Bottom line: Apple’s surge in fourth-quarter China sales owes to its iPhone 6 release and growing relationship with China Mobile, though it could have trouble retaining its new crown as the nation’s top smartphone brand.
iPhone sales zoom in China
Skeptics who thought Apple (Nasdaq: AAPL) might be losing its luster in China might have to rethink that theory, following release of a new report that says the gadget giant grabbed the title of China’s biggest smartphone seller for the first time ever in the fourth quarter. That surprising result came as Apple released new quarterly earnings that showed China sales also surged 70 percent in its latest quarter, more than double the pace of its global revenue growth.
The surprising China surge comes as Apple works closely to address Beijing’s concerns about national security risks and the privacy of Chinese iPhone users, issues that reflect one of the continuing challenges it will face in the market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 28. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
Yahoo to Spin Off Alibaba (NYSE: BABA) Stake Tax-Free As Public Company (English article)
Taobao Publishes Merchant Letter Questioning Accuracy Of Govt Piracy Audit (Chinese article)
JD.com (Nasdaq: JD) Launches Major Imported Foods Initiative (GlobeNewswire)
Apple (Nasdaq: AAPL) Ranked As Top China Smartphone Seller In Q4 – Report (Chinese article)
Huawei Eyes $16 Bln In 2015 Smartphone Sales With High-End, Export Push (Chinese article)
Bottom line: Apple’s allowance of audits of its products by Chinese inspectors marks its latest compromise to address China’s national security concerns, and could mark the start of a more transparent approach on the issue by Beijing.
Apple allows product audits by Beijing
Global gadget leader Apple (Nasdaq: AAPL) is deepening its uneasy embrace with Beijing security officials, with word that it has agreed to allow security audits for products that it sells in China. This latest development comes less than a year after Apple took the unusual step of moving some of the user information it collects to China-based servers, which was also aimed at placating security-conscious regulators in Beijing.
Apple’s increasingly close cooperation with Beijing contrasts sharply with Google (Nasdaq: GOOG), whose popular Internet products and services are increasingly being locked out of China as it refuses to play by Beijing’s rules. Other global tech giants are also having to deal with the delicate situation, each taking a slightly different approach to try to protect user privacy while complying with Beijing’s insistence that they make their information available to security-conscious government regulators. Read Full Post…
Bottom line: Xiaomi’s new more upscale Mi Note phablet should get a strong reception and sell well, drawing on the company’s trendy name and growing base of loyal buyers.
Xiaomi goes upscale with new Mi Note
Smartphone sensation Xiaomi doesn’t seem content to only follow its role model Apple (Nasdaq: AAPL) anymore, and is also taking a page from stumbling sector leader Samsung (Seoul: 005930) with its latest model as it seeks a long-term direction for its products. Of course I’m being just a little facetious with my comparison to Apple, since the only thing Xiaomi shares with the US company is a cool and trendy image. Apple is firmly placed at the top end of the smartphone market, whereas Xiaomi began its life in the mid-range and has steadily moved downmarket since then. Read Full Post…
Bottom line: Lenovo’s branding relaunch set for April could see it retire some of its local brands obtained through recent acquisitions, helping to improve its sales through better consumer awareness.
Lenovo prepares for brand overhaul
PC maker Lenovo (HKEx: 992) is hinting at a major overhaul for its crowded stable of brands later this year, in a move to simplify the many names it has acquired in a buying spree over the last decade. This kind of move is long overdue for Lenovo, which launched its global buying binge a decade ago with a landmark deal to buy the PC business of IBM (NYSE: IBM). To this day Lenovo still counts the Think name it got from IBM as one of its leading PC brands, though it has also added a number of other major names over the last 10 years. Read Full Post…
Bottom line: Ctrip’s latest M&A reflects the growing scarcity of good acquisition targets for cash-rich Chinese Internet firms, which could pressure them to issue dividends or launch share buy-backs.
Ctrip makes UK acquisition
A new overseas purchase by leading online travel agent Ctrip (Nasdaq: CTRP) is drawing yawns from investors, reflecting the very real fact that Chinese Internet firms have far too much cash in their coffers and no place to spend it. This particular dilemma is one that most western companies would love to have, since excess cash can be used for not only M&A and organic expansion, but also to pay dividends or buy back shares. But in the case of Chinese companies, a big chunk of the cash has been raised in a series of massive bond and share offerings over the last 2 years, meaning it would be strange to turn around and return the money to investors through a dividend or share repurchase. Read Full Post…
Quiet has fallen over much of the blogosphere in this week before Christmas, though buzz was lingering around smartphone sensation Xiaomias it wrestled with a patent dispute that threatened to halt its nascent overseas expansion. Xiaomi chief Lei Jun was also full of congratulations for his company as it scored a court victory that partially lifted an order banning the sale of its phones in India. Meantime, Lei’s many friends and admirers were offering their congratulations as Xiaomi’s co-founder celebrated his 45th birthday.
Meantime, another courtroom battle saw the chief executive of online cosmetics seller Jumei International (Nasdaq: JMEI) reacting to a series of class action shareholder lawsuits filed against his firm last week. This kind of lawsuit is quite common, and usually comes anytime bad news causes a stock to suddenly drop. Still, the case was obviously an eye-opener for Jumei CEO Chen Ou, and serves as a good reminder of the many dangers that await Chinese tech firms that list overseas. Read Full Post…
Bottom line: Qihoo’s new joint venture looks like a smart tie-up to promote its software and online services, while Xiaomi’s resumption of India sales looks like a hollow win in its patent battle with Ericsson.
Qihoo, Coolpad in JV
A trio of smartphone stories are in the news today, including updates on major news involving security software specialist Qihoo 360 (NYSE: QIHU) and the ultra-cool Xiaomi. The first headline has Qihoo moving into the overheated smartphone space through a major new joint venture with domestic giant Coolpad (HKEx: 2369). In the second headline, Xiaomi has been allowed to resume selling some of its smartphones in India, after a judge last week ordered it to stop sales amid an ongoing patent dispute with Swedish mobile technology giant Ericsson (Stockholm ERICb). Read Full Post…
Bottom line: New copycat claims by a Japanese air purifier maker reflect the kinds of challenges Xiaomi will face as its profile rises, slowing down its global expansion and potentially undermining its cool image.
Xiaomi faces new coypcat allegations
The last couple of months have been a tough time for smartphone sensation Xiaomi, which is becoming a growing target of accusations that increasingly portray the company as China’s leading copycat. The latest such accusations are coming from a Japanese firm, which says its designs were ripped off for a new line of high-tech air purifiers that Xiaomi announced earlier this week. Those allegations come the same week that Xiaomi was penalized in India for illegally using patented technology from telecoms equipment giant Ericsson (Stockholm: ERICb), and 2 months after Xiaomi was slammed by a top Apple (Nasdaq: AAPL) executive for being China’s copycat supreme. Read Full Post…
Bottom line: Xiaomi is likely to quickly settle a patent dispute against it by Ericsson in India, which could slightly raise its costs but won’t affect its longer term development in the market.
India judge crimps Xiaomi’s global expansion
The global expansion plans of fast-rising Xiaomi may have hit a major roadblock, with word that a court has ordered the company to stop importing and selling its popular low-cost smartphones in India. Xiaomi had been targeting India as one of the main drivers in its campaign to become a major global smartphone brand, and has made a number of major moves in the market this year. But now it will have to deal with this new litigation, which is coming from global telecoms equipment giant Ericsson (Stockholm: ERICb) over patent infringement claims. Read Full Post…
Bottom line: The visit by a top Chinese Internet official to Facebook’s US campus shows Mark Zuckerberg’s charm offensive toward China is producing results, which could see his company finally get permission to enter the market next year.
China Internet official Lu visits Facebook campus
I have to commend Mark Zuckerberg for his tenacity, after the Facebook (Nasdaq: FB) founder once again made headlines for receiving a visit from a top Chinese Internet official visiting the US. There are several interesting things about this latest development involving Zuckerberg’s endless quest to bring Facebook to China, beginning with the source of this latest news.
It turns out the news didn’t come from Facebook or even ordinary people who caught a glimpse of the meeting, but rather it came from the web page China.com.cn, an official government site under the State Council. (Chinese article) What’s more, the account was rather detailed and upbeat, and featured several photos of Zuckerberg chatting happily on the Facebook campus with Lu Wei, minister of the Cyberspace Administration of China. Read Full Post…
