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US manufacturing sector weakens on easing demand: survey

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US manufacturing activity contracts for a second straight month to its lowest level since the pandemic recovery began
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US manufacturing activity contracted for a second month in December, remaining at the lowest levels since May 2020 as new orders and production slipped, survey data showed Wednesday.

The world’s biggest economy has been squeezed by decades-high inflation, prompting the central bank to raise interest rates multiple times in an all-out campaign to ease demand and rein in cost increases.

While the domestic economy has largely held up, there are growing signs the Federal Reserve’s policy moves are rippling through sectors — adding to broader factors like slowing global activity.

The Institute for Supply Management’s (ISM) manufacturing index dipped 0.6 points to 48.4 percent in December, according to data released Wednesday.

This was similar to analyst expectations, and the reading remains firmly below the 50 percent threshold indicating growth.

The manufacturing Purchasing Managers Index also remains at its lowest level since the coronavirus pandemic recovery began, said ISM manufacturing survey chair Timothy Fiore in a statement.

The latest reading “offers more evidence that the days of heady growth are behind us,” said economist Oren Klachkin of Oxford Economics, adding that a pandemic-driven hot streak in manufacturing ends this year.

“Tighter financial conditions and a weaker labor market will cramp domestic goods demand, and the strong greenback and soft external demand will weigh down exports,” he added.

For now, ISM’s Fiore said with respondents “reporting softening new order rates over the previous seven months,” December’s index reflects that companies are slowing their output.

The new orders index remains weak, data showed, and the production index fell into contraction.

While supplier deliveries has improved, “companies continue to judiciously manage hiring,” Fiore added.

The employment index has picked up, but many firms confirm that they are still managing headcount through hiring freezes, employee attrition and layoffs, the report said.

“Customer demand continues to be depressed,” according to a survey respondent in the chemical products sector.

“While 2023 pipeline is looking very positive, current demand is significantly down,” the firm added.

Other participants reported skilled labor shortages and continued uncertainty in the economy.

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HTC boss welcomes Apple VR competition

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Taiwanese company HTC showed off its virtual reality headset at the Mobile World Congress (MWC), the telecom industry's biggest annual gathering, in Barcelona
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The boss of consumer electronics firm HTC on Monday welcomed Apple’s launch of its own a mixed reality headset, saying it will help the technology take off and become mainstream.

Apple began sales of Vision Pro, the company’s pricey virtual and augmented reality headset on February 2 in company’s biggest product launch since the original iPhone went on sale in 2007, putting it in competition with HTC.

Once a major player in the smartphone market, the Taiwanese company has staked its future on the merging of virtual and physical worlds with its HTC Vive line of headsets.

“I think it is good that Apple joined the competition. I mean Apple is a big brand so its good,” HTC chief executive and co-founder Cher Wang told AFP at the four-day Mobile World Congress, the telecom industry biggest annual show, which got underway in Barcelona on Monday.

“I think their price is very high but people started to see what you can do” with the technology, she added.

Asked when she thought virtual and augmented reality would become mainstream, Wang said: “It is not going to be too long. Definitely this is an area we believe will be the next internet.”

“I think when the price point gets lower and the technology, what we provide, improves further, things will get more ubiquitous,” she added.

Sales of virtual and augmented reality headsets have remained modest with critics complaining the devices cause eye strain, mess up the user’s hair and often require a clunky battery pack although they are getting lighter.

Most headsets are still mostly used for gaming but Wang said VR is increasingly being used in business settings to simulate work experiences, such as in healthcare such to train surgeons to become more proficient in the operating room as well as to help police learn how to de-escalate violent situations.

“We have been doing quite well in these areas. There are all sorts of applications,” she said.

HTC Vive Focus 3 headset are even being used on the International Space Station to help astronauts exercise and give them images of life on Earth during their long stays, Wang said.

“Astronauts talk about how they really miss greenery, the air, butterflies,” she said. “It calms down their anxiety because it is such an enclosed space for many, many months.”

The IDC consultancy estimates worldwide shipments of augmented reality and virtual reality headsets fell by around 8.3 percent in 2023 to 8.1 million units as rising inflation damped household consumption and business spending slowed.

But it expects shipments to grow by 46.4 percent this year, thanks in part to a “full year’s availability” of Apple’s Vision Pro “which is expected to bring lots of attention” and Meta’s Quest 3 which went on sale in October 2023.

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Smartphone makers bet on AI to boost sales

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Smartphone makers are promoting AI-infused devices at the Mobile World Congress
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Smartphone makers are packing their latest devices with flashy new artificial intelligence tools such as real-time voice translation and advanced photo editing in efforts to reignite consumer demand.

The trend was on display at the telecom industry’s biggest annual show, the four-day Mobile World Congress (MWC) which got underway Monday in Barcelona, where handset makers focused on the unique AI-powered features of their new flagship devices.

“Phones have just got boring, they are not as exciting as they used to be. The changes from one model to the next are not that great,” Ben Wood, chief of researcher at CCS Insight, told AFP.

While cameras, battery life and screens are “a little better” than before, companies need to add more “exciting” capabilities to their products to encourage people to upgrade their phones, Wood added.

“AI is a way to do that,” he said.

South Korean giant Samsung’s stand at the MWC prominently plugged its new premium AI-powered Galaxy S24 range, which allow users to make or receive a call in a language they don’t speak and then receive a live translation of the call both audibly and on the screen.

The feature can handle 13 languages, including French, Japanese and Hindi.

The new handsets — which were launched in January — also includes an AI-powered photo editing tool that allows you to easily move and erase objects and people from photos, and then generates content to fill the empty spaces that match its surroundings.

– ‘Changes everything’ –

Smaller device makers are also betting heavily on AI.

China’s Honor launched its new AI-infused flagship Magic 6 Pro smartphone in Barcelona which features a camera with motion-sensing capabilities that can detect and automatically photograph a fast actions such as sports at the best moment.

The device anticipates users’ needs to help them navigate apps more efficiently. For example it can recognise an address in a text message to automatically direct you to a map app.

“AI changes everything,” Honor CEO George Zhao said, adding it “can make fantastic things happen.”

Smartphone makers are now able to offer these sort of AI-powered features — often directly on the handset without resorting to more time-consuming and costly cloud computing — because the computing power of AI chips has increased significantly, analysts said.

“This potentially could be the start of a new era for smartphones,” said PP Foresight analyst Paolo Pescatore, adding the challenge for device makers will be to inform consumers about the new AI-powered tools.

“Articulating the merits of AI and the new features to users will be no easy feat. Not all users are necessarily aware of AI and they will be sceptical at first,” he told AFP.

– Falling sales –

The focus on AI comes amid sluggish smartphones sales as consumers are taking longer to upgrade their devices due to a lack of significant innovations, high inflation and economic uncertainties.

Global smartphone shipments declined 3.2 percent to 1.17 billion units in 2023, its second consecutive yearly decline, according to the IDC consultancy which predicts a marginal rebound this year.

AI-powered tools could also become a new revenue stream for device makers. Samsung has hinted that it may introduce more powerful AI features in the future for paid subscribers.

“The kind of value it is adding does not feel like it is enough to justify spending money on it. But Samsung have more of an eye on the future when AI goes to a whole different level of experience and becomes even more powerful that people then may be prepared to pay for it,” said Wood.

“Everybody wants to drive a services revenue. They all look at Apple, particularly in the mobile phone business, and they are so jealous of Apple being able to generate so much revenue from a services model,” he added.

Apple charges users of its iPhone for a variety of services such as extra cloud storage which has buoyed its profits.

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‘Fake love’ crypto scammers ensnare US victims

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Romance crypto scams have resulted in losses worth billions of dollars
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The “wine trader” wooed her online for months with his flirtatious smile and emoji-sprinkled texts. Then he went for the kill, defrauding the Philadelphia-based tech professional out of $450,000 in a cryptocurrency romance scam.

The con — which drained Shreya Datta, 37, of her savings and retirement funds while saddling her with debt -– involved the use of digitally altered deepfake videos and a script so sophisticated that she felt her “brain was hacked.”

The scam is commonly known as “pig butchering,” with victims likened to hogs fattened up by fraudsters with feigned love and affection before the proverbial slaughter — tricking them into a fake crypto investment.

The rapid growth of this fraud, thought to be run by crime syndicates in Southeast Asia, has resulted in losses worth billions of dollars in the United States, with victims saying there is little recourse to recover the money.

As it has for many victims, Datta’s experience began on a dating app — Hinge, in her case, where last January she met “Ancel,” who introduced himself as a French wine trader based in Philadelphia.

Datta said she was “charisma bombed” as the conversation quickly moved to WhatsApp. The gym buff with a dreamy smile deleted his Hinge profile to give her “focused attention,” a refreshing experience in the age of fleeting online relationships.

They exchanged selfies, flirty emoticons and did brief video calls in which the suave but “shy” man posed with a dog, later determined to be AI deepfakes.

They texted daily, with “Ancel” enquiring about little things like whether she had eaten, preying on Datta’s desire for a caring companion after her divorce.

Plans to physically meet kept getting pushed back, but Datta was not immediately suspicious. On Valentine’s Day last year, she received a bouquet from “Ancel” sent from a Philadelphia flower shop, with the card addressing her as “Honey Cream.”

When she sent him a selfie, posing with the flowers, he sprayed her with red kiss mark emojis, according to WhatsApp exchanges seen by AFP.

– ‘Traumatizing’ –

Between the mushy exchanges, “Ancel” sold her a dream.

“The dream was, ‘I’m retiring early, I’m well off. What is your plan?'” Datta, an immigrant from India, told AFP.

“He’s like, ‘I’ve made all this money investing. Do you really want to work till you’re 65?'”

He sent her a link to download a crypto trading app — which came with two-factor authentication to make it appear legitimate — and showed her what he called money-making trades through annotated screenshots seen by AFP.

Datta converted some of her savings into cryptocurrency on the US-based exchange Coinbase and the fake app initially allowed her to withdraw her early gains, boosting her confidence to invest more.

“As you make astronomical amounts of money trading, it messes with your normal risk perception,” Datta said in hindsight.

“You feel like, ‘Wow, I can do even more.'”

“Ancel” egged her on to invest more savings, take out loans and, despite her reluctance, liquidate her retirement fund.

By March, Datta’s nearly $450,000 investment had more than doubled on paper, but alarm bells went off when she tried to withdraw the amount and the app demanded a personal “tax.”

She turned to her London-based brother, who did a reverse image search of the pictures “Ancel” had sent her and found they were of a German fitness influencer.

“When I realized it was all a scam and all the money was gone, I had proper PTSD symptoms — I couldn’t sleep, couldn’t eat, couldn’t function,” Datta said.

“It was very traumatizing.”

– ‘Brainwashed’ –

Dating sites are rife with disinformation, with Facebook groups such as “Tinder swindler dating scams” and “Are we dating the same guy?” cropping up, and researchers calling out the growing use of AI-generated profile pictures.

But the use of romance as a hook to commit financial fraud is provoking new alarm.

The FBI told AFP that last year more than 40,000 people reported losses totaling well over $3.5 billion from cryptocurrency fraud, including pig butchering, to the agency’s Internet Crime Complaint Center.

But that estimate is likely low, as many victims tend not to report the crime out of shame.

“What’s horrific about this crime is it is meant to take every last penny from its victim,” Erin West, a California-based prosecutor, told AFP, adding that she is “deluged with victims every day.”

Self-harm among victims is a common concern, campaigners say, with most unable to recover their losses and some falling prey to another breed of scammers — fake recovery agents.

Datta, who is in therapy and has moved to a smaller apartment to manage her debt, said she had little hope of recovery after reporting the crime to the FBI and Secret Service.

Neither body responded to AFP’s queries about her particular case. Nor did Coinbase, which informed Datta in an email –- after she was conned — that she “may have sent cryptocurrency to a fraudulent investment platform.”

More agonizing, Datta said, was dealing with public judgments such as, “How could you be so stupid?”

“There should be no shame in becoming a victim of this absolutely masterful psychological scam,” West said.

“Victims are truly brainwashed.”

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