The following press releases and media reports about Chinese companies were carried on April 13-15. To view a full article or story, click on the link next to the headline.
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Fake Apple (Nasdaq: AAPL) Watches Flood China As Order-Taking Begins (Chinese article)
Sina (Nasdaq: SINA) Faces Suspension Over Lack Of Censorship (English article)
Fake Xiaomi Products Show Up In Germany, Copiers Being Copied (Chinese article)
Color TV Sales Up 13 Pct In Q1, Online-Connected TV Sales Double (Chinese article)
Cloud Service Provider UCloud Wins $100 Mln Series C Funding (English article)
Bottom line: New smart car initiatives from Tencent, LeTV and Baidu are all likely to struggle, with Baidu most likely to be first to drop out of this race to copy Internet giant Google.
LeTV car to debut at Shanghai Auto Show
China is quickly living up to its copycat reputation in the smart car space, with the latest word that Tencent (HKEx: 700) will enter the business in a tie-up with Taiwanese contract manufacturing giant Foxconn (HKEx: 2038). That pair are following Google (Nasdaq: GOOG) into the area, but they certainly aren’t the first Chinese to mimic the world’s largest Internet company.
That distinction would probably go to Chinese Internet search leader Baidu (Nasdaq: BIDU), which last year announced its own smart car initiative that was also back in the headlines this week as CEO Robin Li discussed the plan. Yet another similar initiative is also in the headlines today, as online video sensation LeTV (Shenzhen: 300104) discussed its own plans to show off its first smart car at the Shanghai auto show next month. Read Full Post…
Bottom line: The exclusion of foreign tech giants from criticism in a prominent annual consumer rights show is unrelated to the broader bias they are facing from Beijing, and they will continue to come under fire for the next 1-2 years.
Foreign techs not targeted on annual consumer rights show
Top China officials at global tech giants like Apple (Nasdaq: AAPL) and Amazon (Nasdaq: AMZN) are probably breathing a sigh of relief today, after their companies weren’t targeted for attacks in an annual consumer rights show that has become a famous for creating public relations nightmares for its victims. Instead, this year’s edition of the investigative Consumer Rights Day program on China Central Television (CCTV), broadcast on March 15 each year, singled out China’s 3 major telcos for criticism in the tech sector.
Multinationals weren’t completely spared from attack, with a number of car makers including Vokswagen (Frankfurt: VOWG), Nissan (Tokyo: 7201) and Daimler (Frankfurt: DAIGn) coming under fire for things like abusive after-sales practices. (English article) But for now at least, China’s central media seem to be backing away from new attacks on foreign tech companies, following recent criticism that Beijing has unfairly targeted such firms for everything from monopolistic practices to posing national security risks over the last year. Read Full Post…
Bottom line: Huawei’s and ZTE’s attempts to cultivate alternative brands with Honor and Nubia could both stand a relatively strong chance of success, though ZTE’s slower, more focused approach looks a bit more prudent.
Huawei holds Honor gala
Chinese smartphone makers Huawei and ZTE (HKEx: 763; Shenzhen; 000063) are trying to shed their stodgy images with newer brands targeting the kind of young trendsetters that have propelled start-up sensation Xiaomi onto the global stage. I got a chance to check out Huawei’s Honor brand phones and ZTE’s Nubia models last week at a major trade show in Spain, where both were trying to show that they can be just as hip and edgy as Xiaomi and Apple (Nasdaq: AAPL), the global leader in trendy, cutting edge smartphones. Read Full Post…
Bottom line: Apple Watch should debut strongly in China thanks to extensive partnerships with top Chinese retailers and app makers, giving the product instant relevance in the local market.
Apple Watch coming to China
Global gadget leader Apple (Nasdaq: AAPL) has been in the local tech headlines nonstop these last few days, wowing Chinese fans with a customized version of its new Apple Watch that will debut in China next month as part of its global launch. Pundits are mixed on how the watch will fare in China, but I expect it should do quite well thanks to inclusion of China’s hottest apps together with the company’s own strong reputation for well-designed, cutting-edge products.
In a separate but probably related Apple headline, media are also reporting a new smart air conditioner that the company has developed with local appliance leader Haier (HKEx: 1169) will also debut in April. Apple first announced this alliance last June as part of a broader smart device alliance under the name of HomeKit, and I suspect the Apple Watch will be usable with these new air conditioners. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 11. To view a full article or story, click on the link next to the headline.
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EU Accuses 3 Chinese Firms Of Non-Compliance With Solar Panel Agreement (Chinese article)
P&G (NYSE: PG) Fined 6 Mln Yuan Over Crest’s Teeth-Whitening Ads (English article)
Sina (Nasdaq: SINA) Reports Q4 2014 Financial Results (PRNewswire)
Haier Says First HomeKit Air Con With Apple (Nasdaq: AAPL) To Debut In April (Chinese article)
Apple (Nasdaq: AAPL) Watch Not Yet Setting Chinese Pulses Racing (English article)
Bottom line: China needs to realize that hardware from private western firms isn’t a risk to national security, and change its stance on new security-related requirements or risk another major trade war.
China’s growing insecurity
China’s growing insecurity is quickly shaping up as the next front line in a seemingly endless series of business disputes with the west, with word that Beijing is weighing a major new anti-terrorism law that would place huge new intrusive conditions on western technology firms. This story has been gaining rapid momentum over the last year, though until now many of the moves have been largely talk and one-time actions aimed at individual companies.
This new move, involving a proposed counter terrorism law, looks set to formally place many of the previous requirements on all foreign tech companies that sell their equipment to Chinese government agencies and other sensitive sectors like banks. Most of the companies being targeted come from the telecoms and related sectors, including networking equipment and the software that runs such equipment. Read Full Post…
Bottom line: ZTE’s decision to slim down its cellphone product line and focus on 4 key areas looks like a smart formula for success, but its big bet on voice could bring trouble if the technology fails to gain momentum.
ZTE slims down cellphone product line
After a painful but necessary restructuring, telecoms stalwart ZTE (HKEx: 763; Shenzhen: 000063) has largely withdrawn from the price wars that have plagued China’s smartphone market and is focusing on a strategy that emphasizes simplicity and higher-end products. The simplification strategy takes its cues from Apple (Nasdaq: AAPL), whose focus on just 2 or 3 new smartphones each year contrasts sharply with the many different models rolled out by its now-struggling chief rival Samsung (Seoul: 005930).
I quite like the simplification strategy for a number of reasons, even though consumers ultimately get less choice. Fewer models lowers product development costs, and allows a company to focus on a smaller number of phones with better designs. Such a strategy also creates stronger focus in consumers’ minds, which in turn helps to build a brand’s identity and the kind of customer loyalty that Apple has found. Read Full Post…
Bottom line: New online service platforms from Lenovo and Tencent could both do reasonably well, but will face challenges due to inexperience and product limitations, respectively.
Hisense, Tencent join hands in gaming smart TV
The “platform” concept is becoming a hot area in China’s overcharged Internet world, as companies look for newer and better ways to deliver their products and services over a growing number of devices and online channels. That rush is behind 2 of the latest big moves in the space, one from PC giant Lenovo (HKEx: 992) and the other from Internet titan Tencent (HKEx: 700).
Lenovo’s new foray into online products and services has been in the headlines for the last few months, but I’ve finally received some clarification on what exactly is behind its plans for an online platform with the new name of ShenQi. Meantime, Tencent is aiming to boost its leading position in the online gaming space through a new tie-up with household electronics giant Hisense (Shanghai: 600060). That tie-up looks set to produce a new gaming TV that could compete with more traditional consoles from Microsoft (Nasdaq: MSFT) and Sony (Tokyo: 6753). Read Full Post…
Bottom line: China could end 2015 with up to 450 million 4G subscribers, with telcos, 4G smartphone makers and mobile-focused Internet firms most likely to benefit from the massive migration.
China Telecom targets 100 mln 4G users
China Telecom (HKEx: 728; NYSE: CHA) has just become the final of China’s big 3 telcos to announce an extremely aggressive subscriber target for its new 4G service, confirming my earlier prediction that the nation could end 2015 with as many as 450 million 4G users if everyone meets their goals. If they do reach those targets, it would represent a remarkable transformation that would see around one-third of the nation’s mobile users switching to 4G service by year end. That could provide a bonanza for not only the telcos, but also the smartphone makers and Internet service providers that would also benefit from such a mass migration. Read Full Post…
Bottom line: Foreign technology suppliers will complain about new requirements for them to reveal source codes to Beijing for selling to Chinese banks, but will ultimately comply over fears of being shut out of the market.
Beijing to force new security rules on foreign tech
China’s sudden obsession with national security risks posed by foreign technology has taken yet another step forward, with word that Beijing is preparing to place yet more restrictions on foreign firms that supply networking products and services to Chinese banks. As a longtime industry watcher, I need to quickly add my own view that this particular move isn’t really discriminatory against firms like IBM (NYSE: IBM), Cisco (Nasdaq: CSCO) and Hewlett-Packard (NYSE: HPQ), which are likely to feel the biggest effects. Read Full Post…
