How Temu Keeps Prices Cheap - DTNSB 4958
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Guaranteed to fit every time. eBay. Things people love. Oh, hi everybody. This is the Daily Tech News for Tuesday, February 18th, 2025. We missed you on Monday. We tell you what you need to know. Follow up on the context of those stories and help each other understand.

Today, Ron Richards and Tim Stevens tell us about the video gamification of pinball in part two of Tom's chat with them and a bit of feedback from you. I'm Tom Merritt. I'm Jen Cutter. Let's start this time with what you need to know with The Big Story. The Big Story

Henri Isaac, a scientist at Paris Dauphin University, has an article in The Conversation about how Timu keeps its prices down. If you don't know Timu, it's like really cheap shopping. Timu, Timu, Timu.

They had a big Super Bowl ad. Everybody talks about how you buy things on Timu. They're like less than a dollar. Maybe they break in two weeks, but who cares? They'd only cost you 80 cents. Now, some of you may have learned a little more about Timu and Sheehan recently when the U.S. temporarily stopped giving customs exemptions to packages with a value less than $800. The EU has a similar exemption for goods less than 150 euros.

That is one of the way Timu, Sheehan, AliExpress and others keep their prices down. They ship cheap things as individual packages and then they don't need to be examined by various countries customs enforcement. But that is not the only way.

Timu's parent company, Pinduoduo, has offered low prices through Pinhaohou in mainland China for years. And Timu is really the international edition of Pinhaohou.

It started by using WeChat's group buying model to make bulk orders of fresh fruit. I think I remember hearing this on an Economist podcast. They just got a bunch of people together on WeChat to agree to buy, you know, like a pound of oranges each. And then they would make one huge order for oranges and get them to people in a lot of times in rural areas where they didn't have good supplies of fresh fruit through the local markets.

The platform got a good price on the bulk order and then passed the savings on to the individuals in the group. Everybody wins. It no longer works that simply, though. That's how it started. But the principle is kind of the same. It still makes bulk orders for things that it knows it can sell fast. And it finds this out by driving sales through social media trends.

In fact, Timu really doesn't do any ordering at all. It creates the demand. It identifies the demand and it assists with the logistics. But the manufacturers actually do the rest.

Now, domestically, Pinduoduo uses a reverse auction with suppliers. So let's say they identify a demand for teacups. The manufacturer with the lowest bid for teacups will send its stock to a Pinduoduo warehouse, and the manufacturer pays the storage cost.

The manufacturer agrees to take back any unsold items and Pinduoduo doesn't pay until the quarter is up based on what is sold. So it's essentially a big consignment model. And that works in China because there are so many low cost manufacturers. You can get a nice bidding war and the manufacturers are like, we'll take it versus nothing.

Now, for Timu, the process isn't managed as fully end-to-end as that. They don't have warehouses for the international version. Merchants will ship products by ocean freight into a warehouse overseas for local distribution, and the manufacturer has to pay for that warehouse space. So sometimes...

These warehouses are Chinese families overseas who do cheap labeling and reshipping from their garage. But the manufacturer is paying either way. And that's why you get a lot of families doing this, because it's a affordable way for the manufacturer to do it. So you might ask, why do manufacturers agree to do that?

Many of these manufacturers would never find big enough markets otherwise, right? They can make teacups all day long, but if they got nobody to sell them to, they're not going to make any money making teacups. And unlike Amazon, Timu doesn't take a cut of sales.

Let that sink in. There's no commission. Timu only charges manufacturers for the marketing and the promotion. So Timu will plow ads onto social media. It'll use gamification in the app to spur you to buy stuff that maybe you wouldn't have bought otherwise. And the platform makes 38% of its revenue from logistics services and 62% from that marketing. So if you add those up, that's 100%. It doesn't take commissions.

One of the keys to Timu winning a market was to focus on underserved customers in smaller cities and rural areas where it didn't have to compete for wealthier urban customers. That goes back to the fruit days, right? It still does that. Timu and Pinduoduo find those shoppers and then connect them with the makers of the products and

And that's valuable enough on its own to make everybody a profit. Jen, I know you were looking at this earlier and saying that you had no idea what went into making the 80-cent teacup through Timo possible. Yeah, what a fascinating process. And it does feel something that would kind of only work there, which is just ingenious to get that going. And of course, gamification. Gamification is everywhere. Yeah.

Yeah. The way I think of it based on this article is there's two elements of it. One is you have to have a concentration of lots of manufacturers. That gives you that economy of scale where you can get them to compete. They can make specialty items on a turn on a dime because there's so much competition among manufacturers. But also the technology part of it, being able to analyze trends, shave pennies off of logistics, right?

and make that so valuable that a manufacturer would be like, well, we can't invent this process on our own, but Timu does it for us. That's great.

Logistics. Oh, my gosh. Logistics are crazy. Like way back in a, you know, take your kid to work day. I went with like a family friend who did logistics for a major Canadian retailer. And that was only Canada and only the provinces. And my head hurt at the end of the day. I have so much respect for it. And especially this global economy. Like, oh, my goodness. I wonder if they're going to start outsourcing that outside of their own thing since they've got it so nailed down. Yeah.

Shout out to the big gyms of the world who work in that logistics business. It is not a simple business with all the rules and regulations, but also just the difficulty of getting something from a factory in Shenzhen onto a boat and then across the Atlantic and then out of a port and then into a Chinese family's living room and then to your house. It's crazy.

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Right now, Microsoft logs you out of its accounts after a certain amount of time. A support page published by Microsoft indicated that starting this month, Microsoft was changing that to leave you signed into its services until you choose to sign out.

This would have meant that you had to remember to sign out when you used a device that didn't belong to you or use private browsing. However, Microsoft told The Verge that the information was, quote, mistakenly published by a Microsoft product team and there will be no changes to the sign-in experience in February.

Yeah, I didn't remember that Microsoft did this. Like, they signed you out. In fact, sometimes it's kind of annoying when you find out you've been signed out. But yeah, it was a bit controversial when it was discovered. And in true Microsoft fashion, it has walked it back immediately. Yeah.

Huawei has globally launched the Mate XT. That's that tri-fold phone. There was an event Tuesday in Kuala Lumpur, Malaysia. The Mate XT has three mini panels and two hinges. So it really only folds twice, but it folds out into three different screens or can be folded in three different ways. Huawei says it is the thinnest foldable phone, 3.6 millimeters, has a 10.2-inch screen when fully unfolded,

Starts at 3,499 euros. Launch dates will come for individual countries. They did not announce those yet. It has been available in China since September 20th, if you were going to try to get one that way. Huawei also launched the MatePad Pro tablet and some open-ear earbuds.

Have you ever used a foldable phone? They kind of terrify me. I have a pixel fold as a matter of fact. And I have used it. I've gotten it. I've had it for more than a year now. It doesn't even feel like it's an issue.

It just feels like any old flip phone, like a Razr or something like that. Like, I don't even think about it anymore. So it's really come a long way from those launch units. Yeah, yeah. The ones where like one piece of dust broke the screen. Yeah, these things are pretty reliable, pretty durable now. Evan Blass posted on X that Lenovo is close to releasing a laptop with a foldable screen called the ThinkBook Flip.

Blast believes it will be announced during Mobile World Congress in Barcelona, which begins on March 3rd. The screen folds backward to create a tablet-like form when the laptop is closed. Lenovo already announced a laptop with a rollable screen called the ThinkBook Plus Gen 6 coming in June. That's what struck me about this story. It was like, wait, they already announced a rollable. They haven't announced a foldable yet? But this does look interesting. I like that idea of, oh, it can be a tablet when closed.

And then unfold to be a laptop or even be a laptop with a really big portrait style screen. That's not new for them. I have an older, like this was back in like the IBM Lenovo days where it is a ThinkPad, but I can swivel the screen around and flip it down to be a tablet. So I was like, huh, okay.

I don't blame them for passing things off as new because that's what a lot of people are doing now. But obviously the tech has come along. I mean, it is new in the fact that it's a foldable screen instead of the swivel, right? Yes. But the rest of the form factor wouldn't be new. And this is a leak. I assume we'll see it at Mobile World Congress. Evan Blass has a good track record on this. But yeah, well, maybe they won't try to pass it off as new. But just to say like, hey, we took our wonderful old form factor and made it foldable.

The Financial Times reports on the tactics China is using to deter Apple from continuing to move production out of the country, especially to India. One method is to make it more difficult for engineers in China to travel abroad.

So that might keep a company like Foxconn, which makes devices for Apple, from sending its own engineers from mainland China to train engineers at a new plant, perhaps in India or perhaps somewhere else. China is also reportedly using customs delays to slow down the flow of parts and equipment into India specifically and is considering strengthening export restrictions. Meanwhile, China's President Xi Jinping held a rare meeting with tech executives Monday, including Alibaba founder Jack Ma.

We used to hear from Ma all the time, but the last time we heard from him was 2020 when he was outspoken about government regulations related to his IPO. He then backed off of those criticisms and has been out of the public eye for around five years now.

It is a change in emphasis for the president of China who had been working to reduce the influence of tech companies to do this about face, probably in the face of increased competition on the world stage. Amongst the other folks attending this tech summit were DeepSeek founder Liang Wenfeng, Xiaomi's Lei Jun, robotics company Unitree's Wang Xingxing, and Huawei founder Ren Zhengfei, who all were pictured in various brutalities.

relationships to the president. And so there's a lot of Kremlin ology about Huawei's founder was the closest. Well, yeah, of course he was like Huawei's the poster child. Right. But where were the other people? And significantly, you did not see the founders of ByteDance and Baidu, who apparently did not attend.

Well, everyone's feeling slightly protectionist lately. It's kind of going around. Yeah. ByteDance not showing up makes sense because of the whole TikTok US thing. It might have been like, let's not show you just to make it clear that we don't want to emphasize that you have connections to the Chinese government right now. Right. I don't know why Baidu wasn't there. And it took a stock hit because of it.

First impressions are out for the upcoming OnePlus Watch 3, which arrives on February 25th for $330. It has a five-day battery life, a rotating crown, GPS, and runs Wear OS 5. CNET got four days of battery life, which it still found impressive, and overall liked the design and interface. The Verge found it doesn't push the boundaries, but it is a refined alternative to Samsung and Google.

Meta had a few announcements worth noting. Llamacon will take place on April 29th. And I hate to disappoint a few of you, but there will be no actual llamas there that I'm aware of. It is instead a gathering of open source AI developers who work with Meta's models. This is separate from MetaConnect, which is Meta's developers conference, which is not coming until September 17th.

Meta also announced it is going to build a 50,000 kilometer subsea cable that will connect the U.S., India, South Africa, Australia and more as it goes all the way around the world. It would become the longest underwater cable project in the world when completed.

A filing Meta made in the EU on February 14th said WhatsApp averaged 46.8 million EU monthly active users in the second half of 2024. That puts it above the threshold to qualify as a very large online platform under Europe's Digital Services Act. The European Commission must now rule on whether WhatsApp must comply with these stricter regulations on large platforms. That would mean risk assessments and mitigation strategies for harmful content.

Meta's head of global policy warned Europe at the Munich Security Conference last week that it will not hesitate to ask the U.S. government to step in if it feels it is being regulated unfairly in the EU.

This next one is like way at the top of tech meme today. And I usually pay close attention to what's at the top of tech meme, but I'm not sure why. XAI released a new flagship model called Grok 3 Monday. It's comparable to OpenAI's GPT-4.0. Grok 3 Reasoning in particular is one of the models that uses chain of thought reasoning like DeepSeek R1 and OpenAI O3 Mini. It does not share all the reasoning information.

in order to prevent distillation. That's when people like take the output of models to train another model.

Power is a feature in the Grok app called Deep Search, which can do research for users. That's similar to OpenAI and Google's models, which are both called Deep Research. So Grok did change it up a little bit by calling it Deep Search. Grok 3 is available to subscribers of X's Premium Plus tier, which also raised its price from $22 to $50 a month. Again, nice new model. Not sure it's setting the world on fire, but good new model. Yeah.

Yeah, comparisons will be definitely interesting because everyone's got different answers for stuff right now. And it is too bad. Like, I understand why they're not showing the steps, but it will be cool if someone reverse engineers that and figures it out.

Later this month, Nokia's 4G cell network in a box will launch on a mission to the south pole of the moon. The system will help prepare a communications network for U.S. Project Artemis, which aims to return people to the surface of the moon. Enough people that simple point-to-point communications may become unwieldy, so they really got to sort this out.

Nokia's network is hardened against radiation, extreme temperature, and vibrations it may experience during flight, takeoff, and landing. The network box will attach to the lunar lander and draw power from its solar panels. This test will be done in preparation for a more extensive 4G or 5G cell network that can cover a planned Artemis habitat.

Yeah, if you've got even like six people, point to point starts to become complicated. So this makes sense. I love the idea that literally, according to this MIT Technology Review article, you could take your 5G phone to the moon and it'll connect or would be able to connect anyway. And of course, my brain's like, oh, Artemis Habitat is going to be habitat on the moon. Yeah, I love moon stuff. Me too. Those are the essentials for today. Let's dive a little deeper into some ongoing stories and follow up.

In part two of our three-part series on pinball tech today, Tom talks to journalist Tim Stevens and Scorbic co-founder Ron Richards about how tech is taking some cues from video games these days. Let's talk about bringing pinball games into the present and even the future. I know there's a lot of what I might call video gamification of pinball, right? Pinball, I think in a lot of people's minds is

You stand there, you play the game, maybe you get a high score up on the LED screen and you're done, right? What are some of the things, Ron, that you're doing to bring that more into the Internet age? Well, yeah, and that was really what the whole kind of premise was, is that initially when myself and my co-founder, Jay Adelson, over at Scorebit,

were dreaming up, dreaming it up back in 2015, you know, I initially had the idea of like, you know, I'm really tired of writing down my high scores. Wouldn't it be cool if there was an app to keep track of it? And then, you know, Jay kind of pushed it one further and goes, yeah, that's fine. But, you know, anyway, you can make an app. Wouldn't it be cooler if we could, you know, put, build a device that went in the pinball machines to actually connect them. And then we can extract all other sorts of data that we can,

from there to see what's going on there. And that's really when we're like, oh God, that'd be so cool. And it took us a whole bunch of years, but we did it. We reverse engineered a bunch of machines. We understood how every machine from every era worked from the solid states all the way up into today and to figure out how we could extract that data. And once we did that, not only are you able to extract scores, which allow you to keep track of your own personal high scores, we plug into pinball tournament software to make sure that the score keeping is accurate and things like that. But then it said, oh, wait a minute.

We can do a lot more here in that we can create a layer of achievements on top of an old game. So you can have a game like Medieval Madness that came out in 1995. The code is finished. The company is out of business. The game is what it is. And anybody who's played pinball, a lot has probably played it, played it to the wizard mode. And then at that point, you think you're done with the machine. But wouldn't it be great if you could create...

targets and create quests and create games within the game by using that connection. And that's really what we're doing. And it's been great to see what we're doing at score, but validated by the largest current pimple manufacturer, Stern, who has a system called insider connected where they're basically doing that on games that are shipping today and

So all of their new games come, uh, come out connected. They built the, they built the game, the game rules and things like that. But then on top of that, they've created achievements and targets and quests and things like that to, to pursue. And so really what you've got is you've got this whole kind of whole world of giving a pinball machine, a new life, so to speak. Um,

The newer games, it's just like another thing, another feature. But for what really gets me excited is, you know, like, so Tim on Comet, you know, we can create a whole bunch of new goals that you can, you know, layer into while you're playing Comet. So you're not just going for the score you're going for. How many times do you, you know, do you hit that right ramp or how many times do you, you know, get that spinner or whatever it might be? Yeah.

Yeah, that's great because if you are only used to playing modern pinball machines and you're used to really complex modes and cycling from one to the next and quests and things within the game, which manufacturers have added over the past five or 10 years. But if you go back to the earlier machines, there's really none of that. It is basically three balls and you're out. Yeah.

There's not a lot of saving state even between from one ball to the next. And in a lot of games, even through the mid-80s, if you had two balls locked for a multiball and the second player comes in and triggers multiball, they get your multiball. So it wasn't even shared from one player to the next. But now we see machines like we have the new Dungeons & Dragons machine coming out from Sturm this year, which has persistent characters. So you can basically level up your character in the game as you go from one game to the next and unlock new features and that kind of thing.

It's really been an interesting evolution. If you do get to go to one of those shows like Ron mentioned, there are quite a few places out there that have collections of pinball machines that date back over different generations.

On the East Coast, for example, there's the Electromagnetic Museum in Rhode Island, or there's a place called Pastime Pinball in Manchester or Sanctum in Connecticut. I'm sure there's a ton on the West Coast as well. Silver Ball in Asbury Park in New Jersey. The Pacific Pinball Museum in Alameda actually is one of the best collections on the West Coast that people want to check out. Yeah, if you get to go to one of those, I highly recommend you pick a table from the 60s, then step up to the 70s and 80s and see the evolution as –

Yeah.

you know, a lot of modern gamers, they play a game like common thing. This is, this is kind of lame and boring. I want to go back to Godzilla. Well, exactly. And then another, another piece, at least what we're trying to do a score, but as we're trying to promote play. And so what we've added also is the ability of a concept of challenges or head to head play. So I could step up to a comment, get a great score and then challenge you, Tim saying, Hey, can you beat the score? And it becomes kind of a great way to take what was a, a single player game or a, a,

a multiplayer game only if you're all four of you are physically there into a head-to-head game with anybody in the world who has access to that same game. If you were to put score bit on comment, how does that work? So basically how it's real, real simple. We have a device called the score, but Ron,

which, you know, I did not name after myself. I just was trying to squirm it. Yeah. It reminds me of that idea of like the 1950s, like the magnetron, like that. Yeah. Anyway, but so we have a device called the score Tron, which is a, um, which is basically what we invented coming off of that idea that Jay and I had years ago, which was a, uh,

it's a single, uh, circuit board that goes into a, in pinball machine. And then we've, uh, developed a series of connectors for the different types of pinball machines. So for comment, there would be a specific type of connector, which is different than a more modern games connector, that sort of thing. And, um,

what happens is that as the data is flowing around inside the pinball machine, we kind of siphon it off and then send it up to our, uh, cloud platform that we built, um, in our infrastructure, um, where we absorb all that data. And then we send it back down to the mobile app, to the user in order to, to use it. Um, and so, you know, it, it takes maybe five minutes to install. Um,

You know, maybe you just got to, you know, plug it into power. There's a whole bunch. There's a whole bunch. As Tim, as you probably know, a whole bunch of sources of power in a pinball machine. You know, imagine like the inside of a computer or the motherboard. You got those white, those white power cables. You can siphon off those power cables. Some are more dangerous than others.

Exactly. Please be careful. We have very explicit instructions to show you what to do. And then you plug in a cable within the machine to our device, and that's what gets the data, and that's how it works. It's pretty simple. And for the more modern machines, we work with a lot of manufacturers, and they are able to bypass our device completely. We're working with them on the software level so that their code –

incorporates our SDK and sends the data up to our cloud service without a device even need only use internet connection. And now we get a quick report from Dan Campos in Mexico about how companies are diversifying in the face of possible tariffs. Several companies have been considering diversifying their manufacturing centers due to the potential impositions of tariffs by the Trump administration.

Samsung Electronics is considering moving their productions of dryers from its plants in Mexico to South Carolina, while LG Electronics is contemplating shifting refrigerator manufacturing to Tennessee. Meanwhile, Nissan CEO Makoto Uchida stated that the company might move its production out of Mexico if the 25% tariff on automotive imports is implemented.

Nissan currently exports 320,000 units to the United States, and the Samsung plant, located in Querétaro, which produces refrigerators, washing machines, and dryers with an annual output of 4 million units, allocates 20% of its production to meet demands in Mexico, while 80% is exported to the rest of the continent.

For more details about what's happening down the border, such as the upcoming exit of Telefónica from Argentina, Colombia and Mexico, check out the latest Noticias de Tecnología Express. Back to you, amigos. Thank you, Dan. Join in the conversation in our Discord, which you can join by linking your Patreon account. And to become a Patreon, you go to patreon.com slash DTNS.

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Ryan Reynolds here for Mint Mobile with a message for everyone paying big wireless way too much. Please, for the love of everything good in this world, stop. With Mint, you can get premium wireless for just $15 a month. Of course, if you enjoy overpaying, no judgments, but that's weird.

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We end every episode of DTNS with some shared wisdom. Today, James Brucker is helping us with some firsthand perspective on EV prices outside the U.S. Yeah, James writes in the February 11th DTNS briefing, we mentioned EV prices in other countries. He says, I'd like to offer a few examples of good quality, reasonably priced EVs here in Thailand.

So the BYD Dolphin standard model is 570,000 baht. That's about $16,900, nearly the same size and shape as a Honda Fit, maybe a bit longer than a Volkswagen Golf, 60 kilowatt hour battery, range of about 400 kilometers, says it's very popular not only in Thailand but Australia.

The Neta V version 2, N-E-T-A, standard model is 430,000 baht. That's about 12,800 bucks. It is a brand of Hosun New Energy, Hosun Motors of China. It's about 10 centimeters shorter, so not much shorter, and 500 kilometers lighter than the BYD Dolphin. 36 kilowatt hour LFP battery still gets you 320 kilometers of real world driving range.

He says, I like this car. It's a very basic car. Manual seat adjustment instead of electric motors. Real door key in addition to passive entrance system. Spacious interior without a lot of clutter. And then he points out the BYD Atto 3 ATTO. Standard model list for a

million ninety nine thousand baht that's thirty two thousand six hundred dollars so this one's on the more expensive end but looks similar to a Tesla Model Y in fact he says Jim says the Atto 3 looks better to him 480 kilometers real world range but the real world range he says is more like 400 to 420 but

Also very popular in Australia as well as Thailand. Jim says, sorry that the U.S. is stuck with a lot of expensive EVs. They don't need to be expensive as the above examples show. Thank you, Jim. I really love getting these on the ground reports from people. This is the thing that makes an email really stand out to me and want to share it with everybody is when someone's like, I have a piece of information maybe not everybody else in your audience has. So thank you, Jim, for that. Really appreciate it.

I know, like, I'm obviously more giving people the Canadian perspective, but especially, oh man, I love worldwide things. If anyone has any kind of, again, on the ground experience from their part of the world for anything we talk about here, we would love to hear it.

And thanks to Ron Richards, Tim Stevens, and Jim for contributing to today's show. Thank you for being along for Daily Tech News Show. It's made possible by our patrons, patreon.com slash DTNS. There's also DTNS Live. If you want to just hang out and chat with me, Sarah Lane, Roger Chang, and the gang, find that on YouTube and Twitch or dailytechnewsshow.com. Talk to you tomorrow. The DTNS family of podcasts.

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