Bottom line: China is likely to wrap up its probe of Qualcomm by year end with a record fine of more than $1 billion and Qualcomm’s agreement to significantly change its licensing practices.
End draws near in Qualcomm probe
After filling the headlines for much of the summer, news on the flood of anti-trust investigations against major foreign firms suddenly came to a halt in the fall, giving the movement an almost seasonal feel. But the story looks set to pop back into the headlines soon, with signs that China’s National Development and Reform Commission (NDRC) is getting ready to levy a record fine for anti-competitive behavior against leading global cellphone chip maker Qualcomm (Nasdaq: QCOM). The signals are coming in new comments this week from Qualcomm’s top 2 executives, as well as from China’s Premier Li Keqiang. Read Full Post…
Bottom line: Google is likely to get Beijing’s permission to open a China version of its app store that could launch next year, paving the way for the roll-out of its smartphones in the market.
Google eyes China app store
A flurry of new reports are saying that global Internet giant Google (Nasdaq: GOOG) is planning to re-enter China by opening an app store there, in what would be a major strategic turnaround for the company. The real story of Google in China is quite complex, and to say it withdrew from the market in 2010 after a high profile spat with Beijing over censorship is quite an oversimplification. The more accurate story is one that’s seen Google diversify from its core desktop-based Internet services to an increasingly mobile portfolio that also includes a growing hardware component. That hardware element of its diversification could well be the focal point for a new China foray if the latest reports about Google’s plan to open a China app store are true. Read Full Post…
Chatter in the microblogging realm this past week was squarely focused on the Double Eleven shopping binge that saw e-commerce sites and smartphone makers log impressive sales on the date also known as Singles Day. But not everyone was boasting about huge sales, as executives from early e-commerce leader Dangdang (NYSE: DANG) and smartphone aspirant Smartisan were both uncharacteristically quiet on their microblogs, hinting at mediocre results on the shopping holiday.
The situation was just the opposite at e-commerce leader Alibaba (NYSE: BABA), which single-handedly commercialized a day that now generates more sales than even Black Friday or Cyber Monday in the US. That rapid success in such a short time was putting a strain on Alibaba’s Alipay electronic payments arm, which reportedly was restricted to processing payments from Alibaba’s own e-commerce sites. That meant other companies’ sites often couldn’t accept Alipay for payments on their sites during the day.
Bottom line: Apple’s new UnionPay tie-up is aimed at an eventual roll-out of its Apple Pay in China, while Baidu’s reported purchase of 99Pay marks a late but needed bid to boost its electronic payments capabilities.
Baidu eyes 99Bill
A couple of electronic payments stories reflect the rapid changes taking place in China’s banking market, where such payments are quickly making cash and even traditional credit cards obsolete. The higher-profile of the 2 deals has global gadget leader Apple (Nasdaq: AAPL) in a deal to accept payments for its China app store in partnership with leading electronic payments firm UnionPay. The second deal has leading Internet search Baidu (Nasdaq: BIDU) reportedly looking to boost its presence in the space with plans to buy existing player 99Bill for 2 billion yuan ($325 million). Read Full Post…
Bottom line: Alibaba will to focus on globalization to maintain momentum for its overvalued stock, but the shares are likely to pull back in the first half of next year due to overvaluation.
Alibaba sales jump on Double Eleven
This year’s November 11 shopping day belonged to e-commerce leader Alibaba (NYSE: BABA), even though I’m just slightly reluctant to write too much about this overhyped company. But I would be remiss if I didn’t mention some of the impressive numbers that Alibaba logged during this year’s Double-Eleven Singles Day event, led by its headline total sales of 57.1 billion yuan ($9.3 billion), up 63 percent from last year. The market didn’t seem too impressed with the growth, with Alibaba’s shares tumbling 3.9 percent in the US trading day after the end of the Chinese shopping binge. Read Full Post…
Lenovo’s (HKEx: 992) talkative CEO Yang Yuanqing was headline news in the microblogging realm over the past week, as the chatty executive formally launched his own account on Sina Weibo and proceeded to bombard the airwaves with a steady series of thoughts on a wide range of topics. Yang is already quite talkative in general, granting numerous media interviews and giving his thoughts on just about anything to anyone who will listen. So this kind of move isn’t really that surprising, and I expect we’ll hear lots from him in the months and years ahead.
Meantime, executives from the equally talkative Xiaomi were also full of microblogging chatter, touting their latest steal of a high-profile executive from another tech firm. In this case they were congratulating themselves for hiring Chen Tong, one of the earliest top employees at web stalwart Sina (Nasdaq: SINA). A final footnote in this week’s microblogging roundup also saw a teasing tweet from the missing CEO of online video site LeTV (Shenzhen: 300104), amid recent speculation that he may have left China to avoid criminal prosecution. Read Full Post…
Bottom line: Xiaomi’s new $1.5 billion funding is smaller than expected but gives it a strong valuation, as its small investments in Youku Tudou and iQiyi look like a smart way to quickly build up its product ecosystem.
Xiaomi gets rich valuation from new funding
There’s no shortage of news this week on hyperactive smartphone sensation Xiaomi, which is showing up at least 3 major headlines as it lands major new funding and explores potential tie-ups with China’s top 2 online video sites as well as faded smartphone pioneer BlackBerry (Toronto: BB). I almost have to catch my breath after writing all of that, as any one of these 3 stories would normally qualify as major news. The fact that all 3 are coming at the same time testifies to Xiaomi’s ability to do big deals, and its charismatic CEO Lei Jun may soon take the title for China’s most hyperactive tech leader from the current holder of that title, Alibaba (NYSE: BABA) founder Jack Ma. Read Full Post…
Bottom line: Lenovo’s latest results show its smartphone business continues to gain market share at the expense of profits, and it would be better advised to focus on building a strong brand to increase customer loyalty.
Lenovo smartphones post health sales gains
The latest results for leading PC maker Lenovo (HKEx: 992) don’t look too rosy, even as the company’s smartphone business continued to outperform the global market. There are quite a few pieces to this puzzle, which means the longer-term outlook for Lenovo’s smartphone business is still unclear as the overheated market undergoes a much-needed shakeout. The outcome of this story will be crucial to Lenovo’s future, since the global market for its core PC business is stagnating and even starting to contract as consumers gravitate to a newer generation of more mobile, specialized devices. Read Full Post…
Bottom line: Sony’s stalling fortunes in China’s smartphone market are the prelude to its eventual pullout, while Lenovo’s high-end push with the Motorola brand is likely to fall flat.
Sony smartphones in China setback
The latest news bits from the overheated Chinese cellphone market show an increasingly grim battle that’s claiming a growing number of victims at the lower and even middle ends. The latest bad news comes from struggling Japanese giant Sony (Tokyo: 6753), which has announced a significant pullback in the market as part of a broader global retrenchment. That could bode poorly for the equally struggling mid-range Motorola, as media report the brand will also target the mid- to upper-range of the Chinese smartphone market under its new ownership by PC giant Lenovo (HKEx: 992). Read Full Post…
Bottom line: Improved working environments are allowing Chinese tech firms to compete with multinationals for top talent, a template that state-run firms and other industries would be wise to follow.
Xiaomi attracts top exec from Spotify
Fast-rising smartphone maker Xiaomi made headlines last week when it lured away a top western executive from European online music streaming giant Spotify by offering him an attractive new job at its Beijing headquarters. The move marks the latest in a stream of high-profile defections by technology executives from comfortable jobs at major western firms to join up-and-coming Chinese names like Xiaomi and Baidu (Nasdaq: BIDU).
The movement reflects a maturation for China’s fast-growing high-tech sector, whose rapid rise and improving working conditions are making companies more competitive with big western names traditionally preferred by many highly-skilled workers. But the trend is still limited mostly to China’s private high-tech sector, and is largely absent in state-run firms and other industries. Read Full Post…
Bottom line: Hugo Barra’s remarks in defense of criticism that his employer Xiaomi copies Apple’s designs could mark the start of a longer-term war of words that could end in one or more lawsuits by Apple.
Barra defends Xiaomi’s copycat ways
A trans-Pacific war of words that began with critical remarks made by Apple’s (Nasdaq: AAPL) chief designer 2 weeks ago is continuing, with the foreign face of Chinese smartphone sensation Xiaomi giving fresh remarks on the copycat controversy in his company’s defense. The comments from Xiaomi’s international marketing head Hugo Barra are a bit lame in my view, and I really doubt he would have made such remarks last year when he was still a rising star at global Internet giant Google (Nasdaq: GOOG). Read Full Post…
