the question about the conservative worker, Apple shareholders voted on a proposal that would have urged the company to disclose to shareholders the "ideology" of each of its director nominees. In his statement advocating the proposal, Justin Danhof, an attorney at the National Center for Public Policy Research, which submitted it, made clear that it was an effort to ensure that conservative political viewpoints were represented on Apple's board.

"When the company takes overtly political, legal, and policy positions, it would benefit to have voices from both sides of the aisle in the room," Danhof said. "At this company, the consideration of conservative viewpoints appears to be discouraged if not altogether forbidden."

The proposal sparked a lengthy debate among investors about the wisdom of the proposal, the company's frequently progressive policy stances, and its openness to conservative people and points of view. Although supporters of the proposal were well represented in the audience, investors as a whole overwhelmingly voted against it. According to a preliminary tally released by Apple, the measure secured just 1.7% of shareholder votes.

In his comments later, Cook argued against the notion that Apple should query potential employees or anyone affiliated with the company about their political beliefs. As a gay man from the South, he learned not to ask people their thoughts on homosexuality, because if he had done that, "you don't have a lot of friends," he said.

"I don't check people at the door as to who they are and what they believe," he said. "I care about skills and capabilities and contributions."

Apple focuses on promoting certain policies, not on partisan politics, Cook said. It supports pro-environment and pro-immigration policies. It back diversity and privacy. But it also believes in capitalism, he said.

Like most of the top Silicon Valley tech companies however, Apple has a lot of room for improvement when it comes to workforce diversity. Cook said that more than half of the company's new hires last year were women or underrepresented minorities, but he did not say what portion of those were hired to work in Apple's retail stores, which is where a disproportionate number of its women and minority employees work.

To promote its favored policies, Apple works with people from both political parties in the US. Sometimes the policies it favors are supported by one party, sometimes its the other. Sometimes it find common ground for its preferred policies on both sides of the aisle; sometimes both sides are opposed, he said.

"We don't really look at the politics of it," he said. "We think about the policy of it."

What's more, he said, Apple doesn't have a corporate political action committee and doesn't donate to political campaigns.

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