Feb 27, 2020

Axios Login

By Ina Fried
Ina Fried

Phew. I get so nervous sitting in your inbox. I sit there going, "Open me, open me, open me," while you scroll through all the coupons and other junk. Anyway, thanks.

Today's Login is 1,338 artisanal words, a breezy 5-minute read.

1 big thing: Huawei makes its case at RSA

Illustration: Aïda Amer/Axios

Two top Huawei U.S. executives are at the RSA Conference in San Francisco this week, hoping the crowd of security experts will be more receptive to its position than have been policymakers in Washington, where the Chinese giant has gotten an increasingly hostile reception.

The big picture: Huawei's business has been under all manner of attack from the U.S. government, from trade sanctions to criminal charges to efforts to persuade allies not to buy their gear.

What they're saying: Huawei argues that it is being unfairly targeted because it is a Chinese company.

  • "This country of origin issue is something that needs to be considered," says Huawei's Tim Danks. "It's one factor you should look at — it's not the only [one]."
  • The whole global supply chain is an issue, Huawei contends, noting that many of Huawei's non-Chinese competitors get their components and manufacturing from some of the same suppliers as Huawei.

Some of those suppliers are U.S. companies, Huawei notes.

  • "While it's impacted Huawei and nobody can say it hasn't impacted us to some degree … it's hurting Americans at this point more than it's hurting Huawei," Danks said.

Yes, but: U.S. officials and many in the security community have argued there are specific concerns with Huawei beyond just that they are a Chinese company. The company faces criminal charges in the U.S. over trade secret theft and violation of U.S. sanctions.

What's next: At this point, China and the U.S. are aggressively trying to decouple what have been very tightly interdependent tech economies. That's causing a lot of pain in the short term for both sides, and setting up a future that increasingly looks to bring more walled-off competition than global trade.

  • Europe also remains a wild card in the fight. Although historically closely allied with the U.S. on both trade and political matters, Europe has been largely resistant to U.S. calls to completely shut Huawei out as a supplier of equipment for next-generation 5G cellular networks.

Meanwhile: Danks said that thus far, the impact of the coronavirus on Huawei's business has been limited.

  • No plants have been shuttered, though certain groups are having people work from home where possible.
  • The company had hoped to increase 5G gear production this year, but at this point things are looking roughly flat, he said. "We don't see any major disruption to our supply chain," Danks said.

Go deeper: The new tech cold war between China and U.S.

2. Scoop: Facebook hire aims to infuse ethics into product design

Facebook has hired the World Economic Forum's former head of technology policy, Zvika Krieger, as its new director of responsible innovation, Axios has learned.

Why it matters: In the wake of its many scandals and amid growing regulatory scrutiny, Facebook is looking to make sure it addresses ethical issues earlier in the design and engineering processes.

Details: The responsible innovation team that Krieger joins is not new, but has been growing in both size and importance.

  • The team is responsible for developing methods, tools and training that help address potential issues while products are still in the design and development phase. 
  • While Krieger helps manage the company's responsible innovation team, ultimately the unit (and Krieger) report to Margaret Stewart, vice president of product design, who oversees the broader Responsible Innovation and Design Core team.
  • Krieger's background also includes time in both the State and Defense Department, as well as nearly a decade as a journalist, serving as a correspondent for The Atlantic and Newsweek, among other publications.

What they're saying: Facebook confirmed Krieger's hiring to Axios.

"In this role, Zvika will support our teams very early in the product development process of new technologies and throughout the product development lifecycle to anticipate and minimize potential harm and ensure we are building responsibly," a Facebook representative said in a statement. "He will also oversee the development of training and educational resources focused on best practices and implementation."

The big picture: The goal of the responsible innovation effort, as Facebook sees it, is to add a dose of healthy skepticism alongside the optimism it still believes is needed for innovation.

  • CTO Mike Shroepfer talked about the vision at last year's F8, saying that the company learned a lot of painful lessons and needed to do a better job of anticipating the potential for misuse and other harms invited by new products. "We have to take those considerations in mind with every new thing we build," he said.
3. Coronavirus impact hits Microsoft and other tech firms

Illustration: Aïda Amer/Axios

More companies are saying publicly that disruptions caused by the coronavirus are hitting their bottom lines. Microsoft warned Wednesday that its personal computing unit, which includes Windows and Surface, will likely miss revenue expectations due to a slower-than-expected return to production after the Lunar New Year.

The big picture: Although Apple was the first big tech company to warn of a financial impact from the outbreak, most industry watchers said they expected the impact to be felt broadly across the industry, which depends heavily on China for manufacturing.

In addition to Microsoft and Apple, chipmaker Nvidia has lowered its revenue expectations by $100 million for the current quarter.

Meanwhile: Global electronics manufacturing association IPC warned this week that the virus could cause suppliers to delay product shipments by roughly five weeks, based on a survey it conducted.

  • The group said that most suppliers are quoting a three-week delay, on average, but the manufacturers expect the real delays will average closer to five weeks.

Our thought bubble: It was always clear that not just Apple, but any company that gets manufacturing done in China, would be affected by the crisis. The question remained whether we'd see just a couple of weeks' impact or a sharper and longer-lasting disruption. We still don't know the answer, but a more serious scenario looks more possible as the virus continues to spread, not just in China but beyond.

Yes, but: A small number of tech companies, those who focus on tech that helps employees work remotely, are seeing an uptick in business. Videoconferencing supplier Zoom, for example, has reportedly added as many users this year as for all of 2019.

Also: IBM is announcing today that its IBM Clinical Development (ICD) system will be available without charge to national health agencies for clinical trials designed to speed development of drugs to combat the virus. The company first offered the software to Chinese health officials last week and will offer it to a broader network of national health agencies.

4. Report: Nokia exploring merger or asset sales

Photo: Nokia

Finnish network gear-maker Nokia has hired advisers to consider merger possibilities, asset sales or other strategic alternatives, according to a report Wednesday from Bloomberg.

Why it matters: Although Nokia has been struggling amid intense competition, it is one of only a handful of companies that make gear for 5G and other cellular networks, an area of increasing geopolitical focus and concern.

The big picture: The Trump administration, in particular, has been concerned with who builds and runs cellular networks, with Attorney General Bill Barr recently suggesting the U.S. find ways to take a stake in Nokia or Ericsson, which along with the aforementioned Huawei, dominate the telecommunications equipment business.

Context: Nokia is best known for its phones, although the company sold that business several years ago to Microsoft, which used the brand to sell its Windows phones before exiting that business. These days the company makes nearly all its money from selling network gear, along with its patent licensing and related efforts.

  • There are Android phones sold under the Nokia brand, but those are made by another company, HMD Global, under a licensing agreement.
5. Take Note

On Tap

  • RSA Conference continues in San Francisco.
  • It's Pokémon Day.
  • House Energy & Commerce's communications subcommittee holds a hearing at 10:30am on a passel of bills meant to bolster emergency communications.

Trading Places

  • Husani Oakley was promoted to CTO at marketing firm Deutsch.
  • Lending Club hired former Uber risk management executive Annie Armstrong to be its chief risk officer.

ICYMI

6. After you Login

Bet you didn't know today would be the day you learn a more efficient way to eat spaghetti.

Ina Fried